US-China Trade Framework; Musk Regrets Posts about Trump
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Good morning, I'm Nathan Hager. And I'm Lisa Mateo. Here are the top stories we're following today. Lisa, we begin with a preliminary deal between the U.S. and China. The two countries have agreed on a framework for how to implement the consensus they reached in a prior round of trade talks in Geneva. The framework includes China's pledge to speed up shipments of rare earth metals and the U.S. easing some of its export controls. Here's Commerce Secretary Howard Lutnick.

The two largest economies in the world have reached a handshake, right, for a framework. We're going to start to implement that framework upon the approval of President Trump.

and the Chinese will get their President Xi's approval, and that's the process. So once the presidents approve it, we will then seek to implement it. Commerce Secretary Howard Lutnick says the two sides negotiated for more than 20 hours in London. The deal could still be rejected by Presidents Trump and Xi. Many issues remain unresolved, including China's trade surplus with the U.S.,

and concerns over dumping goods on U.S. markets. Meanwhile, Nathan, Bloomberg News has learned the European Union believes trade negotiations with the U.S. will extend beyond Donald Trump's July 9th deadline. The date marks the end of President's 90-day pause on most global tariffs.

After that point, U.S. charges will increase drastically for many nations, with EU facing a 50% levy if a deal can't be struck and no extension is offered. And Lisa, there is a legal victory for the president on the trade front. A court has ruled that the president can continue enforcing his global tariffs. The U.S. Court of Appeals for the Federal Circuit extended an earlier reprieve for the Trump administration, which is challenging a lower court ruling that blocked the tariffs.

arguments are scheduled for July 31st. Well, now to the latest on the unrest in Los Angeles. The city imposed a curfew last night in a stretch of downtown that's seen the highest tensions over immigration rates. Almost 380 people have been arrested across L.A. since the weekend in clashes between protesters and law enforcement. But after

President Trump authorized the deployment of 700 Marines and up to 4,000 National Guard troops into the city. California Governor Gavin Newsom is sounding a warning. - 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. IN A TELEVISED SPEECH, GOVERNOR GAVIN NEWSOM SAID ICE AGENTS HAVE BEEN JUMPING OUT OF UNMARKED VANS AND DETAINING PEOPLE IN HEAVILY LATINO NEIGHBORHOODS. THE TRUMP ADMINISTRATION HAS SAID THE CONDITIONS IN L.A. ARE SPIRALING AND FEDERAL FORCES ARE NEEDED TO SUPPORT

In other political news, Lisa, two winners have emerged in the race to be the next governor of New Jersey. And we get the very latest on that from Bloomberg's John Tucker. John. Good morning, Nathan. Republican Jack Gennarelli and Democratic Congresswoman Mikey Sherrill won their primary elections.

Sheryl emerging from a crowded field on the strength of her background as a Navy pilot and former prosecutor. In her victory speech, the 53-year-old Sheryl criticized Cittarelli as a lackey of Donald Trump and invoked New Jersey's role in the American Revolution. We are in an American crisis, but not in a war for independence.

In a fight for our future. To fight for justice, for liberty, for opportunity and for prosperity. The 63-year-old Cittarelli, a former state lawmaker and small businessman, wasn't shy about his affinity with the president. And to our most well-known part-time New Jersey resident who honored me with his endorsement and strong support, thank you, President Donald J. Trump.

Cheryl had 34% of the vote. Her closest competitor was Newark Mayor Roz Baraka with 20%. Cittarelli had 68% compared to his closest competitor, Bill Spadia, who had 22%. New Jersey has been reliably Democratic in Senate and presidential candidates, a contest for decades.

But the odd year races for governor had tended to swing back and forth. New Jersey and Virginia are the only states that hold races for governor the year after a presidential election. And results are often seen as an early barometer of voter sentiment ahead of next year's congressional midterm elections.

I'm John Tucker, Bloomberg Radio. All right. Thanks for that, John. Well, the debate continues on Capitol Hill on President Trump's $3 trillion tax and spending cut bill. Senate Majority Leader John Thune says Republicans will deliver on the president's campaign promises to end taxes on tips, overtime, Social Security and auto loans. House Ways and Means Chairman Jason Smith says any bill that doesn't would be dead on arrival.

No tax on tips, no tax on overtime. These are items that the president spoke at every one of his rallies and 77 million people voted for him. The House delivered on it. The Senate will deliver on it as well. House Ways and Means Chair Jason Smith spoke on Bloomberg's balance of power. Meantime, the House Rules Committee is moving ahead with changes to make the bill comply with Senate budget rules.

They include stripping out language, targeting an energy assistance program, Medicaid provisions in the Social Security Act, and a small amount of new Pentagon funds. Of course, as you remember, Lisa, disagreements over the tax cut bill led to a major falling out between President Trump and Elon Musk, now the world's richest man.

Maybe looking to patch things up. Let's get that story from Bloomberg's Kimberly Adams. In a posting on X in the middle of the night, the billionaire said, quote, I regret some of my posts about President Trump last week. They went too far. Musk had served as a close advisor and confidant to the president until a bitter public falling out last week.

The dispute, which was triggered by Musk's opposition to the tax cut bill Trump is pushing through Congress, posed a threat to Musk's wealth when the president raised the prospect of retaliating by cutting off his government contracts. Musk had riled Trump by claiming credit for his election victory, endorsing his impeachment, and even suggesting the president was implicated in the sex crimes of Jeffrey Epstein.

Kimberly Adams, Bloomberg Radio. Thank you, Kimberly. Meanwhile, Elon Musk's space company, SpaceX, is calling off a mission that was supposed to take off today. Four private astronauts, including the first Indian in space in more than 40 years, were scheduled to lift off to the International Space Station with NASA in Axiom Space.

Well, now the launch is being delayed to fix a liquid oxygen leak that was found during inspections of the Falcon 9 rocket. SpaceX says a new launch date for Axiom Mission 4 will be announced once the repairs are complete. Thank you, Ron Earthly. So let's turn to the markets and the economy. Futures are a touch lower this morning as investors await a key reading on inflation at

8.30 a.m. Wall Street time. We get the May Consumer Price Index, and we get a preview now from Bloomberg's Michael McKee. Economists are certain the Trump import tax will push up inflation. What they don't know is when, by how much, and for how long. Today's data should offer a first clue. The consensus is the first inflation waves could be lapping at the shore. Prices for imported goods like furnishing, apparel, and electronics are

and for used cars are expected to rise. And that should push headline and core CPI up for the first time since January. How much they rise will set the tone on Wall Street, although it will take a few more months' data for the Fed to decide whether there is a price problem. Michael McKee, Bloomberg Radio.

Thanks, Mike. Meanwhile, a growing course of advisors inside and outside the Trump administration are pushing for a familiar name to succeed Jerome Powell as Fed chair, U.S. Treasury Secretary Scott Besson. Bloomberg's Valerie Teitel says investors would likely consider Besson a safe choice to succeed Powell. But he's seen as very loyal to Trump. And we know that Trump wants these Fed cuts sooner rather than later. So perhaps if he does emerge as a clear front runner, the market might take that very dovishly.

Bloomberg's Valerie Teitel adds that President Trump said Friday he would name a successor, quote, very soon. Jay Powell's term as Fed chair ends May 2026. In company news, Lisa, General Motors is making a big move in the U.S. to help manage President Trump's tariffs. GM plans to invest $4 billion in U.S. plants over the next two years to boost output of some of its top-selling gas-powered vehicles.

GM says the investments will allow it to produce more than 2 million vehicles in the U.S. each year, reduce its reliance on Mexican factories, and add between 3,000 to 4,000 U.S. jobs. And a record for Nintendo. The company says it sold 3.5 million-plus units of the Switch

too in just four days. Nintendo has already sold more units than the original Switch did in its first month in 2017, and it's on track to meet its target of selling 15 million units by March next year.

Time now for a look at some of the other stories making news in New York and around the world. For that, we're joined by Bloomberg's Michael Barr. Michael. Thank you very much, Lisa. Representative LaMonica McIver has been indicted on federal charges alleging she assaulted and interfered with immigration officers during a skirmish outside a New Jersey detention center. McIver has disputed the allegations as baseless.

The skirmish happened last month as Newark's mayor was arrested after trying to join MacGyver and two fellow Democratic representatives who said they went to conduct congressional oversight at Delaney Hall. Police body cam video shows MacGyver's elbows pushing into an officer, but it is not clear from the video whether that contact was intentional.

Employees walked out at the CDC Tuesday one day after Health and Human Services Secretary Robert F. Kennedy Jr. removed all 17 sitting members of the Centers for Disease Control and Prevention's Vaccine Advisory Committee. Some experts are concerned, fearing this could backfire as the flu and cold season rolls around in the fall. Emergency Medicine Physician Dr. Darian Sutton.

In the short term, there's typically nothing that is significantly changing. And typically, the advisory committee makes recommendations that then leads to the approval by the Health and Human Services Secretary. And then inevitably, vaccine companies will typically cover that vaccine to provide coverage and access. So we have to wait and see how these changes will take effect in the fall, especially with the upcoming flu season.

Dr. Sutton spoke to ABC. Austria has declared a three-day period of national mourning following a massacre at a school in the city of Graz. Police say investigators found a goodbye letter and a non-functional pipe bomb when they searched the home of a 21-year-old man who opened fire at his former school, killing nine teenagers and a teacher before taking his own life.

The Air Force has reduced its request to Congress for F-35s from 48 to 24. It's a significant cut that may reflect the Defense Secretary's plan to reduce U.S. military spending by 8% over the next five years. Global News, 24 hours a day and whenever you want it, with Bloomberg News Now. I'm Michael Barr and this is Bloomberg, Lisa. Thank you, Michael.

When you have bars in the sky, onboard showers and award-winning in-flight entertainment, it's no surprise that Emirates was recently named the best airline in the world. We fly you to over 140 destinations and with partners across the globe, we connect you to another 1,700 cities across six continents. So when we say we're also the largest international airline, what we really mean is...

If you're going there, so are we. Book now on emirates.com. Fly Emirates. Fly better. Thrivent can help you plan your finances for the people, causes, and community you love. What makes Thrivent different? Financial services and generosity programs are combined to help you build a financial roadmap for the future.

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Time now for the Bloomberg Sports Update. For that, we bring in John Stashower. Good morning, John. Good morning, Lisa. The Yankees are coming off Sunday's loss to Boston, a game where Aaron Judge hit two-run homers in the first and ninth innings in Kansas City. He came up again with a man on in the first. Swing and a deep blast way out into left field. Judge can't stop, won't stop. Why would he? Two-run jack in the first. Two-nothing Yankees.

Unbelievable. Yes, that worked the call. They got out the tape measure. 469 feet for judges. 24th home run. The ball landed on the roof of the Royals Hall of Fame. Austin Wells had a three-run shot, then a two-run double. Yankees all over the Royals. 10-2. Max Fried is now 9-1. And Citi Field Mets trailed Washington 4-2 in the eighth inning. Juan Soto, who had homered earlier...

with an RBI double and then Pete Alonso drove him in to tie the game and then Jeff McNeil a walk-off hit 10th inning Mets won 5-4 they've won 13 of the last 16 the Giants have won six in a row and all by one run they scored four the ninth to beat Colorado Red Sox a 3-1 win over Tampa Bay Thunder and Pacers tied at one

Game three of the NBA Finals tonight at Indianapolis. What it's worth, Indiana 0-3 in game threes, 13-2 in all the other games. The Knicks search for a new coach had them reportedly ask for permission to interview Houston coach Yime Udoka and Minnesota's Chris Finch, and both times,

permission denied. Running back J.K. Dobbins signed with Denver, played previously with the Ravens and Chargers. First look at Aaron Rodgers in a Steelers uniform and after his mini camp workout, he was asked why he chose to play for Pittsburgh. It starts with Mike Tomlin. I've been a fan of his for a long time. There's a few iconic franchises in the NFL. I played for one of them for 18 years. This is another one of those.

there's something special about obviously this this area so many great quarterbacks are from Pittsburgh the 41 year old lifelong bachelor Rogers revealed he recently got married John Stashower Bloomberg Sports Lisa and all right thank you John taking a look at the markets once again futures still falling we have Nasdaq futures down a tenth of percent 27 points Dow futures down a tenth of percent 69 points and S&P futures falling a tenth of a percent or nine points the two-year yield

4.02%. That is little change, and the yield on the 10-year, 4.48%, and that's up one basis point. Coast to coast on Bloomberg Radio, nationwide on Sirius XM, and around the world on Bloomberg.com and the Bloomberg Business App. This is Bloomberg Daybreak. Good morning. I'm Nathan Hager. It took two days of marathon talks, but the U.S. and China have reached an agreement to restart flows of sensitive goods that they

They agreed to start in Geneva just a month ago. Commerce Secretary Howard Lutnick spoke after the negotiations wrapped up in London last night. First, we had to get sort of the negativity out. And now we can go forward to try to do positive trade, growing trade and beneficial to both China and to the United States of America.

Commerce Secretary Howard Ludnick speaking in London overnight this morning. We're joined by Bloomberg News senior editor Bill Ferry. So, Bill, is this kind of back to where we started from for the U.S. and China? Good morning.

Hey, good morning, Nathan. Thanks for having me. It is a little bit depends on how far you want to roll the calendar back. But it is, you know, roughly back to where the U.S. was at least a month ago when Scott Besson and his Chinese counterpart reached a deal in Geneva that was supposed to get trade talks on the right track.

It didn't really work out that way. But the two sides had two intensive days there in London. And and they really did seem to find an agreement. We're still waiting for the details of what was in that accord. But Howard Lutnick, when he spoke to reporters afterwards, made it clear that one key issue was.

was resolved, at least from the U.S. perspective, and that is the export of these rare earth magnets that are so critical to businesses from the defense industry to the auto industry. And it's really believed that that is what put the pinch on the U.S. to try to get a deal done quickly. You look at the market reaction this morning, a modest dip in futures with some of those details still waiting to be released here.

particularly in terms of the export controls that the U.S. had put on China. There's still a lot of questions to be answered there. Yeah, before this deal was reached, there was a lot of talk about the U.S. potentially lifting its restrictions on things like chip software design, chip software design.

software and jet engine parts and things like that. It's not clear what the U.S. conceded in this side. We have seen Asian stocks, particularly some of the consumer electronics stuff, doing quite well today. It's a bit of a contrast with the reaction in the U.S. market, which, as you said, has been a little bit down in terms of the futures.

So while we're waiting for some of those details to come out, we've got negotiations going on on multiple fronts, including with the European Union. It sounds like they're trying to reach a framework deal of their own before the July 9th deadline.

Yeah, it sounds like they are looking at potentially getting an extension already in those talks. That July 9th deadline is just under a month away, and they are hoping to get some kind of a framework agreement, but that—

that would allow kind of talks to continue without those tariffs kicking back in, those suspended tariffs. So that's something, you know, it is a sign, I suppose, of progress, but also I think just a recognition that you're not going to be able to work through all this in the span of just another 30 days or so.

All right. Turning from the trade talks to, I guess, domestic politics, the situation in Los Angeles continues to unfold. There's an overnight curfew and the war of words between President Trump and California's governor just is not letting up, Bill.

That's right. I mean, it was a little bit of an even quieter day and night compared to, really compared to the weekend when you had all those cars getting burned. Things have calmed down a bit. On the streets, the rhetoric has not really calmed down at all. There is a curfew in about a one-square-mile section of Los Angeles, fairly confined area where a lot of businesses were attacked or looted overnight, that's according to Mayor Karen Bass.

And there are now up to 4,000 National Guard troops and 700 Marines who have been authorized to deploy to the city. California Governor Gavin Newsom getting on the air today addressing his state, saying that California may be the first to face these policies from the administration, but saying it clearly won't be the last.

And so that rhetoric is continuing to escalate, even as the situation on the streets has perhaps quieted a little bit. And our last minute, while we haven't really been talking much about the war of words between President Trump and Elon Musk with what's been happening in L.A., but Elon Musk looks like he's trying to dial things back there.

Yeah, Elon Musk, who's not, I don't think, known for making a lot of apologies, saying that he regrets some of the posts he put up about Donald Trump last week, saying that they went too far. Of course, you'll remember that he said that there were mentions of Donald Trump in the Epstein files, and he said, have a nice day, DJT, after posting that. He never provided any evidence for it, but it was seen as a particularly low blow against the president.

And obviously, you know, part of the bigger meltdown we've seen these two leaders have. This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond. Look for us on your podcast feed by 6 a.m. Eastern each morning on Apple, Spotify, or anywhere else you listen. You can also listen live each morning starting at

5 a.m. Wall Street time on Bloomberg 1130 in New York, Bloomberg 99.1 in Washington, Bloomberg 92.9 in Boston, and nationwide on Sirius XM Channel 121. Plus, listen coast to coast on the Bloomberg Business app, now with Apple Podcasts.

CarPlay, and Android Auto interfaces. And don't forget to subscribe to Bloomberg News Now. It's the latest news whenever you want it in five minutes or less. Search Bloomberg News Now on your favorite podcast platform to stay informed all day long. I'm Nathan Hager. And I'm Lisa Mateo. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

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