US-China Close to Signing a Truce 🤝

President Trump has announced a preliminary trade deal with China. The agreement was struck after two days of talks in London and still awaits final sign-off from both Trump and President Xi Jinping. It builds on a May truce that temporarily eased a spiraling tariff war between the two countries.

The U.S. House of Representatives has passed two key maritime bills aimed at strengthening port infrastructure and limiting foreign influence at American ports. H.R. 2390 amends the Port Infrastructure Development Program (PIDP) to allow federal funding to replace port cranes using hardware or software of Chinese origin.

H.R. 252 prohibits entities owned or controlled by China, Russia, North Korea, or Iran from owning, leasing, or operating U.S. port facilities that are governed by the Maritime Transportation Security Act (MTSA) rules.

The legislative package also includes a provision mandating that 100% of U.S. Department of Transportation cargo be shipped on U.S.-flagged, U.S.-crewed commercial vessels—up from the current 50%. This expansion of cargo preference rules is expected to provide support to the declining U.S.-flag fleet.

The bills are part of a broader push to secure U.S. maritime infrastructure from foreign influence and reinforce domestic shipping capabilities.

General Motors will invest $4 billion in U.S. manufacturing facilities over the next two years. The decision comes as the company adjusts its production strategy in response to evolving tariff policies and a slowdown in electric vehicle demand.

According to GM CFO Paul Jacobson, the investment will support the reshoring of specific vehicle models currently produced in Mexico, including the gas-powered Chevrolet Blazer and Equinox, which are set to begin U.S. production in 2027.

The company also plans to shift production at its Orion, Michigan, plant from electric vehicles (EVs) to internal combustion vehicles, including full-size SUVs and light-duty pickups such as the Chevrolet Tahoe and Silverado. EV production will be relocated to GM’s Factory Zero plant, which is dedicated to electric models.

China’s exports to the United States dropped 35% year-over-year in May, according to new customs data.

China exported $28.8 billion to the U.S. last month, down from $44 billion in May 2024. Imports from the U.S. also fell to $10.8 billion, contributing to a total monthly trade surplus of $103.2 billion. Overall, China’s global exports rose 4.8% in May, down from 8.1% growth in April, while imports declined 3.4%.

Analysts expect a temporary rebound in June due to a 90-day suspension of some tariffs, but forecast weaker growth by year-end. Exports to other markets showed strength. Shipments to Southeast Asia increased by 14.8%, and exports to the EU rose by 12%. Germany, Thailand, Vietnam, and Indonesia saw particularly strong increases.

The U.S. Court of Appeals for the Federal Circuit has allowed President Trump’s broad “Liberation Day” tariffs to remain in effect while it reviews a lower court ruling that had blocked them.

The tariffs are under legal challenge because Trump exceeded his authority by invoking the 1977 International Emergency Economic Powers Act (IEEPA), which is typically used to impose sanctions or freeze assets in national security situations.

The appeals court noted the case’s “exceptional importance” and scheduled a rare full-court hearing with all 11 judges on July 31. This step bypasses the usual three-judge panel review.

The European Commission has imposed definitive anti-dumping duties of 131.1% on vanillin imports from China. The decision follows an investigation that found Chinese vanillin was being dumped at unfair prices, harming producers within the EU.

Vanillin, used in foods, perfumes, and pharmaceuticals, is mostly synthetic. Natural vanillin makes up less than 1% of the global supply. The EU's trade investigation concluded that low-priced Chinese imports undercut local manufacturers, prompting the trade defense measure. U.S. House Passes Bills to Boost Maritime Security

The new duties aim to restore competitive balance for EU-based vanillin producers. The tariff applies to all vanillin imports originating in China, effective June 12, 2025.

Spot ocean freight rates on key trans-Pacific routes have spiked sharply in early June as shippers rush to move goods during the 90-day suspension of U.S.-China tariffs.

According to Xeneta, average spot rates for shipments from the Far East to the U.S. East Coast climbed 88% from May 3, reaching $6,100 per forty-foot container. On the U.S. West Coast route, rates jumped to $5,082 from $2,615 per FEU.

Cosco, Evergreen, Hapag-Lloyd, and HMM have responded by raising spot charges by up to $3,000 per container. Mid-to-high market rates for East Coast deliveries reached $7,180 per FEU by early June, reflecting a surge in expedited bookings.

The rate surge isn’t limited to U.S. lanes. According to reports, mid-high spot rates in the Far East to North Europe rose 32% to $2,704 per FEU, despite available capacity on the route reaching 346,000 TEUs — the highest level since the pandemic.

The European Union is debating changes to its corporate due diligence law aimed at curbing environmental and human rights abuses in supply chains. Swedish MEP Jörgen Warborn, the lead negotiator, has called for narrowing the scope of the law to reduce the regulatory burden on businesses.

The law, finalized in 2024, is set to take effect once individual EU member states transpose it into national legislation. Warborn supports upholding the law but wants fewer companies to be covered and specific obligations, such as mandatory climate transition plans, to be removed.

Currently, the law applies to companies with 250 or more employees. The European Commission has proposed raising that threshold to 1,000 employees and easing some reporting requirements. Warborn has suggested raising it further to 3,000 employees and €450 million in turnover, with full exemptions for subsidiaries.

DHL Express Canada has locked out over 2,100 unionized workers after failing to reach a new labor agreement with Unifor, escalating tensions in the country’s parcel delivery sector. The lockout began just after midnight on June 8, following a 72-hour strike notice from the union.

Talks had been underway since the previous contract expired in December 2024. Unifor says DHL introduced last-minute demands, including reduced driver pay, fewer work guarantees, and extended travel without additional compensation. The union criticized DHL’s decision to bring in temporary replacement workers ahead of Canada’s anti-replacement worker legislation taking effect on June 20.

DHL claims it has contingency plans in place to continue operations, serving roughly 50,000 customers, including Lululemon, Shein, Temu, and Siemens.

U.S. business logistics costs rose to $2.58 trillion in 2024, a 5.4% increase from the previous year, according to the 2025 State of Logistics report by CSCMP and Kearney. This spending now accounts for 8.8% of GDP, up from the 7.4–8% range seen in the post-COVID years.

The largest contributor to the increase was water transportation costs, which rose 93% year-over-year to $161.6 billion due to disruptions in the Red Sea and Suez Canal. While total motor carrier spend remains the highest, full truckload costs declined to $387 billion, a decrease of over $100 billion from 2022. In contrast, spending on private and dedicated fleets rose to $541.4 billion, continuing a multi-year upward trend.

Between March and May 2025, 97% of iPhones exported from India by Foxconn were shipped to the United States, a sharp increase from the 2024 average of just over 50%, according to customs data reviewed by Reuters.

According to the Reuters report, Foxconn’s India shipments to the U.S. totaled $4.4 billion in the first five months of 2025—already surpassing the $3.7 billion total for all of 2024. In March alone, Foxconn exported a record $1.3 billion worth of iPhones to the U.S., followed by nearly $1 billion in May.

The shift comes as Apple seeks to mitigate the impact of high tariffs on Chinese-made products. The U.S. currently imposes a 10% baseline tariff on Indian goods, while China faces up to 55% tariffs under a revised trade agreement awaiting final approval.

U.K. exports to the United States fell by £2 billion in April 2025, the largest monthly drop on record since 1997, according to data from the Office for National Statistics (ONS). The sharp decline was attributed to newly imposed U.S. tariffs on British goods, which took effect in early April.

Total goods exports from the U.K. to the U.S. fell to £4.1 billion, the lowest since February 2022. Key affected categories included automobiles, chemicals, and metals. At the same time, U.S. imports to the U.K. fell by £400 million, shifting the bilateral goods trade balance in favor of the U.S. for the first time since May 2024.

Despite a draft U.S.-U.K. trade deal announced in May, 10% blanket tariffs on British exports remain in place while final terms are pending.

This newsletter was curated by Shyam Gowtham

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