Morning brief: US-China talks,Trump vs Fed, UK-US nuclear deal, xAI Layoffs

A weekend marked by tense diplomacy, courtroom battles, major energy agreements, and upheaval in the tech sector underscored the shifting economic and political landscape.

From marathon US-China talks in Madrid to a looming fight over the Federal Reserve, as well as a nuclear power pact in Britain and sweeping layoffs at Elon Musk’s AI venture, the weekend’s developments reflected both global cooperation and domestic turbulence.

US and China hold extended talks in Madrid

Senior US and Chinese officials met in Madrid on Sunday for nearly six hours of high-level discussions covering trade, economic issues, and national security, including the status of ByteDance Ltd.’s TikTok.

The US delegation, led by Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer, sat down with a Chinese group headed by Vice Premier He Lifeng. Talks are expected to continue Monday.

“We’ll start again in the morning,” Bessent told reporters as he left the venue.

The discussions come ahead of a looming deadline for TikTok to secure a deal to continue operations in the United States.

Officials are also preparing groundwork for a potential meeting between President Donald Trump and Chinese President Xi Jinping at a summit in South Korea next month.

Trump, speaking in New Jersey, suggested TikTok’s future was uncertain.

“We may let it die, or we may — I don’t know, it depends. Up to China,” he said.

China’s Ministry of Commerce confirmed its delegation will remain in Spain through September 17, while Bessent continues a wider European trip through September 18 that includes Britain.

Trump is also expected to travel to the UK this week.

Trump presses court to remove Fed Governor

President Trump escalated his legal effort to remove Federal Reserve Governor Lisa Cook, pressing a US appeals court on Sunday to allow her dismissal ahead of the central bank’s policy meeting next week.

Trump has accused Cook of mortgage fraud, allegations she has denied. A lower court issued an injunction on September 9 blocking her removal while she challenges her dismissal in court.

Trump is now seeking an emergency stay order from the appeals court, which could rule as early as Sunday night or Monday.

If denied, the administration is expected to appeal to the Supreme Court immediately.

The dispute is unfolding just days before the Fed’s September 16-17 meeting, where policymakers are set to decide on interest rates.

Britain and US to seal nuclear energy pact

Britain and the United States are set to sign a wide-ranging agreement to deepen cooperation on nuclear power during President Trump’s state visit to the UK this week, the British government announced Monday.

Prime Minister Keir Starmer has made nuclear expansion a cornerstone of his energy strategy, with the government pledging £14 billion ($19 billion) toward the Sizewell C project and backing Rolls-Royce’s small modular reactor (SMR) program.

The new US-UK partnership aims to accelerate investments and projects, including plans by X-Energy and Centrica to build up to 12 advanced modular reactors in northeast England.

Holtec International, EDF, and Tritax are also expected to unveil an £11 billion ($15 billion) project to develop advanced data centres powered by SMRs at the former Cottam coal station in central England.

“These major commitments set us well on course to a golden age of nuclear that will drive down household bills in the long run,” Starmer said.

Musk’s xAI Cuts 500 Jobs Amid Reorganisation

Elon Musk’s artificial intelligence start-up xAI has laid off at least 500 employees, even as it advertised new job openings on X, the social media platform he owns.

Business Insider reported that the company emailed staff last week, informing them their contracts would be paid out until November 30, but system access was immediately revoked.

The layoffs primarily hit the data annotation team, which has played a key role in training xAI’s Grok chatbot.

The move followed leadership changes and the deactivation of several senior employees’ Slack accounts.

Staff were called into one-on-one meetings to discuss responsibilities, with some asked to evaluate colleagues’ work before the reorganisation was confirmed.

The restructuring signals a strategic shift for xAI, even as it seeks new talent to expand its AI capabilities.