The stock market on the brink as trade talks stall on all fronts

After Trump accused China of “totally violating its agreement,” Beijing didn’t hold back.

A spokesperson for the Chinese Embassy in Washington urged the U.S. to “immediately correct its erroneous actions” and honor the Geneva trade consensus.

China’s Ministry of Commerce went even further, warning,“If the U.S. insists on its own way and continues to damage China’s interests, China will continue to take resolute and forceful measures.”

U.S. Treasury Secretary Scott Bessent admitted the talks are “a bit stalled,” but said he’s still hopeful.

“I think once the president makes his preferences known, we’ll see movement,” Bessent told reporters this week (Reuters).

Last month, stocks rallied on optimism that President Trump could hammer out quick new tariff deals with China and the EU. But patience in Beijing and Europe may be running thin.

🇪🇺 Europe draws its own red lines

Brussels isn’t staying put, either. EU trade negotiators warned they could slap retaliatory tariffs on U.S. goods as soon as July 14 if talks fail to come to a permanent deal

The U.S. and EU are undera 90-day tariff truce, but both sides haven’t made much progress since the deal.

“If what has been announced really becomes reality, then we should apply these counter-tariffs immediately,” said Bernd Lange, head of the European Parliament’s trade committee, in an interview with Politico.

The standoff highlights the glaring disconnect between U.S. and EU strategies. “For the U.S., tariff levels are a starting point for demanding concessions. For the EU, they’re a ceiling to be negotiated down,” wrote Goldman Sachs in a recent note.

📉 Why it matters

Despite looming uncertainty, the stock market has largely held up. Since April, the S&P 500 and Nasdaq have bounced back, driven largely by chip stocks and AI optimism.

But with key deadlines approaching in July and August, the runway for diplomacy is shrinking fast.

Trump still has time to secure trade deals. But if nothing is settled soon, another round of tit-for-tat tariffs could be just around the corner, and Wall Street isn’t going to like it.