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Yahoo
6 days ago
- Business
- Yahoo
Trump cornered as China weaponises its rare-earths dominance
When or if Donald Trump gets on the phone with Xi Jinping, the tone between the two men is likely to be frosty. The US and China have in recent days both accused each other of violating their fragile, three-week-old trade truce. The two presidents are expected to speak this week in an effort to rescue the deal. But Trump has a tough pill to swallow: it is his arch-rival who looks to have the better negotiating hand. China's near-total dominance of the world's supply of rare-earth metals – which are used in the manufacture of everything from cars and computer chips to F-35 fighter jets and nuclear-powered submarines – means Xi can squeeze the US where it hurts. 'Critical minerals are one of the most important bargaining chips for China in its negotiations with Washington. China will really hold on to this, as a significant point of leverage,' says Matilda Buchan, a senior analyst at Asia House, a London think tank. Beijing's willingness to weaponise the rare-earths supply chain is so potent a threat to the US economy and military that it has already pushed the White House into de-escalating its planned trade war with China. After Trump's April 2 'liberation day' announcement raised tariffs on US imports from China to an eventual peak of 145pc, Beijing's retaliation included a ban on exports to the US of magnet alloys containing key rare-earth materials. The impact was quickly felt. On May 9, some of the biggest carmakers in the US – including General Motors, Toyota, Volkswagen and Hyundai – wrote to the White House warning that unless China's export ban was lifted, they would soon have to start cutting back production. That same day, Trump told his Truth Social followers that he was ready to make big concessions to get a deal with China. Negotiations in Geneva took place over the ensuing weekend, and the tariffs came tumbling down. It emerged, more quietly, in subsequent days that China would allow rare-earths exports to the US to resume. Last Friday, though, Trump was back on Truth Social claiming that China had 'TOTALLY VIOLATED ITS AGREEMENT WITH US'. Jamieson Greer, the president's trade envoy, told CNBC that Beijing was 'slow-rolling' its issuance of licences to export products containing rare earths. 'We haven't seen the flow of some of those critical minerals as they were supposed to be doing,' he said. The question is whether China is actively frustrating the deal, as some White House officials reportedly suspect, or whether the explanation is more mundane: not a grand conspiracy but simply a system coming to grips with new red tape. Back in April, Beijing did not just slap a ban on exports, it built a new bureaucratic structure to underpin future rare-earths trade. China-based companies wanting to export metal alloys containing more than a trace of seven key rare earths – samarium, gadolinium, terbium, dysprosium, lutetium, yttrium and scandium – now need to apply for a licence from the commerce ministry. It was not initially clear which shipments would be caught by the new rules, and there was plenty of precautionary laboratory testing, even of exports that were below the rare-earth content threshold. 'What initially looked like an almost total freezing of exports from China was really just a response to this need for testing of all the material, and of any material which contained more than 0.1pc of any of these elements,' says David Merriman, the research director at Project Blue, a critical minerals analysis and advisory firm. Project Blue's analysis suggests the application process is taking about 45 days, which may explain why exports to the US have been slower than expected. By mid-May, six large companies had received export licences, and at least another three were in the process of doing so. 'We are seeing some approvals come through, certainly slower than industry would like,' Michael Hart, president of the American Chamber of Commerce in China, told Bloomberg this week. 'Some of the delay is related to China working through their new system to approve exports, not that they are not allowing exports.' As part of the Geneva trade deal between the US and China, the commerce ministry has taken 28 US businesses off its export-control blacklist. But exports will still have to be approved on a shipment-by-shipment basis, and none is so far bound for the US. Volkswagen's European operations appear to have been an early beneficiary of an export licence, but not in sufficient quantities to ease supply concerns. 'There are a few approvals coming through, but they are far from being sufficient to prevent imminent production halts,' Jens Eskelund, the president of the European Union Chamber of Commerce in China, told the New York Times. 'We are still facing a major disruption of supply chains.' The threat of factory production lines grinding to a halt highlights the immense power of China in this crucial market, and the power of its hand in negotiations. China's mines churn out about 61pc of the world's rare earths, according to the International Energy Agency (IEA). Chinese refiners and manufacturers also hoover up most of the rare earths from elsewhere, processing 92pc of the world's supply. It is refining that is key, as this is the process that turns the material into a usable product. The country has a particular stranglehold on the manufacture of magnet alloys containing rare earths, which have near-ubiquitous application in computing, vehicular and electrical systems. 'Particularly as you move further down the supply chain, from mined products towards downstream highly engineered products, China's market share only grows,' Merriman says. 'Its grip only gets tighter.' Rare earths are used in very small quantities, which means it has long been uneconomic for most countries to mine or refine them – most, that is, except China, where the industry is under state control. The US has been spearheading sporadic efforts to restart rare-earths production and magnet manufacture either at home or in friendlier countries. But these efforts are yet to bear real fruit. The IEA estimates that a decade from now, China will still account for 85pc of refined rare-earths output. This leaves Trump cornered. He has been talking up the prospects of Ukraine and Greenland as alternatives, but his presidency will be long gone before either of those becomes a realistic option. Tariffs are no use here either. His only weapon is semiconductors. Over the past month, the US has been gradually tightening controls over China-bound exports of chips and associated software, particularly those used in artificial intelligence. The chips squeeze is partly motivated by the White House's long-term strategic desire to retain technological supremacy over China. But it also has some immediate tactical trade leverage – as Howard Lutnick, the US commerce secretary, admitted on Sunday. '[We are] taking certain actions to show them [the Chinese] what it feels like on the other side of that [export ban] equation,' he told Fox News. This has riled Beijing. 'The United States has unilaterally provoked new economic and trade frictions,' the Chinese commerce industry said in a statement on Monday. 'These practices seriously violate the consensus.' Despite the war of words, Lutnick claimed he was confident that Trump would 'work it out' with Xi. Perhaps his confidence is well-founded. With the US and Chinese tech and manufacturing industries hanging in the balance, a deal looks essential for both sides. But Trump is in no position to dictate terms – and he won't like that one bit. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Arab News
20-04-2025
- Business
- Arab News
Trump tariffs bolstering ties between Gulf and Asian nations
In recent weeks, much media attention has focused on US President Donald Trump's tariffs. However, one of the implications of the American duties that has not yet been explored extensively is how, by disrupting trade flows, they might encourage and intensify political and economic ties between the Gulf Cooperation Council member states and other countries in Asia. These nations, like other powers around the world, are seeking renewed partnerships to bolster their political and economic futures amid growing US protectionism. Vietnam and the UAE recently upgraded their diplomatic ties, while Malaysia and Indonesia are strengthening their relationships with Saudi Arabia. Take, for example, the injection of $100 million into Malaysia's AirAsia by the Saudi Public Investment Fund. Indonesia has also been in talks with the Kingdom to boost trade. The growing economic connections between Asia and the Gulf were highlighted in an eye-catching report by the Asia House think tank. What it termed the Middle Eastern 'pivot' to Asia is evidenced by the fact that the value of two-way trade reached a record level of $512 billion in 2022. As highlighted by the report, this remarkable phenomenon has been driven by major bilateral relationships. One of the key findings was that Gulf-China trade growth will continue to outstrip that of the region's trade with the West. Assuming that both trade relationships continue to expand at 2010-2023 rates, trade with China will overtake trade with the West in 2027. Certainly, there are some risks, including oil price volatility, political instability in the Middle East and US-China tensions, all of which could affect global economic flows. However, the pivot by Gulf nations to Asia continues, now additionally fueled by Trump's trade tariffs. This Middle Eastern pivot to Asia will continue, driven in large part by hydrocarbons, which still account for about half of trade between the Gulf and Asia. In 2023, about half of Asia's oil imports originated from the Gulf region and wider Middle East and such trade will probably continue to rise through to 2030 as energy consumption in China, India and Association of Southeast Asian Nations member states further expands. However, there are also key areas of cooperation outside of energy, including artificial intelligence, advanced technologies, construction and infrastructure. One of the other highlights of the Asia House report was the ways in which two-way trade between ASEAN and GCC nations has grown, reaching a high of $134 billion in 2022. One of the key components of this region-to-region trade is the relationship between the UAE and Indonesia, which was boosted in 2022 by a bilateral agreement in nuclear energy, investment and financial services. In recent years, GCC-ASEAN relations have also been enhanced by a new summit initiative that began in October 2023 in Riyadh. The first was co-hosted by Indonesian President Joko Widodo and Saudi Arabia's Crown Prince Mohammed bin Salman. The next will take place in Malaysia in May, hosted by Prime Minister Anwar Ibrahim, who has called for the two regions to begin negotiations for a formal trade agreement. This is one of the defining geopolitical and economic shifts of our multipolar age, with potential ramifications worldwide. Andrew Hammond Key recent economic deals between the regions include the UAE awarding, in September 2024, Malaysia's Petronas an oil and gas exploration concession covering more than 7,000 sq. km in Abu Dhabi's Al-Dhafra region. In July 2024, Dubai International Financial Centre and Indonesia's Nusantara Capital City Authority signed a memorandum of understanding for the development of Indonesia's Nusantara Financial Center. Moreover, Indonesia's state-owned electricity company, Perusahaan Listrik Negara, in August 2024 signed a power purchase agreement with Saudi Arabia's ACWA Power to develop the Saguling Floating Solar Project in West Java province. The agreement built on an announcement last year that ACWA Power would work with Perusahaan Listrik Negara and chemicals company Pupuk Indonesia on a green hydrogen project, scheduled to begin in 2026. It is, in part, this Middle Eastern pivot to Asia that is driving renewed European interest in GCC economies. Last December alone, both French President Emmanuel Macron and UK Prime Minister Keir Starmer visited the region. Whereas Macron visited only Saudi Arabia, Starmer traveled to both the UAE, meeting President Sheikh Mohammed bin Zayed, and Saudi Arabia, where he held talks with the crown prince, highlighting what he called the region's 'untapped economic potential.' His trip followed a state visit to the UK in December by Qatari Emir Tamim bin Hamad Al-Thani, who agreed to a new long-term green energy partnership worth more than $1 billion. The UAE and Saudi Arabia are both major investors in the UK. Britain's two-way trade with the UAE is worth about $30 billion a year, while trade with Saudi Arabia is worth more than £20 billion ($26.5 billion). More than 7,000 UK businesses export goods and services to Saudi Arabia, supporting almost 90,000 jobs across the country, and 14,000 businesses sent goods to the UAE in 2023. During his trip, Starmer sought not only to boost bilateral economic ties with these two key GCC members, but also to push for a broader UK-Gulf deal. Forecasts suggest such an agreement with the region could increase bilateral trade by about 16 percent, potentially adding more than $10 billion a year to two-way trade in the longer term. One of the big prizes for the UK of a GCC deal could be additional open access to investment from Gulf sovereign wealth funds. These tend to be cross-sector investors who often take a multidecade economic view that would enable the rebuilding of the UK's aging infrastructure and assist its energy transition. It is therefore likely that the growing global focus on Gulf countries, not only by Asian but also European nations, is likely to grow. This is one of the defining geopolitical and economic shifts of our multipolar age, with potential ramifications worldwide.
Mid East Info
21-02-2025
- Business
- Mid East Info
DIFC unveils flagship Future of Finance report series, publishes first report on the Global Finance and Investment Outlook
default First report in six-part Future of Finance series highlights emerging trends, shifting capital flows and high-growth opportunities in the global financial landscape. Dubai, United Arab Emirates;February 2025: Dubai International Financial Centre (DIFC), the leading global financial centre in the Middle East, Africa and South Asia (MEASA) region, in collaboration with its research partner Asia House, reveals the key drivers behind the deep and broad transformation of the global financial services industry across sectors and geographies in a report released today titled The Global Finance and Investment Outlook: Charting technological shifts and new global flows . The first report has been informed by comprehensive network-based research as well as first-hand perspectives of global financial services leaders who are part of DIFC's financial services related ecosystem. It highlights global financial trends shaping the flow of capital and talent, reveals emerging growth corridors, discusses geoeconomic uncertainties, and provides an overarching outlook for the future of the industry. Commenting on launch of the report series, Salmaan Jaffery, Chief Business Development Officer, DIFC Authority, said: 'The global financial services industry is in a new era. Through our Future of Finance series, we will share insights on how the industry is experiencing rapid and far-reaching transformation, fuelled by a redrawing of the global capital landscape. Our inaugural report discusses a shift of the economic centre of gravity eastwards, the emergence of new economic corridors, expectations from talent, and the revolutionary impact of AI. Against this backdrop, Dubai and DIFC hold a distinctive position in the future of finance as the gateway to the region's emerging economies and a centre for global wealth and capital, strategically positioned between East and West.' Michael Lawrence OBE, Chief Executive, Asia House, added: 'The global financial services sector is evolving rapidly in the face of geographical and structural shifts and advances in technology. The Future of Finance series examines the impact of these profound changes and the way in which financial services are adapting. Our first report explores the key trends and risks that need to be at the forefront of thinking among global finance leaders. We are delighted to be partnering with DIFC in this important research.' Strong outlook for finance and investment: The report states that in an evolving economic environment, financial services firms are looking for an environment that is conducive to scalable growth, with forward-thinking regulations, a strong legal framework, strategic location and high-growth opportunities backed by skilled talent and innovation readiness. Shifts in capital allocation and growing investor interest in private markets are also explored with Dubai positioned favourably due to its status as home to the region's highest concentration of wealth. DIFC provides financial services companies access to USD 4trn worth of private and family wealth, and is playing an important role in converting these large pools of regional wealth into investable capital. The report explores global monetary policy, emerging market opportunities and new growth corridors that are reshaping the financial services industry. It discusses the impact of artificial intelligence (AI) and digitisation, Islamic Finance, sustainable finance, private credit, and far-reaching influences of geoeconomic relations between major economies of the east and west. Navigating uncertainties: Providing an overview of the geoeconomic shifts and uncertain market conditions impacting the world, the report gives an account of risks to navigate. These include interest rate movements, inflationary pressures, protectionism and bridging of the talent gap in the financial services sector. It also highlights the movement of wealth across geographies, the factors causing these shifts, and implications for the financial services sector. Emerging trends: AI and emerging technologies are expected to have the biggest impact on finance. AI is set to contribute USD 15.7trn to the global economy by 2030 and the financial services sector is expected to reap the most benefits – unlocking new revenue streams, improving customer experience, enhancing operational efficiency, and reducing costs. One of the biggest challenges to AI adoption is inconsistent standards of regulation. The transformative potential of AI in financial services can only be realised with clear and robust regulations. Dubai is showing leadership in this space, and a good example is DIFC introducing the world's first Digital Assets Law. The Centre also announced a first-of-its-kind Dubai AI Licence and the 'AI as a Service' model with both initiatives envisioned to propel Dubai's supportive and growth-enabling innovation ecosystem. Over the last 20 years, DIFC has expanded into a dynamic global ecosystem that supports innovation, collaboration, and sustainable development. As Dubai launched the Dubai Universal Blueprint for Artificial Intelligence, DIFC accelerated the momentum for the integration of artificial intelligence within industries and strengthened its position of being the largest AI, FinTech and innovation ecosystem in the region. About Dubai International Financial Centre: Dubai International Financial Centre (DIFC) is one of the world's most advanced financial centres, and the leading financial hub for the Middle East, Africa, and South Asia (MEASA), which comprises 77 countries with an approximate population of 3.7bn and an estimated GDP of USD 10.5trn. With a 20-year track record of facilitating trade and investment flows across the MEASA region, the Centre connects these fast-growing markets with the economies of Asia, Europe, and the Americas through Dubai. DIFC is home to an internationally recognised, independent regulator and a proven judicial system with an English common law framework, as well as the region's largest financial ecosystem of 46,000 professionals working across over 6,900 active registered companies – making up the largest and most diverse pool of industry talent in the region. The Centre's vision is to drive the future of finance through cutting-edge technology, innovation, and partnerships. Today, it is the global future of finance and innovation hub offering one of the region's most comprehensive FinTech and venture capital environments, including cost-effective licensing solutions, fit-for-purpose regulation, innovative accelerator programmes, and funding for growth-stage start-ups. Comprising a variety of world-renowned retail and dining venues, a dynamic art and culture scene, residential apartments, hotels, and public spaces, DIFC continues to be one of Dubai's most sought-after business and lifestyle destinations.
Zawya
21-02-2025
- Business
- Zawya
DIFC unveils flagship future of finance report series
DUBAI - Dubai International Financial Centre (DIFC) in collaboration with its research partner Asia House, reveals the key drivers behind the deep and broad transformation of the global financial services industry across sectors and geographies in a report released today titled The Global Finance and Investment Outlook: Charting technological shifts and new global flows. The first report has been informed by comprehensive network-based research as well as first-hand perspectives of global financial services leaders who are part of DIFC's financial services related ecosystem. It highlights global financial trends shaping the flow of capital and talent, reveals emerging growth corridors, discusses geoeconomic uncertainties, and provides an overarching outlook for the future of the industry. Commenting on launch of the report series, Salmaan Jaffery, Chief Business Development Officer, DIFC Authority, said, 'The global financial services industry is in a new era. Through our Future of Finance series, we will share insights on how the industry is experiencing rapid and far-reaching transformation, fuelled by a redrawing of the global capital landscape. Our inaugural report discusses a shift of the economic centre of gravity eastwards, the emergence of new economic corridors, expectations from talent, and the revolutionary impact of AI. Against this backdrop, Dubai and DIFC hold a distinctive position in the future of finance as the gateway to the region's emerging economies and a centre for global wealth and capital, strategically positioned between East and West.' Michael Lawrence OBE, Chief Executive, Asia House, added, 'The global financial services sector is evolving rapidly in the face of geographical and structural shifts and advances in technology. The Future of Finance series examines the impact of these profound changes and the way in which financial services are adapting. Our first report explores the key trends and risks that need to be at the forefront of thinking among global finance leaders. We are delighted to be partnering with DIFC in this important research.' The report states that in an evolving economic environment, financial services firms are looking for an environment that is conducive to scalable growth, with forward-thinking regulations, a strong legal framework, strategic location and high-growth opportunities backed by skilled talent and innovation readiness. Shifts in capital allocation and growing investor interest in private markets are also explored with Dubai positioned favourably due to its status as home to the region's highest concentration of wealth. DIFC provides financial services companies access to USD 4trn worth of private and family wealth, and is playing an important role in converting these large pools of regional wealth into investable capital. The report explores global monetary policy, emerging market opportunities and new growth corridors that are reshaping the financial services industry. It discusses the impact of artificial intelligence (AI) and digitisation, Islamic Finance, sustainable finance, private credit, and far-reaching influences of geoeconomic relations between major economies of the east and west. Providing an overview of the geoeconomic shifts and uncertain market conditions impacting the world, the report gives an account of risks to navigate. These include interest rate movements, inflationary pressures, protectionism and bridging of the talent gap in the financial services sector. It also highlights the movement of wealth across geographies, the factors causing these shifts, and implications for the financial services sector.
Zawya
20-02-2025
- Business
- Zawya
AI to have biggest impact on finance sector says report
AI and emerging technologies are expected to have the biggest impact on the finance sector, according to the Future of Finance report, published by Dubai International Financial Centre (DIFC) in collaboration with its research partner Asia House. AI is set to contribute $15.7 trillion to the global economy by 2030 and the financial services sector is expected to reap the most benefits - unlocking new revenue streams, improving customer experience, enhancing operational efficiency, and reducing costs, it said. The report, titled the Global Finance and Investment Outlook: Charting technological shifts and new global flows, reveals the key drivers behind the deep and broad transformation of the global financial services industry across sectors and geographies. The first report has been informed by comprehensive network-based research as well as first-hand perspectives of global financial services leaders who are part of DIFC's financial services related ecosystem. It highlights global financial trends shaping the flow of capital and talent, reveals emerging growth corridors, discusses geoeconomic uncertainties, and provides an overarching outlook for the future of the industry. Commenting on launch of the report series, Salmaan Jaffery, Chief Business Development Officer, DIFC Authority, said: 'The global financial services industry is in a new era. Through our Future of Finance series, we will share insights on how the industry is experiencing rapid and far-reaching transformation, fuelled by a redrawing of the global capital landscape. Our inaugural report discusses a shift of the economic centre of gravity eastwards, the emergence of new economic corridors, expectations from talent, and the revolutionary impact of AI. Against this backdrop, Dubai and DIFC hold a distinctive position in the future of finance as the gateway to the region's emerging economies and a centre for global wealth and capital, strategically positioned between East and West.' Michael Lawrence OBE, Chief Executive, Asia House, added: 'The global financial services sector is evolving rapidly in the face of geographical and structural shifts and advances in technology. The Future of Finance series examines the impact of these profound changes and the way in which financial services are adapting. Our first report explores the key trends and risks that need to be at the forefront of thinking among global finance leaders. We are delighted to be partnering with DIFC in this important research.' Strong outlook for finance and investment The report states that in an evolving economic environment, financial services firms are looking for an environment that is conducive to scalable growth, with forward-thinking regulations, a strong legal framework, strategic location and high-growth opportunities backed by skilled talent and innovation readiness. Shifts in capital allocation and growing investor interest in private markets are also explored with Dubai positioned favourably due to its status as home to the region's highest concentration of wealth. DIFC provides financial services companies access to $4 trillion worth of private and family wealth, and is playing an important role in converting these large pools of regional wealth into investable capital. The report explores global monetary policy, emerging market opportunities and new growth corridors that are reshaping the financial services industry. It discusses the impact of artificial intelligence (AI) and digitisation, Islamic Finance, sustainable finance, private credit, and far-reaching influences of geoeconomic relations between major economies of the east and west. Navigating uncertainties Providing an overview of the geoeconomic shifts and uncertain market conditions impacting the world, the report gives an account of risks to navigate. These include interest rate movements, inflationary pressures, protectionism and bridging of the talent gap in the financial services sector. It also highlights the movement of wealth across geographies, the factors causing these shifts, and implications for the financial services sector. AI challenges One of the biggest challenges to AI adoption is inconsistent standards of regulation. The transformative potential of AI in financial services can only be realised with clear and robust regulations, the report says. Dubai is showing leadership in this space, and a good example is DIFC introducing the world's first Digital Assets Law. The Centre also announced a first-of-its-kind Dubai AI Licence and the 'AI as a Service' model with both initiatives envisioned to propel Dubai's supportive and growth-enabling innovation ecosystem. Over the last 20 years, DIFC has expanded into a dynamic global ecosystem that supports innovation, collaboration, and sustainable development. As Dubai launched the Dubai Universal Blueprint for Artificial Intelligence, DIFC accelerated the momentum for the integration of artificial intelligence within industries and strengthened its position of being the largest AI, FinTech and innovation ecosystem in the region. Copyright 2024 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. (
