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Good morning Intriguer. There are weekends when nothing happens, then there’s this one, somehow featuring an India-Pakistan ceasefire, a US-China trade truce, US-Iran nuclear talks, a Hamas hostage release, and Putin saying he’s open to direct Ukraine peace talks, all before that Monday frosted blueberry Pop Tart even hit your plate.
Today’s briefing gets you up to speed on all of it, but leads with the US-China trade truce, so let’s dive in.
$4 billion
That’s how much cash the world’s largest EV battery-maker (China’s CATL) hopes to raise on the Hong Kong stock exchange, in what could be the world’s biggest listing this year.
A US-China trade truce
The top economic representatives of the US (Scott Bessent) and China (He Lifeng) just emerged from a weekend of talks at the Swiss ambassador’s UN residence on Lake Geneva, and announced they’ll lower tariffs and de-escalate their trade war.
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The US will cut its tariffs from 145% to 30%, while…
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China will drop its 125% tariffs to 10%.
In practice, this means trade between the world’s two biggest economies is once again viable, though this is just a 90-day pause while they find a more permanent solution.
In the meantime, both sides are still claiming this weekend’s talks were the result of the other’s desperation, so as talks continue, it’s worth exploring: who has the cards here?
That depends on three questions:
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Who can find substitute goods?
Friday saw zero US-bound ships depart China for the first time in recent history (excluding Covid), while China’s manufacturing activity has started to contract. Meanwhile, US ports like LA just saw arrivals drop by a third last week, and US trucking stocks have plunged.
All that to say… this trade war is moving from the front pages onto our world’s shelves. But can’t we just buy from elsewhere? Sure, the US can get cheap jeans and flatscreens from (say) Bangladesh or Mexico, while China is already getting more soy from Brazil.
The challenge, however, is when there’s no substitute: for the US, despite years of diversification efforts, it still relies on China’s rare earths, solar panels, and batteries, while China still needs the US for advanced chips, pharma, and key industrial chemicals.
So, who's got the cards? Both Beijing and DC.
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Who can find substitute markets?
China is way more dependent on selling stuff to the US than vice versa:
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China exports triple to the US what the US sells to China, and
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China's exports to the US alone are ~2.8% of China's GDP (it's <0.5% for the US)
So, US leaders have cited these figures as evidence why China needs the US more.
But as this trade war moves into boardrooms, China’s firms have already started selling a) to the US via third countries, b) to other markets, and c) back home at steep discounts (though there are costs and challenges with each).
It’s a little trickier for the US, with its China export base more concentrated on soy, oil, jets, and chips. China is the world’s single-largest buyer across each of those categories, and there’s just nobody else out there willing or able to buy that much US soy or Boeings.
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So, who's got the cards? Both Beijing and DC
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And… who can withstand the politics?
As the head of China’s Communist Party, Xi can silence local reporting on the economic fallout, and quash any related unrest, while his state outlets continue to talk tough.
As for Trump, he’ll face the democratic rigours of a free press, opinion polls, and next year's mid-terms. And that might shape his negotiation timeline or willingness to shift.
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So, who's got the cards? As an unelected authoritarian, Xi might just have an edge.
Anyway, they both have some cards, which might be why they’ve both just de-escalated.
Intrigue’s Take
America’s big bet was that, by integrating China into the global economy, the US model would win by nudging China to liberalise both its economy and its politics. But Xi has now shown an ability to do the opposite, jujitsu-ing markets to serve his own political strategy.
But timing is everything. History might show that Xi moved too early when he abandoned Deng's 'hide and bide' approach to reveal a more assertive China abroad. And history might show the US has now moved a little late in response.
Meanwhile, the US might've also mis-timed its strategy: it makes sense to gather trading partners, then jointly approach China with more leverage. But that happened already — it was called the Trans-Pacific Partnership and would've had the US at the helm of a deal covering 40% of global trade. But by the time that deal landed, US public opinion on trade had cratered, and both 2016 candidates disavowed it.
Even if a future administration wants to revisit that kind of strategy, 2025 isn't 2016: China is now the top trade partner for more countries than the US by ~two-to-one, and those capitals will now be more reluctant to jeopardise their China ties.
Still, with this de-escalation, both Xi and Trump now have space to plan their next move.
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Meanwhile, elsewhere…
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🇺🇦 UKRAINE – Zelensky and Putin to have in-person talks? Comment: While hosting European leaders in Kyiv, Zelensky has really put Putin in a bind here: if Putin agrees to a ceasefire, he has to explain what his million casualties were for. If he again refuses, the world gets more clarity that maybe Ukraine’s self-defence wasn’t the problem, after all. |
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🇺🇸 UNITED STATES – Hamas to release last living US hostage. |
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🇵🇱 POLAND – Warsaw says Moscow behind mall fire. Comment: Europe has long accused Russia of waging a hybrid war to impose costs on the West’s support for Ukraine’s self-defence. The risk of that hybrid strategy is that, at some point, it might just jolt Europe awake instead. |
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🇮🇳 INDIA – Wobbly ceasefire with Pakistan holds. Comment: The two sides are both claiming victory but the truce doesn’t appear to address the underlying drivers, like India wanting an end to cross-border terrorism — and meanwhile, the real winner here might be China, whose J-10C jet downed some of India’s French-made Rafales. Stocks in the J-10C’s maker have soared. |
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🇦🇱 ALBANIA – Uncertainty over election results. |
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🇮🇷 IRAN – The US and Iran agree! (to more talks) Comment: Trump’s two-month ‘deal or war’ deadline for Iran expired last week, but his impending visit to Iran’s rivals in the region is a way to maintain pressure. |
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🇵🇦 PANAMA – Former president gets asylum in Colombia. Comment: These asylum deals often work along ideological lines, but we now have left-leaning Colombia helping right-leaning Martinelli. Colombia’s Petro probably wanted to bolster his regional credentials, help fellow leftist Nicaragua out of a bind, and help neighbouring Panama move on from Martinelli’s destabilising presence. |
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🇦🇫 AFGHANISTAN – Taliban bans chess. |
Extra Intrigue
🤣 Your weekly roundup of the world’s lighter news
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A local has managed to gain entry to the Japan 2025 Expo using an 85-year-old ticket to Japan’s postponed 1940 expo.
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A Swiss woman is in court after repeatedly feeding her neighbour’s cat, which eventually just stopped returning home.
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A British broadsheet has had to hit ctrl-z after publishing a headline claiming China had invaded Taiwan (turns out it was just a hypothetical piece).
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A tourist in the Philippines has been bitten by a crocodile after mistaking it for a statue.
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And speaking of innocent but dangerous mistakes, Nicolas Cage is claiming he’s regularly mistaken for Nick Cave.
Space relic of the day
The Soviet Venera 8, which looks similar to the Kosmos 482 in question. Credits: NASA.
They say aim for the stars and you might hit the moon. So the Soviets aimed for Venus in 1972, but a malfunction meant their Kosmos 482 satellite never made it out of Earth’s orbit. That’s where it remained stuck until this Saturday morning, when it crashed back into the Indian Ocean (west of Indonesia), a half century later.
Today’s poll
Who do you think holds *more* cards? |
Thursday’s poll: Which long-term trend makes you optimistic for our future?
🩺 Medical breakthroughs (23%)
🌳 Renewable energy growth (30%)
💻 Technological advancements (21%)
💸 Declining global poverty (10%)
✏️ Improving global literacy (10%)
✍️ Other (write in!) (5%)
Your two cents:
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✍️ N.J: “Over 75 years without a nuclear war!”
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💻 M.D.F: “General tech advancements will accelerate medical breakthroughs and renewable energy as well, while helping to lift more people out of poverty.”
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🩺 R.B: “Medical advancements in cancer treatment and even just hip replacement has made it possible to live a longer and more enjoyable life.”
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✏️ J.E: “With literacy comes innovation.”
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✍️ E.K.H: “My own increasing involvement in politics. I'm tired of watching other people tear everything apart, now I'm starting to see a future where I can help rebuild it.”