U.S. and China Agree to ‘Framework’ for Trade Deal
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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. He again chose escalation.

He chose more force. He chose theatrics over public safety. And we look ahead to the big event for markets today, U.S. inflation data. It's Wednesday, June the 11th. I'm Azhar Sukri 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 economies. 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 US Commerce Secretary Howard Lutnick

said the US and China have reached a, quote, handshake for a framework, including on the key issues of rare earth minerals.

Absolutely expect that the topic of rare earth minerals and magnets with respect to the United States of America will be resolved in this framework implementation. That is a fundamental part of that. 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 31st, 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 8 p.m. to 6 a.m., 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 deployments of the U.S. Marines in California was an authoritarian overreach. 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 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. 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.

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.

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.

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

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.

And 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 Gen AI. So before we now over-regulate, 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're 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 will tell you who's feeling the pain after the break. Isn't home where we all want to be? Reba here for Realtor.com, the pro's number one most trusted app. Finding a home is like dating. You're searching for the one. With over 500,000 new listings every month, you can find the one today.

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Victoria's Secret, North Face, Cartier, they're among the most recognisable retail brands and they're also among the latest targets of cyber criminals. Here in the UK, Harrods, Marks & Spencer and Co-op have also seen customer data stolen. Kim Nash leads our team of reporters at the Wall Street Journal covering cyber security and data privacy. Our Luke Vargas spoke to her earlier.

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 targeting the retail industry specifically. Take us into these incidents and what's standing out to you about them.

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 U.K. officials 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. 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. 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. And Kim, this is affecting businesses quite acutely.

Some of them needing to pause online 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 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. So in the face of these attacks, I would imagine cybersecurity insurance is becoming more prevalent. If so, what does that actually cover? 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 there

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 Healthcare 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 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 my pleasure. Thank you, Luke and

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 Sukri, filling in for Luke Vargas for The Wall Street Journal. We'll be back tonight with a new show. Until then, thanks for listening. MUSIC

Isn't home where we all want to be? Reba here for realtor.com, the pros number one most trusted app. Finding a home is like dating. You're searching for the one. With over 500,000 new listings every month, you can find the one today.

Download the Realtor.com app because you're nearly home. Make it real with Realtor.com. Pro's number one most trusted app based on August 2024 proprietary survey. Over 500,000 new listings every month based on average new for sale and rental listings. February 2024 through January 2025.