Is the End in Sight for Trump’s Trade War?: 2025.06.30
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In this roundup, we take a closer look at the status of the US trade deal negotiations around the world.
The talks with China appear to be moving in the right direction. At least that is the assessment of the US officials involved – which, after six months of Trump, should be taken with a “huge” grain of salt, EPM notes. In any event, China is indicating it will end its restrictions on the export of rare earth minerals and we think that is certainly a positive sign.
The EU is also optimistic it can achieve a deal, while Canada appears to be bow to every US demand. It quickly scrapped a digital sales tax over the weekend, after Trump on Thursday said he would refuse to negotiate as long as it was in place (and stepped-up talk of Canada as the 51st state).
Most other countries should expect to receive a letter from the US shortly, in which they will be informed of the tariffs the US has unilaterally imposed on them. EPM notes that could be another pressure tactic by the Trump administration – but we also believe they are crazy enough to actually do it!
Our main EPM takeaways, then. Firstly, the positive. As the deadline approaches, it seems like uncertainty will be reduced. Secondly, as the US is nowhere near achieving its goal of 90 deals in 90 days, we would indeed not be surprised if Trump just unilaterally imposes additional tariffs on most countries, without talking or properly thinking things through. Thirdly, and related, the rest of the world will not sit still if indeed Trump hikes tariffs. As some countries will try to evade the tariffs, others try to avoid them, and again others will want to retaliate, trade flows will change.
So in short, we expect more certainty in the short term, but leading to significant disruption.
Furthermore, we look at:
The status of the “BP carve up”
The US – Israel Alliance War on Gaza, where new lows continued to be achieved; Israeli soldiers have come forward to confirm they have been ordered to shoot at civilians gathering for aid at the GHF centers; and the Alliance stands accused by the Gazan Health Ministry of lacing the flower it provides as aid with oxycodone
The US – Israel Alliance War on Iran, where CIA director Ratcliff appears to provide trump a way out of his embarrassment, saying that because Iran’s sole metal conversion facility was destroyed, effectively the country’s nuclear program was set back by years; EPM notes that he did not say Iran nuclear facilities were destroyed
The US – Israel Alliance War on Lebanon, as late last week Israel surprised southern Lebanon with the heaviest bombardment since the announcement of the ceasefire; and people on the ground note that Israel’s continued violations of this ceasefire have effectively turned southern Lebanon into an uninhabited buffer zone, which is what EPM always said was the Israeli objective
Russia’s War in Ukraine, where a summer offensive is now clearly underway
Google’s bet on fusion energy, via a second investment Commonwealth
General Energy
Oil prices are steady at the moment, with Brent hovering around $67.50 and WTI around $65.50. The longer the ceasefire regarding Iran holds, the more the market will be looking at other things, most importantly the outlook for the global economy and OPEC+ supply. As to the latter, this is where EPM’s analysis of the Trump Tariff War will hopefully be useful to you.
The Financial Times has an update on the sale of BP. Shell recently declared it had “no intention” of pursuing a deal. Under stock market rules, Shell is now bared from making an offer until the end of this year. Few others would really want to purchase all of the company, is a common belief. The Gulf of Mexico is widely considered BP’s crown jewel. The company is working to raise production there to 400,000 barrels of oil per day. BPX meanwhile, could appeal to US bidders seeking acreage in the huge shale basins in Texas. There’s its profitable lubricants arm Castrol. BP’s renewables unit, with an enterprise value of $14bn, may be too large for a single buyer. But potential other bidders for BP’s “crown jewels” might be thinking that the current low oil price environment will make BP more desperate to cut a deal.
Macroeconomics & Technology
The US and China are making progress in their trade talks. On Friday, China said that it will review and approve export applications for controlled items while the US will also remove some limits, writes the South China Morning Post. US Commerce Secretary Howard Lutnick also told reporters that the US and China reached a deal. The flow of rare earth minerals from China to the US will resume unimpeded again, he said. Lutnick also said the US plans to reach agreements with 10 major trading partners in the coming weeks. The deadline for individual countries to negotiate trade terms before higher tariff rates are reinstated – import duty hikes were paused for 90 days shortly after their unveiling on April 2 – is July 9.
The European Union believes it can clinch some form of a trade agreement before the July 9 deadline, when Washington is set to impose a 50% tariff on nearly all EU products and the bloc plans to unleash its own series of countermeasures, writes Bloomberg. EU Commission President Ursula von der Leyen told EU leaders behind closed doors that she was confident a deal could be reached before the deadline to avoid an economically damaging escalation, according to people familiar with the matter. Von der Leyen said that the Trump administration had shared a new proposal this week.
US President Donald Trump declared he was cutting off trade talks with Canada "immediately", writes the BBC. The move, announced on social media, comes as the neighbouring nations had been working to agree a trade deal by mid-July.
We are hereby terminating ALL discussions on Trade with Canada, effective immediately. We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven-day period.
The US President said he was ending talks due to what he called an "egregious tax" on tech companies and added he would announce new tariffs on goods crossing the border within the next week. Canada's 3% digital services tax has been a sticking point in its relationship with the US since the law was enacted last year. The first payments are due on Monday. Business groups estimate it will cost American companies, such as Amazon, Apple and Google, more than $2bn a year. In response, Canada scrambled to quickly rescind the digital sales tax, writes Reuters. Canadian Prime Minister Mark Carney and U.S. President Donald Trump will now resume trade negotiations in order to agree on a deal by July 21, the Canadians say. EPM notes that it is a sad day for so-called sovereignty as foreign power just changed Canadian law with a social media post.
For most other countries a trade deal is no longer needed, Trump says. The US will simply send them letters to inform them of their assigned tariff rates, writes Axios. We made deals, but I'd rather just send them a letter, a very fair letter, saying 'congratulations, we're going to allow you to trade in the United States of America, you're going to pay a 25% tariff, or 20%, or 40 or 50%.' I would rather do that," Trump said. “I'm going to send letters. That's the end of the trade deal," Trump added, giving US ally Japan as an example. “Dear Mr. Japan, here's the story. You're going to pay a 25% tariff on your cars," he said. Trump said letters would go out "pretty soon" and that "we don't have to meet. We understand, we have all the numbers."
Geopolitics
As to Gaza, there is now testimonial evidence of what every observer already knew about the US – Israel Alliance’s “aid operation” in Gaza, under the banner of the Gaza Humanitarian Foundation. EPM has said from the beginning that GHF has nothing to do with humanitarianism, and that instead it is part of the Alliance’s war plan against the people of Gaza. The daily massacres of Gazan civilians trying to get food from the GHF provided sufficient evidence that this part of the Alliance’s war plan is indeed utterly evil, sadistic. Now, Israeli soldiers have come forward and testified that they were told by their superiors to shoot at the starving Gaza’s outside the GHF facilities, writes The National. Commanders ordered their troops to fire at crowds to drive them away or disperse them, even though it was clear the people posed no threat. One soldier said:
It's a killing field. Where I was stationed, between one and five people were killed every day. They're treated like a hostile force – no crowd-control measures, no tear gas – just live fire with everything imaginable: heavy machine guns, grenade launchers, mortars. Then, once the centre opens, the shooting stops, and they know they can approach. Our form of communication is gunfire.
The soldier said he was unaware of "a single instance of return fire. There's no enemy, no weapons". At least 549 Palestinians have been killed while waiting for food aid near the GHF distribution centres since they began operating late in May.
In response to the testimonies by the Israeli soldiers, the head of the GHF actually released a statement in defense of the Israeli army, writes the BBC. The head of the GHF said
We spent an extended period of time trying to understand what actually happened, if anything actually happened and whether there's a way that we can make it less likely to happen. In most circumstances we haven't been able to identify anything happening. People need to understand that it is disinformation that people going to GHF sites are being killed, we have no evidence of that happening in proximity to our sites.
EPM notes that if there were any doubts left as to what role the GHF plays, its narrative forms the basis of a cynical attempt at gaslighting the world, and should clear any lingering doubts.
Meanwhile, what is left of the Gazan health authority has accused the GHF of lacing the flour it provides to Gazans with oxycodone, the highly additive opioid, writes Timeline Daily.
And as if all this wasn’t bad enough already, Israel attacked the tented refugee camps scattered across Gaza over the weekend, writes the Associated Press. Muwasi near the southern city of Khan Younis was struck, as was the Palestine Stadium in Gaza City. At least 72 people were killed in these attacks on Friday alone, with as usual a majority being women, children and the elderly. At least 86 people were killed as the result of Israeli attacks in the 24 hours before midday on Sunday, the BBC writes.
As to Iran, US president Trump repeated his statements that the 12-day Iran War by the US – Israel Alliance has severely affected not only Iran, but also Israel. At NATO summit in The Hague last week Trump said, “Israel got hit really hard. Boy, those ballistic missiles took out a lot of buildings.” EPM speculates, based on open source intelligence, that Iran did not hit random buildings inside Israel, and as such what Israel lost was probably much more than just buildings. Then on Friday during a press conference Trump said the two countries wouldn't resume fighting because they are “exhausted”, writes The National. “I tell you they're exhausted, and Israel's exhausted too,” he said. “And I dealt with both of them, and they both wanted it settled, both of them, and we did a great job.”
During the same press conference, Trump also let it be known that he is furious with the Iranian supreme leader the Ayatollah Khamenei’s statements last week in a public address, where he said that Iran had won the 12 day war against it by the US – Israel Alliance and that it had “slapped America in the face”. The National writes that Trump took personal offence and has now cancelled all talks about sanctions relief for Iran.
Meanwhile, CIA Director John Ratcliffe told US lawmakers that the American military strikes on Iran destroyed its lone metal conversion facility, and that this is a major obstacle to Iran restarting its nuclear program, writes the Associated Press. Reading between the lines, EPM notes that Ratcliff did not say Iran’s enrichment facilities were destroyed. But he also told US lawmakers that the intelligence community assessed the vast majority of Iran’s amassed enriched uranium likely remains buried under the rubble at Isfahan and Fordo, two of the three key nuclear facilities targeted by US strikes.
Rafael Grossi, head of the International Atomic Energy Agency, was more skeptical on Sunday. The Associated Press writes that he said that the three Iranian sites with “capabilities in terms of treatment, conversion and enrichment of uranium have been destroyed to an important degree.” But, he added, “some is still standing” and that because capabilities remain, “if they so wish, they will be able to start doing this again.”
As to Lebanon, Israel again attacked southern Lebanon through a series of airstrikes on Friday, writes the Washington Post. Analysts and officials on the ground called it some of the most significant strikes since Israel and Hezbollah agreed to a ceasefire in November. The National News Agency reported there were more than 20 hits in under 15 minutes. Lebanon’s official National News Agency reported an Israeli airstrike hit a residential building in Nabatieh, killing 2 and injuring at least 21 people. The repeated Israeli attack on southern Lebanon area have left it a no-go zone for its residents, which has now become a de facto depopulated buffer zone for Israel. EPM notes this was the Israeli objective all along, and we called it as such even during the “official” war – because in Lebanon’s south, the ceasefire never really ended hostilities. The International Crisis Group is warning that this is causing deep resentment in Lebanon not only against Israel, but also against the overseers of the ceasefire, the US and France, and against the new Lebanese government, effectively installed by the US, for not doing anything against the Israeli ceasefire violations. We at EPM repeat our view that this is the natural outcome of the US – Israel Alliance and its complete disregard for the interests of the millions of people living around Israel and, that we predict will be the root cause of the next asymmetric conflict that inevitably come to the Middle East. While their actions are arrogant and come across as significantly indifferent to suffering of others, examined from the perspective of great power politics, the US and Israel are executing on a grand strategy designed to secure their interests and are doing so with ruthless clarity and action. The message is loud and clear and echoes George Bush Jr.’s quote: “You’re either with us, or against us”.
As to Ukraine, Russia is ready for its summer offensive, writes The National Interest. NI provides a holistic review of the current state of the war, including the front line situation, tactical objectives, and the supply chain strengths and weaknesses. EPM notes a few key points from the article, that warrants a full read by anyone interested in the Ukraine War. On the battlefield, the primary Russian aim appears to be stretching Ukrainian forces thin across multiple fronts to increase pressure on Donetsk Oblast, which is Moscow’s primary objective. Russia recently opened new front in Sumy fits into this. A key Russian operational tactic is to use fiber-optic drones to attack the Ukrainian supply line. Russia says 65% of Ukrainian casualties result from this tactic, with only 35% resulting from actual front line fighting. The tactic has left Ukraine facing an acute shortage of trucks, pickups, and armored transport vehicles. The China-Iran-Russia axis has accelerated Russia’s technological advancement; its partnership with Iran enabling domestic significant production of Iranian-designed Shahed drones. Chinese companies and the supplies they provide are key reasons Russia can sustain its war. North Korea is provided Russia with manpower for its factories, as well as military support to protect Russian territory from Ukrainian counteracts. Russia is also hosting Chinese officers to enable China to learn from the Ukraine War.
Energy Transition
Google has agreed to purchase 200 megawatts of power from Commonwealth Fusion System’s planned first commercial plant, which is expected to begin delivering electricity to the grid in the early 2030s, writes Bloomberg. Commonwealth, which was spun out of the Massachusetts Institute of Technology, has raised more than $2 billion, far more than any of its rivals. The company has been building a demonstration system at its Devens, Massachusetts, headquarters. That device, Sparc, is expected to achieve a critical milestone in 2027, triggering a fusion reaction that generates more energy than is needed to sustain the process. That will pave the way for Arc, the larger, commercial version that may go into service at the Virginia site in the early 2030s. This is Google’s second investment in Commonwealth. Its previous investment in Commonwealth went toward research and development of the company’s high-temperature super-computing magnets, which are used to contain a super-heated cloud of plasma that releases energy as hydrogen atoms fuse into heavier elements. The additional capital will help Commonwealth fund development of both Sparc and Arc simultaneously instead of one after the other.
