On Wednesday, a US auto parts group, MEMA, the Vehicle Suppliers Association, has urged immediate action over China’s tighter controls on rare earth exports, warning the move could soon disrupt car production. China processes over 90% of these minerals, which are used in motors and cameras.
Car giants, such as General Motors (GM), Ford (F) and Toyota (TM) joined the call for help. China’s rare earth curbs are seen as part of the wider trade tensions with the US.
With US-China tensions rising, President Trump said it’s “extremely hard” to reach a deal with his Chinese counterpart Xi Jinping.
“I like President XI of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!” Trump posted on Truth Social in the early hours of Wednesday.
The US-China detente — reached in mid-May in Geneva, when each country eased sky-high tariffs on the other — has been looking more fragile amid both trade-related and other tensions. Each side has accused the other of violating that truce.
Trump’s words for Xi come as the US is pushing countries to speed up trade talks. The White House has confirmed that the US had sent a letter to partners as a “friendly reminder” that Trump’s self-imposed 90-day pause on sweeping “reciprocal” tariffs is set to expire in early July.
US friction with China and the EU — two key trade partners — amped up after Trump doubled tariffs on steel and aluminum from 25% to 50%. Those tariffs took effect Wednesday, June 4.
US trade talks with the EU have come back into focus as an early-July deadline looms for Trump’s 50% tariffs on imports from the bloc.
Meanwhile, Trump’s most sweeping tariffs face legal uncertainty after a federal appeals court allowed the tariffs to temporarily stay in effect, a day after the US Court of International Trade blocked their implementation, deeming the method used to enact them “unlawful.”
Here are the latest updates as the policy reverberates around the world.
LIVE1085 updates
US auto suppliers say immediate action needed on China rare earths restrictions
A major US auto parts group warned on Wednesday that China’s new export rules on rare earths could soon cause serious problems for car production. These rare earth materials are used in cars and cameras and China controls over 90% of the world’s supply.
This follows news that China is trying to monitor and control who is buying and selling rare earths by using a tracking system.
Car giants like GM (GM), Ford (F) and Toyota (TM) are already feeling the pressure. Ford has paused production of its SUV because of rare earth shortages.
In a statement to Reuters, MEMA, the Vehicle Suppliers Association said: “The situation remains unresolved and the level of concern remains very high,” the group said. “Immediate and decisive action is needed to prevent widespread disruption and economic fallout across the vehicle supplier sector.”
It was also reported on Thursday that Japan is planning to propose strengthening cooperation with the US on rare earth supply chains in upcoming tariff talks with the US, due to recent export restrictions by China.
China’s rare earth curbs are seen as part of the wider trade tensions with the US, as the two nations seek to reach a trade deal and avoid tariffs.
Wed, June 4, 2025 at 6:45 PM UTC
Late-night social media and surprise tariffs complicate Trump’s two biggest trade talks
Apple and Alibaba’s AI rollout in China delayed by Trump’s trade war
Apple (AAPL), which has become caught in the crossfire of President Trump’s trade war several times this year, now faces delays to the launch of Apple Intelligence in China, the Financial Times reports.
It’s the latest instance in which the conflict between the US and China has spilled into areas other than tariffs, including aircraft bans, export controls, and student visas.
Carney says Canada will take ‘some time’ to respond to 50% metal tariffs
Prime Minister Mark Carney said Canada will take “some time” to assemble a response to the doubled steel and aluminum tariffs President Trump imposed on Tuesday and that the US and Canada are currently involved in “intensive” trade talks.
“We will take some time — not much, some time — because we are in intensive discussions right now with the Americans on our trading relationship,” Carney said, as reported by the Canadian Press.
Carney also stated that the 50% steel and aluminum tariffs are “unlawful and unjustified,” and he predicted they will harm American workers as well as Canada.
He noted that Canada is considering its response to Trump’s escalation. Already the country has implemented countermeasures on $90 billion worth of US goods.
Budget office estimates tariffs will reduce the deficit by $2.8 trillion but increase inflation for US households
In a new letter approximating the budgetary impacts of President Trump’s tariffs, the nonpartisan Congressional Budget Office (CBO) stated that tariffs would reduce deficits but reduce the US economy and raise inflation.
CBO assessed that the collections from tariffs implemented between Jan. 6 and May 13 would reduce primary deficits by a net $2.8 trillion over the next decade when accounting for reduced outlays of interest payments as well as changes in the size of the economy.
The preliminary analysis stated that the effects of retaliatory tariffs, plus reductions in investment and productivity due to tariffs, are expected to weigh on economic growth. The budget office pegged a $300 billion increase in the deficit to these economic changes, partially offsetting the $3 trillion deficit reduction from tariff revenue.
CBO also estimated that inflation will increase by 0.4 percentage points on average in 2025 and 2026, thereby “reducing the purchasing power of households and businesses.”
The estimates reflect the duties imposed as of May 13, including 10% broad-based tariffs, 25% auto tariffs, and 25% steel and aluminum tariffs (the last of which doubled as of June 3). They do not reflect the US-UK trade pact announced on May 8.
Wed, June 4, 2025 at 2:54 PM UTC
Wealthier Americans flock to dollar stores as tariffs stoke consumer angst
President Trump’s tariffs are leading many American’s, especially those with deeper pockets to flock to dollar stores. Chains such as Dollar General and Dollar Tree, whose core customer base was once (and still is) those with less money, are now seeing a rise in wealthier customers visiting their stores, as Trump’s tariffs darken US consumer sentiment.
Services sector falls into contraction for first time since June 2024
Activity in the services sector has fallen into contraction for the first time in a year.
The Institute for Supply Management’s Services PMI registered a reading of 49.9 in May, below the 51.6 seen in April and lower than the increase to 52 economists had expected. Readings above 50 for this index indicate an expansion in activity, while readings below 50 indicate contraction. May’s data marked just the fourth time the services sector has fallen into contraction in the past five years.
New orders tumbled to a reading of 46.4 in May, below the 52.3 seen the month prior. Meanwhile, the prices paid index increased to 68.7, up from 65.1 in April. This marked the highest prices paid reading since November 2022, when the Consumer Price Index had shown inflation at 7.1%.
Steve Miller, the chair of ISM’s Services Business Survey, said in the release that “tariff impacts are likely elevating prices paid.”
“May’s PMI level is not indicative of a severe contraction, but rather uncertainty that is being expressed broadly among ISM Services Business Survey panelists,” Miller said.
Wed, June 4, 2025 at 2:38 PM UTC
ADP private payrolls show firms ‘driving through fog’ of trade uncertainty
Bank of Canada says Canadian economy is ‘softer but not sharply weaker’ amid US trade dispute
The Bank of Canada noted that it’s seeing softness in the Canadian economy due to tariffs as it held interest rates steady on Wednesday.
“With uncertainty about US tariffs still high, the Canadian economy softer but not sharply weaker, and some unexpected firmness in recent inflation data, Governing Council decided to hold the policy rate as we gain more information on US trade policy and its impacts,” the Bank said in a statement. “We will continue to assess the timing and strength of both the downward pressures on inflation from a weaker economy and the upward pressures on inflation from higher costs.”
Governor Tiff Macklem also noted that while it’s too soon to see tariff-related inflation broadly in consumer prices, the US-Canada trade conflict is “the biggest headwind facing the Canadian economy.”
Starmer: Confident that tariffs on US imports of British steel will be reduced to zero
British Prime Minister Kier Starmer said on Wednesday he is confident the tariffs on US imports of British steel will be reduced to zero within a “couple of weeks” and that the UK will avoid the July deadline, which could see levies rise up by 50%.
Britain managed to avoid the 50% tariff on steel imports into the US, but President Trump has said if a deal is not made by July 9, British steel will face the same fate as other countries.
Dollar Tree forecasts weak second-quarter profit on tariff uncertainty
Like many other retailers, tariffs have hit the discount store Dollar Tree (DLTR), who have blamed President Trump’s trade war for its weak second-quarter profit.
Shares of the company were down about just over 1% in premarket trading.
UN trade agency: Tariffs to drive up seafood prices in the US
Tariffs are set to drive up seafood prices in the US, as global trade tensions could disrupt the ocean goods trade, according to a report from the United Nations trade agency published on Wednesday.
Higher US metals tariffs kick in as deadline for ‘best offers’ arrives
President Trump doubled tariffs on steel and aluminium on Wednesday, the same day that Washington expects countries to “make best offers” in order to avoid crippling levies from the Trump administration.
Apple bulls and bears don’t see tariffs changing the story
When it comes to Apple stock both the bull and the bear cases are unfazed by tariffs, despite the fact these levies and presidential threats could deflate the company, bull and bear arguments tend to focus on the tech company’s well established products and competitor advantage.
Despite the political landscape changing for Apple CEO Tim Cook, for Wall Street the story remains the same.
The bull case is focused on strong earnings, a legacy built on underpromising and overdelivering. Delivering stable results and always managing expectations. But this may be hard to see now.
My colleague, Yahoo Finance’s senior reporter Hamza Shaban looks at why Apple bull and bear cases don’t see tariffs changing the story.
China weighs massive Airbus deal, a likely message to Trump
Jets are taking center stage as countries vie for President Trump’s attention — and China could be the latest, with a potential Airbus (AIR.PA, EADSY) deal.
Chinese airlines are considering placing an order for as many as 500 Airbus planes to coincide with a visit by European leaders to Beijing in July, sources told Bloomberg.
Deals for US rival Boeing’s (BA) planes have emerged as the US’s favored bargaining chip in trade discussions. The spotlight fell on the gambit after Trump’s acceptance of a $400 million luxury Boeing jet from the Qatari royal family in May, for use in the Air Force One fleet.
Though China’s Airbus negotiations are said to be fluid and could fall through, the European jet maker’s stock rose as much as 4% in Paris. Meanwhile, shares of Boeing hovered below the flat line.
Tariff uncertainty is hammering one of America’s favorite food escapes — snacks
Yahoo Finance’s senior reporter Brooke DiPalma looks at how tariff uncertainty and inflation are key driving forces behind many US consumer decisions when they head to grocery stores.
EU and US trade negotiators meet in Paris as tariff storm intensifies
US and EU negotiators, Jamieson Greer and Maroš Šefčovič, will meet in Paris today to try and iron out a deal.
President Donald Trump doubled tariffs on steel and aluminium from 25% to 50% last week. This is in addition to the “reciprocal” US tariffs of 50% that Trump slapped on the EU last month and are due to kick in on July 9, unless a trade deal with Brussels is met.
The increase in metals levies also appear to be taking place at the same time as this meeting between the EU trade commissioner Maroš Šefčovič and the US trade representative, Jaimeson Greer.
The FT reported that neither side wished to discuss the negotiations in advance. But two European Commission officials said that unlike some countries, Brussels had not received a letter from Greer asking to send final negotiating offers for a potential trade deal by today.
Trump posts to Truth Social calling out Xi Jinping
Trump posted to his Truth Social account, calling China’s President Xi Jinping “hard to make a deal with.” Posting at 2:17 a.m. on Wednesday, Washington time, the post pulls into focus the tight nature of negotiations between the world’s two largest economies.
The post in full:
Trump’s statement follows a series of back-and-forth claims from both the US and China that each country has violated the tentative trade agreement currently in place. Since the May 12 agreement in Geneva, both countries have agreed to a 90-day truce in the contentious trade war that rocked the global economy.
White House officials have said that Trump and Xi are expected to talk directly to each other later in the week. But Beijing has not confirmed plans for a call, and it wasn’t clear whether Trump’s comments arose from direct contact with the Chinese leader.
The US and China have clashed over trade issues beyond tariffs, most recently over the supply of rare earth minerals.
Tue, June 3, 2025 at 7:10 PM UTC
White House confirms letter to trade partners asking them for offers
The White House on Tuesday confirmed that the US has sent a letter to trade partners seeking to speed up talks ahead of a self-imposed July deadline.
Though Reuters reported earlier this week that the administration asked for countries’ best offers by Wednesday, White House press secretary Karoline Leavitt on Tuesday framed the letter, which she said was sent by the US Trade Representative, as a “friendly reminder.”
“I can confirm the merits in the content of the letter,” she said, per Bloomberg. She sadded: “USTR sent this letter to all of our trading partners, just to give them a friendly reminder that the deadline is coming up, and they are in talks. The president expects good deals, and we are on track for that.”
Bloomberg cited a “recipient of the letter” who said it was “framed as a way to steer ongoing talks rather than an ultimatum.
Tue, June 3, 2025 at 7:04 PM UTC
White House: Trump to sign order doubling steel, aluminum tariffs
President Trump will sign an executive order doubling duties on steel and aluminum imports to 50%, the White House said Tuesday.
Trump first announced plans to up the duties last Friday during an event with steelworkers in Pennsylvania. White House press secretary Karoline Leavitt didn’t confirm the exact timing of the escalation Tuesday.
Trump’s most sweeping “reciprocal” tariffs are locked in legal limbo. But duties on specific sectors or commodities, like those on steel and aluminum, are so far unaffected because Trump has imposed them under a different legal authority.
