U.S., China to hold trade talks this weekend... Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer will meet China’s economic tsar He Lifeng in Switzerland this weekend for talks that could be the first step toward resolving the trade war. “My sense is this will be about de-escalation,” Bessent told Fox News. “We’ve got to de-escalate before we can move forward.” China’s commerce ministry said, “On the basis of fully considering global expectations, China’s interests and the appeals of U.S. industry and consumers, China has decided to re-engage the U.S.”
The two sides are expected to discuss reductions to broader tariffs, two sources familiar with the planning told Reuters. The talks should also cover duties on specific products, export controls and President Donald Trump’s decision to end de minimis exemptions on low-value imports, one of the sources added.
Officials indicated they are not expecting major breakthroughs but see these talks as a necessary first step to reduce tensions and set the stage for future negotiations.
China injects broad ‘tactical’ monetary stimulus ahead of U.S. trade meeting... Chinese authorities announced multiple stimulus measures, including interest rate cuts and a major liquidity injection, as Beijing steps up efforts to soften the economic damage caused by the trade war with the United States. China’s central bank will lower the borrowing cost of its seven-day reverse repurchase agreements, its benchmark interest rate, by 10 basis points to 1.40%, effective May 8. Other interest rates will drop in line with the key rate. The amount of cash that banks must hold as reserves, known as the reserve requirement ratio (RRR), will also be cut by 50 basis points from May 15, bringing the average level to 6.2%. This will release 1 trillion yuan ($138 billion) in liquidity into the banking system.
Additionally, authorities will help A-share listed companies affected by tariffs to cope with difficulties, expand a pilot scheme allowing insurance companies to invest in stock markets by an additional 60 billion yuan ($8.31 billion), set up low-cost relending facilities for purchases of tech-related bonds, and for investments in elderly care and services consumption, enhance support agriculture and small businesses and trim mortgage costs for some buyers.
These steps are aimed at boosting lending, encouraging consumer spending and stabilizing financial markets as the country faces economic headwinds from higher U.S. tariffs and global uncertainties.
All attention squarely on Powell’s post-monetary policy meeting comments... The Fed is widely expected to hold interest rates at 4.25% to 4.50% following the two-day Federal Open Market Committee meeting this afternoon. Fed Chair Jerome Powell’s post-meeting press conference will be closely monitored for indications about possible rate cuts later this year, especially since this is the first policy decision since President Trump’s tariff announcements.
Mexico ag minister touts unspecified deals with United States... Mexican Agriculture Minister Julio Berdegue said on Tuesday he reached agreements with USDA Secretary Brooke Rollins in a “friendly” meeting in Washington and met with tomato industry executives. Berdegue did not elaborate in his post on X, but said the deals would benefit both countries. He later posted again on X saying he met with more than two dozen representatives and companies involved in distributing Mexican tomatoes in the United States.
“They highlighted the adverse effects of the measure adopted by the U.S. government, which will make tomatoes more expensive for consumers,” Berdegue said about his meeting with executives.
WSJ urges Congress to overhaul SNAP by tightening work rules, sharing costs with states... In a sharply worded editorial (link), the Wall Street Journal Editorial Board throws its weight behind major reforms to the Supplemental Nutrition Assistance Program (SNAP), arguing the system is “dysfunctional” and ripe for overhaul as part of House Republicans’ broader budget push.
While emphasizing that Republicans “aren’t indifferent to whether children and the poor have enough to eat,” the piece criticizes SNAP for drifting far from its original purpose of offering temporary support. With over 41 million Americans enrolled, the program has become “a contributor to one of America’s most pressing social ailments: Prime-age men attenuated from work.”
Key points:
- Work requirements evaded: Though federal rules require able-bodied adults without dependents to work 20 hours a week or lose benefits, “a mere 16%” meet that threshold, and “only 28%” show earned income, citing EPIC and government data.
- Waivers exploited: States gerrymander jobless zones to win waivers from these requirements. “Nearly 40%” of the target population lives in such waived areas.
- Call for stronger mandates: The board calls for applying the 20-hour rule more broadly, even to parents with school-aged children. Job training or volunteering would also qualify.
- Cost-sharing with states: SNAP is federally funded but state-run, creating a perverse incentive to inflate rolls. The editorial backs phasing in a 25% to 50% state match, which EPIC says could save $250 billion over a decade.
- Fraud and inefficiency: With USDA pegging improper payments at over 10%, the editorial says tighter oversight is overdue.
“Congress can crack down on the waiver offenses and make work a centerpiece of the program,” the board writes, invoking the bipartisan success of the 1990s welfare reforms. “If Republicans can’t defend these basic principles of self-government, they have bigger problems than passing a tax and spending bill.”
Trump walks back push to reinvite Russia to G7, citing poor timing... President Donald Trump on Tuesday said it is “not good timing” for Russia to rejoin the Group of Seven (G7), just months after publicly advocating for Moscow’s return to the elite economic bloc. Speaking during a World Cup task force meeting, Trump said, “We missed that gate with another great decision by some people that shouldn’t have been making decisions.”
The reversal comes amid stalled efforts to broker a peace deal in Ukraine, with Russian President Vladimir Putin demanding significant territorial concessions. In February, Trump argued that excluding Russia from the G7 may have contributed to the 2022 invasion, claiming Putin might have been deterred if he’d remained at the table.
Russia was expelled from what was then the G8 in 2014 following its annexation of Crimea, a move widely condemned as illegal under international law. Despite reiterating that he’d “love to have them back,” Trump acknowledged that now is not the right moment for readmission.
Bessent warns U.S. nearing debt-limit ‘warning track,’ but timeline unclear... Treasury Secretary Scott Bessent told lawmakers Tuesday the U.S. is “on the warning track” toward hitting the federal debt ceiling, though he declined to provide a specific estimate for the so-called “X-date.” Speaking before the House Appropriations Committee, Bessent said Treasury is still assessing recent tax revenues and will inform Congress when it believes the government risks running out of cash. The debt ceiling was reinstated in January, and Treasury has since relied on special measures to remain under the cap.
Wall Street analysts generally project the government could face a crunch between August and October.
Despite the uncertainty, Bessent stressed the U.S. will not default and promised Treasury would not rely on “gimmicks” to circumvent the limit.