European Markets Are Becoming Increasingly Difficult to Ignore
The rebound isn't confined to stocks: the euro is up 13% against the dollar in the six months through June. Meanwhile, the chaotic rollout of US tariffs wiped some of the shine off Treasuries. German bunds have outperformed them since April even as the government braces to issue more debt. Assets in emerging European markets like Poland and Hungary are also rallying sharply.
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New York Times
24 minutes ago
- New York Times
U.S. and China Meet as Trade Truce Nears Expiration
Top officials from the Trump administration will meet with their Chinese counterparts in Sweden this week for their third formal round of economic talks since President Trump raised tariffs on Chinese imports to triple-digit levels this year. The primary goal is to extend a fragile trade truce that has prevented a devastating clash between the world's largest economies. The discussions are scheduled for Monday and Tuesday in Stockholm. Treasury Secretary Scott Bessent and Jamieson Greer, the United States trade representative, are leading the U.S. delegation. He Lifeng, the vice premier for economic policy, has been leading the talks on behalf of China. The negotiations come during a pivotal week for the global economy, which has been gripped by uncertainty as a result of Mr. Trump's chaotic trade agenda. The Trump administration has been trying to win concessions from many countries before an Aug. 1 deadline for reimposing tariffs announced in April. Those levies were suspended in order to reach trade deals. Over the last week, the Trump administration has announced deals with some of America's biggest trading partners in quick succession. Last Tuesday, the United States and Japan finally agreed to a deal that included a 15 percent tariff on Japanese imports and a pledge from Japan to invest $550 billion in the United States. On Sunday, Mr. Trump announced that he had also reached a deal with the European Union, a 27-nation bloc whose economies rely on exports to the United States. The deal would put a 15 percent tariff on many European exports, including cars. But one of the biggest unknowns is what will happen with China, which remains one of America's largest source of imports. After a tit-for-tat period of tariffs and retaliation, the two nations have come to something of an uneasy truce after talks in Geneva in May, and in London in June. On Sunday, before he met with European officials, Mr. Trump implied that some kind of trade arrangement with China might be close at hand. 'We just struck a deal with Japan as you know, and we're very close to a deal with China,' he said. This will be the first meeting between the countries without an imminent crisis, like the tariff standoff or China's economically crippling ban on rare earth exports this year. Trade experts said the list of potential topics for discussion was long, ranging from Mr. Trump's push to get China to stop the flow of fentanyl to the United States, to America's concerns about its purchases of Russian and Iranian oil, and recent exit bans that have prevented U.S. citizens from leaving China. U.S. officials appear to be looking forward to more ambitious trade talks in the months to come. Those could include Chinese purchases of American products, steps to open the Chinese market and, potentially, Chinese investment in the United States. They are also likely seeking to lay the groundwork for a potential meeting between Mr. Trump and Xi Jinping, the Chinese leader, this year. Administration officials are considering a trip to Beijing before a meeting of Asian and Pacific countries in South Korea in October, or potentially connecting Mr. Trump and Mr. Xi on the sidelines of an international meeting. Michael Pillsbury, a former government official who has advised the Trump administration on China, said this would be Mr. Trump's sixth summit meeting with Mr. Xi. Each of those summits had a minimum of two hours of dialogue, and Mr. Trump went prepared with specific deal-making requests, he said. 'The president feels it's better to deal face to face,' he said. Trade experts are also wondering whether U.S. technology controls or an agreement to transfer ownership of TikTok may be on the negotiating table. On CNBC on Thursday, Howard Lutnick, the secretary of commerce, said that the United States had submitted a proposal to China for transferring ownership of TikTok to American companies, and that the administration was waiting for the Chinese response. The topic was 'not officially' part of the trade talks, he said, 'but unofficially, of course.' Tensions between the United States and China started to spiral after Mr. Trump announced his 'Liberation Day' tariffs in early April. China was the only country to immediately retaliate, matching Mr. Trump's tariffs of 34 percent with 34 percent tariffs on American products. Beijing also set up a licensing system to restrict exports of seven rare earth elements that are processed almost exclusively in China and used in electric cars, smart bombs and other high-tech devices. Mr. Trump then responded by ratcheting up tariffs on Chinese products to a minimum of 145 percent, which brought much of the trade between the countries to a halt. The previous rounds of negotiations secured a temporary truce that included China's relaxing its restrictions on shipments of valuable rare earth minerals and magnets needed by U.S. manufacturers. In return, U.S. officials agreed to roll back limits on exports of U.S. products and technology, including ethane and airplane parts, as well as the proposed visa restrictions. U.S. tariffs on Chinese imports were scaled back to 30 percent, while China has 10 percent tariffs on American products. The truce is scheduled to expire on Aug. 12, after which tariffs would rise 10 percentage points. However, Mr. Bessent has been optimistic that the truce could be extended. In an interview on the Fox Business Network last week, Mr. Bessent said that 'trade is in a good place' with China. He added that he hoped to begin having broader discussions with his counterparts about rebalancing the Chinese economy and encouraging China to curb purchases of Russian and Iranian oil. Mr. Bessent said China was in a manufacturing slump and faced a residential real estate market crisis. He argued Beijing must focus on building a consumer economy. 'They can't export their economic problems to the rest of the world, they need to solve them,' Mr. Bessent said. U.S. companies continue to have a rash of criticisms about doing business in China, including the country's newly established rare earth licensing system. The processing time for licenses is long, American firms say, and China requests proprietary and sensitive business information as part of the applications. In a survey released this month, members of the U.S.-China Business Council said strained relations and tariffs between the two countries remained their biggest concerns. But they also said Chinese policies favoring domestic companies were eroding confidence in doing business in the country.
Forbes
24 minutes ago
- Forbes
Mistral AI's Environmental Audit Puts Spotlight On AI's Hidden Costs
Mistral AI Mistral AI has quantified the environmental price of artificial intelligence with unprecedented transparency, releasing what appears to be the first comprehensive lifecycle assessment of a large language model. The French AI startup's detailed analysis of its Mistral Large 2 model reveals that training alone generated 20,400 metric tons of carbon dioxide equivalent and consumed 281,000 cubic meters of water over 18 months. This disclosure comes as enterprises face dual pressures - implementing AI to stay competitive while fulfilling sustainability commitments. The audit provides decision-makers with concrete data points that were previously hidden behind industry opacity, enabling more informed technology adoption strategies. The numbers from Mistral's assessment illustrate the resource intensity of AI. Training the 123 billion parameter model required energy equivalent to 4,500 gasoline-powered cars operating for a year, while water consumption matched filling 112 Olympic-sized swimming pools. Each individual query through Mistral's Le Chat assistant generates 1.14 grams of CO2 equivalent and consumes 45 milliliters of water, roughly equivalent to growing a small radish. Mistral AI More significantly, the analysis reveals that operational phases have a greater impact on the environment. Training and inference account for 85% of water consumption, far exceeding the environmental cost of hardware manufacturing or data center construction. This operational dominance means that environmental costs accumulate continuously as model usage scales up. Mistral's research identifies actionable strategies for reducing environmental impact. Geographic location has a significant influence on carbon footprint, with models trained in regions with renewable energy and cooler climates exhibiting markedly lower emissions. The study demonstrates a strong correlation between model size and environmental cost, with larger models generating impacts roughly one order of magnitude higher for equivalent token generation. These findings suggest specific optimization approaches. Enterprises can reduce environmental impact by selecting appropriately sized models for specific use cases rather than defaulting to larger, general-purpose systems. Continuous batching techniques that group queries can minimize computational waste, while deploying models in regions with clean energy grids substantially reduces carbon emissions. Mistral's disclosure strategy differs significantly from that of its competitors. While OpenAI CEO Sam Altman recently claimed ChatGPT queries consume just 0.32 milliliters of water per request, the lack of a detailed methodology makes meaningful comparison difficult. This transparency gap presents opportunities for companies willing to provide comprehensive environmental data, allowing them to differentiate themselves competitively. The audit establishes environmental transparency as a key differentiator in the enterprise AI market. As sustainability metrics increasingly influence procurement decisions, vendors providing detailed environmental impact data gain advantages in enterprise sales cycles. This transparency enables more sophisticated vendor evaluations that balance performance requirements against environmental costs. For technology executives, Mistral's audit provides decision-making criteria previously unavailable. Organizations can now factor environmental impact into AI procurement decisions, alongside traditional metrics such as performance and cost. The data enables more sophisticated total cost of ownership calculations that include environmental externalities. Looking ahead, environmental performance may become as critical as computational performance in selecting AI vendors. Organizations that establish environmental accounting practices now position themselves advantageously as regulatory requirements expand and stakeholder scrutiny intensifies. The Mistral audit demonstrates that detailed environmental measurement is feasible, potentially making opacity from other vendors increasingly untenable in enterprise markets.
Bloomberg
24 minutes ago
- Bloomberg
The ‘Most Talked About Bond' in London Is a Losing Bet
It was the buzziest bond trade in London's financial circles — a good chance at a quick profit, and all the gains coming tax free. As far back as 2022, a UK bond maturing in 2061 was one of the most popular plays, with City bankers buying them for their own personal accounts and brokers reporting a surge in trading volumes from wealthy clients.
