US and China officials to meet for trade talks in London – business live

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Qualcomm to buy UK's Alphawave for $2.4bn

There’s a flurry of takeover excitement in the City this morning, where US chipmaker Qualcomm has secured a deal to buy UK semiconductor designer Alphawave in a $2.4bn deal.

The two companies have agreed takeover terms, with Qualcomm paying 183p in cash for each Alphawave share; they closed at 149p on Friday night.

That’s almost double Alphawave’s share price at the end of March, the day before Qualcomm revealed it was considering an offer.

The Alphawave board has unanimously recommended the deal, under which shareholders can choose to exchange their stock for Qualcomm, rather than taking cash.

Alphawave designs chips that allow high-speed data transfer, which are used in data centers which train and run artificial intelligence technology.

Cristiano Amon, president and chief executive officer of Qualcomm, says Alphawave’s high-speed wired connectivity and compute technologies will complement Qualcomm’s power-efficient CPU and neural processing unit cores, adding:

Qualcomm’s advanced custom processors are a natural fit for data centre workloads. The combined teams share the goal of building advanced technology solutions and enabling next-level connected computing performance across a wide array of high growth areas, including data centre infrastructure.“

China’s stock market has risen slightly today, amid hopes that today’s trade talks in London might yield progress.

The CSI 300 index is up 0.25%, while the Shenzhen Composite has gained 0.8%.

The outcome of these discussions will be “crucial” for market sentiment, reports Kathleen Brooks, research director at XTB.

Rare earth shipments from China to the US have slowed since President Trump’s ‘Liberation Day’ tariffs in April. The US wants these shipments to be reinstated, while China wants the US to rethink immigration curbs on students, restrictions on access to advanced technology including microchips, and to make it easier for Chinese tech providers to access US consumers.

A trade agreement between China and the US could calm fears about the economic fallout from US tariff plans, although it is still worth noting that an agreement between the US and the EU is conspicuous by its absence.

Oof! China’s factories are slashing prices at the fastest rate in almost two years, as trade war tensions hit demand.

China’s producer price index fell 3.3% in May from a year earlier, worse than a 2.7% decline in April and the deepest contraction in 22 months, National Bureau of Statistics data showed on Monday.

The PPI index measures prices ‘at the factory gate’, so is a good gauge of demand for goods.

China's inflation rate sticks at -0.1%

China has slipped further into deflation territory, underlining the importance of agreeing a trade deal with the US.

China’s consumer prices fell for a fourth consecutive month in May, new data from the National Bureau of Statistics shows.

The CPI index fell by 0.1% in May compared with a year ago, indicating a small drop in prices over the last 12 months. That suggests Beijing’s stimulus measures are not boosting domestic consumption and demand.

The annual CPI index has now been in negative territory since February, when it fell 0.7% year-on-year, follows by 0.1% drops in March and April.

Introduction: US-China trade talks in London today

Good morning, and welcome to our rolling coverage of business, the financial markets, and the world economy.

London is playing host to the latest stage in the US and China’s efforts to agree a trade deal.

Top US and Chinese officials are due to meet in the UK capital today, in an attempt to build on the preliminary agreement reached last month in Geneva, with rare-earth minerals and advanced technology likely to be high on the agenda.

Both sides are sending senior representatives – the US delegation is being led by Treasury secretary Scott Bessent, commerce Secretary Howard Lutnick and US trade representative Jamieson Greer. Vice premier He Lifeng leads China’s team.

Investors, and leaders, around the globe will hope that the two superpowers can cool their dispute; they’re currently partway through a 90-day truce which reduced the new tariffs between the pair to 10%.

Yesterday, a UK government spokesman said:

“The next round of trade talks between the U.S. and China will be held in the UK on Monday.

“We are a nation that champions free trade and have always been clear that a trade war is in nobody’s interests, so we welcome these talks.”

The meeting follows a phone call between Donald Trump and Xi Jinping last week, in which Xi reportedly told Trump to “withdraw the negative measures” which the US has taken against China”.

Reminder: a week ago, China accused the US of “seriously violating” their Geneva pact, after Washington complained that Beijing had not delivered on promises to roll back restrictions on the export of key critical minerals to the US.

The sight of the two sides meeting again may cheer markets, which “are sniffing out the scent of détente”, according to Stephen Innes, managing partner at SPI Asset Management.

Innes writes:

This isn’t your typical trade theatre. Forget the pomp of Mar-a-Lago photo ops—this is trench diplomacy in Savile Row suits, with both sides recognizing that the clock is ticking. Trump needs market serenity to maintain the illusion of economic strength heading into the Summer.

At the same time, Xi navigates a domestic economy riddled with landmines in the property sector and a consumer base still struggling to recover from the pandemic. That creates a mutual incentive to tone down the tariff tantrums and cue up the handshake optics—even if no signatures are signed.

The agenda

• All day: US-China trade talks in London