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Asia Times
15-04-2025
- Business
- Asia Times
The coming US-China financial divorce
The financial decoupling between the United States and China is no longer a distant threat. It is here, formalized, accelerating, and profoundly disruptive. For investors, understanding this new era is not optional; it's imperative. The sweeping tariffs on Chinese imports, now codified into law, mark more than a trade skirmish. They signal a historic reordering of global capital flows, supply chains, and technological ecosystems. This is not merely about economics. It is about economic power—and control. Investors must now adapt to a world in which the foundational rules of global commerce are being redrawn at speed and under pressure. On April 2, President Trump declared Liberation Day, signing into law a sweeping universal 10% tariff on all imports, escalating to an extraordinary 60% on Chinese goods. These new levies come atop an already formidable 85% existing tariff wall, resulting in cumulative charges of 145% on Chinese exports to the US. The market reaction was immediate: supply chains began to unspool, cost pressures reignited across industries, and Beijing launched the first salvos of retaliation, notably banning the export of critical minerals essential for American tech and aerospace sectors. What is unfolding is not a tactical dispute, but a structural decoupling of the world's two largest economies. While the term 'Cold War' is frequently overused, it is increasingly difficult to ignore the parallels. The long-standing belief that economic integration would serve as a bulwark against geopolitical conflict is being abandoned in real time. What would a full-blown financial divorce look like? First, capital flows will become increasingly politicized. Transactions between American and Chinese entities—once considered routine—will be subject to growing scrutiny and restriction. Dollar-denominated activities could be curtailed. US pension funds, university endowments, and index-linked ETFs may face outright bans or mounting political pressure to divest from Chinese assets. This could trigger a wave of delistings from US exchanges, tighter reviews by the Committee on Foreign Investment in the United States (CFIUS), and outbound investment controls targeting key sectors. Already, Trump's advisors are sending clear signals: American capital should not be 'funding China's rise.' Second, the technological split will widen and deepen. In previous years, companies like Huawei, ZTE, and DJI were placed under significant pressure. Now, attention is shifting toward AI, semiconductor manufacturing, green energy platforms, and next-generation industries. Washington is not merely aiming to restrict exports; it is moving to wall off entire innovation ecosystems. Expect tighter licensing regimes, broader investment bans, and more aggressive sanctions targeting both Chinese companies and those of allied nations that maintain deep ties with Beijing. This is about asserting technological dominance and denying China access to foundational capabilities. Third, the very plumbing of global finance is being contested. For decades, the dollar-based system has served as the neutral arbiter of international commerce. That neutrality is eroding. China, anticipating restrictions on its dollar access, is pushing aggressively to internationalize the yuan. Its Cross-Border Interbank Payment System (CIPS) is being positioned as an alternative to SWIFT, aiming to create a rival monetary ecosystem less vulnerable to Western sanctions. The emergence of parallel financial systems will reshape the flow of capital, reconfigure trade settlements, and inject new layers of complexity into currency markets. For investors, this period of transition will bring volatility—but also opportunity. On one side, countries aligned with the United States will become magnets for strategic capital. India, Vietnam, Mexico, and parts of Eastern Europe are already seeing significant inflows as companies diversify manufacturing footprints away from China. Reshoring and friendshoring—once corporate buzzwords—have become explicit government policy, backed by substantial financial incentives and political will. On the other, China is not retreating; it is repositioning. President Xi Jinping's active courtship of the Global South underscores Beijing's strategy to deepen ties with developing nations that find themselves squeezed by Western protectionism. Xi's recent visits to Vietnam, Malaysia, and Cambodia—countries directly impacted by Trump's tariffs—highlight Beijing's bid to integrate these economies into its sphere of influence through partnerships in 5G, AI, green energy, and advanced manufacturing. Investors must recognize that this is no longer about tactical tariff battles or headline-driven skirmishes. It's about a bifurcation of the global financial order—a structural realignment that will touch every dimension of capital allocation, foreign exchange strategy, ESG frameworks, and index composition. The old assumption that globalization was an irreversible force is being dismantled before our eyes. While the financial divorce is not yet final, the momentum behind it suggests it is becoming irreversible. And as with any messy separation, fortunes will be made not by those who react emotionally but by those who anticipate where assets, influence and opportunities will migrate once the old household is split. For the discerning investor, the coming decades will not be defined by a return to the familiar but by a mastery of the new.
The Hill
07-04-2025
- Business
- The Hill
Trump orders new review of proposed US Steel acquisition
President Trump ordered on Monday a new review of a proposed U.S. Steel acquisition by Japanese corporation Nippon Steel. In a memo to multiple government figures including department heads, the president told the Committee on Foreign Investment in the United States (CFIUS) to conduct a review of the acquisition of U.S. Steel for help 'in determining whether further action in this matter may be appropriate.' Earlier this year, former President Biden announced that he was going to stop the sale of U.S. Steel to Nippon Steel in the wake of a yearlong review of the possible acquisition. 'We need major U.S. companies representing the major share of US steelmaking capacity to keep leading the fight on behalf of America's national interests,' Biden said in a previous statement. 'As a committee of national security and trade experts across the executive branch determined, this acquisition would place one of America's largest steel producers under foreign control and create risk for our national security and our critical supply chains.' U.S. Steel's president and CEO slammed the president's decision to block his company from being acquired by Nippon Steel shortly after the president's announcement. 'President Biden's action today is shameful and corrupt. He gave a political payback to a union boss out of touch with his members while harming our company's future, our workers, and our national security,' David Burritt said in a post on the social platform X in January. Trump vowed in December to block Nippon Steel's acquisition on his Truth Social platform. 'I am totally against the once great and powerful U.S. Steel being bought by a foreign company, in this case Nippon Steel of Japan,' Trump said in a post at the time.
Yahoo
26-02-2025
- Business
- Yahoo
Trump's latest moves signals most ‘hawkish' approach on China yet: expert
President Donald Trump's latest move to restrict Chinese investment in strategic areas shows the president may be even more aggressive than ever toward the U.S. rival in his second term. "Although it will take time for the necessary agency and regulatory actions necessary to implement the policy, Trump 2.0 is taking an even more hawkish approach to China as he did in his first term," Larry Ward, a national security law expert and current partner at the international law firm Dorsey & Whitney, told Fox News Digital. The comments come after Trump signed a memorandum last week that directed the Committee on Foreign Investment in the United States (CFIUS) that aims to both promote foreign investment from some countries while restricting investment from adversaries such as China, protecting U.S. national security interests. "The Committee on Foreign Investment in the United States (CFIUS) will be used to restrict Chinese investments in strategic U.S. sectors like technology, critical infrastructure, healthcare, agriculture, energy, raw materials, and others," reads a fact sheet about the memorandum released by the White House last week. Taiwan Dispatches Navy, Air Force After China Launches Live-fire Drills With No Warning The memorandum, dubbed the National Security Presidential Memorandum (NSPM), specifically singles out China for "exploiting our capital and ingenuity to fund and modernize their military, intelligence, and security operations, posing direct threats to United States security with weapons of mass destruction, cyber warfare, and more," according to the White House release. Read On The Fox News App "Chinese hackers have repeatedly targeted U.S. entities, including recently breaching the Treasury Department's CFIUS office, the entity responsible for reviewing foreign investments for national security risks," the release adds. While Trump has in the past imposed tariffs on China, Ward argued that the president's new policy is a further step in aggressively responding to the threat posed by China. "This is very different from tariffs. It's different from trade concerns. Foreign investment is an issue that potentially impacts national security," Ward said. Ward noted the example of the social media application TikTok, which has famously been at the center of a debate about protecting Americans from potentially being targeted by China. Trump Must Dump 'One China' Policy And Recognize 'Free' Taiwan, House Republicans Say "TikTok initially went through the CPA process and was examined on a national security basis, and then the determination was made that there were national security concerns," Ward said. Ward noted that Chinese investment in certain sectors has faced restrictions for years, but Trump's move makes clear that such restrictions are likely to expand beyond those that investors have traditionally seen. "So you look at sectors like semiconductors, the AI space increasingly is a tech sector that has been a general focus," Ward said. "But certainly this policy again puts out in front that, yes, certainly as to those sensitive industry sectors, we are going to be very stringent when it comes to Chinese investment, but also we're going to expand into other industry sectors that maybe haven't been sort of front and center over the last five, 10 years." Responding to Trump's move, the Chinese commerce ministry accused the U.S. of "politicizing" and "weaponizing" economic issues, according to a report from Reuters, adding that it would continue to closely monitor the situation to defend its interests. Nevertheless, Ward believes Trump's memorandum signals that the president is more committed than ever to combating Chinese threats to U.S. security. "The biggest thing about this policy is that President Trump is not afraid to say that really the threat here is China," Ward said. "Everybody that sort of works in this space knows that, but it was the elephant in the room, right? People sort of weren't willing to speak about it publicly. And President Trump has really come out and said through this policy, yeah, China's the concern."Original article source: Trump's latest moves signals most 'hawkish' approach on China yet: expert
Fox News
26-02-2025
- Business
- Fox News
Trump's latest moves signals most ‘hawkish' approach on China yet: expert
President Donald Trump's latest move to restrict Chinese investment in strategic areas shows the president may be even more aggressive than ever toward the U.S. rival in his second term. "Although it will take time for the necessary agency and regulatory actions necessary to implement the policy, Trump 2.0 is taking an even more hawkish approach to China as he did in his first term," Larry Ward, a national security law expert and current partner at the international law firm Dorsey & Whitney, told Fox News Digital. The comments come after Trump signed a memorandum last week that directed the Committee on Foreign Investment in the United States (CFIUS) that aims to both promote foreign investment from some countries while restricting investment from adversaries such as China, protecting U.S. national security interests. "The Committee on Foreign Investment in the United States (CFIUS) will be used to restrict Chinese investments in strategic U.S. sectors like technology, critical infrastructure, healthcare, agriculture, energy, raw materials, and others," reads a fact sheet about the memorandum released by the White House last week. The memorandum, dubbed the National Security Presidential Memorandum (NSPM), specifically singles out China for "exploiting our capital and ingenuity to fund and modernize their military, intelligence, and security operations, posing direct threats to United States security with weapons of mass destruction, cyber warfare, and more," according to the White House release. "Chinese hackers have repeatedly targeted U.S. entities, including recently breaching the Treasury Department's CFIUS office, the entity responsible for reviewing foreign investments for national security risks," the release adds. While Trump has in the past imposed tariffs on China, Ward argued that the president's new policy is a further step in aggressively responding to the threat posed by China. "This is very different from tariffs. It's different from trade concerns. Foreign investment is an issue that potentially impacts national security," Ward said. Ward noted the example of the social media application TikTok, which has famously been at the center of a debate about protecting Americans from potentially being targeted by China. "TikTok initially went through the CPA process and was examined on a national security basis, and then the determination was made that there were national security concerns," Ward said. Ward noted that Chinese investment in certain sectors has faced restrictions for years, but Trump's move makes clear that such restrictions are likely to expand beyond those that investors have traditionally seen. "So you look at sectors like semiconductors, the AI space increasingly is a tech sector that has been a general focus," Ward said. "But certainly this policy again puts out in front that, yes, certainly as to those sensitive industry sectors, we we are going to be very stringent when it comes to Chinese investment, but also we're going to expand into other industry sectors that maybe haven't been sort of front and center over the last five, 10 years." Responding to Trump's move, the Chinese commerce ministry accused the U.S. of "politicizing" and "weaponizing" economic issues, according to a report from Reuters, adding that it would continue to closely monitor the situation to defend its interests. Nevertheless, Ward believes Trump's memorandum signals that the president is more committed than ever to combating Chinese threats to U.S. security. "The biggest thing about this policy is that President Trump is not afraid to say that really the threat here is China," Ward said. "Everybody that sort of works in this space knows that, but it was the elephant in the room, right? People sort of weren't willing to speak about it publicly. And President Trump has really come out and said through this policy, yeah, China's the concern."
Saba Yemen
23-02-2025
- Business
- Saba Yemen
Beijing threatens to respond to new restrictions on Chinese investments in US
Beijing - Saba: Beijing on Sunday said it will take retaliatory measures against Washington in response to US tightened policies regarding investment cooperation with China. "We have taken the current situation into consideration.. China will closely monitor the actions of the United States and take the necessary measures to protect its legitimate rights and interests," the Chinese Ministry of Commerce said in a statement, after the White House published a memorandum aimed at curbing Chinese investments in strategic American sectors. Beijing urges the US side to abide by international investment and trade rules, respect the principle of market economy, and stop politicizing economic and trade issues and using them as a weapon, according to the statement. The statement noted that such restrictions imposed by Washington "will further distort investment cooperation between the two countries and will not benefit the United States itself." The US administration "overuses the concept of national security," engages in discriminatory practices, and resorts to non-market measures that severely disrupt normal economic and trade cooperation between the two countries. China said that this would "seriously harm the confidence of Chinese companies wishing to invest in the United States," and called on Washington to provide a fair, transparent, stable, and predictable business environment for Chinese investors. The statement warned that these restrictions and tightening controls on Chinese investments would lead to "US companies losing the Chinese market to competitors." On Friday evening, US President Donald Trump signed a memorandum aimed at "promoting foreign investment while protecting the national security interests of the United States, especially against threats posed by foreign adversaries such as China." The US administration accuses Beijing of "increasingly exploiting US resources to develop and modernize its military, intelligence and other security apparatuses." The White House said the new US administration intends to call on the Committee on Foreign Investment in the United States (CFIUS) to "restrict Chinese investment in strategic US sectors" such as technology, critical infrastructure, health, agriculture, energy, raw materials and others. Whatsapp Telegram Email Print more of (Economy)
