PDB Afternoon Bulletin | May 7th, 2025: China Caves, Agrees To Trade Talks With US & The Fallout From India's Strike On Pakistan
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It's Wednesday, the 7th of May. Welcome to the PDB Afternoon Bulletin. I'm Mike Baker, your eyes and ears on the world stage. All right, let's get briefed. First up, U.S. and Chinese officials are set to meet this weekend for the first direct trade talks since the tariff war began last month, though experts caution there's likely a long road ahead before a new deal is reached.

Later in the show, we'll have the latest on India's deadly airstrikes inside Pakistan early Wednesday. The strikes mark the most dangerous escalation between the nuclear-armed rivals in decades. But first, today's PDB Afternoon Spotlight. It appears that trade tensions between the U.S. and China are beginning to thaw as Beijing and Washington agree to take the first steps towards finding a resolution to the crippling tariff war.

U.S. Treasury Secretary Scott Besant announced Tuesday that he and senior U.S. Trade Representative Jameson Greer will meet in Geneva, Switzerland this weekend with Chinese economic czar Qi Lifeng to break the ice on the subject of mutual de-escalation.

The apparent U-turn by China, which until now has publicly refused negotiations unless the US unconditionally drops its tariffs, comes as the communist regime's export-dependent economy begins to buckle, marked by factory shutdowns and mass layoffs. That's according to our report from Reuters.

The Geneva talks, which will run from May 9th through the 12th, are expected to cover possible reductions to Trump's 145% tariffs and Beijing's 125% retaliatory tariffs, as well as potential exemptions for specific product categories critical to both the U.S. and Chinese economies.

But don't expect a major breakthrough. Financial analysts say the talks will likely only serve as a starting point for more negotiations, which many expect will drag on for several months or even upwards of a year.

In an interview with Fox News on Tuesday, the Treasury Secretary said, "...my sense is that this will be about de-escalation, not about the big trade deal, but we've got to de-escalate before we can move forward." He added, "...we have a shared interest that this isn't sustainable, and 145%, 125% is the equivalent of an embargo. We don't want to decouple, he said. What we want is fair trade."

For their part, Chinese officials have said their participation in the talks is not a sign of them caving to U.S. pressure, but based on a consideration of global expectations, China's interests, and appeals from American businesses and consumers. At a daily press conference on Wednesday, a spokesman for China's foreign ministry stated that Beijing's, quote, position of firmly opposing U.S. abuse of tariffs has not changed, end quote. They

They added, "If the United States wants to resolve the issue through negotiations, it must face up to the serious negative impact of unilateral tariff measures on itself and the world."

While China's statements are certainly geared at downplaying expectations for the summit, global investors appeared more optimistic. The news drove stock markets in the U.S., China, and Hong Kong higher on Wednesday, rekindling hopes that some economic relief is finally in sight.

So, why the U-turn on negotiations from China? Well, as we've discussed earlier this week, China's massive factory sector has so far borne the brunt of the economic standoff, with factory activity contracting at its fastest pace in 16 months. Major global banks have now cut China's full-year growth forecast to around 4%. That's well below Beijing's official target.

And Goldman Sachs recently estimated that some 16 million jobs across Chinese industries are now at risk. China's export orders have also hit their lowest levels since the worst days of the COVID lockdowns.

The severe hit to China's economy has already prompted the Chinese Communist Party, the CCP, to begin quietly exempting a host of U.S.-made products from their 125% retaliatory tariffs. While China is not publicly acknowledging the exemptions, they are substantial, applying to roughly $40 billion in goods, or nearly a quarter of all Chinese imports from the U.S. this year.

Still, the impact on China's domestic economy has sparked major protests across the country, with thousands of disgruntled workers taking to the streets in recent weeks to demand back pay and to challenge layoffs linked to the wave of factory closures. In one of the more extreme examples, construction workers in a northeast province recently climbed onto rooftops and threatened to jump unless they were paid.

But the pain may also soon set in for U.S. businesses and consumers. The International Monetary Fund recently slashed growth forecasts for the U.S. Cargo volumes into the U.S. have fallen by as much as 60%. And most American businesses will need to restock by mid-May, and major retailers have warned consumers to brace themselves for higher prices and empty shelves.

All right, coming up next, the latest on India's deadly airstrikes inside Pakistan early Wednesday as the two nuclear-armed rivals hedge closer to a major conflict. I'll be right back.

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Welcome back to the Afternoon Bulletin. We're learning new details about India's airstrikes inside Pakistan early Wednesday. Islamabad has denounced the operation as an act of war after at least 31 people were killed, marking one of the most dangerous escalations between the nuclear-armed rivals in years.

As we discussed on today's PDB, the strikes, dubbed Operation Sindor, lasted just 25 minutes and targeted nine locations across Pakistan and Pakistan-administered Kashmir. The Indian military said the targeted sites were linked to the Islamist terror groups Jaish-e-Mohammed and Lashkar-e-Taiba.

New Delhi holds Lashkar-e-Taiba responsible for last month's grisly attack in the Indian-administered part of Kashmir, which left 26 Indian tourists dead. According to the Indian Defense Ministry, the strikes destroyed what it described as "launch pads, weapons stockpiles, and Islamic terrorist recruitment centers used to facilitate cross-border terrorism."

India's foreign secretary told reporters that intelligence indicated, quote, further attacks against India were impending, prompting what the military called a, quote, measured, responsible, and non-escalatory response. The military added that, quote, only known terror camps were targeted, and the munitions selected were calibrated to reduce civilian casualties.

Islamabad disputes that account. Pakistani government officials claimed just six sites were hit, not nine, and dismissed the existence of any terrorist infrastructure in the areas struck. They said 26 people were killed on Pakistani soil, including civilians, and accused India of attacking mosques in regions along the shared border. Another seven people reportedly died in Pakistani-controlled Kashmir during retaliatory artillery exchanges.

India, meanwhile, reported its own casualties from Pakistani shelling but did not provide figures. Pakistani Prime Minister Sharif condemned the strikes, saying they "violated Pakistan's sovereignty" and vowed a "measured but forceful response." He claimed Pakistani forces shot down five Indian aircraft, though that figure has not been independently confirmed.

Indian and Pakistani media outlets did report that at least two Indian aircraft were downed, one in India and another near the line of control. An Indian defense official later confirmed three aircraft had gone down, though investigations into the causes and the exact number of jets remain ongoing.

Indian Prime Minister Modi has yet to issue a public statement. Notably, just minutes before the operation commenced, the Indian Army posted a video to X showing troops in combat formation with a caption of, quote, "'Ready to strike, trained to win.'"

International reaction has been swift. President Trump called the situation a "shame" and urged both countries to show restraint. Secretary of State Marco Rubio echoed that message, stating he was in direct contact with counterparts in New Delhi and Islamabad. UN Secretary-General Antonio Guterres urged both sides to exercise maximum military restraint.

And, as with so many India-Pakistan flashpoints before, it remains unclear whether Wednesday's strikes mark the start of a sustained military campaign or remain a limited exchange between the two nuclear-armed neighbors.

And that, my friends, is the PDB Afternoon Bulletin for Wednesday, the 7th of May. If you have any questions or comments, please reach out to me at pdbatthefirsttv.com. And of course, to listen to the show ad-free, which, you know, you can do, just become a premium member of the President's Daily Brief by simply visiting pdbpremium.com. I'm Mike Baker, and I'll be back tomorrow. Until then, stay informed, stay safe, stay cool.

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