On Thursday’s broadcast of the Fox News Channel’s “Special Report,” Treasury Secretary Scott Bessent said that there are a couple of “very large” trade deals that “are close” but talks with China “are a bit stalled.” And will require direct talks between Xi and President Donald Trump.
Bessent stated, “There are a couple of very large deals that are close. A couple of them are more complicated, and, as we saw with the President’s threat of 50% tariffs last Friday, the E.U. came to the table very quickly over the weekend. So now we’ve got the E.U. in motion, also.”
Host Bret Baier then asked, “And what about China, specifically China? And that, obviously, started in a different place. How can you characterize those talks now?”
Bessent answered, “I would say that they are a bit stalled. I believe that we will be having more talks with them in the next few weeks. And I believe we may, at some point, have a call between the President and party chair Xi.”
Baier then said, “So stalled. There was a time when the President thought that that was moving forward pretty significantly.”
Bessent responded, “Again, I think that, given the magnitude of the talks, given the complexity, that this is going to require both leaders to weigh in with each other. They have a very good relationship. And I am confident that the Chinese will come to the table when President Trump makes his preferences known.”
India’s government has just signed a deal with the United Kingdom that allows more Indian graduates to take more white-collar jobs from British graduates.
The deal is “truly appalling,” said Nigel Farage, leader of the fast-rising, anti-migration Reform UK party. The government has “betrayed working Britain” by giving Indian white-collar workers a 20 percent price advantage over similar Brits in jobs, he said.
But the deal is also bad news for American graduates because it may be similar to the still-secret trade deal that President Donald Trump is negotiating with Indian government officials.
“Hopefully, @POTUSand JDVancewill not be willing to screw American workers in a US trade deal with India,” said a May 7 tweet from the Immigration Accountability Project.
“We’ve heard nothing out of this administration so far that would indicate to me they are serious about doing anything about employment visas that are displacing Americans,” said Kevin Lynn, founder of U.S. Tech Workers. He added:
We’re not seeing anything coming out of India saying that they’re aghast that the U.S. is looking to curb these employment visa programs.
Indian officials have been pressuring Trump to welcome many more mixed-skill Indian graduates into the U.S. white-collar jobs, many of which are already closed to Americans because of ethnic hiring networks created by Indian managers within the Fortune 500.
Also, U.S. lobbies welcome the Indian migrant workers because they provide India with billions of dollars in remittances needed to buy U.S. weapons, grain, energy, and technology that the U.S. hopes to sell via the trade deal. Under President Joe Biden, the U.S. dramatically expanded visa awards to Indians, including the B-1 visitor visas used by Indians to get truck-driving jobs in the United States.
So far, U.S. officials have remained tight-lipped about the pending U.S.-India deal.
Trump and his deputies — including Vice President JD Vance and top policy aide Stephen Miller — know the unpopularity of the Indian inflow of mixed-skilled, white-collar workers.
It is unpopular because millions of subservient foreign workers have been imported by companies to displace millions of American graduates in technology, engineering, management, finance, and increasingly in accounting. Top executives and investors import the workers via the multi-year H-1B, J-1, L-1, H4EAD, CPT, and OPT programs that dangle the promise of citizenship in front of desperate migrants.
For example, many young American graduates are being pushed out of career-starting jobs by the annual flood of roughly 300,000 foreign graduates who get work permits via the “F-1 Optional Practical Training” program. The program was created by President George W. Bush — without approval from Congress — and rewards companies that hire Indian graduates by exempting them from Social Security or Medicare taxes. It also allows foreign-born hiring managers to favor home-country job-seekers and to discriminate against American graduates.
At least 1.5 million white-collar jobs are now held by college-graduate migrants. In 2024, President Joe Biden’s deputies made it even easier for more Indian students to get white collars jobs.
Unsurprisingly, many recent or pending American graduates are alarmed and despondent over their failure to get jobs or even internships.
Computer professional Jim from Herndon told Breitbart that he has a nephew who graduated last year with a degree in engineering and computers, and a nephew who is about to graduate with a degree in Geographic Information Systems: “They found nothing, so they think they’ll be doing lifeguarding in the summer.”
Graduates “only have two years after they graduate to get a pipeline [career-starting job, and then [recruiters] move on to the next new grads,” he said. In contrast, his two nieces with degrees in sociology and film studies landed administration and marketing jobs for roughly $100,000, he added.
“Something strange, and potentially alarming, is happening to the job market for young, educated workers,” the Atlantic magazine reported in April:
According to the New York Federal Reserve, labor conditions for recent college graduates have “deteriorated noticeably” in the past few months, and the unemployment rate now stands at an unusually high 5.8 percent. Even newly minted M.B.A.s from elite programs are struggling to find work. Meanwhile, law-school applications are surging—an ominous echo of when young people used graduate school to bunker down during the great financial crisis.
The concerns about a white-collar NAFTA rose this week when Trump told reporters that India has agreed to drop tariffs on U.S. goods to zero. “They’ll drop it to nothing,” Trump said in a White House media interaction alongside Canada’s Mark Carney. “They’ve already agreed.”
India has offered to slash its tariff gap with the U.S. to less than 4% from nearly 13% now, in exchange for an exemption from President Donald Trump’s “current and potential” tariff hikes, two sources said, as both nations move fast to clinch a deal.
Indians are unlikely to remove their tariffs without a U.S. concession — such as more white-collar jobs for Indian graduates, said Lynn. The Indians are “dropping tariffs to zero on American products that they have no intention of buying, and if they do, they’ll be buying with salaries taken from American [professionals],” he said.
India must demand more American jobs because its economic growth is built on its legal and illegal migrants who send remittances and outsourcing jobs back to India. The dependence on U.S. jobs was described in a May 5 article in Bloomberg:
“Everyone goes to the US to make money, and most of that money comes back to India,” says Jayesh Patel, whose entire family left the country. Patel, who runs a water bottling plant in Gujarat’s capital, Ahmedabad, frequently visits his native village to watch over the family’s land. “Everything here—the roads, temples, schools—it all comes from dollars.”
…
Mahindra Vithal Das, 65, who lives in Gujarat’s Mehsana district, has … two sons. Both made harrowing and expensive journeys to reach the US, where they work [illegally] in convenience stores and send money home to support Das and his wife.
But their UK-India agreement also hides the tax-break gain that will likely allow more U.K. jobs to be taken from young British professionals and be given, at lower wages, to desperate Indian migrants delivered by multinational outsourcing companies.
The deal includes a huge “Double Contribution Convention” clause that allows Indian migrants to avoid paying a healthcare tax, dubbed the “National Insurance” tax. This tax giveaway ensures that British employers will hire low-tax Indians at less cost than Brits who must pay the tax as well as their higher college debts.
British officials insist the tax break is fair because it also would apply to any British people who were hired for jobs in India’s low-wage economy, and it only covers workers who hold jobs with transnational Indian companies.
Yet Indian officials are describing the deal as a “huge” win for their white-collar outsourcing industry: “In an unprecedented achievement, India has secured an exemption for Indian workers who are temporarily in the UK and their employers from paying social security contributions in the UK for a period of three years under the Double Contribution Convention. This will make Indian service providers significantly more competitive in the UK.”
The deal will also “greater global mobility for aspirational young Indians,” the pro-migration government declared, adding: “The FTA eases mobility for professionals including Contractual Service Suppliers; Business Visitors; Investors; Intra-Corporate Transferees; partners and dependent children of Intra-Corporate Transferees with right to work; and Independent Professionals like yoga instructors, musicians and chefs.”
The Indian officials say the deal will also help Indian companies sell services into the U.K. market: “India has secured significant commitments on digitally delivered services for Indian service suppliers, especially in professional services such as architecture and engineering, computer related services and telecommunication services.”
“The mobility chapter of the deal [is] meant to smooth the way for more inter-company transfers,” the Indian press release said, without directly saying that more Indian graduates will be able to take jobs and salaries from U.K. graduates.
In. D.C., U.S. officials have given little indication that they would welcome more Indian white-collar workers, and are promising to raise Americans’ productivity and wages.
“Over one in ten young adults in America are neither employed, in higher education, nor pursuing some sort of vocational training,” White House spokesman Kush Desai told Axios on May 7. “There is no shortage of American minds and hands to grow our labor force, and President Trump’s executive order to modernize workforce training programs represents this Administration’s commitment to capitalizing on that untapped potential,” he added.
The promise of cheap labor is ” a drug that too many American firms got addicted to … [and] globalization’s hunger for cheap labor is a problem precisely because it’s been bad for innovation,” Vance told investors at the American Dynamism Summit in March. He added:
Real innovation makes us more productive, but it also, I think, dignifies our workers. It boosts our standard of living. It strengthens our workforce and the relative value of its labor.
U.S. equity investors will be watching closely as trade talks kick off between the Trump administration and China, with trillions of dollars hanging in the balance for American companies.
The average member of the S&P 500 made 6.1% of its revenue from selling goods in China or to Chinese companies in 2024, according to an analysis from Bloomberg Intelligence’s Gillian Wolff and Gina Martin Adams.
“The bottom line is that if the U.S. has to decouple completely from China, it would result in a significant decline in earnings for S&P 500 companies no longer selling products to Chinese consumers,” Torsten Slok, chief economist at Apollo, wrote.
U.S. firms generated $1.2 trillion in revenue selling to Chinese consumers, which is about four times more than the size of the trade deficit in goods between the countries, according to an analysis from Slok.
On top of that, there are the costs for companies that sell Chinese-made goods in the U.S., which will get hit by the levies imposed by the Trump administration. Mattel Inc., for example, withdrew its forecast for a return to sales growth in 2025, citing the plan to impose tariffs on imported toys. Trump called out the company by name on Thursday and said he would impose a 100% tariff on any toys produced overseas.
Though it is hard to isolate the impact of the trade spat with China on the profits of S&P 500 companies, strategists have been sharply lowering their earnings estimate for the benchmark this year, often due to concern that policy uncertainty is going to hurt growth. Earnings for the index are currently expected to be about $265 in 2025, down from $273 in early January.
China has been at the center of the trade offensive that President Donald Trump launched on April 2, when the administration announced the harshest trade barriers in a century. While the levies on most countries were put on a 90-day pause a week later, those on China were pushed higher. Several rounds of retaliation have raised the U.S. tariffs on imports from China to 145%, while the Chinese have put in place a 125% duty on U.S. goods.
The S&P 500 erupted into a phase of historic volatility when the tariffs were first announced and then paused, leaving the index down 15% for the year by April 8. Since then, however, stocks have recovered, buoyed by hopes that negotiations will bring rates lower than initally proposed. On Thursday, Trump said that a trade agreement with the UK is likely to be the first of many, and he expressed confidence that the talks with China can result in tangible progress.
The equities benchmark is now down only about 3.7% in 2025, but many of the biggest companies are still caught in the trade crossfire. Smart-phone maker Apple Inc. and semiconductor behemoth Nvidia Corp. both have big revenue exposures to China, according to data compiled by Bloomberg. Electric-vehicle giant Tesla Inc. makes more than one-fifth of its sales from the country.
“Technology and apparel companies are at the epicenter of the trade embargoes for now,” said Joe Gilbert, portfolio manager at Integrity Asset Management. Gilbert is avoiding semiconductor capital equipment companies and smaller retailers that do not have the scale to cope with tariffs or find new suppliers outside China.
Here are the sectors worth watching as the headlines on trade negotiations start to roll in.
Chipmakers
The makers of chips and the firms that develop related technology and equipment are highly exposed to China, putting them at the front line of the trade negotiations.
Monolithic Power Systems Inc., KLA Corp., Lam Research Corp. and Qualcomm Inc. — all semiconductor related names — were the S&P 500 companies with the highest exposure to China, according to the analysis from BI.
The first-quarter earnings season has seen several of these firms starting to sound the warnings about the trade uncertainty, particularly when it comes to China. Advanced Micro Devices Inc. said U.S. restrictions on sales to China will cost it $1.5 billion in revenue this year. Qualcomm Inc., which counts China as the biggest market for its chips and is the largest maker of smartphone chips, gave a tepid revenue forecast. Intel Corp.’s revenue forecast for the current quarter was also well below analysts’ projections and the company warned that a tariff-fueled recession could torpedo chip demand.
The Philadelphia Semiconductor Index is down 11% this year, compared to the 3.7% drop of the S&P 500. Declines in the chip index were led by Marvell Technology Inc., Teradyne Inc., ON Semiconductor Corp. and Amkor Technology Inc.
Consumer
Companies like Nike Inc., Estee Lauder Cos. and Philip Morris International Inc. are heavily exposed according to Bloomberg supply-chain data. Meanwhile, Starbucks Corp. and McDonald’s count thousands of Chinese locations each.
One of the starkest example of the impact of tariffs on this sector came on Wednesday. Shoe retailer Steven Madden Ltd., which said in February that it was expecting sales to grow nearly 20% this year, pulled that forecast, citing “meaningful near-term headwinds” from tariffs.
Amazon.com Inc., meanwhile, said it was bracing for a tougher business climate in the coming months.
The S&P 500 Consumer Discretionary Index has fallen 12% so far this year.
Autos
Auto components are the most-exposed S&P 500 sector to international demand, according to Bloomberg Intelligence’s Adams. BorgWarner Inc. and Aptiv Plc get a particularly large chunk of their revenue from China.
Automakers General Motors Co. and Ford Motor Co. both pulled their guidance for 2025, citing tariffs. GM imported nearly 55,000 cars last year from China. Harley-Davidson Inc. also withdrew its 2025 outlook, citing a lack of clarity around U.S. trade policy.
The S&P Composite 1,500 Automobiles and Components Index is down 26% this year, with Gentherm Inc., Fox Factory Holding Corp. and Winnebago Industries among the top decliners.
Industrials
U.S. industrial giants are firmly plugged in to global supply chains and markets and the trade war is already weighing on freight operators and big machinery makers, among others.
Caterpillar Inc. has said most of the hit it is expecting will come from China’s retaliatory levies. It tallied the cost from tariffs at $250 million to $350 million in the second quarter alone. Honeywell International Inc. was placed on one consulting firm’s list of the large U.S. companies most at risk from China exposure last year.
Boeing Co., the largest U.S. industrial exporter, has been a direct target of Beijing’s retaliation. Chinese officials last month ordered airlines not to take any further deliveries of its jets, leaving in doubt the fate of about 50 that were slated to go to China this year.
Home improvement products manufacturer Masco Corp. also withdrew its full-year guidance, and Truist Securities analyst Keith Hughes said the company’s exposure to China tariffs could see prices grow in the mid-single digits, contributing to a 50 cent to 70 cent hit to earnings per share in 2025.
Expeditors International of Washington Inc. said that it was seeing “early signs” that ocean freight volumes from China to the U.S. were falling significantly. Meanwhile, Matson Inc. earlier this week said that since the China tariffs were implemented in April, the company’s container volume declined about 30% year-over-year.
United Parcel Service Inc. did not update its full-year outlook, saying it would stand behind the 2025 guidance if conditions were to stabilize. However, UPS expects to see weakening demand between the U.S. and China, which is the company’s most profitable trade lane. Peer FedEx Corp. lowered its full-year guidance.
Materials
From chemical-makers to metals and mining companies, the resources industry also has major vulnerabilities to U.S.-China relations.
Eastman Chemical Co. last month provided a disappointing outlook for the second quarter, citing factors that included “tariffs between the U.S. and China.” Copper producer Freeport-McMoRan Inc. said the 145% tariffs the White House placed on China were the largest driver behind the increase in its cost of goods.
Companies are also subject to indirect shockwaves. Fertilizer company Mosaic Co. is watching for a hit to demand for crop inputs as Chinese buyers shift to purchasing grains elsewhere, including from Brazil, an executive said on an earnings call.