US-China Sign Trade Deal 🇺🇸🇨🇳

In a major step toward de-escalating trade tensions, U.S. Commerce Secretary Howard Lutnick confirmed that Washington and Beijing have officially signed a trade understanding reached last month in Geneva.

🤝 The deal:

Lutnick also stated that the U.S. is preparing to finalize trade deals with 10 other nations — including India and Japan, which are currently in active talks — in the next two weeks, ahead of Trump’s July 9 deadline. But uncertainty lingers: if rare earths don’t flow, the U.S. could reimpose its restrictions.

Amazon is accelerating its rural expansion. The e-commerce giant announced plans to roll out same-day and next-day Prime delivery to over 4,000 smaller towns and rural regions across the U.S. by year-end — part of a broader $4 billion initiative to grow its domestic logistics network through 2026.

Since testing faster delivery in select rural areas, Amazon says it’s already seeing higher purchase frequency and a spike in essential goods orders.

The rural expansion helps Amazon diversify both its customer base and fulfillment risk, especially as rivals like Walmart double down on omnichannel reach and alternative delivery methods.

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UK vehicle production dropped sharply in May, falling 32.8% year-on-year to 49,810 units, according to data from the Society of Motor Manufacturers and Traders (SMMT). Aside from pandemic-era shutdowns in 2020, this marks the lowest May output since 1949.

The decline was driven by a combination of factors, including model transitions, ongoing restructuring, and recently imposed U.S. tariffs. Exports to the U.S. fell by 55.4% last month, while shipments to the European Union dropped by 22.5%. The U.S. and EU are the UK automotive sector’s two largest overseas markets.

In May, President Trump signed an order reducing the tariff on the first 100,000 UK-made vehicles to 10% annually, but the impact on production was already evident. SMMT said total UK vehicle output for 2025 is down 12.9% so far, with cumulative production at its lowest level since 1953.

Shipping traffic through the Strait of Hormuz is slowing as global carriers respond to rising tensions after U.S. airstrikes targeted Iranian nuclear sites. BIMCO, the world’s largest shipowner association, says some operators have already paused transits due to security concerns.

The Strait, which handles nearly 20% of global oil and LNG flows, is considered a vital chokepoint. Following the U.S. strikes, Iran’s parliament approved a motion to block the strait, though the final decision lies with its National Security Council.

Major carriers, including Nippon Yusen and Mitsui O.S.K. Lines, have introduced standby policies, asking ships to delay entry into the Gulf. LNG suppliers are also holding vessels outside the region to minimize risk. Insurers are reportedly increasing war risk premiums, and global energy traders fear further escalation could disrupt oil markets.

FedEx is experiencing its largest structural overhaul in decades. As part of its "Network 2.0" consolidation strategy, the company will close 30% of its U.S. parcel distribution facilities over the next two years. The move is aimed at eliminating overlap between its Express and Ground operations—like two trucks delivering to the same block—and is expected to generate $2 billion in annual cost savings.

In the latest quarter alone, FedEx integrated 45 stations and is on track to blend 33 more by June's end. Approximately 12% of the total parcel volume will soon be processed through consolidated facilities. The company expects to achieve $1 billion in structural cost reductions this year, with $200 million of that amount expected to be realized this quarter.

U.S. rail traffic totaled 487,328 carloads and intermodal units for the week ending June 21, up 0.4% from the same period last year, according to the Association of American Railroads. Carload volume rose 4.5% year-over-year to 229,655 units, led by increases in grain, miscellaneous goods, and metallic ores. However, intermodal shipments—containers and trailers—fell 2.9% to 257,673 units.

Through the first 25 weeks of 2025, total U.S. rail traffic is up 4.1%, driven by strong intermodal growth (+5.4%) and steady carload demand (+2.5%).

Across North America, weekly volumes rose 1.3% to nearly 680,000 units, with Canada showing strong intermodal growth (+8.9%) and Mexico continuing to lag (-8.8% YTD).

China’s industrial sector took another hit in May, with profits plunging 9.1% year-on-year—the steepest monthly decline in seven months. The National Bureau of Statistics blamed weak domestic demand and falling product prices for the downturn.

Cumulative profits for the first five months of 2025 are down 1.1% versus the same period last year. Mining profits fell sharply by 29%, while manufacturing and utilities saw only slight gains. The auto manufacturing sector posted an 11.9% drop.

State-owned firms saw profits dip 7.4%, while private and foreign-invested firms fared slightly better. Analysts cite price wars and global commodity deflation as key drags on profitability.

Air cargo rates slipped again last week, with the Baltic Air Freight Index falling 0.3% week-on-week and 6% year-on-year, according to TAC Index data. This drop came despite rising jet fuel costs and flight disruptions caused by the Iran–Israel conflict.

Rates from Hong Kong ticked up slightly, but Shanghai and India saw declines. Vietnam posted mixed results—softening on U.S. lanes but firming toward Europe. Frankfurt rose 5.7% on transatlantic demand, while Heathrow dropped after the prior week’s surge.

North American rates to Europe and China increased modestly, although Chicago's index remained 4.6% below last year's level. Analysts say the market remains volatile, with regional disparities and shifting demand patterns driving uneven pricing

China has begun loosening its ban on urea exports, a move expected to ease global fertilizer prices and alleviate strained international supply chains. While controls are being relaxed, shipments will still be subject to quotas and minimum pricing rules, according to Bloomberg.

China had suspended urea exports in mid-2023 to stabilize domestic prices and support local farmers amid food security concerns. With local prices now subdued and inventories steady, authorities are beginning to prioritize industry profitability alongside supply stability.

Analysts say the move is a welcome development for the global market, where fertilizer supplies have been stretched due to geopolitical shocks and trade restrictions. China was the world’s largest urea exporter prior to the 2023 ban.

Danish shipping giant Maersk has filed a lawsuit against Brazil’s maritime regulator Antaq, seeking to challenge bidding rules that exclude current operators at the Port of Santos—like Maersk and MSC—from the first round of a $1 billion auction for the new Tecon 10 container terminal.

The auction, billed as Brazil’s largest port project ever, is scheduled for later this year and requires an estimated 5.6 billion reais in investment. The restrictions are intended to promote competition, but critics argue that they exclude the most experienced global players.

MSC's port unit, Terminal Investment Limited, may also sue if the rules aren't revised. Local rival JBS, which recently entered the terminal business, could benefit from the exclusion of global incumbents.

Imabari Shipbuilding, Japan’s largest shipbuilder, will acquire a controlling 60% stake in rival Japan Marine United (JMU), making it a subsidiary.

The move is aimed at bolstering Japan’s shipbuilding competitiveness against Chinese and South Korean giants like Hyundai Heavy and China State Shipbuilding Corp. JMU—formed by the 2013 merger of JFE Holdings’ and IHI’s shipbuilding arms—will see IHI and JFE reduce their stakes from 35% each to 20%.

Imabari currently ranks third globally in shipbuilding volume, while JMU ranks 11th. The deal, announced jointly by Imabari, JFE, and IHI, follows a 2019 capital alliance and underscores Japan’s urgency to compete on pricing, technology, and scale.

This newsletter was curated by Shyam Gowtham

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