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U.S. President Joe Biden is moving to tamp down trade tensions with Europe and the U.K., even as he keeps the pressure on China. But with the American economy needing further tailwinds out of the pandemic, are tariffs with Beijing still worthwhile? The trade war initiated under the Trump administration arguably served a political purpose for both the U.S. and China. Donald Trump got to sound tough on Beijing and Xi Jinping — headed toward a key Communist Party meeting in early 2022 where he will need re-endorsing as president — got to sound tough in turn with America. Less clear is what it did to two countries needing to keep their engines humming in the face of extraordinary challenges. The pandemic, with its disruption to supply chains, is a stark reminder of what can happen when trade gets snarled. New research from Federal Reserve economists looks at an anomaly that started early in 2020, where China said it was selling more to the U.S. than America actually reported buying from it. The conclusion from the study is that exporters in China and importers in the U.S. were probably fudging their numbers. That weakens the argument that the trade war gave a fundamental economic advantage back to America. The under-reporting of U.S. imports also means a chunk of tariff revenue was lost. With Biden, the U.S. is moving to shield its economy from reliance on China. Investment in R&D is an important step. But trying to equalize the equation by persisting with tariffs on China may not deliver the goods economically — even if it sounds like a quick result politically. — Rosalind Mathieson A worker welds wheel hubs of baby carriages for export at a factory in Hangzhou in China's eastern Zhejiang province. Photo Credit: AFP/Getty Images Check out all our biggest stories on the Bloomberg Politics web page here and tell us how we're doing or what we're missing at balancepower@bloomberg.net.

Global Headlines

Blocked sites | The U.S. shut down three dozen Iranian websites including state-run media in retaliation for an alleged attempt to influence American elections, a move likely to increase friction as diplomats seek to revive the 2015 nuclear deal. It comes before a deadline expires tomorrow for a monitoring pact between Iran and the International Atomic Energy Agency, which if not renewed could hurt efforts to ease tensions in the Persian Gulf. Iran said the U.S. had agreed to lift sanctions on its oil industry and banks, but the main issues stalling efforts to restart the nuclear pact are linked to penalties that go back to 2015. Truce possible | British and European Union officials are increasingly optimistic they'll avert a post-Brexit trade war and strike a truce in the dispute over checks on goods moving into Northern Ireland. With the two sides locked in an argument that media dubbed the "sausage wars," London has asked for the EU to extend the grace period on a ban against the sale of chilled meats and fresh sausages to Northern Ireland from the rest of the U.K. Border tensions | China's military deployment along its disputed Himalayan border with India and uncertainty over whether Beijing will fulfill its promise on troop reductions remain a challenge, India's Foreign Minister Subrahmanyam Jaishankar said. His comments come a year after 20 Indian soldiers and at least four Chinese troops were killed in the bloodiest clashes between the nations in more than four decades. China has profoundly changed how it deals with the outside world under Xi, a top Australian diplomat says, describing the Asian nation as "dogged by insecurity." Hong Kong's Apple Daily newspaper, owned by jailed media tycoon and pro-democracy activist Jimmy Lai, will close on June 26 after authorities moved to block access to its bank accounts. Chip-starved industries from automakers to consumer electronics will need to wait longer for components as delays in filling orders worsen. The gap between ordering a semiconductor and taking delivery increased by seven days to 18 weeks in May from the previous month, according to the Susquehanna Financial Group. Trust busting | Germany's top competition official has wielded new powers to take on the giants of Silicon Valley, opening probes into Amazon, Google and Apple over the past five weeks alone. Andreas Mundt's onslaught may reshape the way tech companies do business in a race that could elevate the German Cartel Office to be a serious rival to the European Commission, which yesterday announced its own probe into Google. Australia passed legislation to reduce cyber abuse, allowing it to force platforms like Facebook and Google to remove harmful material within 24 hours or be fined as much as $415,000. Early lead | Brooklyn Borough President and ex-New York police Captain Eric Adams led the first round of counting in the Democratic mayoral primary, with a focus on law enforcement in a crime- and pandemic-battered city. Despite a nine-point advantage over civil rights lawyer Maya Wiley (and with former presidential candidate Andrew Yang dropping out), Adams must survive a further 12 rounds of vote counting to win the primary. What to Watch U.S. Secretary of State Antony Blinken is in Berlin today for talks with German Chancellor Angela Merkel to prepare for her trip to Washington on July 15. Hong Kong's first trial under national security legislation imposed by Beijing has started, offering a glimpse of how such hearings will be handled. Top Chinese and U.S. diplomats may hold talks during a Group of 20 meeting next week in Italy, the Financial Times reported. The Biden administration is calling for a scaled-down, in-person gathering of world leaders for the United Nations General Assembly in September as New York City recovers from the pandemic. And finally ... Births in the U.S. have generally fallen since the Great Depression as Americans started getting married later and putting off having kids. That only grew more pronounced during the pandemic: Nine months after the declaration of a national emergency, U.S. births fell by 8% in a month. States such as California and New York led the decline as people feared going to hospitals and lacked nearby family support because of lockdown restrictions. A father lures his child along with an iPhone during warmups before babies race in the NYC Triathlon's annual Diaper Derby. Photographer: Photographer: Dominick Reuter/AFP/Getty Images

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