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We're back to treading water on trade policy. A deal to get the U.S.-China trade truce back on track does little to resolve longstanding tensions.
China's weaponization of rare earth exports gives it a strong hand in future talks. Its export licence system gives it unprecedented insight into supplier chokepoints in areas ranging from motors for electric vehicles to flight-control systems for guided missiles.
Beijing has a near-monopoly over the processing of heavy rare earths into magnets but it is heavily reliant on Myanmar for the raw materials. Its access to fresh stockpiles has been throttled recently after a major mining belt in Myanmar's north was taken over by an armed group. But it is finding fresh supplies. Reuters has an exclusive on a Chinese-backed militia securing new rare earth mines in the east of the country.
But China is also feeling the heat from tariffs, particularly its smaller exporters. The intense competition among manufacturers is evident in falling prices.
Taosha Wang describes this stage as the "Slow Grind" and the protracted uncertainty could act as a cap on stock markets on both sides of the Atlantic as we head into the seasonally weaker summer period.
You can catch Wang's insights and other commentary on Reuters Open Interest - a new platform that hosts data-driven, expert analysis.
Less of a slow grind for the UK, meanwhile. Tax increases and U.S. President Trump's tariffs triggered a sharp slowdown in Britain's economy in April. The country's goods exports to the U.S. fell by 2 billion pounds ($2.7 billion), the largest drop since monthly records began in 1997, after a rush to get ahead of U.S. tariffs in the first quarter.
Finance Minister Rachel Reeves told the BBC that the monthly numbers are notoriously volatile and pointed to recent trade deals with the U.S., the European Union and India as growth drivers. The government will need all the help it can get to support its spending plans. A weaker economy increases the chances of more tax rises in the fall.
Before you go, Congress is poised to pass legislation that will bring stablecoins into the mainstream of U.S. finance. On this week's Reuters Econ World podcast I talk to John D'Agostino of Coinbase about the benefits and risks of that move. Plus, what's the point of meme coins? Listen here
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