Flagship

US, China near trade deal

The US and China agreed on the contours of a trade deal, officials said Sunday, in a sign of easing tensions before the two countries’ leaders meet later this week. The agreement, which came at the start of US President Donald Trump’s diplomatic jaunt through Asia, could resolve issues including high tariffs, rare earth export controls, and soybean sales. Trump is aiming to clinch the pact with China’s Xi Jinping in South Korea on Thursday. The development follows weeks of contention, after US Treasury Secretary Scott Bessent lashed out at his Chinese counterpart, Li Chenggang, calling him “unhinged.” Rather than punishing Li — as some initial speculation suggested — Beijing formalized his role last week as top trade negotiator.

Trump’s busy week in Asia

US President Donald Trump’s trip to Asia this week will demonstrate his appetite for dealmaking and personal diplomacy, analysts said. Trump on Sunday presided over a peace ceremony between Cambodia and Thailand, following a brief conflict in July that he took credit for ending; he also signed trade deals with several Southeast Asian nations. A meeting with Japan’s new conservative prime minister on Tuesday will test the countries’ alliance as Trump presses for Tokyo to hike military spending, ahead of talks with China’s Xi Jinping on Thursday. Trump said he also wants to meet with North Korean leader Kim Jong Un; such a summit could bolster Pyongyang’s global legitimacy, even as it refuses to discuss denuclearization, experts told The Wall Street Journal.

‘Messy’ transition into changed global order

Analysts and world leaders warned the transition to a new global order — defined by the US power vacuum — will be a rocky one. Singapore’s prime minister called for “new trade connections” to combat a “messy” shift as Washington steps back from global institutions and embraces protectionism. The era of “rising powers is ending, but its immediate aftermath may prove no less violent,” Foreign Affairs wrote. Those changes, wrought by US President Donald Trump’s shakeup of global alliances, pose an opportunity for his domestic opposition, former diplomat James Rubin wrote in Liberties: The American left should lean into a mid-20th-century approach to foreign policy, defined by “an enlightened global role” for the US and “dual containment” of China and Russia.

Tech earnings make for high-stakes week

Investors are gearing up for a pivotal week, as Big Tech earnings and an expected US interest rate cut could set the country’s economic trajectory for the rest of the year. A cooler-than-expected inflation report on Friday sent stocks to fresh highs as traders bet the Federal Reserve will trim the cost of borrowing on Wednesday. But some analysts warn the market is particularly fragile and increasingly reliant on AI spending, with overvalued equities prone to dramatic swings. Earnings reports on Wednesday and Thursday from Microsoft, Alphabet, Meta, Amazon, and Apple — which together account for a quarter of the S&P 500 — will provide a fresh test for the bull market.

Amazon to ramp up robot usage

Amazon, the US’ second-biggest employer, expects increased use of robots will allow it to hire 600,000 fewer workers over the next eight years. Internal documents seen by The New York Times suggested the company believes automation will lead to 160,000 fewer hires by 2027; separately, company executives said last year they expect sales to double by 2033 even while headcount remains unchanged. The Times estimated that this implied 600,000 fewer jobs in that period. The news may be bad for would-be Amazon workers but could lead to cheaper goods: Automation in agriculture has led to fewer farmers, but the average US household spend around 10% of its income on food in 2020, compared with more than 40% in 1900.

Europeans aim to rival Starlink

Three European aerospace and defense giants announced a partnership to rival Elon Musk’s Starlink satellite internet network. Europe has been hungry for a homegrown alternative to Starlink, which dominates the sector — the service has been vital to Ukrainian troops in the war against Russia, and fears of a possible shutdown accelerated Europe’s space ambitions. French President Emmanuel Macron said in June that space “has in some way become a gauge of international power.” The new partnership between Airbus, Leonardo, and Thales is “the first tangible evidence of Europe addressing its waning technological sovereignty since the start of the second Trump administration,” one analyst told CNBC.

American Eagle’s summer campaign with Sydney Sweeney blew up in ways no one could’ve imagined, but chief marketing officer Craig Brommers knew it was going to hit a cultural nerve. This week, Ben and Max bring on the AE CMO to give us an inside look into the “Great Jeans” campaign, what he made of the controversy that surrounded it, and how Donald Trump and JD Vance boosted their sales. They also discuss how marketing today is like running an entertainment company, why he ignored the advice of what he calls the “crisis communication industrial complex,” and whether AE’s campaign with Travis Kelce was timed to Kelce’s engagement to Taylor Swift.

US PhD admissions tumble

US PhD admissions are down in the wake of federal science funding cuts. Harvard University is slashing admissions in one department by 75% and making other cuts elsewhere; 40 out of 45 biology departments told Nature that they were shrinking their cohorts; and some institutions are pausing admissions altogether. Researchers said that the US political environment is driving most of the cutbacks. President Donald Trump’s administration has frozen billions of dollars in research funding and ordered universities to reduce diversity programs. The government has also tried to offer schools priority funding if they agree to further restrictions, with less success. Canada, China, the EU, and the UK are trying to attract researchers unable to find funding in the US.

First arrests in Louvre heist

French prosecutors on Sunday announced the first arrests tied to the Louvre Museum heist last weekend. The two men taken into custody were known to police for other “sophisticated thefts,” Le Monde reported. Police are still searching for the loot taken from the museum in last weekend’s brazen daytime theft, as well as for other accomplices. The saga is having a ripple effect through French politics: Officials are debating whether to put a police station at the Louvre (the country’s interior minister opposes the idea), while the Parisian left is using the heist to attack France’s right-wing culture minister, who is running for mayor next year.

Baijiu gets lighter

Producers of the traditional Chinese liquor baijiu are leaning into the lower-alcohol trend thanks to new economic and political realities. The popular spirit, made from fermented grains like sorghum, typically has an alcohol content of 50%, but popular brands are rolling out lighter variants as more consumers around the world embrace low- or no-alcohol drinks. In China, that shift has been exacerbated by a new government frugality push that bans costly alcohol at official gatherings and has triggered “a wave of self-restraint” among bureaucrats, Nikkei wrote. As a result, many civil servants are wary of serving baijiu at government functions; others are skirting the rule by disguising the clear liquor as water.