U.S., China trade talks into Day 2... U.S. officials struck an optimistic tone as the second day of high-level trade talks with China unfolded in London. Treasury Secretary Scott Bessent described Monday’s session as a “good meeting,” while Commerce Secretary Howard Lutnick characterized the discussions as “fruitful,” noting on Tuesday that “they’re going well, and we’re spending lots of time together.” Talks reportedly lasted seven hours Monday and resumed Tuesday morning.
The Chinese delegation did not comment publicly.
Negotiations are centering on a potential deal that would see the U.S. ease certain tech export restrictions in exchange for Beijing lifting limits on rare earth shipments — critical components for U.S. industries ranging from smartphones to military hardware.
White House National Economic Council chief Kevin Hassett told CNBC that if the talks conclude positively, the U.S. could ease export controls on some semiconductors — but emphasized that the move would not apply to Nvidia’s most advanced AI chips.
U.S. Appeals Court weighs extended pause on ruling against Trump tariffs... The U.S. Department of Justice has asked the U.S. Court of Appeals for the Federal Circuit to extend its stay on a lower court’s decision that found most of President Donald Trump’s global tariffs illegal. The request, filed Monday, aims to keep the tariffs in place while the protracted legal fight over their legitimacy continues — a process that could take months and potentially reach the Supreme Court.
On May 28, a three-judge panel of the U.S. Court of International Trade (CIT) ruled that Trump exceeded his authority under the 1977 International Emergency Economic Powers Act (IEEPA) by imposing broad tariffs, including a 10% global levy and the April 2 “Liberation Day” tariffs. CIT concluded that IEEPA does not grant the president unlimited power to impose tariffs and that the tariffs did not directly address the emergencies cited as justification.
Other tariffs imposed under separate statutes — such as those on steel, aluminum, and automobiles — remain unaffected by these rulings.
In its latest filing, the Justice Department contends that lifting the tariffs would harm the president’s ability to conduct foreign policy and weaken America’s negotiating position in sensitive trade talks. The administration warned that removing the tariffs now would “catastrophically harm our economy,” embolden other countries to exploit U.S. vulnerability, and disrupt ongoing trade negotiations.
The government also pushed back against arguments from small businesses and Democratic-led states that alternative legal avenues exist for imposing tariffs. DOJ argued that such hypothetical alternatives would not address the urgent timing of current economic and diplomatic challenges: “The emergencies are looming now, negotiations are proceeding now, and the CIT’s injunction threatens them,” the government stated.
The Federal Circuit could rule at any time on whether to maintain the pause for the length of the appeals process, which is expected to last several months. Several related lawsuits have been put on hold pending this decision, though at least one case regarding a specific tariff exemption is moving forward in a lower court.
If the appeals court ultimately rules against the administration, the case is likely to proceed to the Supreme Court, with the outcome potentially reshaping the scope of presidential authority over U.S. trade policy.
China extends EU pork investigation by six months... China extended an investigation into imported pork from the European Union by six months. The investigation period was extended to Dec. 16 due to the “complexity” of the case, China’s commerce ministry said.
While officially framed as a routine procedural extension, the move is widely seen as retaliation for EU tariffs on Chinese electric vehicles (EVs). Trade watchers see the pork case as a bargaining chip. Talks on Chinese EV exports to the EU are reportedly progressing, but no final deal has been announced.
House initiates ‘fatality scrub’ to prepare budget bill for Senate rules... The House is performing a “fatality scrub” on its sprawling budget reconciliation package — branded the “One Big, Beautiful Bill” — to eliminate provisions that violate Senate rules and jeopardize its ability to pass with a simple majority. This scrub is necessary to comply with the Senate’s Byrd Rule, which prohibits policy measures not directly related to federal spending or revenue.
Under budget reconciliation, bills can bypass a filibuster if every component meets strict criteria. The Senate Parliamentarian, Elizabeth MacDonough, is set to determine which provisions fail this test. The House will then adopt a new rule reflecting those changes, possibly as early as Thursday, before sending the package to the Senate.
Provisions Facing Removal
- AI regulation moratorium: A 10-year state and local AI regulation ban may be tossed for being “merely incidental” to budget goals.
- Planned Parenthood funding ban: Past attempts to defund the organization through reconciliation have failed this test.
- Permanent tax cuts: Extending the 2017 Trump tax cuts hinges on budget impact calculations beyond the 10-year window.
- Foreign company tax hike: A $116 billion provision may face scrutiny over potential conflicts with international tax treaties.
House Ways and Means Chair Jason Smith (R-Mo.) has expressed confidence in the tax sections, but others remain wary of surprises from the Parliamentarian’s office.
Following the scrub and House approval, the bill heads to the Senate where further changes are expected. GOP senators may seek to revise spending cuts and tax language. If the Senate amends the bill as is likely, it will be sent back to the House for a final vote — testing unity among Republican factions.
Leadership change ahead in House GOP... Rep. Mark Green (R-Tenn.), chairman of the House Homeland Security Committee, announced he will resign from Congress following a vote on the current budget-reconciliation bill. Green, a key figure in shaping GOP policy on border security and national threats, said he intends to step down once the legislation clears the chamber, though he did not provide an exact date.
Green’s departure comes at a precarious moment for House Republicans, who hold a razor-thin 219-212 majority. With every vote critical for passing legislation aligned with President Donald Trump’s policy agenda, Green’s exit could complicate efforts to maintain internal unity — particularly as contentious votes on taxes, spending and immigration loom in the coming weeks.
Republican leaders have not yet named a successor to helm the Homeland Security Committee, a crucial role as the party prepares to advance new border security measures. Green, who has represented Tennessee’s 7th Congressional District since 2019, did not elaborate on his post-Congressional plans.
Update on OMB sessions for EPA RFS proposed rule... The Office of Management and Budget (OMB) has adjusted its schedule regarding EPA’s Renewable Fuel Standard (RFS) Program: Set 2 proposed rule. There are now 23 meetings listed as either scheduled or completed for this rulemaking process. Notably, a previously planned session for June 12 with the Small Refineries Coalition and Wynnewood Refining Company has been removed from the OMB’s public calendar. These organizations are not currently listed as participants in any other sessions concerning the RFS Set 2 proposed rule.
However, the Small Refineries Coalition and Wynnewood Refining Company remain scheduled for a separate meeting with OMB on June 11. This session pertains to the EPA’s final rule on the RFS Partial Waiver of the 2024 Cellulosic Biofuel Volume Requirement, rather than the broader Set 2 proposal.
This change reflects ongoing adjustments in stakeholder engagement as OMB and EPA finalize key components of the RFS program. The removal of the June 12 session reduces the total number of meetings on the Set 2 proposal and may indicate either a consolidation of stakeholder input or a shift in advocacy focus to the partial waiver issue.