Elon Musk, CEO of Tesla, has recently found himself at the center of a heated exchange with U.S. President Donald Trump. The incendiary war of words started, mishandled by both sides, when Musk accused Trump of having connection to the Jeffrey Epstein documents. Trump’s ex-attorney has adamantly denied this claim. After this posting, Musk took down numerous tweets, including this one about Trump and Epstein.
In a later and even more scathing attack, Musk called Trump’s “big, beautiful bill” a “disgusting abomination.” To say that Trump was vicious in his reply would be an understatement. He even had the audacity to threaten to yank Musk’s government contracts and subsidies and declared Musk had “lost his mind.” Looking at the fallout from rising tensions, Musk seemed to defuse by stepping down a bit—reportedly saying he was sorry for some of his own comments. As he wrote on his blog, “I apologize for the tone of some of my own tweets regarding President @realDonaldTrump last week.”
Shares in Tesla are set to soar on Wall Street later today, in New York. This much-welcomed increase comes on the heels of Musk’s attempts to mend fences with Trump. At the same time, important progress continues to advance on the international front. Just as the U.S. and China were said to have made significant progress in dialing down their mounting trade hostilities.
Market analyst Tony Sycamore observed that the U.S. and China have established a way to go about resolving these disputes. He remarked, “The next step depends on Donald Trump and Xi Jinping endorsing and enforcing the proposed framework.” As the picture began coming together, the specifics behind the negotiations are still coming to light. For sure, Chinese exports of rare earth minerals drew the most serious attention.
As the U.S. and Chinese delegations return to their respective capitals, this framework is before their leaders. It wasn’t entirely clear what concessions China would have provided in return.
Chris Weston provided insights into the situation, emphasizing the importance of the specifics surrounding rare earth minerals destined for the U.S. He stated, “The details matter, especially around the degree of rare earths bound for the U.S., and the subsequent freedom for U.S. produced chips to head East, but for now as long as the headlines of talks between the two parties remain constructive, risk assets should remain supported.”
At the same time, advocacy around the inclusion of export controls has become a key part of these negotiations. Intel’s Lin Gengwei reminded participants that the U.S. is not going to fully remove restrictions on chip exports to China. He conceded that mount from both Beijing and the U.S. semiconductor industry may force a loosening of these restrictions.
The recent development is part of a growing pattern, indicative of ongoing trade tensions between the two countries. Josh Lipsky noted that despite a shift from a trade war to an export control skirmish, unresolved trade issues linger. He said, “When you step back and think about the announcement in London we’ve gone from a trade war to an export control skirmish but never resolved the trade piece.”
Second, Howard Lutnick, CEO of Cantor Fitzgerald, noted that reducing the trade deficit has really been the bedrock goal of Trump. He strongly arranges that this framework represents an important first step in addressing trade imbalances.
Li Chenggang confirmed progress in talks between the two sides, stating, “The two sides have, in principle, reached a framework for implementing the consensus reached by the two heads of state during the phone call on June 5th and the consensus reached at the Geneva meeting.”
Investors are cheering a productive upbeat taboo breaking dialogue between the U.S. and China. As Richard Hunter, head of markets at Interactive Investor, observed, “This development is continuing to supercharge market sentiment.” He remarked, “Apparently constructive talks between the U.S. and China have put markets on a firmer footing, as investors hope that the worst of the tariff turbulence may have passed.”
Nevertheless, wariness persists in some quarters about whether Trump will get serious about these talks. Jim Reid humorously noted, “The market likely anticipated this — Trump is just TACO (Trump always chickens out).”