Do the U.S. and China Have a Deal? + May Inflation Data & Tesla Delays Its Robotaxi Again

Ed breaks down the new U. S.-China trade deal framework, explains what the May CPI report signals about the economy, and unpacks why Tesla is once again pushing back its robotaxi launch. Subscribe to the Prof G Markets newsletter Order "The Algebra of Wealth" out now Subscribe to No Mercy / No Malice Follow Scott on Instagram Follow Ed on Instagram and X Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  Flowing ad budget on metrics that look great till the CFO sees them? That's bull spend and marketers are calling it out in dashboard confessions.

• 0:09Speaker 01

  I remember telling my boss, it'll be good for the brand when leads were slow. Yeah, it it wasn't.

• 0:17Speaker 00

  Cut the bull spend. LinkedIn lets you target by company, job title and more. Advertise on LinkedIn. Spend $250 on your first campaign and get a $250 credit. Go to LinkedIn.com/campaign. Terms and conditions apply.

• 0:30Speaker 02

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• 1:01Speaker 03

  This episode is brought to you by Michelob Ultra. Good times mean competitions between you and your friends. Like seeing who can throw some pigskin the farthest or rush the field the fastest. Winner gets an ultra because it's not just a superior like beer. It's also giving fans superior access to their favorite sporting events. Superior is worth playing for. Visit michelobultra.com/superioraccess to enter. Enjoy responsibly. Copyright 2026 Anheuser Busch InBev Michelob Ultra Beer, St. Louis, Missouri.

• 1:29Ed Elson?

  Today's number, seven and a half billion dollars. That's how much advertisers are expected to spend on podcasts in 2025, up 20% from the year before. I don't believe that number because we are the number one business podcast in America. And yet I am still wearing a Swatch watch. So something doesn't add up here. Someone needs to walk me through the math. Until I have a big, fat, ugly Rolex on my wrist, I don't buy it.

• 2:02Speaker 05

  Money markets mad. If money is evil, then that building is hell.

• 2:11Ed Elson?

  Welcome to Prof you markets. I'm Ed Elson. It is June 12th. Let's check in on yesterday's market vitals. The S and P and Dow closed nearly flat as investors digested the US-China deal. The Nasdaq slipped 0.5%. The yield on 10-year Treasuries fell after inflation data came in cooler than expected, and steel stocks dropped on reports that a trade deal with Mexico would remove the 50% tariffs on steel imports. By the way, Scott called this last week when the tariffs were first announced.

• 2:45Scott Galloway?

  It's not gonna happen. Trump always chickens out. This is

• 2:47Ed Elson?

  What do you mean? Because it went into effect this week. Are you saying it's not gonna hold? It's not gonna last?

• 2:53Scott Galloway?

  No, it'll be it'll be revised downward or it'll affect it. I just don't think it'll hold.

• 2:58Ed Elson?

  Okay, what else is happening? The US and China have reached a deal. That is according to the White House. President Trump said, quote, "Our deal with China is done, subject to final approval with President Xi and me." He said the agreement would lead to China supplying its rare earth minerals to America, quote, "upfront." He also said that the US would hold up its end of the deal, and that would include allowing Chinese students to use our colleges and universities. However, he did not mention our export controls on AI chips. And that was something that was hinted at by the White House earlier this week. But as of today, US chips are still not allowed to be sold to China. The talks took two days. They happened in London. President Trump and President

• 3:43Ed Elson?

  Xi Jinping were not there themselves, but Scott Besant and Howard Lutnick were there. And on China's end, the delegation was led by He Li Fang, who was in charge of China's economy. Now, how did the markets react? They didn't, really. I mean, stocks were pretty subdued. The dollar remained steady. The market basically shrugged. And I have to say, I'm with the market here. I mean, my reaction to this deal is the same reaction I had to every other deal we've seen so far. And that is, what is the deal? I mean, what did we even get? What has changed? And that's not a straw man position. That is truly what has happened here. I mean, Trump said China's going to supply these rare earth minerals.

• 4:28Ed Elson?

  Up front, but it's not really clear what that actually means. On CHIPS, we're still in the same position. We haven't seen any concessions on chip policy. Maybe that will change, but as of today, there's nothing new here to react to. And the dumbest part was Trump coming out and saying that the China tariff is now set at 55%, which sounds like a change at first. That's a number we haven't heard from him before. But then you realize, actually, no, it's not a change. That's just a consolidation of all of the pre-existing tariffs we already had. The effective tariff rate on China after the Geneva deal several weeks ago was 55%. So I look at this and my reaction is the same as the market's reaction.

• 5:13Ed Elson?

  And that is, I have no reaction. I don't think anything's changed here. And the way I see it, this is just another instance of a press release that is being poorly disguised as some sort of policy breakthrough. I can't find anything of substance in this quote unquote deal. But let's get a second opinion. Our producer Claire spoke with our favorite China expert, Alice Han. Alice is the China Economist and Director at Greenmantle. Here's what she had to say about the deal.

• 5:44Speaker 07

  Well, I think that what is clear is that we're still in the art of the deal, where the performance matters more than the substance. My number one takeaway is that ultimately, nothing really was worked out. The tariffs remain paused at the current rate of basically 30%, including the fentanyl 20% tariffs. And that ultimately, there wasn't a real concession that was offered to Trump. Now, the Chinese have already started, I think, issuing licenses to European and American companies for rare earths exports. And I think that will continue to accelerate. But certainly, my own sense is that both sides have basically decided to continue

• 6:26Speaker 07

  the ceasefire on tariffs and maybe do a little bit of a trade in terms of China getting access to potentially EDA, the equipment for semiconductors, in return for Americans getting more access. To the rare earths that in the last few weeks were actually blocked off from from exports to the US. That hit obviously order makers quite hard, both Europeans and Americans. But my number one takeaway is that ultimately this wasn't very substantive. And both of them have a vested interest in showing that they want to continue to negotiate. And we've moved towards a trade deal.

• 7:03Speaker 08

  And what do you make of the market's reaction to all this?

• 7:05Speaker 07

  I think markets in the US have largely shrugged this off. They are obviously worried about inflation risk. They're also worried about the big beautiful bill and what that will mean for the fiscal deficit. And I think that that is going to preoccupy markets moving forward beyond the US-China tariffs, which seem to again have been locked into a bit of a ceasefire détente period. But I I see some upside and already in the Chinese markets, they actually finished up. So that is an indicator that people are getting a little bit more bullish about China with the relief from obviously these tariffs. But also from the prospect that we may see in the coming weeks and months of Chinese fiscal stimulus. So I think we have two very different outlooks.

• 7:50Speaker 07

  The Chinese stocks seem to be performing better in this environment. Whereas US stocks, I think, are still stuck in a bit of a quagmire, not just because of trade-related issues, but primarily domestic-related fiscal issues.

• 8:01Speaker 08

  So what should investors be watching for next?

• 8:03Speaker 07

  I think we'll have to see, number one, in the immediate run, we'll have to see what happens on semiconductor sanctions as well as rare earths from China's side. If we start to see rare earths exports go back to normal, this will relieve a lot of pressure for order makers, but a ton of industries, even defense tech-related industries, which rely on Chinese rare earths. And secondly, the Chinese market will be heavily dependent on on EDA, the equipment for semiconductors, as well as potentially H20s, Nvidia's H20 AI chips. If there are concessions on that front, that could be quite interesting and it could be good for semiconductor stocks across the board.

• 8:44Speaker 07

  But certainly, I I think that the next thing to watch over the medium to longer term is where we end up with tariffs. Now, my own base case is that we're probably stuck here at the 30% mark. But certainly, there is some upside fat tail risk in the sense of tariffs going downwards, or even worse, on the opposite side, tariffs going further up. I mean, with this administration and Trump in power, it's really hard to say. And the ball is in the Americans' courts in terms of where they want tariffs to land. So I think that that is the next thing that we'll have to watch beyond some of these tech and rare earths-related sanctions.

• 9:20Ed Elson?

  Well, there you have it. Alice and I agree, this is another nothing deal. The only thing that might matter here is an update on our chip policy, because to Alice's point, that would have a significant upward impact on chip stocks. But again, we haven't gotten that yet. So the verdict is in. This deal is purely symbolic. It lacks substance. In short, it doesn't really matter.

• 9:48Ed Elson?

  The CPI report for May was published yesterday morning, and it was not so bad. US inflation did rise, but it rose less than expected to 2.4% year-over-year. Economists were expecting 2.5%. And the core measure of inflation, which strips out food and energy prices, and as a reminder, the reason they do that is because food and energy are very volatile, that measure remained flat at 2.8%. Let's take a look at some of the categories that really moved the needle here. Egg prices fell quite significantly, down more than 2% from the previous month. Gasoline prices also fell more than 2% from last month. But the biggest mover here was airline fares, which fell nearly 3% from the previous month.

• 10:33Ed Elson?

  So overall, pretty good, or at least not bad. Inflation did rise a little bit, but it didn't rise too much. But the big question that everyone is asking is, what does this say about the economy? And more specifically, what does this say about the tariffs? And the answer to that question, as I've said time and time again, and as I said on yesterday's episode, it tells us nothing about the tariffs, because the tariff impact isn't here yet. It's going to take three to six months for the price increase. To funnel through, which means we're not going to see an impact in May. We're not going to see an impact in June. We're going to see an impact sometime in the fall.

• 11:16Ed Elson?

  Now, did that stop the administration from going out there and saying, "Look, tariffs don't have an impact on the economy"? No, of course it didn't. That is exactly what they did. It is the tried and true playbook of this administration. And the cheerleader in chief was, yet again, Scott Besse. And this time, he said not only that tariffs aren't causing inflation, as we discussed yesterday, but this time, he's now suggesting that inflation is moderating because of the tariffs, because of Trump's policies.

• 11:46Speaker 09

  After four years of price increases diminishing the US standard of living, inflation is showing substantial improvement due to the administration's policies.

• 11:56Ed Elson?

  So, look, I'm sorry to keep throwing these Scott Besse clips at you, but, you know, he is the Treasury Secretary and he is kind of the leader of this whole tariff inflation psy-op. So it does need to be covered. But the point I want to emphasize is, again, the tariff impact isn't here yet. And that is why inflation hasn't risen. If we get to December and we still haven't seen any price increases, then I will be willing to admit defeat. I will concede that Scott Besse was somehow right. But as of today, June 12th, no, I'm not going to engage in that conversation. The CPI report was decent. We saw those egg prices come down after the bird flu outbreak, which happened at the beginning of the year.

• 12:41Ed Elson?

  And that's great news. I personally love eggs. I was getting pissed off at how much I was paying every time I went to Whole Foods. So that's great. But does any of that say anything about the tariff policy in America? No, no, no, it doesn't. Up next, Tesla delays its robot taxi launch once again. Stay with us.

• 13:10Speaker 00

  Are your ad campaigns lighting up the dashboard? But not the pipeline? That's bull spend. And marketers are calling it out in Dashboard Confessions.

• 13:20Speaker 01

  My boss asked for results, so I opened my dashboard for the only positive sounding metric I had: impressions.

• 13:27Speaker 00

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• 13:41Speaker 02

  Energía baja. Falta de concentración? Nebla mental? You might be dehydrated. Gatorade Zero Powders han sido diseñados científicamente para ayudarte a mejorar el balance de hidratación en el cuerpo. Hechos con la mezcla número uno de electrolitos, sin colores ni sabores artificiales. Shop now online or at retailers nationwide. Gatorade: Hydrates better than water. Is it in you? Signos de dehidratación leve y moderada. Consulta a tu médico si los síntomas persisten.

• 14:11Speaker 03

  This episode is brought to you by Michelob Ultra. Good times mean competitions between you and your friends, like seeing who can throw some pigskin the farthest or rush the field the fastest. Winner gets an Ultra. Because it's not just a superior-like beer, it's also giving fans superior access to their favorite sporting events. Superior is worth playing for. Visit michelobultra.com/superioraccesstoenter. Enjoy responsibly. Copyright 2026 Anheuser Busch InBev Michelob Ultra Beer, St. Louis, Missouri.

• 14:44Ed Elson?

  We're back with Prof G Markets. Our final story: Tesla has delayed the robotaxi launch again. As we discussed on Tuesday, the robotaxi was supposed to launch in Austin on June 12th, i.e. today. And I made the point that we shouldn't worry so much about all this Elon Trump drama because the thing that matters for Tesla is the robotaxi. That business is what determines the company's valuation. Well... It's June 12th and it's been delayed again. Elon said on X that the robot taxi will now launch on June 22nd. He also added that Tesla is quote, "super paranoid about safety, so the date could shift." So even that launch date might not materialize.

• 15:27Ed Elson?

  Now, I do want to be fair to Elon and to Tesla because yes, this isn't good for Tesla. But the June 12th launch date was an internal target that was set within the company. They never actually came out and officially confirmed or announced it publicly. All they said publicly was that the launch would happen sometime before the end of June. So I don't want to be too harsh here and I don't want to say they lied. They, they, they didn't, or at least they haven't so far. But it is becoming almost farcical how they consistently continue to drop the ball on this robot taxi. And I just want to remind you of the promises Elon Musk has made about the robot taxi in the past.

• 16:10Ed Elson?

  In 2015, he said we'd have robot taxis by 2018. In 2017, he said we'd have them by 2019. In 2019, he said we'd have a million Tesla robot taxis by 2020. In 2022, he said the robot taxi would come in 2023. And here we are in 2025, still no robot taxi. In sum, he's been making these promises for over a decade. So yeah, this is a theme now and it's becoming a running joke. And it's hilarious that just two days ago, I was saying, give it a couple of days and we'll see the launch. So even I, who am a very outspoken skeptic of Tesla and of Elon Musk, even I bought in.

• 16:55Ed Elson?

  I genuinely thought it was going to happen. So it didn't happen. Now the question is, will the robot taxi launch on June 22nd? Or will they delay again? And to answer that question, our producer Claire spoke with Sean O'Kane, the senior transportation reporter at TechCrunch.

• 17:14Speaker 08

  What would your prediction be? Do you think they'll push it again? Or do you think, can we safely expect they'll roll something out end of June?

• 17:21Speaker 10

  I think there will be something by the end of June. There will be some sort of form of public ride, whether it's on the 22nd or later in the week. The closer we get to July, the closer we get to financial figures from the second quarter. Those are going to be probably still pretty ugly. The first quarter was pretty rough for Tesla. They had some shutdowns at their factories that affected that. But in general, we've seen sales trending down almost all around the world for many different reasons. And so I think the closer they get to that, the more they lose this sort of buffer period where they can really get some good news out about the future of the company. Elon Musk has said he's bet basically the entire company

• 18:03Speaker 10

  on the autonomy piece versus selling vehicles at volume. And that's going to be essentially like a sort of complimentary piece of the company going forward. So I think, I think we will see something, you know, something happen, smallish scale.

• 18:19Ed Elson?

  Okay, so Sean sounds somewhat optimistic about the launch schedule. Sounds like he thinks Tesla will launch something, not because they necessarily want to, but because they have to. And I like his reasoning there. But before we end the episode, let's get a launch prediction from one more person. And just a quick disclaimer, this person is a little bit of a Tesla bear. Some call him a hater, some say he has Musk derangement syndrome. You know, I'll leave it to you to decide that. But in spite of all of that, we do love him very much. Let's bring in Prof G.

• 18:55Ed Elson?

  Hey Scott.

• 18:56Scott Galloway?

  Add quick question, what's the number one business podcast in the world after this morning?

• 19:01Ed Elson?

  Prof G Markets, baby, with Ed Elson. How do you feel about that?

• 19:04Scott Galloway?

  Oh, yeah, they had that, yeah, yeah. Something tells me someone's going to want to raise $8.50 an hour.

• 19:11Ed Elson?

  That's right. That's exactly what I'm thinking about. I just checked we're four out of 10 of the top business podcasts on Apple Podcasts today. I don't want to brag, but I do want to brag. So there I said it.

• 19:23Scott Galloway?

  Well, Ed, I don't want to get you too excited, but if you keep this up, someday I will be able to have a second one of these delicious Rolls Royces. Hello, Daddy.

• 19:33Ed Elson?

  Oh, wow.

• 19:33Scott Galloway?

  You know what happens?

• 19:34Ed Elson?

  Beautiful.

• 19:35Scott Galloway?

  You know what happens?

• 19:35Ed Elson?

  That's not yours. You don't have a car.

• 19:37Scott Galloway?

  Oh, okay. You know what happens though when you have a Rolls Royce, Ed?

• 19:39Ed Elson?

  What's that?

• 19:40Scott Galloway?

  Blowjobs, Ed. Blowjobs.

• 19:43Ed Elson?

  Okay.

• 19:44Scott Galloway?

  Is that wrong?

• 19:45Ed Elson?

  You know.

• 19:45Scott Galloway?

  Is that wrong? Number one business podcast in the world.

• 19:48Ed Elson?

  I think you're right. I think you're probably factually correct. Scott, so Elon has delayed the robotaxi launch once again. The new launch date is June 22nd. Quick take from you. Will it happen? Or will they delay again?

• 20:04Scott Galloway?

  Speaking of things you all, you do all autonomous driving takes over.

• 20:12Scott Galloway?

  Daddy's had a few cocktails tonight. I'm just leaving Maison Estelle.

• 20:16Ed Elson?

  In a suit and tie, which is rare.

• 20:17Scott Galloway?

  Yeah, I went to the Fan Food County event at the Royal Academy of Arts where I met one of my heroes. I own one piece of art and it's my guy, Grayson Terry.

• 20:26Ed Elson?

  Legend.

• 20:27Scott Galloway?

  Guy slash gal. Yeah, lives half his, half his year as a woman, half as a man. And I really enjoyed meeting him. Very impressive.

• 20:33Ed Elson?

  Well, I did. Yeah, I didn't ask you about your art collection.

• 20:37Scott Galloway?

  I own one piece of art. Anyways, like when Kathy would tries to justify how fucking insane or ridiculous price targets are on Tesla, they hold out, they hold out autonomous driving. And it could be disruptive. It could be a fundamental, it could be a game changer, huge margins. The problem is, is that this podcast is as about as far in autonomous driving or as credible in autonomous driving. If you and I said we were going to have autonomous driving in about three years, it might be just as credible as what they're saying right now. They just can't. Supposedly this test next week or in two weeks is going to be geo fenced, a small number of Teslas.

• 21:18Scott Galloway?

  Meanwhile, Waymo is running away with it. And even Elon Musk said, okay, Tesla is either going to be worth a lot or worth not a lot. Based on autonomous driving. So essentially, it's probably not worth very much. If Tesla gets valued at where, say, BYD is, which is, in my opinion, a better EV, but let's just give them the benefit of the doubt and say it's a BYD-like company. That means its stock gets cut by 95%. So they've been holding out this vision of autonomous driving, which just isn't happening. I feel as if we're on the launchpad and it's 10, 9, 8, oh wait, 11, 10, 9, oh wait, 15, 14, 13.

• 22:03Scott Galloway?

  This is at some point, tomorrow needs to be today, and it never happens. And this is my prediction, we're going to get to this event, and it's going to be a bunch of jazz hands with bullshit like the Robovan, or robots, or I don't know, flamethrowers. He's going to pull out anything he can out of his ass to say, hey, look over here, and ignore the fact, we are still way off from autonomous driving. I think this is literally the biggest head fake. This is a $950 billion head fake. This is a car company that's worth $30 to $50 billion, trading at nearly a trillion, all based on this hope and promise of autonomous driving, which is turning out to be a hallucination.

• 22:47Scott Galloway?

  It's not even a dream. It's literally hallucination.

• 22:51Ed Elson?

  I'll lock in your prediction there. End of June, we'll see a launch, but it'll be a bullshit launch.

• 22:57Scott Galloway?

  Yeah, that brings new definition to the term launch. I think there'll be an event. I think they'll have videos of these things driving. But the team pulled some data. They've had dramatically more crashes. And despite the fact he's managed to insert himself in the government and fire every inspector general and regulator overseeing his automobile company, the market, just as the bond market is the adult in the room in the cabinet, the market is going to be the adult in the room. And if these things come out of the gates with a bunch of crashes, it's game over. So he knows he can't come out with an unsafe product. And so far, the record is not good. This is I think you're going to see another fun prediction.

• 23:40Scott Galloway?

  At this launch event, Alphabet stock ticks up because everyone's going to realize that Waymo is the market leader here and is way ahead, is further ahead than previously imagined.

• 23:54Ed Elson?

  Okay, pseudo-launch and Alphabet stock ticks up. Thank you, Scott. Enjoy your night.

• 23:58Scott Galloway?

  Greetings. Thank you, Ed. Congratulations, number one.

• 24:02Ed Elson?

  Okay, that's it for today. Thanks for listening to Prof G Markets from the Vox Media Podcast Network. I'm Ed Elson. I'll see you tomorrow.