Economy

The appeals court’s decision delivered an important but interim victory for the Trump administration.A federal appeals court agreed on Tuesday to allow President Trump to maintain many of his tariffs on China and other U.S. trading partners, extending a pause granted shortly after another panel of judges ruled in late May that the import taxes were illegal.The decision, from the U.S. Court of Appeals for the Federal Circuit in Washington, delivered an important but interim victory for the Trump administration, which had warned that any interruption to its steep duties could undercut the president in talks around the world.But the government still must convince the judges that the president appropriately used a set of emergency powers when he put in place the centerpiece of his economic agenda earlier this year. The Trump administration has already signaled it is willing to fight that battle as far as the Supreme Court.The ruling came shortly after negotiators from the United States and China agreed to a framework intended to extend a trade truce between the two superpowers. The Trump administration had warned that those talks and others would have been jeopardized if the appeals court had not granted a fuller stay while arguments proceeded.At the heart of the legal wrangling is Mr. Trump’s novel interpretation of a 1970s law that he used to wage a global trade war on an expansive scale. No president before him had ever used the International Emergency Economic Powers Act, or IEEPA, to impose tariffs, and the word itself is not even mentioned in the statute.But the law has formed the foundation of Mr. Trump’s campaign to reorient the global economic order. He has invoked its powers to sidestep Congress and impose huge taxes on most global imports, with the goal of raising revenue, bolstering domestic manufacturing and brokering more favorable trade deals with other countries.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

Negotiators said the two governments would stick to a previous truce and reduce tensions that had escalated in recent weeks between the world’s largest economies.The United States and China have agreed to a “framework” that is intended to ease economic tension and extend a trade truce that the world’s two largest economies reached last month, officials from both countries said on Tuesday.After two days of marathon negotiations in London, top economic officials from the United States and China are now expected to present the new framework to their leaders, President Trump and President Xi Jinping, for final approval.The agreement is intended to solidify terms of a deal that the United States and China reached in Switzerland in May that unraveled in recent weeks. Commerce Secretary Howard Lutnick, who was part of the negotiating team, said American concerns over China’s restrictions on exports of rare earth minerals and magnets had been resolved.“We have reached a framework to implement the Geneva consensus,” Mr. Lutnick told reporters in London, describing the agreement as a “handshake.”He added that Mr. Trump and Mr. Xi would be briefed on the agreement before it took effect.“They were focused on trying to deliver on what President Xi told President Trump,” Mr. Lutnick said. “I think both sides had extra impetus to get things done.”The U.S. trade representative, Jamieson Greer, who took part in the discussions, said they were also focused on ensuring compliance with what was agreed to in Geneva about rare earth mineral exports and tariffs. He said the two sides would remain in regular contact as they tried to work through their economic disagreements.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

Ursula von der Leyen, president of the European Commission, announced a proposal meant to ramp up pressure on Moscow.The European Union’s executive arm unveiled its latest package of sanctions against Russia, aiming to apply pressure to President Vladimir V. Putin by damaging the nation’s energy and banking sectors.The sanctions proposed on Tuesday — which still need to be debated and passed by member states — would ban transactions with the Nord Stream pipelines, hoping to choke off future flows of energy from Russia into Europe.They would lower the price cap at which Russian gas can be purchased on global markets, hoping to chip away at Russian revenues.And they would hit both Russian banks and the so-called “shadow fleet,” old tanker ships, often registered to other countries or not registered at all, that Moscow uses to covertly transport and sell its oil around the world to skirt energy sanctions. The new measures would blacklist a new batch of ships that are being used in this way.The proposal is the 18th sanctions package to come out of Brussels since Russia’s full-scale invasion of Ukraine. Taken as a whole, the measures are a sweeping effort to threaten Russian economic might and morale at a critical juncture in the war.The announcement comes as peace talks between Russia and Ukraine stall. Despite pressure from the Trump administration to work toward a cease-fire, the latest round of talks between the two sides, earlier this month in Istanbul, created little result outside of another agreement to swap prisoners.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Citigroup is poised to increase provisions for potential bad loans by hundreds of millions of dollars for the second quarter, in a sign of growing financial stress among US consumers and businesses. “Given the macro environment [and] cost of credit compared to last quarter, we expect to be up a few hundred million dollars,” Citi’s head of banking Vis Raghavan told investors at a Morgan Stanley conference on Tuesday.The increase comes amid concerns that Donald Trump’s tariffs will slow US economic growth or even cause a recession. The US president’s levies may also raise the prices of some products — notably on imported goods from China, hitting consumers. Consumer sentiment has darkened in the US as an increasing number of Americans worry about their financial wellbeing. It has, however, stabilised as the world’s two largest economies, the US and China, work to draw up a deal to resolve their trade war.A Conference Board measure of consumer confidence rose to 98 in May, up from 85.7 in April, although it remained below the 110 reading from when Trump won November’s presidential election.JPMorgan Chase chief executive Jamie Dimon said on Tuesday that the biggest US bank by assets experienced “a teeny deterioration” in consumer finances due to the impact of higher tariffs, but he said it would take several months before the full effect became clear.“I think there is a chance real numbers will deteriorate soon,” Dimon said at the Morgan Stanley conference. “Employment will come down a little. Inflation will go up a little bit.” He added that consumers were still “feeling pretty good” and their behaviour would be driven by the labour market. “If you look at consumers — their real behaviour follows unemployment.”Raghavan said he was reassured by the fact that Citi’s credit card loan book was geared towards customers with higher credit scores. Citi is one of the largest retail lenders in the US and took a $2.7bn provision for credit losses in the previous quarter.Raghavan added that he was “incredibly reassured” by the credit quality of the bank’s corporate clients, with 80 per cent of its exposure being to high-grade issuers.Executives at some other banks have said US consumer activity seems to be holding up surprisingly well despite the uncertainty created by Trump’s threat to impose high tariffs on imports from many countries.“It’s quite possible that there will be some kind of slowdown, but we hope it’s not too meaningful,” Wells Fargo chief executive Charlie Scharf told the Bernstein conference in New York two weeks ago. “Both businesses and consumers go into that period relatively strong. So it’s a very, very odd time. It’s very hard to see any kind of trend either way.”At the end of the last quarter, the industry-wide rate of credit card charge-offs, the proportion of loans deemed to be unrecoverable, rose above the level before the Covid-19 outbreak. More

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The World Bank sharply cut its global economic growth projection Tuesday to 2.3% in 2025.
“This would mark the slowest rate of global growth since 2008, aside from outright global recessions,” the World Bank said.
It also cut its 2025 growth forecast for the U.S. by 0.9 percentage points to 1.4%, and reduced its euro area GDP expectations by 0.3 percentage points to 0.7%.

Cargo shipping containers are loaded with cranes on container ships at the Burchardkai container terminal at the harbour of Hamburg, northern Germany, on June 3, 2025.
Fabian Bimmer | Afp | Getty Images

The World Bank sharply cut its global economic growth projections Tuesday, citing disruption from trade uncertainty in particular.
It now expects the global economy to expand by 2.3% in 2025, down from an earlier forecast of 2.7%.

“This would mark the slowest rate of global growth since 2008, aside from outright global recessions,” the Bank said in its Global Economic Prospects report.
Trade uncertainty, especially, has weighed on the outlook, the World Bank suggested.
“International discord — about trade, in particular — has upended many of the policy certainties that helped shrink extreme poverty and expand prosperity after the end of World War II,” Indermit Gill, senior vice president and chief economist of The World Bank Group, said in the report.
It also cut its 2025 growth forecast for the U.S. by 0.9 percentage points to 1.4%, and reduced its euro area GDP expectations by 0.3 percentage points to 0.7%.
The Bank noted that an escalation of trade tensions could push growth even lower, but the picture could improve if major economies strike lasting trade agreements.

“Our analysis suggests that if today’s trade disputes were resolved with agreements that halve tariffs relative to their levels in late May, 2025, global growth could be stronger by about 0.2 percentage point on average over the course of 2025 and 2026,” Gill said.
The U.S. and many of its trading partners are currently in negotiations after U.S. President Donald Trump imposed steep tariffs on numerous countries in April. This week, for example, the U.S. and China are meeting in London after the two countries agreed to temporarily reduce levies following talks in May.
Negotiations are also still ongoing between the U.S. and European Union with less than a month to go before previously announced tariffs are set to come into full force.
In cutting its global growth expectation, the World Bank follows various other bodies, including the Organisation for Economic Co-operation and Development, which also cited the fallout from trade and tariff-related uncertainty as the key factor.
The OECD said earlier this month that it was expecting global growth to slow to 2.9% in 2025, also caveating its forecast with the potential for future tariff developments. It had previously forecast global growth of 3.1% this year. More

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