U.S. and China Agree to ‘Framework’ for Trade Deal

Summary

Podcast Summary: WSJ What’s News – Episode: U.S. and China Agree to ‘Framework’ for Trade Deal
Release Date: June 11, 2025
Host: Azhar Sucri (Filling in for Luke Vargas)
Source: The Wall Street Journal

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1. U.S.-China Trade Deal Framework

Overview:
In a significant development, U.S. and Chinese negotiators concluded two days of intense trade discussions in London, successfully agreeing on a framework aimed at restoring a truce and mitigating tensions between the world's two largest economies.

Key Points:

• The agreed framework essentially reinstates a deal previously negotiated in Switzerland last month.
• Chinese Negotiator Li Chenggang stated, "The two sides have agreed in principle," highlighting mutual commitment to the agreement (01:20).
• U.S. Commerce Secretary Howard Lutnick described the accord as a "handshake for a framework," emphasizing key areas such as rare earth minerals (01:45).

Notable Quotes:

• Li Chenggang: "The two sides have agreed in principle." (01:20)
• Howard Lutnick: "We've reached a handshake for a framework including key issues of rare earth minerals." (01:45)

Discussion:
The framework addresses critical issues like rare earth minerals and magnets, which have been central to U.S.-China trade tensions. Kim Nash elaborated on the resolution of rare earths, noting that previously imposed U.S. measures would be lifted in a balanced manner, as intended by former President Trump (02:08).

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2. U.S. Legal Rulings on Trump Tariffs

Overview:
A federal appeals court has granted the Trump administration’s request to maintain the administration's tariffs temporarily. Although these tariffs are currently in place, the court expedited the case for summer deliberations.

Key Points:

• The U.S. Court of Appeals for the Federal Circuit extended a temporary pause on a trade court decision, meaning tariffs remain active for at least the next two months.
• The court plans to hear arguments on July 31, potentially altering the current stance on Trump’s tariff powers (03:00).

Notable Quotes:

• "The tariffs will likely remain in effect for at least the next two months," summarizing the court’s decision. (03:00)

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3. Immigration Protests and Political Tensions in Los Angeles

Overview:
Los Angeles is grappling with ongoing protests over immigration enforcement, leading to heightened tensions between state and federal authorities.

Key Points:

• Los Angeles Mayor Karen Bass imposed a curfew from 8 PM to 6 AM in downtown areas following days of escalating protests, with arrests reaching nearly 200 (03:30).
• Governor Gavin Newsom criticized President Trump’s actions, condemning the deployment of U.S. Marines as "authoritarian overreach" (03:55).

Notable Quotes:

• Gavin Newsom: "This isn't just about protests here in Los Angeles... Democracy is under assault before our eyes." (03:51)

Discussion:
Newsom's strong stance against Trump's immigration policies has sparked conversations about potential presidential ambitions, although he remains undecided. Protests are not limited to California, with similar demonstrations emerging in Atlanta, Chicago, and New York, indicating a nationwide unrest over immigration policies (04:20).

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4. U.S. Inflation Data and Tariffs Impact

Overview:
Today's Consumer Price Index (CPI) report is critical for assessing the impact of President Trump's tariffs on U.S. inflation.

Key Points:

• Caitlin McCabe, a markets reporter, anticipates CPI will show a 2.4% increase in May year-over-year, up from 2.3% in April. Core CPI is expected to rise to 2.9% from 2.8% (04:58).
• This potential rise signifies a reversal of the downward trend observed in recent months.

Notable Quotes:

• Caitlin McCabe: "If those numbers hold up, this will be a reversal of this trend that we've been seeing for the last several months." (05:10)
• Caitlin McCabe: "I think this month could be different and offer a bit of a more robust picture." (05:48)

Discussion:
McCabe highlighted that April's inflation data might not fully capture the tariffs' effects, as some businesses absorbed costs or stockpiled goods in anticipation. Companies like Walmart have already started raising prices, indicating shifting costs due to tariffs (05:40).

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5. AI Regulation in Europe and Google's Strategic Moves

Overview:
As artificial intelligence continues to transform industries, European leaders are urged to balance regulation with innovation. Concurrently, Google is making significant investments to stay competitive in the AI landscape.

Key Points:

• Christian Klein, CEO of SAP, urged the European Union to avoid stifling innovation with excessive AI regulation:

  "Before we now overregulate, let's see first how we can innovate together and then you can still regulate the outcome but don't regulate the technology because you are killing actually the innovation before it actually becomes reality." (06:05)

• Google has extended voluntary buyout offers to U.S. employees across multiple divisions to reallocate funds towards AI development, planning to increase its capital expenditure from $52.5 billion in 2024 to $75 billion in 2025 (06:30).

Notable Quotes:

• Christian Klein:

  "Don't regulate the technology because you are killing actually the innovation before it actually becomes reality." (06:10)

• Azhar Sucri:

  "It's ramping up spending to compete with the likes of ChatGPT and other AI competitors that threaten to erode its search dominance." (06:35)

Discussion:
Klein emphasized the importance of fostering AI innovation before implementing regulatory measures. Google's substantial investment underscores the competitive drive to maintain leadership in AI, especially against emerging technologies like ChatGPT.

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6. Cyberattacks on Major UK Retailers

Overview:
Prominent UK retailers, including Victoria's Secret, North Face, Cartier, Harrods, Marks and Spencer, and Co-op, have fallen victim to cybercriminal attacks, leading to significant disruptions and data breaches.

Key Points:

• Marks and Spencer experienced operational downtime for several days, resulting in $400 million in lost revenue due to what appears to be a ransomware attack (09:00).
• The attacks are attributed to a group known as Star Fraud or Scattered Spider, characterized by sophisticated social engineering tactics to infiltrate company networks (09:50).
• Victoria's Secret had to delay its quarterly reporting as internal systems were compromised, affecting both online and in-store operations for three days (10:00).

Notable Quotes:

• Kim Nash:

  "They use a tactic called social engineering where they will call up an employee of the company and talk them into revealing their passwords." (10:01)

• Kim Nash:

  "Victoria's Secret had to delay its quarterly reporting because internal systems were taken down." (10:35)

Discussion:
These cyberattacks highlight the vulnerability of large retail operations to sophisticated hacking strategies. The immediate financial impact and operational disruptions emphasize the need for robust cybersecurity measures. Kim Nash also touched on the growing prevalence and complexity of cyber insurance, although its high costs make it inaccessible for some large corporations (11:24).

Notable Quotes:

• Kim Nash:

  "It's a specialized insurance that you can get in addition to your regular business policies... but it is cost prohibitive." (11:33)

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7. Conclusion

Today's episode of WSJ What’s News delved into pivotal developments shaping global economics and politics. The tentative U.S.-China trade framework offers a glimmer of hope for easing longstanding tensions, while domestic challenges in the U.S. highlight the intricate balance between federal authority and state-level governance. The impending inflation data will be crucial in understanding the real-time impact of trade policies, and the rapid advancements in AI underscore the critical interplay between innovation and regulation. Lastly, the surge in cyberattacks against major retailers serves as a stark reminder of the ever-evolving threat landscape in cybersecurity.

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Timestamps:

• #timestamp1 01:20
• #timestamp2 01:45
• #timestamp3 02:08
• #timestamp4 03:00
• #timestamp5 03:30
• #timestamp6 03:55
• #timestamp7 03:51
• #timestamp8 04:20
• #timestamp9 04:58
• #timestamp10 05:10
• #timestamp11 05:48
• #timestamp12 05:40
• #timestamp13 06:05
• #timestamp14 06:30
• #timestamp15 06:10
• #timestamp16 06:35
• #timestamp17 09:00
• #timestamp18 09:50
• #timestamp19 10:00
• #timestamp20 10:01
• #timestamp21 10:35
• #timestamp22 11:24
• #timestamp23 11:33

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This summary was produced based on the transcript provided and aims to encapsulate the key discussions, insights, and conclusions from the episode. For more detailed information, listeners are encouraged to tune into the full podcast episode.

Transcript

[Azhar Sucri]

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[Luke Vargas]

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[Azhar Sucri]

U.S. china trade tensions look like they might be cooling off. Now it's up to their leaders to seal a deal. Plus, Los Angeles remains on edge as protests over immigration continue. California's governor accuses Trump of being an authoritarian.

[Gavin Newsom]

He again chose escalation. He chose more force. He chose theatrics over public safety.

[Azhar Sucri]

And we look ahead to the big event for markets today. U.S. inflation Day data. It's Wednesday, June 11th. I'm Azhar Sucri filling in for Luke Vargas for the Wall Street Journal. Here is the AM Edition of what's news, the top headlines and business stories moving your world today. US And Chinese negotiators have wrapped up two days of intense trade talks here in London. They said they've agreed to a framework to get their truce back on track and ratchet down tensions between the two biggest econom. That framework essentially restores a deal representatives agreed to in Switzerland last month. Chinese negotiator Li Chenggang said the two sides have agreed in principle. And U.S. commerce Secretary Howard Lutnick said the U.S. and China have reached a, quote, handshake for a framework including on the key issues of rare earth minerals.

[Kim Nash]

Absolutely expect that the topic of rare.

[Azhar Sucri]

Earth minerals and magnets with respect to the United States of America will be resolved in the this framework implementation.

[Kim Nash]

That is a fundamental part of that.

[Azhar Sucri]

Also, there were a number of measures the United States of America put on when those rare earths were not coming. You should expect those to come off sort of as President Trump said, in a balanced way. Meanwhile, a federal appeals court has granted the Trump administration's request to keep the president's far reaching tariffs in effect for now, but it agreed to fast track its consideration of the case this summer. The U.S. court of Appeals for the Federal Circuit extended its earlier temporary pause of a trade court decision that found Trump exceeded his powers in imposing the tariffs. The appeals court said it intends to hear arguments on July 31, which means the tariffs will likely remain in effect for at least the next two months. Los Angeles Mayor Karen Bass has imposed a curfew across parts of the city's downtown area. Her move comes after days of escalating protests over immigration enforcement in California. The curfew, which began last night and runs from 8pm to 6am is expected to stay in place for several days. Arrest numbers have surged, peaking at nearly 200 yesterday. The curfew comes after President Trump condemned the protesters as, quote, animals and professional agitators. Serving as Trump's antagonist in this political storm is California Governor Gavin Newsom. In a televised address yesterday evening, Newsom said that President Trump's deployment of the U.S. marines in California was an authoritarian overreach.

[Gavin Newsom]

This isn't just about protests here in Los Angeles. When Donald Trump sought blanket authority to commandeer the National Guard, he made that order apply to every state in this nation. This is about all of us. This is about you. California may be first, but. But it clearly will not end here. Other states are next. Democracy is next. Democracy is under assault before our eyes. This moment we have feared has arrived.

[Azhar Sucri]

The governor's forceful pushback has fueled talk of a potential presidential run, though Newsom told the Wall Street Journal he hasn't made up his mind. Meanwhile, protests are spreading, with demonstrations taking place in Atlanta, Chicago and New York.

[Kim Nash]

Foreign.

[Azhar Sucri]

Economists will be watching to see whether President Trump's tariffs are starting to impact inflation. That's in today's Consumer Price Index report due out this morning. To preview what might be coming up in the data is Journal markets reporter Caitlin McCabe.

[Caitlin McCabe]

So economists surveyed by the Wall Street Journal expect CPI to show that consumer prices rose 2.4% in May compared to a year earlier, which is up from 2.3% in April. Separately, something known as core CPI, which excludes volatile food and energy prices, that's expected to rise to 2.9% in May, up from 2.8% the month before. And what's notable about this is that if those numbers hold up, this will be a reversal of this trend that we've been seeing for the last several months where we have seen annualized CPI coming down.

[Azhar Sucri]

And Caitlin says that we'll get a better sense of how President Trump's tariffs are affecting inflation in this month's data.

[Caitlin McCabe]

Analysts and investors that I spoke with say that the April inflation data that we got didn't offer the fullest picture. We had some businesses absorbing tariff related costs that month as they waited to get a sense of how this would all shake out. I think in other cases, we saw some businesses for front running tariffs a bit by stockpiling some goods. And so I think this month could be different and offer a bit of a more robust picture. Look at Walmart, for example, the biggest retailer in America. It said last month that it was starting to raise its prices.

[Azhar Sucri]

Speaking at a Wall Street Journal CEO Council session in London today, Christian Klein, chief executive of German software group SAP, said that as AI reshapes entire industries, Europe needed to be careful not to strangle innovation with excessive regulation. I always tell the European Union and of course we are talking to them a lot about hey, in businesses, probably customers have yet seen 10% productivity increase because of Genai. So before we now overregulate, let's see first how we can innovate together and then you can still regulate the outcome but don't regulate the technology because you are killing actually the innovation before it actually becomes reality. And that is the wrong order. Google has extended voluntary buyout offers to U.S. employees in multiple divisions, including its search and advertising units, one of a number of cost cutting steps it's made to help fund billions in AI spending. Google is expected to spend $75 billion on capital expenditure this year, compared with 52.5 billion in 2024. It's ramping up spending to compete with the likes of ChatGPT and other AI competitors that threaten to erode its search dominance. Coming up, cybercriminals are hitting some of the world's best known retailers where it hurts their data. We'll tell you who's feeling the pain after the break.

[Luke Vargas]

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[Azhar Sucri]

Victoria's Secret North Face, Cartier. They're among the most recognizable retail brands and they're also among the latest targets of cyber cybercriminals here in the uk. Harrods, Marks and Spencer and Co Op have also seen customer data stolen. Kim Nash leads a team of reporters at the Wall Street Journal covering cybersecurity and data privacy. Our Luke Vargas spoke to her earlier.

[Luke Vargas]

Kim first just out of the gate here. I'm aware that the indication so far doesn't necessarily suggest that all of these attacks were related and yet it does feel at least that there is a lot happening all at once. These attacks kind of coming around the same time all target regarding the retail industry Specifically take us into these incidents and what's standing out to you about them.

[Kim Nash]

The attack on Marks and Spencer in the UK really stands out to me because their operations were down for several days. You couldn't order online. There were some store operations affected and then the company came out and said that they had $400 million in lost revenue and other costs related to the hack. And it appears to be a ransomware attack. No UK that are investigating this have definitively said who it was, but it appears to be related to the attack on the retailer there co op and also Harrods.

[Luke Vargas]

And there's been some interesting reporting that's come out about the group apparently behind this attack called Star Fraud, more widely known as Scattered Spider. The group whose motivations and tactics are pretty attention grabbing.

[Kim Nash]

They are an English speaking group. They appear to be younger people in the western world who are pretty ruthless in their tactics to extort companies. They don't necessarily deploy ransomware, but they often do and they try to interrupt operations so that you can't do business and you're more motivated to pay a ransom to them. They use a tactic called social engineering where they will call up an employee of the company and talk them into revealing their passwords, their account information so that they can get in without much hacking trouble. So they'll steal that account information and then go into the company network as that employee and then move around as quickly as they can cause their trouble.

[Luke Vargas]

And Kim, this is affecting businesses quite acutely. Some of them needing to pause online.

[Kim Nash]

Ordering, losing revenue if they're taken by surprise. Obviously it's a big cost because if you can't do business, you're really in a crunch. Victoria's Secret had to delay its quarterly reporting because internal systems were taken down and their finances finance employees couldn't get at the data needed to file their quarterly earnings report. Their online and in store operations were disrupted for three days. So there'll be some revenue impact there.

[Luke Vargas]

Right? So in the face of these attacks, I would imagine cybersecurity insurance is becoming more prevalent. If so, what does that actually cover?

[Kim Nash]

It's a specialized insurance that you can get in addition to your regular business policies. And the pricing of policies for cyber insurance has been all over the place because the risk is so unpredictable. But what it can cover is the cost of restoring operations, the cost of investigating afterwards, the cost of notifying data breach victims. So there's a menu of items that cyber insurance can cover. It's really become very prevalent, but it is cost prohibitive. Depending on your situation and how big you are as a company and what your risk is, just not in the realm of retail hacks, but here in the US The United Health Care breach, where they were out of full operation for several months and it's a huge, huge health insurance company that later admitted that it didn't have cyber insurance because the cost of insuring such a large company was too much. And so they decided to risk it and they were attacked and they have spent billions of dollars recovering from that attack.

[Luke Vargas]

Kim Nash leads a team of reporters at the Wall Street Journal covering cybersecurity and data privacy. Kim, thank you so much for stopping by.

[Kim Nash]

My pleasure. Thank you, Luke.

[Azhar Sucri]

And that's it for what's news for this Wednesday morning. Today's show was produced by Kate Bullivant. Our supervising producer was Pierce Lynch. I'm Azhar Sucri filling in for Luke Vargas for the Wall Street Journal. We'll be back tonight with then. Thanks for listening.