Highlights for the morning: US-China trade deal, SoftBank bets on superintelligence

SoftBank CEO Masayoshi Son said he intends to make the company the leading platform for «artificial superintelligence». The U.S. and China signed a trade agreement that includes supplies of rare earth metals. The US Treasury Department also scrapped the «retaliatory tax» (Section 899 of Donald Trump's budget bill), which excludes US companies from international digital taxes in exchange for concessions from G7 countries. On these and other topics - in our review of key events for the morning of June 27.

The United States and China have given final approval to the trade agreement reached last month in Geneva, U.S. Commerce Secretary Howard Lutnick said, reported Bloomberg. He said the White House plans to strike similar deals with ten more key trading partners in the near future.

Latnick said the treaty includes a commitment by China to supply the U.S. with rare earth metals, which are used in products ranging from wind turbines to jet airplanes.

«They will supply us with rare earths,» he told Bloomberg. - And once they do, we will withdraw our retaliatory measures.»

A spokesman for the Chinese Embassy in Washington declined to comment, and the Chinese Foreign Ministry did not respond to Bloomberg's request for comment.

SoftBank CEO Masayoshi Son said at its annual shareholder meeting that he aims to make the Japanese investment giant the largest provider of platforms for «artificial superintelligence» (ASI) within a decade, reports Reuters.

Sohn compared his goal to the position of tech giants such as Microsoft, Amazon and Google, which benefit from the winner-take-all principle. Previously, Sohn defined artificial superintelligence as AI that surpasses human capabilities by 10,000 times.

SoftBank is once again making aggressive investments like those that have made Son famous in the past (such as his early bet on Alibaba) but also resulted in losses like the WeWork debacle. In 2024, SoftBank acquired US-based Ampere for $6.5 billion and committed to invest up to $40 billion in ChatGPT developer OpenAI. As of today, the agreed investment in OpenAI has reached $32 billion. «I bet everything on OpenAI,» Son emphasized, adding that he wishes he had invested earlier and expects the company to go public.

SoftBank previously owned about 5% of Nvidia, but sold it back in 2019 - before interest in AI soared amid the launch of ChatGPT. Now Nvidia is the dominant AI chip maker and one of the most valuable companies in the world.

After the failures of high-tech startups funded through the Vision Fund, SoftBank was forced to reduce activity. However, the situation changed after the IPO of British chipmaker Arm in September 2023: the growth of Arm's shares increased the value of the group's assets, allowing them to be used as collateral for new investments.

Son emphasized that SoftBank has a prudent investment policy and retains the financial resources and user base to take the risk at the right time. Earlier in June, SoftBank raised $4.8 billion through the partial sale of a stake in T-Mobile.

The U.S. Treasury Department announced an agreement with G7 allies that would exempt U.S. companies from a portion of taxes imposed by other countries in exchange for removing a proposal for a so-called retaliatory tax (Section 899) from Donald Trump's bill, reports Bloomberg.

Treasury Secretary Scott Bessent announced that he has asked the Senate and House of Representatives to remove Section 899 from the bill under discussion. Congressional Tax Committee leaders Jason Smith and Mike Crepeau were quick to endorse the proposal: «At Secretary Bessent's request, and in light of a shared understanding of the need to preserve U.S. tax sovereignty,» Section 899 will be removed from the bill.

Section 899, dubbed the «retaliatory tax,» was proposed by Republicans in the House of Representatives with the support of the White House. Its purpose is to respond to the actions of countries in Europe, Canada, Australia and other states that impose taxes on the activities of U.S. technology companies or promote a global minimum tax for corporations. The bill would have raised taxes for those countries whose policies the U.S. considers discriminatory.

On Wall Street, Section 899 raised concerns that its passage could scare away foreign investors. After the news, the markets' reaction was subdued: the Bloomberg Dollar Index declined for the fourth consecutive day, Treasury bond yields fell, and the S&P 500 Index approached an all-time high - with most of these moves occurring before the deal was officially announced.

Nike said it expects a softening of declining sales and profits after posting its biggest loss ever in the fourth quarter of its fiscal year ended, reports CNBC.

While the toughest times seem to be behind us, Nike is facing new challenges, particularly duties. CFO Matt Friend called them a «significant and new» cost driver.

«Including the new duties, we estimate Nike's incremental costs in the current fiscal year 2026 to be approximately $1 billion,» he said. The company plans to offset those costs by optimizing supply chains, working with manufacturing and retail partners, and raising prices.

Right now, about 16% of Nike's production chain is located in China, and by the end of the current fiscal year (summer 2025), the company expects to reduce that figure to  high single-digit levels (between 7-9%). «Despite current duties, manufacturing capacity in China remains important to our global network,» Friend noted.

Friend added that Nike is considering cost reductions, but the priority remains stabilizing the business, which requires investment. The impact of duties on gross profit in 2026 is estimated at minus 0.75 percentage points, with the main pressure coming in the first half of the year.

Markets in the Asia-Pacific region are trading mixed on Friday.

- Japan's Nikkei 225 index rose 1.4%, hitting a six-month high and surpassing the 40,000-point mark for the first time since Jan. 7. The broader Topix index added 1.2%.

- In South Korea, the Kospi index was down 1 percent and the Kosdaq small-company index was down 1.2 percent.

- Hong Kong's Hang Seng fell by 0.4%, and China's CSI 300 index fell by 0.2%. Data from the National Bureau of Statistics of China showed: in the first five months of the year, the profits of industrial enterprises in the country fell by 9.1% compared to the same period last year.

- In Australia, the S&P/ASX 200 index was down  0.2 percent.

- U.S. stock index futures fluctuated near zero during morning hours in Asia as investors awaited the release of a range of macroeconomic data including inflation, personal income, consumer spending and consumer confidence index.

- The S&P 500 index rose 0.8% to 6141.02 points in the US the previous day, approaching a new record high. Up 2.9% since the beginning of the week, the index was just a few points away from the intraday record of 6147.43 set at the end of February. The Nasdaq Composite added 0.97% to 20,167.91, also nearing a new record. The Dow Jones Index rose 0.94% to 43,386.84. 

The White House on Thursday sought to diminish the significance of looming trade duties that have previously negatively affected investor sentiment, reports CNBC. The duties are set to take effect on July 8 after a 90-day pause, and a deal with the EU that could prevent the imposition of 50 percent duties expires on July 9.

This article was AI-translated and verified by a human editor