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Analysts at Nomura explained that President Trump said on Friday that the 12 June North Korea summit will take place, reversing a previous cancellation announcement.  

Key Quotes:

“Overall, the planned summit could reduce the likelihood of a materially disruptive development in US-China trade relations over the near term.”

“Commerce Secretary Ross will be traveling to China on 2-3 June, barely one week after a somewhat hawkish statement from the White House about the ongoing Section 301 investigation.”  

“US-China talks while Ross is in Beijing will take place with an increasingly tense background following trade developments this week with major US trading partners. Thus, the news on the summit today may reduce near-term US-China risk, but uncertainty remains.”

“The Trump administration announced on Thursday that it will impose steel and aluminum tariffs on the EU, Mexico and Canada after a temporary exemption expired on 1 June. This is the first time that the Trump administration has imposed meaningful tariffs on imports from these major trading partners.”  

“Consequently, Thursday’s announcement marks a notable shift in policy. Moreover, the timing of the announcement could put further strain on ongoing NAFTA renegotiations.”  

“Finally, the new tariffs come at a time of increased US-China trade tensions.”