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Sunday, May 11, 2025

11: Trade War Truce?

'Total reset' with China sends market soaring China's official state news agency, Xinhua, said on May 10 that the high-level meeting began at the request of the U.S. A "stable and constructive" relationship serves the interests of both nations and the world at large, it mentioned and added, "Trade wars and tariff battles yield no winners."

U.S. Announces Trade Deal Reached With China In Geneva Secretary of the Treasury Scott Bessent and U.S. Trade Representative Ambassador Jamieson Greer addressed the media, reporting "substantial progress" and a productive round of negotiations. .......... He extended thanks to the Swiss government for providing a conducive venue, which he believes contributed to the productivity of the discussions. ........ "This was, as the Secretary pointed out, a very constructive two days. It’s important to understand how quickly we were able to come to agreement, which reflects that perhaps the differences were not so large as maybe thought."

Current Status of the US-China Trade War (as of May 11, 2025)
The US-China trade war, escalating since April 2025 with US tariffs of 145% on Chinese goods and China's retaliatory 125% tariffs, remains a significant global economic disruptor. High-level trade talks between US and Chinese officials began in Geneva, Switzerland, on May 10, 2025, marking the first direct engagement since the tariff escalation. These talks involve US Treasury Secretary Scott Bessent, US Trade Representative Jamieson Greer, and Chinese Vice Premier He Lifeng.
Key Developments:
  • Talks Ongoing, No Formal Truce: The Geneva talks, continuing into May 11, 2025, aim to de-escalate tensions rather than secure a comprehensive trade deal. Both sides have expressed cautious optimism, but no formal truce has been announced. US President Donald Trump described the first day of talks as a "very good meeting" with "great progress made," suggesting a "total reset" in relations, but specifics remain undisclosed. A source indicated discussions would extend into Sunday, May 11, with details possibly released on Monday.
  • No Breakthrough Achieved: Analysts and sources report low expectations for a major breakthrough. The talks focus on establishing frameworks, setting boundaries, and exploring de-escalation pathways, such as tariff reductions. Swiss hosts hope for a "roadmap" to emerge, but experts like Evan Medeiros suggest the meetings are primarily about setting the stage for future negotiations.
  • Positive Signals: US stock futures rose after the talks were announced, reflecting market optimism for potential de-escalation. A post on X from
    @amitisinvesting
    quoted Bessent claiming "substantial progress" with details forthcoming on Monday, though this remains unverified. China's Xinhua News Agency called the talks a "positive and necessary step," while maintaining Beijing's stance against unilateral tariffs.
  • Points of Contention: The US seeks to reduce its $295 billion trade deficit with China and address perceived unfair practices, including technology transfers and subsidies. China demands tariff reductions, clarity on US purchase expectations, and equal treatment. Non-trade issues, such as fentanyl exports and geopolitical tensions, complicate negotiations, with China sending a top public-security official to the talks.
Economic Impact:
  • US: The tariffs have driven up consumer prices, with Goldman Sachs predicting inflation could double to 4% by year-end. US GDP contracted in the first quarter since 2022, partly due to importers rushing goods before tariffs took effect.
  • China: Exports to the US dropped 21% in April 2025, and the IMF downgraded China's growth outlook. The trade war threatens up to 16 million jobs, prompting China's central bank to announce monetary stimulus.
  • Global: The trade war has roiled markets, disrupted supply chains, and raised fears of a global economic downturn.
Critical Perspective:
While the Geneva talks signal a willingness to negotiate, deep mistrust and entrenched positions—US demands for structural reforms versus China’s insistence on tariff rollbacks—suggest a low likelihood of immediate resolution. Trump’s suggestion of reducing tariffs to 80% indicates potential flexibility, but his unpredictable rhetoric and China’s firm stance against "bullying" complicate prospects. The involvement of non-trade issues like fentanyl and the presence of a Chinese security official hint at broader geopolitical tensions overshadowing economic discussions. The talks may yield minor tariff adjustments or a commitment to further dialogue, but a lasting truce or breakthrough remains elusive without addressing core disputes.
For the latest updates, monitor official statements from the US Treasury, China’s Commerce Ministry, or credible news outlets, as details may emerge on May 12, 2025.

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India Pakistan Ceasefire Violations



As of May 11, 2025, the ceasefire between India and Pakistan, announced on May 10, 2025, appears to be holding, though it remains fragile following mutual accusations of violations shortly after the agreement. The ceasefire was brokered through U.S.-led diplomacy, with involvement from multiple countries, to halt four days of intense cross-border strikes—the worst in decades—sparked by a terrorist attack in Pahalgam, Indian-administered Kashmir, on April 22, 2025, which killed 27 people.

Key Points on the Current Status:
  • Ceasefire Agreement: On May 10, 2025, at 5:00 PM IST (11:30 GMT), India and Pakistan agreed to an immediate cessation of all military actions, including firing on land, air, and sea, following talks between their Directors General of Military Operations (DGMOs). The agreement was confirmed by Indian Foreign Secretary Vikram Misri and Pakistani Foreign Minister Ishaq Dar, with further DGMOs talks scheduled for May 12, 2025.
  • Initial Violations: Hours after the announcement, both sides accused each other of breaching the truce. India reported Pakistani shelling and drone activity along the Line of Control (LoC) and International Border (IB), particularly in Jammu, Akhnoor, and Srinagar, with explosions heard in these areas. Pakistan denied initiating violations, claiming India was responsible for breaches in some sectors. Both countries reported their forces responded to the alleged violations.
  • Current Stability: By the night of May 10 into May 11, no further ceasefire violations were reported along the LoC in Kashmir after 11:00 PM on May 10, indicating a tentative calm. Residents in the Kashmir Valley noted a return to normalcy, with no sounds of aircraft, missiles, or drones overnight. However, displaced locals remain cautious about returning to border areas, and both nations maintain high military alertness.
  • Ongoing Tensions: Despite the ceasefire, underlying tensions persist. India accuses Pakistan of supporting terrorism, particularly linked to the Pahalgam attack, while Pakistan denies involvement and calls for international inquiries. Punitive measures, such as India’s suspension of the Indus Waters Treaty, trade bans, and visa cancellations, remain in place, signaling unresolved diplomatic friction.
  • International Response: Global leaders, including U.S. President Donald Trump, UN Secretary-General Antonio Guterres, and UK Prime Minister Keir Starmer, have welcomed the ceasefire, urging both sides to ensure it endures. The U.S. claims a significant role in mediation, though India downplays external involvement, emphasizing bilateral agreement.
Critical Perspective:
While the ceasefire has paused active hostilities, its fragility is evident from the rapid accusations of violations and the lack of progress on broader issues like Kashmir or terrorism. The involvement of external mediators, particularly the U.S., may have pressured both sides to de-escalate, but India’s reluctance to acknowledge foreign mediation and Pakistan’s call for international involvement highlight differing strategic goals. The continued suspension of critical agreements like the Indus Waters Treaty and the high state of military readiness suggest that the ceasefire is a temporary measure rather than a step toward lasting peace. Without addressing root causes, such as the Kashmir dispute or cross-border terrorism allegations, the risk of renewed escalation remains high.
For the latest developments, monitoring official statements from both governments or credible news sources is advisable, as the situation could evolve rapidly.


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