truce

Israeli forces have continued to pound the besieged Gaza Strip, killing at least 72 Palestinians, including several aid seekers, as ceasefire talks stall amid a deepening fuel and hunger crisis.

An Israeli attack near an aid distribution point in Rafah in southern Gaza killed at least five people who were seeking aid on Monday, the official Palestinian news agency Wafa reported.

The killings raised the death toll of Palestinians killed near aid sites run by the controversial Israeli and US-backed Gaza Humanitarian Foundation (GHF) to 838, according to Wafa.

In Khan Younis, also in southern Gaza, an Israeli strike on a displacement camp killed nine people and wounded many others. In central Gaza’s Bureij refugee camp, four people were killed when an Israeli air strike hit a commercial centre, Wafa said.

Israeli forces also resumed stepping up attacks in northern Gaza and Gaza City. Israeli media reported an ambush in Gaza City, with a tank hit by rocket fire and later, with small arms. A helicopter was seen evacuating casualties. The Israeli military later confirmed that three soldiers were killed in the incident.

Al Jazeera’s Tareq Abu Azzoum, reporting from Deir el-Balah, said Israeli forces responded with “massive air strikes in the vicinity of [the] Tuffah and Shujayea neighbourhoods, levelling residential buildings”.

The Wafa news agency said at least 24 Palestinians were killed in Gaza City and dozens more were wounded.

The attacks come as UN agencies continue to plead for more aid to be allowed into Gaza, where famine looms and a severe fuel shortage has brought the already battered healthcare sector to its knees.

Gaza’s water crisis has also intensified since Israel blocked nearly all fuel shipments into the enclave on March 2. With no fuel, desalination plants, wastewater treatment facilities and pumping stations have largely shut down.

Egypt’s foreign minister said on Monday that the flow of aid into Gaza has not increased despite an agreement last week between Israel and the European Union that should have had that result.

“Nothing has changed [on the ground],” Badr Abdelatty told reporters ahead of the EU-Middle East meeting in Brussels.

‘A real catastrophe’

The EU’s top diplomat said on Thursday that the bloc and Israel agreed to improve Gaza’s humanitarian situation, including increasing the number of aid trucks and opening crossing points and aid routes.

When asked what steps Israel has taken, Israeli Minister of Foreign Affairs Gideon Saar referred to an understanding with the EU but did not provide details on the implementation.

Asked if there were improvements after the agreement, Jordanian Minister of Foreign Affairs and Expatriates Ayman Safadi told reporters that the situation in Gaza remains “catastrophic”.

“There is a real catastrophe happening in Gaza resulting from the continuation of the Israeli siege,” he said.

Meanwhile, stuttering ceasefire talks entered a second week on Monday, with mediators seeking to close the gap between Israel and Hamas.

The indirect negotiations in Qatar appear to still remain deadlocked after both sides blamed the other for blocking a deal for the release of captives and a 60-day ceasefire.

An official with knowledge of the talks said they were “ongoing” in Doha on Monday, the AFP news agency reported.

“Discussions are currently focused on the proposed maps for the deployment of Israeli forces within Gaza,” the source reportedly said.

“Mediators are actively exploring innovative mechanisms to bridge the remaining gaps and maintain momentum in the negotiations,” the source added on condition of anonymity.

Hamas accused Israeli Prime Minister Benjamin Netanyahu, who says he wants to see the Palestinian group destroyed, of being the main obstacle.

“Netanyahu is skilled at sabotaging one round of negotiations after another, and is unwilling to reach any agreement,” the group wrote on Telegram.

Netanyahu is under growing pressure to end the war, with military casualties rising and public frustration mounting.

He also faces backlash over the feasibility and ethics of a plan to build a so-called “humanitarian city” from scratch on the ruins of southern Gaza’s Rafah to house 600,000 Palestinians if and when a ceasefire takes hold.

Israel’s security establishment is reported to be unhappy with the plan, which the United Nations agency for Palestinian refugees, UNRWA, said amounts to plans for a “concentration camp”.

Negotiations resume in Qatar as the Israeli leader is set to hold talks with the US president, who has said a deal could be reached this week.

Israel and Hamas are set to hold indirect talks in Qatar for a second day, aimed at securing a ceasefire and a captive deal in Gaza, ahead of a meeting between Israeli Prime Minister Benjamin Netanyahu and United States President Donald Trump in Washington, DC.

The latest round of negotiations on the war in Gaza began on Sunday in Doha, aiming to broker a deal on a truce and the release of captives in exchange for Palestinian prisoners. The US president has said a deal could be reached this week.

Before departing for the US on Sunday, Netanyahu said Israeli negotiators were given clear instructions to achieve a ceasefire under conditions that Israel has accepted.

“We’ve gotten a lot of the hostages out, but pertaining to the remaining hostages, quite a few of them will be coming out,” he told journalists, adding that his meeting with Trump could “definitely help advance this” deal.

Of the 251 captives taken by Palestinian fighters during the October 2023 attack, 49 are still being held in Gaza, including 27 people the Israeli military says are dead.

Netanyahu had previously said Hamas’s response to a draft US-backed ceasefire proposal, conveyed through Qatari and Egyptian mediators, contained “unacceptable” demands.

Al Jazeera’s Nour Odeh, reporting from Jordan because Israel has banned the network from reporting in Israel and the occupied West Bank, said Netanyahu “cannot seem to be going against Trump’s wishes”, adding that the Trump-Netanyahu meeting is being set up as a “very important meeting” for Israel’s regional agenda, not just on Gaza.

“There are disagreements within the Israeli cabinet that it will find difficult to adopt, especially on the issues of redeployment and food aid distribution,” she said, stressing that Netanyahu is under pressure both from Trump and his coalition back home.

Trump is expected to meet the Israeli leader around 6:30pm local time (22:30 GMT) on Monday, the White House said, without the usual presence of journalists.

The truce talks have been revived following last month’s 12-day Israeli and US air strikes on Iran.

Ending war the sticking point

The US-backed proposal for a 60-day ceasefire envisages a phased release of captives, Israeli troop withdrawals from parts of Gaza and discussions on ending the war entirely.

Concluding the war has been the main sticking point in past rounds of talks, with Hamas demanding a full end to the conflict in return for releasing all captives, and Israel insisting it would fight on until Hamas is dismantled.

Some of Netanyahu’s hardline coalition partners oppose ending the fighting. But, with Israelis having become increasingly weary of the 21-month-old war, his government is expected to back a ceasefire.

Since Hamas’s October 2023 attack and the subsequent Israeli offensive in Gaza, mediators have brokered two temporary halts in the fighting. They have seen captives freed in exchange for Palestinian prisoners in Israeli custody.

Recent efforts to broker a new truce have repeatedly failed, with the primary point of contention being Israel’s rejection of Hamas’s demand for a lasting ceasefire.

Israel’s genocidal campaign in Gaza has killed more than 57,500 Palestinians, according to Gaza’s health authorities, led to a hunger crisis, displaced nearly all the population, and left most of the besieged territory in ruins.

Israeli attacks across Gaza have killed at least 82 people as negotiations between Israel and Hamas towards a ceasefire deal begin in Qatar.

On Sunday, at least 39 people were killed in Gaza City alone. A midnight attack on the Sheikh Radwan neighbourhood in the region also trapped victims under debris.

Witnesses have described apocalyptic scenes as neighbours retrieve body parts, including those of children.

Mahmoud al-Sheikh Salama, a survivor of one strike, said it took place at 2am (23:00 GMT on Saturday) while he was sleeping.

“We heard a loud explosion and shortly after, another one. We rushed over… and people were trapped under the rubble – four families, a large number of residents,” he told Al Jazeera.

“We tried to search for survivors and managed to pull out two people alive from under the debris after about three hours of struggle and breaking through. We got two out alive – the rest were martyred and are still trapped.”

Reporting from Gaza City, Al Jazeera’s Hani Mahmoud said Israel’s current military escalation in Gaza is “a chilling and brutal reminder” of the opening weeks of the war because of the intensity and scale of each attack.

“In the span of two hours, we have counted at least seven air strikes across the Gaza Strip,” he said.

“A local community kitchen in the northern part of Deir el-Balah was also struck and three people were killed, including the main operator behind it.”

Attacks near aid sites

Besides Gaza City, medical sources at hospitals told Al Jazeera that at least nine Palestinians were killed by Israeli army fire near aid distribution centres operated by the US- and Israel-backed Gaza Humanitarian Foundation (GHF) since the morning.

Five were killed near the Netzarim Corridor, located just south of Gaza City, which splits the Strip down the middle. The Palestinian Ministry of Health said Israeli forces killed at least 743 Palestinians in attacks at sites run by the GHF since late May.

The GHF has drawn widespread criticism, with multiple reports that its contractors, as well as Israeli forces, have opened fire on desperate aid seekers. Two American contractors were wounded with non-life-threatening injuries on Saturday during an attack on an aid site.

“The attack – which preliminary information indicates was carried out by two assailants who threw two grenades at the Americans – occurred at the conclusion of an otherwise successful distribution in which thousands of Gazans safely received food,” the GHF said.

The United States on Saturday blamed Hamas for the attack. Gaza’s Government Media Office rejected these accusations.

“We categorically and unequivocally reject the claims issued by the US State Department alleging that the Palestinian resistance threw explosives at American personnel operating at sites run by the so-called ‘Gaza Humanitarian Foundation – GHF,’” the media office said in a statement.

Possible ceasefire?

Meanwhile, indirect negotiations between Israel and Hamas towards a ceasefire deal in the Gaza Strip have begun in Qatar.

“Negotiations are about implementation mechanisms and hostage exchange, and positions are being exchanged through mediators,” an unnamed official told the AFP news agency.

US President Donald Trump on Sunday said that there is “a good chance” a Gaza captive release and ceasefire deal could be reached with Hamas this week, “as they’re close”.

Trump told reporters such a deal meant “quite a few hostages” could be released. Trump is set to meet Israeli Prime Minister Benjamin Netanyahu on Monday at the White House.

The US president said last week that Israel has agreed to the conditions for a 60-day ceasefire, and negotiators could meet to carve out a path to finally end Israel’s nearly 21-month war on Gaza.

On Friday, Hamas said it responded to a US-backed Gaza ceasefire proposal in a “positive spirit”.

On Sunday, before boarding his flight to Washington, DC, Netanyahu also said he believed his discussions with Trump on Monday would help advance talks on a Gaza deal.

“I believe the discussion with President Trump can certainly help advance these results,” he said, adding that he is determined to ensure the return of captives held in Gaza and remove the threat of Hamas to Israel.

Analysts, however, say that Netanyahu wants to continue the retaliatory war on Gaza until he can gain enough political leverage to dismiss the court cases against him in Israel and build enough popular support to remain the country’s leader.

Netanyahu is on trial for corruption and is still widely blamed in Israeli society for the security failures that led to Hamas’s deadly attack on October 7, 2023.

“Israel and Netanyahu are not interested in reaching a ceasefire,” Adnan Hayajneh, a professor of international relations at Qatar University, told Al Jazeera, adding that there is a “very slim chance” of a ceasefire.

“What Israel wants is clear… a land without a people,” Hayajneh said.

“So, Palestinians are given three choices… starve to death… get killed… [or] leave the land. But Palestinians have so far proven they will not leave the land, no matter what.”

Donald Trump had said last month that the nuclear-armed neighbours agreed to a ceasefire after talks mediated by the US.

Indian Prime Minister Narendra Modi has made it clear to United States President Donald Trump that a ceasefire between India and Pakistan after a four-day conflict in May was achieved through talks between the two militaries and not US mediation, a top diplomat in New Delhi says.

“PM Modi told President Trump clearly that during this period, there was no talk at any stage on subjects like India-U.S. trade deal or US mediation between India and Pakistan,” Indian Foreign Secretary Vikram Misri said in a press statement on Wednesday.

“Talks for ceasing military action happened directly between India and Pakistan through existing military channels, and on the insistence of Pakistan. Prime Minister Modi emphasised that India has not accepted mediation in the past and will never do,” he said.

Misri said the two leaders spoke over the phone late on Tuesday on Trump’s insistence after the two leaders were unable to meet on the sidelines of the G7 summit in Canada, which Modi attended as a guest. The call lasted 35 minutes.

Trump had said last month that the nuclear-armed South Asian neighbours agreed to the ceasefire after talks mediated by the US, and that the hostilities ended after he urged the countries to focus on trade instead of war.

There was no immediate comment from the White House on the Modi-Trump call.

Pakistan has previously said the ceasefire was agreed after its military returned a call the Indian military had initiated on May 7.

In an interview with Al Jazeera in May, Pakistan’s Foreign Minister Ishaq Dar rejected claims that Washington mediated the truce and insisted Islamabad acted independently.

The conflict between India and Pakistan was triggered by an April 22 attack in Pahalgam, in Indian-administered Kashmir, in which 26 civilians, almost all tourists, were killed. India blamed armed groups allegedly backed by Pakistan, a charge Islamabad denied.

On May 7, India launched missile strikes at multiple sites in Pakistan and Pakistan-administered Kashmir. Over the next three days, the two countries exchanged artillery and air raids, hitting each other’s airbases.

Pakistan said at least 51 people, including 11 soldiers and several children, were killed in Indian attacks.

India’s military said at least five members of the armed forces were killed in Operation Sindoor, under which it launched the cross-border strikes.

Misri said Trump expressed his support for India’s fight against “terrorism” and that Modi told him Operation Sindoor was still on.

June 11 (UPI) — The United States and China have agreed to a framework that would revive last month’s trade truce following two days of talks in London, negotiators announced Wednesday.

The framework and agreement, struck last month in Geneva, must be approved by U.S. President Donald Trump and Chinese President Xi Jinping before it can take effect.

“The two largest economies in the world have reached a handshake for a framework,” U.S. Commerce Secretary Howard Lutnick told reporters. “We have reached a framework to implement the Geneva consensus and the call between the two presidents.”

“The idea is we’re going to go back and speak to President Trump and make sure he approves it. They’re going to go back and speak to President Xi and make sure he approves it, and if that is approved, we will then implement the framework,” Lutnick said.

China’s vice commerce minister told reporters the same information.

“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,” China’s vice commerce minister Li Chenggang said Wednesday.

While specifics of the deal were not revealed, Lutnick said both sides have agreed to roll back controls on exports that are vital to each country. Lutnick expressed optimism that that would include China’s exports of rare earth minerals and magnets to the United States.

“There were a number of measures the United States put on when those rare earths were not coming,” Lutnick added. “You should expect those to come off, sort of as President Trump said, ‘in a balanced way.'”

After their phone call last week cooled tensions amid the escalating trade dispute, Trump said Xi had agreed to restart exports of rare earth minerals and magnets, which are critical to American manufacturing.

Last month, the United States and China announced a 90-day pause on most of their tariffs. Under the agreement, the United States reduced its tariffs on Chinese goods from 145% to 30%, while China reduced its tariffs on U.S. goods from 125% to 10%.

The agreement was reached during trade negotiations in Geneva, where U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer met with their Chinese counterparts, including Vice Premier He Lifeng.

Asian stocks were mostly up after Wednesday’s announcement, as Mainland China’s CSI 300 index advanced 0.77% higher. U.S. stock futures were initially flat as investors waited for more information on the trade talks.

Bessent announced he would depart the negotiations, which could continue through Wednesday, if needed. Lutnick and Greer planned to remain in London.

US Secretary of State Marco Rubio’s salvo against Chinese students, promising to “aggressively revoke” their visas, is the latest move in heightening tensions between the world’s two largest economies.

Despite a temporary tariff truce reached between them earlier this month, divisions between Washington and Beijing remain wide, with recent ruptures over higher education, artificial intelligence (AI) chips and rare earth minerals.

Here’s all we know about how relations between China and the United States are worsening despite diplomatic efforts.

What did the US and China agree on tariffs?

A US-China trade spat escalated after Trump’s administration raised tariffs on Chinese goods to 145 percent earlier this year, with cumulative US duties on some Chinese goods reaching a staggering 245 percent. China retaliated with 125 percent tariffs of its own on US goods.

Under an agreement reached on May 12 following two days of trade talks in Geneva, tariffs on both sides were dropped by 115 percentage points for 90 days, during which time negotiators hope to secure a longer-term agreement. For now, the US has maintained a 30 percent tariff on all Chinese goods while Beijing has a 10 percent levy on US products.

In the weeks since the temporary reprieve, however, Washington and Beijing appear to have had only limited discussions.

On Thursday, US Treasury secretary Scott Bessent told Fox News that trade talks between the US and China are “a bit stalled”, and may need to be reinvigorated by a call between US President Donald Trump and Chinese leader Xi Jinping.

In the meantime, the Trump administration has announced new, strict visa controls on Chinese university students and told US companies to stop selling their advanced chip software used to design semiconductors to Chinese groups.

Why is the US targeting Chinese students?

On Wednesday, Rubio announced that the US will “aggressively revoke” the visas of Chinese students studying in the country. He also pledged to ramp up scrutiny of new visa applicants from China and Hong Kong.

The Trump administration’s decision to carry out deportations and to revoke student visas is part of wide-ranging efforts to fulfil its hardline immigration agenda.

China is the second-largest country of origin for international students in the US, behind India. Chinese students made up roughly a quarter of all foreign students in the US during the 2023-2024 academic year – more than 270,000 in total.

China’s Ministry of Foreign Affairs criticised the decision to revoke visas, saying it “damaged” the rights of Chinese students. “The US has unreasonably cancelled Chinese students’ visas under the pretext of ideology and national rights,” Foreign Ministry spokesperson Mao Ning said.

The Trump administration also banned Harvard University from enrolling any foreign students on May 22, accusing the institution of “coordinating with the Chinese Communist Party”. That move has since been blocked by a US federal judge.

Still, the largest portion of foreign students at Harvard – almost 1,300 – are Chinese, and many top officials, including the current leader Xi Jinping, have sent their children to the Ivy League school.

How is the US taking aim at Chinese semiconductors?

On May 13, just after the end of trade talks in Geneva, the US Commerce Department issued guidance warning American firms against using Huawei’s Ascend AI semiconductor chips, stating that they “were likely developed or produced in violation of US export controls”. 

The move marked the latest in a series of efforts by the Trump administration to stymie China’s ability to develop cutting-edge AI chips. The tiny semiconductors, which power AI systems, have long been a source of tension between the US and China.

China’s Commerce Ministry spokesperson fired back against the guidance last week, accusing Washington of “undermining” the consensus reached in Geneva and describing the measures as “typical unilateral bullying and protectionism”.

Then, on May 28, the US government ramped up the row by ordering US companies which make software used to design semiconductors to stop selling their goods and services to Chinese groups, The Financial Times reported.

Design automation software makers, including Cadence, Synopsys and Siemens EDA, were told via letters from the US Commerce Department to stop supplying their technology to China.

Why is the US targeting Chinese semiconductors?

The US has been tightening its export controls on semiconductors for more than a decade, contending that China has used US computer chips to improve military hardware and software.

Chinese officials and industry executives deny this and contend that the US is trying to limit China’s economic and technological development.

In his first term as president, Trump banned China’s Huawei from using advanced US circuit boards.

Huawei is seen as a competitor to Nvidia, the US semiconductor giant which produces its own-brand of “Ascend” AI chips. In April, Washington restricted the export of Nvidia’s AI chips to China.

But Nvidia’s chief executive, Jensen Huang, recently warned that attempts to hamstring China’s AI technology through export controls had largely failed.

How could China be affected by US measures?

The suspension of semiconductor sales will limit supplies for aerospace equipment needed for China’s commercial aircraft, the C919, a signature project in China’s push towards economic and transport self-reliance.

Christopher Johnson, a former CIA China analyst, told The Financial Times that this week’s new export controls underscored the “innate fragility of the tariff truce reached in Geneva”.

“With both sides wanting to retain and continue demonstrating the potency of their respective chokehold capabilities, the risk the ceasefire could unravel even within the 90-day pause is omnipresent,” he added.

Will China ease restrictions on rare earth minerals exports?

US officials had expected the Geneva talks to result in China easing its export restrictions on rare earth elements. So far, there have been few signs of that, however.

Rare earth minerals are a group of precious minerals required to manufacture a wide range of goods in the defence, healthcare and technology sectors.

Rare earth metals, which include scandium and yttrium, are also key for producing components in capacitors – electrical parts which help power AI servers and smartphones.

China processes some 90 percent of the world’s rare earth minerals and instituted export controls in April to counter Trump’s “Liberation Day” tariffs in April, triggering alarm among US companies.

Last week, for instance, Ford temporarily closed a factory in Chicago which makes utility vehicles after one of its suppliers ran out of a specialised rare earth magnet.

In most new cars, especially elevate vehicles (cars with robotic technology allowing them to “climb” over obstacles), these high-tech magnets are used in parts which operate brake and steering systems, and power seats and fuel injectors.

The restrictions on the supply of rare earth minerals provide Beijing with a strategic advantage in future negotiations, as it can limit supplies of crucial technologies for US industry.

The talks in the Qatari capital have begun without any conditions for Israel to allow aid into Gaza or a ceasefire.

Israel and Hamas have confirmed a new round of Gaza truce talks is under way in Qatar as the Israeli military expanded its ground offensive on the besieged Palestinian territory, despite growing international calls for a ceasefire.

Israel Defence Minister Israel Katz said in a statement on Saturday that the Hamas delegation in Doha returned to negotiations “on a hostage deal”.

Israel had entered the talks without any conditions, according to Katz.

Taher al-Nono, the media adviser for the Hamas leadership, confirmed to the Reuters news agency that a new round of indirect talks had begun without any conditions.

“The Hamas delegation outlined the position of the group and the necessity to end the war, swap prisoners, the Israeli withdrawal from Gaza, and allowing humanitarian aid and all the needs of the people of Gaza back into the Strip,” he added.

Medical sources told Al Jazeera that at least 54 Palestinians were killed in Israeli air strikes on Saturday, as Israel launched a new offensive in Gaza.

Israel’s army said on social media that it was intensifying attacks and exerting “tremendous pressure” on Hamas across Gaza, and wouldn’t stop until the captives are returned and the armed group is dismantled. Katz said that Operation Gideon Chariots was being led with “great force.”

The ground offensive comes after Israel escalated its air attacks on Gaza, killing hundreds of Palestinians in the past three days. Many of the victims were killed in northern Gaza, including in Beit Lahiya and Jabalia, which have received forced displacement orders by the Israeli army in recent days.

As leaders of the Arab League held a Gaza-focused summit in Iraq’s Baghdad and called for international funding to rebuild Gaza, Hamas asked the international community to impose sanctions on Israel.

In a statement on its Telegram channel, the armed group described the situation in Gaza as a “full-blown genocide committed before the eyes of a world that stands helpless, while more than two and a half million people are being slaughtered in the besieged Strip”.

The group also reported continued fighting with invading Israeli forces, claiming on Saturday that its fighters killed and wounded two Israeli soldiers using machineguns in the Shujayea neighbourhood of Gaza City in the northern part of the enclave.

United Nations chief Antonio Guterres said he was “alarmed” by Israel’s moves to expand its ground operations in Gaza and called for an immediate ceasefire.

UN relief chief Tom Fletcher said a joint plan by the United States and Israel to replace international aid mechanisms in Gaza was a “waste of time” as more than 160,000 pallets of aid are “ready to move” at the border, but blocked by Israel.

Nevertheless, Washington has remained adamant in its full support for Israel, with Trump saying on Friday that Gaza must become a “freedom zone”.

Last week, Hamas released Israeli-American soldier Edan Alexander, who, along with families of remaining captives in Gaza, called for the release of all still held in the Palestinian territory.

WASHINGTON — Markets rejoiced this week over news that the Trump administration, after six weeks of maximalist rhetoric, had struck a preliminary deal with China to lower tariff rates between the two countries. Tech stocks led the rally, with investors hopeful that President Trump had finally retreated from plans for a protracted trade war with a vital trading partner.

But the celebration may be premature, industry insiders, foreign diplomats and market experts said, telling The Times that Silicon Valley will face strong headwinds in the months ahead — the makings of a perfect storm of uncertainty that could still tip the U.S. economy into recession.

Investigation at Commerce

Wall Street reacted with similar exuberance last month on word that tech products, such as smartphones and computers, would be exempt from Trump’s 145% tariffs on China — a figure that was reduced in the deal struck on Monday to 30%, marking a significant reduction, but still far higher than tariffs have ever been on Chinese imports.

And yet the April 12 White House announcement outlining exemptions was widely misunderstood as a walk-back. In fact, those tech products, including the iPhone, are exempted from existing tariff rates only temporarily, because the Commerce Department is conducting an ongoing review of whether to impose separate import duties on the sector over specific national security concerns.

The investigation, under Section 232 of the Trade Expansion Act of 1962, is progressing, with the Commerce Department recently ending its acceptance of public comments. The department, led by Secretary Howard Lutnick, could issue findings anytime in the coming months, alongside a tariff rate of unknown size that may severely affect Silicon Valley companies.

The review is causing uncertainty in its own right. But Lutnick has indicated that action is forthcoming. He has repeatedly advocated for the iPhone to be manufactured in the United States — a process that would require a large, skilled workforce in high-tech manufacturing produced by the very universities being targeted by the Trump administration, and would substantially increase the price of computing products for American households.

Scott Bessent, the Treasury secretary who has earned greater confidence than Lutnick from the business community, is the one leading trade negotiations with China, where many of those products are made. That has Silicon Valley executives questioning which one of them is in charge, and whom they should be speaking with, according to one tech executive, speaking on condition of anonymity because they are not authorized to speak publicly.

“The core issue for Silicon Valley lies in the uncertainty and potential cost disruption these bring to critical technology components, especially semiconductors,” said Subhajyoti Bandyopadhyay, a professor of information systems and operations management at the University of Florida.

“While ostensibly about national security, the application of these investigations can introduce significant volatility into supply chain planning and investment decisions. Companies might hesitate to commit to certain sourcing strategies if there’s a persistent threat,” he added. “All of which is to say that there will be quite a bit of turbulence ahead for strategic planners of Silicon Valley firms.”

Looming battle with Europe

Announcing the reduction in trade tensions with China on Monday, Trump turned his attention to the European Union, another major trading partner, and levied a threat.

“The European Union is in many ways nastier than China,” the president said. “They’ll come down a lot. You watch. We have all the cards. They treat us very unfairly.”

But the Europeans believe they have some cards, as well.

Trump’s focus on trade with Europe has been on tangible goods, such as agricultural products, manufactured items, pharmaceuticals and cars — a grouping of products that on their own would show a significant U.S. trade deficit with the continent. But European officials use different math. They want to account for European use of U.S. digital services to level the playing field.

One European official, granted anonymity to speak candidly, said that the taxation of digital services — such as online advertising, social media platforms and streaming services — is expected to be a “significant” component of the upcoming negotiations.

“Silicon Valley should be very concerned,” said Michael Strain, director of economic policy studies at the American Enterprise Institute. “The U.S. really stands to lose if there are certain tariffs that are brought to services, and I think people in the U.S. understand that, and would try to prevent it from happening.”

Targeting the U.S. digital sector offers Europe potent leverage in negotiations with the Trump administration, not only because it represents such a large portion of the American economy, but also because it applies acute pressure on Trump’s political allies in Silicon Valley — a tactic that could ultimately persuade him to cave.

“Trump blinked on the China tariffs at least in part because China aggressively retaliated,” Strain said. “That will be interesting to watch if other trading partners modify their strategy: learning that punching the bully in the nose is the right thing to do.”

Rates remain high on China

One of Trump’s first calls on Monday morning after announcing his temporary truce with China was to Apple’s chief executive, Tim Cook. “He’s going to be building a lot of plants in the United States for Apple,” Trump said. “We look forward to that.”

Apple can’t build them fast enough. Although it committed $500 billion in investments over the next four years in U.S. production, including new plants and a manufacturing academy, uncertainty in the interim will force the company to make hard decisions on its product lines.

Despite some protection from the exemptions in place as the Commerce investigation proceeds, the California tech giant still faces hurdles from the tariffs that remain high across supply chains — not just in China, where rates remain at 30%, but also elsewhere in Asia, including India and Vietnam, which face 10% import duties. In the most recent earnings call, before the China deal was announced, Cook estimated that Apple could incur a $900-million hit from tariffs.

“For companies like Apple, and indeed much of Silicon Valley, this overall environment isn’t just about weathering a storm; it’s about fundamentally rethinking global operations,” Bandyopadhyay said. “We’re already witnessing the strategic pivots.”

To offset the costs of tariffs, Apple could increase the prices of iPhones in the fall. But the company also has to walk a fine line both politically and financially. The Trump administration has been critical of companies such as Amazon that have considered showing consumers the impact of tariffs.

“This is all sort of a game of poker, and also remember, Tim Cook is 10% politician, 90% CEO,” said Dan Ives, a Wedbush Securities analyst who covers the technology sector.

Ives said the upcoming iPhone 17 could cost $100 more than the current model, but his firm estimates that could reduce demand by 5%, delaying consumers’ purchases of new devices. Other analysts said it is tough to say if prices will increase, with the smartphone maker keeping prices relatively stable in recent years.

The debate over Apple’s fate has proved to be a sensitive point in U.S. negotiations with Beijing. Last month, the Chinese Foreign Ministry recirculated a video from a visit Cook made to China in 2017, in which he explained why Silicon Valley companies find themselves so reliant on the Chinese supply chain.

“The popular conception is that companies come to China because of low labor costs. I am not sure what part of China they go to, but the truth is China stopped being a low-labor-cost country many years ago,” Cook said at the time. “The reason is because of the skill, the quantity of skill in one location, and the type of skill it is.”

“The products we do require really advanced tooling and the precision that you have to have in tooling and working with materials that we do are state-of-the-art,” he added. “If you look at the U.S., you could have a meeting of tooling engineers and I’m not sure we could fill a room. In China, you could fill multiple football fields.”

Times staff writer Queenie Wong in San Francisco contributed to this report.

What else you should be reading

The must-read: California to ask federal judge for sweeping pause to Trump’s tariffs
The deep dive: Trade truce with China is hailed, but it may not be enough to stop shortages
The L.A. Times Special: Newsom claims Trump’s tariffs will reduce California revenues by $16 billion

More to come,
Michael Wilner
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