TLDR
- U.S. and China held their first phone call since agreeing to a 90-day tariff pause in Geneva earlier this month
- EU presented a new trade proposal to the U.S. on Thursday, including phased tariff cuts and cooperation in energy and AI
- EU is preparing $108 billion in retaliatory tariffs if trade talks with the U.S. fail
- Major U.S. companies like Walmart, Target, and Nike are raising prices due to tariff impacts
- HSBC survey shows 22% of American companies expect tariffs to hit their revenue by 50% or more
The United States and China conducted their first official phone conversation since establishing a 90-day tariff pause in Geneva earlier this month. U.S. Deputy Secretary of State Christopher Landau spoke with Chinese Executive Vice Foreign Minister Ma Zhaoxu on Thursday.
The two officials acknowledged the importance of bilateral relations between their countries and the global community. They discussed various issues of mutual interest during the call.
Both sides agreed on maintaining open communication channels going forward. A White House spokesperson confirmed these details in an official statement.
The conversation comes after tensions arose between the countries following their Geneva agreement. China’s Commerce Ministry announced Wednesday it would take legal action against organizations helping the U.S. discourage use of Chinese semiconductors.
The U.S. Commerce Department had initially warned that using Huawei chips globally would violate export controls. The department later removed this reference from their guidance.
European Union Presents New Trade Proposal
The European Union submitted a fresh trade proposal to the United States on Thursday. The offer includes phased tariff reductions on non-sensitive goods.
The proposal also covers cooperation in energy, artificial intelligence, and digital infrastructure sectors. EU officials want to create a balanced trade agreement with Washington.
Brussels is preparing retaliatory measures worth $108 billion in case negotiations fail. The EU is also willing to extend a 2020 tariff-free arrangement on U.S. lobster imports.
U.S. Trade Representative Jamieson Greer is scheduled to call European Commissioner MaroÅ” Å efÄoviÄ on Friday. The call aims to advance tariff negotiations between Washington and Brussels.
Corporate Impact From Tariff Policies
American companies are expressing concern about tariff effects on their businesses. An HSBC survey published Friday shows U.S. firms are more worried than global counterparts about revenue impacts.
Twenty-two percent of American survey respondents expect tariffs to reduce their revenue by 50% or more. Over half of respondents anticipate a revenue impact of at least 25%.
Consumer, healthcare, and technology sectors face the highest risk from rising costs. These industries will likely bear the heaviest burden from new duties.
Walmart announced earlier this month it would raise prices to offset tariff costs. Target stated this week it may increase prices “where necessary.”
Nike is also hiking prices on some adult gear by up to $10 starting next week. The company did not directly blame tariffs for this decision.
Treasury Secretary Scott Bessent recently confirmed tariff rates will return to “reciprocal” levels if countries don’t negotiate during the 90-day pause. He warned that failure to negotiate in good faith would trigger rate increases back to April 2 levels.
JPMorgan CEO Jamie Dimon expressed concern Wednesday about potential stagflation risks facing the U.S. economy. Chinese shipments of Apple iPhones and mobile devices to the U.S. fell to their lowest levels since 2011 in April.
