Trade progress made; markets eye inflation data.

U.S. Legal & Political Developments 

• A federal appeals court ruled that former President Donald Trump’s trade tariffs can remain in effect for now. 

• The court extended a previous short-term allowance after the White House appealed a trade court’s decision that halted the tariffs. 

• The ruling acknowledged U.S. officials’ trade concerns outweighed potential economic harm, despite objections from small businesses. 

U.S.–China Trade Negotiations 

• U.S. and Chinese officials reached a framework agreement in London after two days of high-level talks. 

• The discussions focused on rare earth metals and chip export restrictions. 

• U.S. Commerce Secretary Howard Lutnick confirmed a willingness to ease export restrictions if China resumes rare earth exports. 

• Optimism grew after a phone call between Trump and Chinese President Xi Jinping. 

• Chinese Vice Minister of Commerce Li Changang indicated that the framework will be submitted to Xi for approval. 

Economic Outlook & CPI Data 

• All eyes now turn to the upcoming U.S. Consumer Price Index (CPI) data, due Wednesday. 

• Expectations suggest a slight rise in inflation for May, continuing trends from earlier in 2025. 

• Tariffs have contributed to price pressures, affecting consumer prices. 

• A strong dollar and uncertain inflation trajectory may influence the Federal Reserve’s stance on interest rates. 

Conclusion: 

This week marked key developments in U.S. trade policy and economic outlook. Trump’s tariff strategy received legal backing, while cautious optimism emerged in U.S.–China trade negotiations. Meanwhile, CPI data remains a critical piece in the economic puzzle for markets and policymakers alike.