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Mint
2 days ago
- Business
- Mint
Trump-Xi call on tariffs and trade leaves plenty of problems
Investors shouldn't get their hopes up about the talks President Donald Trump and Chinese leader Xi Jinping held on Thursday. The two spoke by phone to discuss rare earths and trade, defusing a tit-for-tat that had put into question the fragile truce reached in mid May. Having the world's two largest economies on talking terms, with both leaders inviting the other for a visit and sending top officials to meet their counterparts again on trade, was a near-term positive. It reduces the risk that the levies could return to the trade-paralyzing levels seen before the May agreement. But geopolitical strategists saw little that meaningfully reduces the uncertainty hanging over businesses. Markets rose after the call on the notion that Trump would back down on the tariffs when they become too disruptive, but ended lower. 'From an investor perspective in the short-term because there's the view he will flip on his worst impulses, but it doesn't work for the economy or businesses and ultimately that uncertainty will lead to a slowdown, which in theory will be reflected back into the market,' said Stephen Myrow, managing director at the independent research firm Beacon Policy Advisors. He previously held various roles in the State and Defense Departments. The call was aimed at breaking an impasse sparked by differing interpretations of what the two sides agreed on in the May talks in Geneva. The U.S. says China hadn't lifted restrictions on the sale of rare-earth minerals, including magnets crucial for automotive and industrial use. And Beijing complained that the U.S. violated the deal with further restrictions on access to artificial-intelligence chip technology and electronic design automation software. The State Department's plans to revoke Chinese students' visas, announced after the truce, added to China's concern. The way the two governments presented Thursday's discussion added to skepticism any real progress was made. 'China has been seriously and earnestly executing the agreement,' said a readout on the call by Beijing, which stressed that Trump had initiated the conversation. 'The U.S. side should acknowledge the progress already made, and remove the negative measures taken against China.' Trump, meanwhile, described the call and his relationship with Xi positively. He said Chinese students were welcome in the U.S.— a week after the State Department said it would look to 'aggressively' revoke their visas—and noted that issues around critical minerals were complicated. 'I think we are in very good shape with China and the trade deal. We were straightening out some of the points related to rare earths and magnets,' he told reporters during a meeting with German Chancellor Friedrich Merz. 'We have the deal and just want to make sure everyone understands what the deal is.' But executing the agreement isn't easy. 'The off-ramp on tariffs was much easier than for export controls.' said Myrow. 'It's a lot harder to release the chips they want versus reducing tariffs.' Support for restricting China's access to technology is much broader than for tariffs, he pointed out. 'These strategic supply chain choke points are the crux of the issue and we basically have a gun pointed at each other's heads.' Myrow said. 'The mistake many in the Trump administration make is they think they have China over the barrel economically. While they have a lot of economic leverage, they underestimate China's ability to weather political pain.' Most analysts expect export controls to stay in focus. Michael Hirson, head of China research at 22V Research, said he is watching whether the U.S. gives China any assurances about future U.S. export restrictions. Many in U.S. national security circles are calling for increased controls to shore up the U.S.'s position in artificial intelligence competition heats up from the likes of China's DeepSeek and Huawei. Investors and companies now looking to the next meeting between high-level U.S. officials and their counterparts may want to lower their expectations. 'The divide is wide and perceptions are deeply entrenched. This is going to take a while,' said Everett Eissenstat, a partner at Squire Patton Boggs who served as deputy director in the National Economic Council during the first Trump term. Write to Reshma Kapadia at
Yahoo
01-05-2025
- Business
- Yahoo
Big Tech struggles to find footing in Trump's first 100 days
The world's biggest tech firms have been left scrambling to adjust to the tumultuous first 100 days of President Trump's second term, despite their efforts to cozy up to the president and his tech-heavy administration. Trump's unpredictable approach to tariffs, his administration's continued accusations of censorship and the decision to double down on antitrust enforcement have underlined the limits of Big Tech's approach, even as it sees some wins on deregulation. 'These efforts to build close relationships have not altogether paid dividends,' said Andrew Lokay, a senior research analyst at Beacon Policy Advisors. 'It's a tough time to be a tech CEO in Washington, D.C., and I think that may come as a little bit of a surprise to some of the CEOs who thought that investing in the relationships with Trump would have a bigger payoff in terms of policy,' he added. Big Tech had a contentious relationship with Trump throughout his first term, and it took a turn for the worse after numerous social media platforms banned the president in the wake of the Jan. 6, 2021, riots. Following Trump's win last fall, the biggest names in tech seemed keen to start anew with the incoming president, visiting him at his Mar-a-Lago resort and offering million-dollar donations to his inaugural fund. These tech leaders — including Meta CEO Mark Zuckerberg, Amazon founder Jeff Bezos, Google CEO Sundar Pichai and Apple CEO Tim Cook — attended Trump's inauguration in January, sitting side by side in prime seats in the Capitol Rotunda and giving the appearance of a new rapport with the president. With Tesla CEO Elon Musk and several other Silicon Valley figures joining the administration, it also appeared as though Big Tech would have key allies in the White House. 'Silicon Valley was perhaps expecting low taxes, low regulation, pro-business perspective in the White House, and to some extent, we've seen some of that, with the push for tax cuts in Congress and the president's deregulatory agenda,' Lokay said. 'But at the same time, tech remains in the crosshairs,' he added. Trump's back-and-forth on tariffs has wreaked havoc on the tech industry, threatening to disrupt supply chains central to the flow of electronics. In March, the president announced sweeping 'reciprocal' tariffs, including massive import taxes on goods from China and Taiwan — key prongs in tech supply chains. Trump ultimately backed off as the markets panicked, opting for a 90-day pause on most tariffs. However, the levies against China remained in place and continued to rise as Beijing and Washington went tit for tat on tariffs. As a result, Chinese imports in the U.S. now face a 145 percent tariff, and U.S. imports in China face a 125 percent tariff. The tech industry received a reprieve earlier this month when Trump announced that electronics would be exempt from the tariffs. However, the relief was short-lived, as the president signaled he would levy separate sector-based import taxes. The administration's rapid shifts have left tech companies scrambling to keep up. 'It's been a 'Nightmare on Elm Street,'' Wedbush Securities analyst Dan Ives said. 'No one expected it would've been this turbulent.' 'Everyone knew reciprocal tariffs [were] going to come. … No one thought we were going to basically put a shut-off valve for China, which is the heart and lungs of the supply chain,' he added. After Punchbowl News reported Tuesday that Amazon was planning to show customers how much Trump's tariffs added to the cost of an item, White House press secretary Karoline Leavitt slammed the move as a 'hostile and political act,' holding up a photo of Bezos. The e-commerce giant later denied the report, saying the plans were not approved and 'not going to happen.' At the same, Big Tech's efforts at reconciliation with Trump have seemingly not tempered Republicans' frustrations with the industry over what they view as censorship of and bias against conservatives. The Federal Trade Commission (FTC) launched a probe into leading tech firms' policies related to content moderation and user bans in February, suggesting they could amount to illegal censorship. The administration's efforts have been accompanied by those of GOP leaders in Congress. House Judiciary Chair Jim Jordan (R-Ohio) has sent off dozens of subpoenas to major tech companies, demanding information about potential censorship. 'Now that Republicans hold both chambers of Congress and the White House, I expect this is an issue that they will pursue more aggressively,' Lokay said. The Trump administration has also declined to pull any punches on antitrust enforcement against Big Tech, taking Meta to court over monopoly allegations and pushing forward with an effort to break up Google. Both cases were brought during the first Trump administration. The Biden administration pushed ahead with an aggressive antitrust approach, bringing additional cases against Google, Amazon and Apple. However, as Trump took office a second time surrounded by Silicon Valley moguls, it was unclear whether his administration would take up the antitrust mantle with the same vigor. His picks to fill key roles at the FTC and Department of Justice (DOJ) hinted at continued scrutiny of Big Tech, which was reinforced by the DOJ's decision to follow through with the prior administration's push to split Google and Chrome. The FTC's trial against Meta also got underway earlier this month, despite Zuckerberg's reported efforts to lobby Trump for a settlement. The Meta CEO was called to the stand as the agency's first witness and spent three lengthy days answering questions. 'There has continued to be a rather aggressive pursuit of antitrust actions against some of the leading tech companies,' said Jennifer Huddleston, a senior fellow in tech policy at the Cato Institute. Still, Trump's second term hasn't been entirely negative for the tech industry. Deregulation has been a key emphasis for the administration, including on artificial intelligence (AI), where officials including Vice President Vance have instead placed a heavy emphasis on innovation. 'This administration appears to likely be taking a lighter-touch approach to artificial intelligence, although we don't fully know what that approach will look like yet,' Huddleston added. Shortly after taking office, Trump revoked former President Biden's executive order focused on AI safety, which Huddleston noted was seen as 'more restrictive and prescriptive when it came to the future' of the technology. The administration has yet to release its own AI policy but put out a request for public comment on its 'AI Action Plan' in February, which received more than 10,000 responses, the White House said earlier this month. 'With President Trump, it's always worth keeping in mind, expect the unexpected,' Lokay said. 'He can be unpredictable, and you can be on his good side one moment, you can be on the outs another moment.' 'I wouldn't be surprised if tech continues to try to build those relationships with the president,' he continued. 'But at the same time, there's no guarantee that that could yield results in terms of policy outcomes.' Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
The Hill
01-05-2025
- Business
- The Hill
Big Tech struggles to find footing in Trump's first 100 days
The world's biggest tech firms have been left scrambling to adjust to the tumultuous first 100 days of President Trump's second term, despite their efforts to cozy up to the president and his tech-heavy administration. Trump's unpredictable approach to tariffs, his administration's continued accusations of censorship and the decision to double down on antitrust enforcement have underlined the limits of Big Tech's approach, even as it sees some wins on deregulation. 'These efforts to build close relationships have not altogether paid dividends,' said Andrew Lokay, a senior research analyst at Beacon Policy Advisors. 'It's a tough time to be a tech CEO in Washington, D.C., and I think that may come as a little bit of a surprise to some of the CEOs who thought that investing in the relationships with Trump would have a bigger payoff in terms of policy,' he added. Big Tech had a contentious relationship with Trump throughout his first term, and it took a turn for the worse after numerous social media platforms banned the president in the wake of the Jan. 6, 2021, riots. Following Trump's win last fall, the biggest names in tech seemed keen to start anew with the incoming president, visiting him at his Mar-a-Lago resort and offering million-dollar donations to his inaugural fund. These tech leaders — including Meta CEO Mark Zuckerberg, Amazon founder Jeff Bezos, Google CEO Sundar Pichai and Apple CEO Tim Cook — attended Trump's inauguration in January, sitting side by side in prime seats in the Capitol Rotunda and giving the appearance of a new rapport with the president. With Tesla CEO Elon Musk and several other Silicon Valley figures joining the administration, it also appeared as though Big Tech would have key allies in the White House. 'Silicon Valley was perhaps expecting low taxes, low regulation, pro-business perspective in the White House, and to some extent, we've seen some of that, with the push for tax cuts in Congress and the president's deregulatory agenda,' Lokay said. 'But at the same time, tech remains in the crosshairs,' he added. Trump's back-and-forth on tariffs has wreaked havoc on the tech industry, threatening to disrupt supply chains central to the flow of electronics. In March, the president announced sweeping 'reciprocal' tariffs, including massive import taxes on goods from China and Taiwan — key prongs in tech supply chains. Trump ultimately backed off as the markets panicked, opting for a 90-day pause on most tariffs. However, the levies against China remained in place and continued to rise as Beijing and Washington went tit for tat on tariffs. As a result, Chinese imports in the U.S. now face a 145 percent tariff, and U.S. imports in China face a 125 percent tariff. The tech industry received a reprieve earlier this month when Trump announced that electronics would be exempt from the tariffs. However, the relief was short-lived, as the president signaled he would levy separate sector-based import taxes. The administration's rapid shifts have left tech companies scrambling to keep up. 'It's been a 'Nightmare on Elm Street,'' Wedbush Securities analyst Dan Ives said. 'No one expected it would've been this turbulent.' 'Everyone knew reciprocal tariffs [were] going to come. … No one thought we were going to basically put a shut-off valve for China, which is the heart and lungs of the supply chain,' he added. After Punchbowl News reported Tuesday that Amazon was planning to show customers how much Trump's tariffs added to the cost of an item, White House press secretary Karoline Leavitt slammed the move as a 'hostile and political act,' holding up a photo of Bezos. The e-commerce giant later denied the report, saying the plans were not approved and 'not going to happen.' At the same, Big Tech's efforts at reconciliation with Trump have seemingly not tempered Republicans' frustrations with the industry over what they view as censorship of and bias against conservatives. The Federal Trade Commission (FTC) launched a probe into leading tech firms' policies related to content moderation and user bans in February, suggesting they could amount to illegal censorship. The administration's efforts have been accompanied by those of GOP leaders in Congress. House Judiciary Chair Jim Jordan (R-Ohio) has sent off dozens of subpoenas to major tech companies, demanding information about potential censorship. 'Now that Republicans hold both chambers of Congress and the White House, I expect this is an issue that they will pursue more aggressively,' Lokay said. The Trump administration has also declined to pull any punches on antitrust enforcement against Big Tech, taking Meta to court over monopoly allegations and pushing forward with an effort to break up Google. Both cases were brought during the first Trump administration. The Biden administration pushed ahead with an aggressive antitrust approach, bringing additional cases against Google, Amazon and Apple. However, as Trump took office a second time surrounded by Silicon Valley moguls, it was unclear whether his administration would take up the antitrust mantle with the same vigor. His picks to fill key roles at the FTC and Department of Justice (DOJ) hinted at continued scrutiny of Big Tech, which was reinforced by the DOJ's decision to follow through with the prior administration's push to split Google and Chrome. The FTC's trial against Meta also got underway earlier this month, despite Zuckerberg's reported efforts to lobby Trump for a settlement. The Meta CEO was called to the stand as the agency's first witness and spent three lengthy days answering questions. 'There has continued to be a rather aggressive pursuit of antitrust actions against some of the leading tech companies,' said Jennifer Huddleston, a senior fellow in tech policy at the Cato Institute. Still, Trump's second term hasn't been entirely negative for the tech industry. Deregulation has been a key emphasis for the administration, including on artificial intelligence (AI), where officials including Vice President Vance have instead placed a heavy emphasis on innovation. 'This administration appears to likely be taking a lighter-touch approach to artificial intelligence, although we don't fully know what that approach will look like yet,' Huddleston added. Shortly after taking office, Trump revoked former President Biden's executive order focused on AI safety, which Huddleston noted was seen as 'more restrictive and prescriptive when it came to the future' of the technology. The administration has yet to release its own AI policy but put out a request for public comment on its 'AI Action Plan' in February, which received more than 10,000 responses, the White House said earlier this month. 'With President Trump, it's always worth keeping in mind, expect the unexpected,' Lokay said. 'He can be unpredictable, and you can be on his good side one moment, you can be on the outs another moment.' 'I wouldn't be surprised if tech continues to try to build those relationships with the president,' he continued. 'But at the same time, there's no guarantee that that could yield results in terms of policy outcomes.'
The Hill
24-04-2025
- Business
- The Hill
Trump's China trade jam
Trump and the White House insist the U.S. and China are making progress toward a deal, but Chinese officials have shot down those claims and chastised the Trump administration's approach. While markets were up on Thursday, the trade war has done economic damage to the U.S. and political damage to Trump. Two other factors are Beijing's relative readiness for this fight, and the fact that Washington and Trump are seen as the instigator of the trade war, a fact that could help China stand strong even if high tariffs in the U.S. do hit its economy. Owen Tedford, senior research analyst at Beacon Policy Advisors, said this means Chinese President Xi Jinping 'will also be hesitant to be seen as being pressured into a deal, potentially meaning that Beijing is willing to wait out the US or try to force Trump to act unilaterally.' Trump insisted that his team is in talks with China after Chinese Commerce Ministry spokesperson He Yadong said any 'claims about the progress of China-U.S. trade negotiations are groundless as trying to catch the wind and have no factual basis.'
The Hill
13-04-2025
- Automotive
- The Hill
Musk, Tesla caught in crosshairs of Trump trade war with China
President Trump's escalating trade war with China is putting Elon Musk and Tesla in a tight spot as the electric vehicle manufacturer faces climbing tariffs in one of its most important markets. Tesla suspended new orders of two models on its Chinese website on Friday as Beijing raised tariffs on American goods to 125 percent in the nation's ongoing trade fight with the U.S. While Tesla did not provide a reason for suspending the orders, the move may signal Musk – one of Trump's fiercest allies – and his company are bracing for the effects of the president's trade war. 'The fact that they're still selling the cars, but not importing them points to one obvious conclusion: The tariff impacts are having an effect on Tesla's international sales,' said Maxwell Shulman, research analyst with Beacon Policy Advisors. The intensifying trade war puts the business interests of Tesla and Musk, who gave millions to reelect Trump and campaigned for him in key swing states, at a crossroads with the president, who is not letting up on the tit-for-tat with China. 'It's not even like the politics helped him [Musk] fend off these tariffs that hurt his company,' said Sarah Kreps, director of Cornell University's Tech Policy Institute. 'It's almost like it's the worst of all worlds that he put his neck out there, lost support from the domestic consumers of Tesla and now, because [the] tariffs are having this dismal effect in his other big market, which is China.' Tesla is now among the various companies forced to make quick changes to their foreign manufacturing process, whether that be through scaled back production or delayed shipments, in the wake of the fluctuating trade war. The two paused Tesla models – Model S and X – are those that are almost entirely assembled in the U.S. at Tesla's Fremont, Calif. factory. The two models that remain active on the Chinese website – Model 3 and Model Y – are made at Tesla's Shanghai Gigafactory and more insulated from the tariff pressure as a result. The website changes happened abruptly overnight Thursday, just one day after Trump shifted the attention of his trade war on China. As of Friday, the U.S. tariffs on Chinese goods sit at a 145 percent. 'Even with time, this kind of tariff policy would be extremely disruptive and costly' said Martin Chorzempa, a senior fellow at the Peterson Institute for International Economics. 'But without time to adjust, you just have to effectively either increase prices with these tariff levels…you just can't increase prices enough to compensate for the tariff, and you definitely can't just eat the tariff because it's so large for most goods,' Chorzempa added. Tesla did not immediately respond to The Hill's request for comment on the changes. The company produces nearly all of its North American cars in the U.S. and observers predicted the company could avoid the brunt of Trump's tariffs due to its focus on domestic production. Still, Musk and the company repeatedly warned in recent weeks it would not go unscathed should reciprocal tariffs take effect in other countries. Experts said the pause on some models is to be expected given the uncertainty and that consolidation of certain models is a way to protect Despite backing the president on most policies in recent months, signs emerged this month that the tariffs were a source of concern for Musk, who is separately leading Trump's so-called Department of Government Efficiency (DOGE) The Tesla CEO publicly broke with the administration on its tariff policy this week, marking one of his few instances of public disagreement with the White House since January. Musk voiced his support for free trade between Europe and the United States last weekend and reportedly made personal appeals to Trump to reverse the tariffs he originally imposed on nearly all of the U.S.'s trading partners. The president eventually paused his new tariffs for all nations besides China, though it is not clear whether Musk's input played a role in his decision. While Musk has made clear his thoughts on tariffs, industry observers say it may not be enough to prevent Tesla from being caught in the global crossfire given the tech billionaire's role within the administration. 'If China wanted specifically to damage the Trump administration or some of its boosters as part of the current trade spat, it would make sense for the country to specifically go after Tesla as opposed to a generic foreign car manufacturer like GM,' Shulman told The Hill. China's Ministry of Finance on Friday said the 125 percent import tax is final and that the nation will seek other countermeasures if the U.S. continues to 'infringe on China's interests substantively.' Tesla has separately become a political lightning rod in recent months as protestors take out their frustrations over DOGE on the electric vehicle company. Most demonstrations at Tesla showrooms or charging stations have been peaceful, though some incidents have involved violence, shootings and setting cars on fire. Some, including many protestors in Europe, are boycotting the company to push back against Musk's leadership and Tesla's global market share has seen a dip as a result. Shulman suggested a similar pattern could unfold in China, but with frustrations centered on the tariffs. 'Local consumers there might want to preference supporting their own car brands, as opposed to this foreign car brand that's associated with a geopolitical adversary,' he said. This could unfold for any American company operating in China, some experts said. 'We could see consumer boycotts…We're certainly likely to see if there's any negative economic news that will now squarely be blamed on the United States, not on China's own domestic economic policy mistakes,' Chorzempa said. While China is one of Tesla's largest markets, experts noted the number of Chinese imports is not a large chunk of company's volume of products. According to data obtained by Reuters from the China Auto Dealers Association, China imported 1,553 Model X cars and 311 Model S cars last year, while 90 percent of the vehicles Tesla delivers in China are Model 3 and Model Y, electrek reported.
