Trade Latest: China Talks in Focus, Europe’s Philips Gets a Boost

President Donald Trump and China’s Xi Jinping may meet personally to seal a trade deal. (AFP via Getty Images)

As President Donald Trump’s team continues talks with Chinese officials in Stockholm, some European companies were getting a boost from the trade deal over the weekend that left rates lower than feared.

American depositary receipts of Philips jumped 10% in premarket trading Tuesday after the Dutch electronics firm lowered its estimate of how much tariffs would hurt earnings. The company has been ramping up its local production and supply chains in China, the U.S. and Europe to mitigate the impact of taxes on trade.

Overall, though, the impact on European companies from the imposition of 15% tariffs on goods to the U.S. is seen as a negative. The Stoxx Europe 600 fell on Monday after the deal was announced over the weekend. The index was up 0.5% Tuesday.

The focus now is on what rate is settled on for China. The pattern established with the Japan and European Union deals is that the final rate will be higher than the temporary 10% baseline, but lower than what was proposed when Trump first unveiled widespread tariffs on April 2. Countries are told that the rates will be higher if they retaliate with tariffs on U.S. goods, and the agreements also involve promises of investments in the U.S.

For any countries that have yet to agree to a deal, new tariff rates are due to come into effect on Friday, Aug. 1—though such deadlines have proved to be flexible in the past. The key date for China is Aug. 12 after a preliminary agreement was made a few months ago.

The deadline for China will probably be extended, Commerce Secretary Howard Lutnick said Monday in an interview with Fox News.

There’s also talk of an in-person meeting between Trump and Chinese leader Xi Jinping. In a Truth Social post late Monday, Trump said he isn’t seeking a summit with Xi, but that he may travel to China at Xi’s invitation. If he does, that would be an obvious opportunity to announce more details of a trade deal between the world’s two biggest economies.

Write to Brian Swint at brian.swint@barrons.com