Deal Reached Between US and China
Tuesday, May 13, 2025
World Events — America and China Reaches a Trade Deal
The Economists
America has given China a surprisingly favorable tariff deal, at least for the next 90 days, following intense negotiations in Geneva. Both countries agreed to slash their “reciprocal” tariffs from 125% to just 10%, a dramatic reduction that offers immediate relief from the escalating trade war. China will also roll back other retaliatory measures, such as restrictions on rare-earth mineral sales. Earlier, both sides had imposed much steeper tariffs-America’s reaching as high as 145%-in a tit-for-tat escalation that threatened to freeze trade entirely and destabilize global markets. The Geneva agreement, reached in a more informal and conciliatory setting, was prompted in part by financial turmoil and pressure on both economies, with U.S. officials conceding that the previous tariffs had become “the equivalent of an embargo,” which neither side wanted. Markets responded enthusiastically: U.S. stocks and the dollar surged, and Hong Kong’s Hang Seng index jumped as well. However, this truce is temporary; if no broader deal is struck in the next 90 days, tariffs could snap back to 34% or higher, leaving uncertainty about the long-term outlook. For now, China enjoys a low 10% reciprocal tariff-better than any other U.S. trading partner-despite being the only country to openly defy Washington’s tariff demands.
Tech — Apple Using AI to Manage Battery in IOS19
Bloomberg
Apple is set to introduce an AI-powered battery management feature in iOS 19, leveraging its Apple Intelligence platform to analyze individual user habits and dynamically optimize power consumption across apps and system features. This tool, designed in part to address the smaller battery in the upcoming ultra-thin iPhone 17 Air, will use extensive device data to predict when and how to reduce energy use, aiming to extend battery life without compromising performance.The new mode will also add a lock-screen indicator showing estimated charging time and will be available to all iPhones compatible with iOS 19, not just the latest models. This move underscores Apple’s broader push to integrate practical AI features into its core products, as it seeks to enhance everyday usability and address long-standing user complaints about battery life.
Business — Irrational Exuberance (Tesla’s Stock)
Bloomberg
Tesla’s return to a trillion-dollar market valuation is driven less by improvements in its core business and more by investor enthusiasm following the temporary US-China tariff truce, which sparked a broad market rally and sent Tesla shares up nearly 7%. Despite this surge, the fundamentals remain shaky: Tesla’s sales in China, its most important EV market, have declined for seven straight months, and its market share there has dropped, while European sales are also weak. The company’s massive valuation-now at 133 times forward earnings-appears disconnected from its recent operational struggles, including disappointing earnings, slowing growth, and the lackluster performance of new models like the Cybertruck. Instead, the stock’s rise reflects a kind of collective amnesia, as investors focus on fleeting positive “vibes” from Washington and hopes for future products, rather than grappling with Tesla’s persistent competitive and operational challenges.
Relationship — Can an Optimist and a Pessimist be Compatible?
Verywell Mind
An optimist and a pessimist can indeed be compatible in a relationship, as their differing outlooks can create a healthy balance-optimists bring hope and creative problem-solving, while pessimists offer realism and risk-awareness, helping each partner broaden their perspective and temper extremes. However, this dynamic can also present challenges, such as misunderstandings or frustration if each partner tries to change the other or fails to appreciate their viewpoint, potentially leading to conflict or resentment. Open communication, empathy, and a willingness to validate each other’s feelings are crucial strategies for navigating these differences; discussing both positive and negative possibilities prepares both partners for whatever comes and helps avoid surprises. Ultimately, accepting and respecting each other's perspectives, rather than dismissing or trying to "fix" them, allows both the optimist and pessimist to support each other and build a stronger, more resilient partnership, with couples therapy as a helpful resource if miscommunication persists.
The Daily Spark
FDIC data shows that the banking sector is currently holding almost $500 billion in unrealized losses on investment securities. In a stagflation scenario, the risk is that rates will be higher for longer and credit losses will begin to accumulate, in particular for lenders to tech, growth, and VC, where borrowers are characterized by having no earnings and low coverage ratios.
Song Recommendation — Supercut (TWINSICK Remix)
Quote of the Day
“It is better to have dreamed a thousand dreams that never were than never to have dreamed at all.” — Alexander Pushkin