Stormy waters

Over the weekend, we heard talk of “substantial progress” in the Sino-US trade negotiations—but without any concrete details. From what we gather, discussions also touched on rare earths and fentanyl. However, the real driver behind the shift appears to be economic urgency: in April, Chinese exports to the U.S. slumped by 21%, and U.S. port activity linked to China has slowed sharply. Confronted with early signs of the economic fallout triggered by its own trade war, the Trump 2.0 administration now seems keen to repair some of the damage—at least before U.S. consumers start feeling the pinch. But reputational harm has already been done, and new risks are emerging, such as new US presidential executive order in the pipeline putting pressure on drug prices through “most favored nation” clauses.

Don’t expect calmer waters from here.