US and China hold trade talks after Donald Trump eyes ‘world tariff’ – business live

US-China trade talks are expected to see a truce extension, with high-level officials meeting in Sweden to monitor existing agreements and discuss rare earth metals, though no major breakthrough is anticipated. This occurs amidst President Trump's threat of a 15-20% "world tariff" on all non-deal countries, which could overshadow the recent US-EU tariff deal limiting tariffs to 15% and introduce broader market uncertainty. Separately, UK bakery Greggs reported a first-half profit decline to £64 million from £74 million despite sales exceeding £1 billion, attributing the dip to challenging market conditions and weather.

Analysis

The global trade landscape remains fraught with uncertainty despite a likely extension of the US-China trade truce. High-level talks in Sweden are focused on monitoring existing agreements, particularly concerning rare earth metals, with officials signaling that a major breakthrough is not expected. This incremental progress is overshadowed by the US administration's consideration of a 15-20% 'world tariff' on all non-deal countries, a move that could neutralize the recently negotiated US-EU deal and perpetuate market volatility. Market reaction has reflected this ambiguity, with initial optimism souring quickly. On the corporate front, UK bakery chain Greggs reported a decline in first-half pre-tax profits to £64 million from £74 million year-over-year, despite sales surpassing £1 billion. The company attributes this margin compression to challenging footfall, adverse weather, and cost headwinds, raising questions about profitability in the consumer sector even as top-line growth and store expansion continue.

Key Decisions for Investors

• Investors should remain cautious on cyclical sectors sensitive to global trade, as the potential for a broad 'world tariff' from the US administration introduces significant uncertainty that could override any progress in bilateral talks with China or the EU.
• Monitor UK consumer discretionary stocks closely, as Greggs' results—declining profits to £64m despite over £1bn in sales—indicate that rising top-line revenue may not protect against margin compression from challenging footfall and cost headwinds.
• Closely watch for any official clarification on the proposed 'world tariff' and monitor developments ahead of the August 12 US-China tariff deadline, as these events are likely to be major catalysts for market volatility.