US-China Trade War PAUSED and US Declares WAR on Big Pharma

The United States and China have agreed to a significant, though temporary, truce in their ongoing trade war. After high-level talks in Geneva, both countries will sharply reduce tariffs on each other's goods for 90 days—a move that has already sent global markets soaring and could reshape the economic landscape in the near term.

What Happened?

• The US had imposed a steep 145% tariff on Chinese imports, while China retaliated with a 125% tariff on US goods.
• Under the new agreement, the US will lower its tariff rate to 30% (down 115 percentage points), and China will drop its rate to 10% (also down 115 percentage points).
• This 90-day pause is designed to create breathing room for further negotiations and to ease the economic strain caused by the escalating trade war.

Why Now?

President Trump’s administration initiated the tariffs to pressure China over several issues:

• The flow of fentanyl, a deadly drug, from China to the US.
• Allegations of intellectual property theft and forced technology transfer by Chinese firms.
• The desire to protect critical US industries, like steel and semiconductors, and to address trade imbalances.

Both countries now see value in de-escalation. According to US Treasury Secretary Scott Bessent, “Both countries represented their national interest very well... We both have an interest in balanced trade, the US will continue moving towards that”.

Immediate Impact

Financial markets reacted instantly:

• US stock indexes (S&P 500, Nasdaq) jumped by up to 3.5%.
• The US dollar strengthened, and Treasury yields rose.
• Oil prices surged, while gold—a typical safe-haven investment—fell as risk appetite returned.

What’s Next?

• The two sides have established a new “Geneva Mechanism” for ongoing talks, aiming for a more comprehensive agreement in the coming weeks.
• The US will continue to protect key industries and pursue strategic decoupling where necessary, especially in areas like steel, medicines, and semiconductors.
• The deal also includes commitments to work together on curbing fentanyl trafficking, a major US concern.

Expert Take

UBS analyst Giovanni Staunovo notes that while the tariff reduction eases immediate tensions, “higher tariffs are still weighing on economic growth and likely force central banks to cut further interest rates later this year.” Volatility is expected to remain as negotiations continue.

 

Trump’s Executive Order to Cut Prescription Drug Prices

President Trump has announced a new executive order aimed at slashing prescription drug prices in the US to the lowest price paid by other countries—a move that could bring immediate relief to millions of Americans.

 

Key Points of the Order

• The order will require Medicare Part B (which covers drugs administered in doctors’ offices) to pay no more than the lowest price paid for the same drugs in other developed countries.
• Trump claims this “Most Favored Nation” policy will reduce drug prices in the US by 30% to 80% almost immediately.
• The policy targets high-cost medications, particularly those for cancer and other serious conditions.

Why Is This Needed?

• Americans pay more for prescription drugs than anyone else in the world—often more than twice as much as people in other developed countries.
• Drug companies have long justified higher US prices by citing research and development costs, but critics argue this unfairly burdens American patients.

How Will It Work?

• Drug manufacturers must offer Medicare the lowest price they charge in peer countries, adjusted for volume and economic differences.
• The executive order revives a similar Trump initiative from 2020, which was blocked by lawsuits and never fully implemented.
• Lawmakers from both parties are now considering legislation to further enforce international price parity for prescription drugs.

Potential Impact

• The original plan was projected to save nearly $88 billion over seven years for the government and Medicare beneficiaries.
• The new order is expected to deliver immediate savings for Medicare patients, though broader impacts will depend on legal and industry responses.

Bipartisan Support

• Senators from both parties have introduced bills to prevent drug companies from charging Americans more than the average price in countries like Canada, France, Germany, Japan, Italy, and the UK.
• The proposed penalties for violators are steep, aiming to force compliance and bring down prices for US consumers.

 

US Peace Efforts in the DRC: Challenging China’s Grip on Critical Minerals

The United States is taking bold steps to broker peace in the Democratic Republic of Congo (DRC)—a move that could undermine China’s dominance over the world’s supply of critical minerals.

Why the DRC Matters

• Eastern DRC holds vast reserves of cobalt, copper, lithium, and other minerals essential for electronics, electric vehicles, and military technology.
• China currently controls about 80% of critical mineral production in the DRC and dominates global refining capacity.

US Strategy

• The US is mediating peace talks between the DRC and Rwanda, aiming to end ongoing violence that has killed millions and destabilized the region for decades.
• If successful, the peace deal will be paired with new mining and investment agreements, opening the door for US and Western companies to re-enter the DRC’s mining sector.
• The US is also investing in infrastructure, such as the Lobito Corridor railway and a new port, to facilitate mineral exports independent of Chinese control.

Obstacles and Opportunities

• Peace is essential: Without it, US investments and ambitions in the region are unlikely to succeed.
• China has benefited from the chaos, operating in dangerous conditions and leveraging low labor and environmental standards to maintain its mineral monopoly.
• The US must ensure that any new mining boom also benefits the Congolese people, or risk sparking new cycles of conflict and anti-American sentiment.

Global Stakes

• China’s recent export bans on certain rare earth minerals have heightened concerns about supply security for the US and its allies.
• By helping stabilize the DRC and investing in infrastructure, the US aims to reduce its vulnerability and secure the raw materials needed for future economic and military strength.

 

In Summary

• The US and China’s 90-day tariff truce offers a much-needed pause in trade tensions, boosting markets and setting the stage for deeper negotiations1.
• Trump’s executive order on drug prices could deliver immediate savings for Medicare patients by tying US prices to the lowest international rates.
• US-led peace efforts in the DRC could break China’s near-monopoly on critical minerals, with far-reaching implications for technology, energy, and national security.

These moves reflect a broader strategy to protect American interests, lower costs for consumers, and secure vital resources for the future.