Latest news with #JensEskelund
Time of India
3 days ago
- Automotive
- Time of India
Export controls are endangering the fragile U.S.-China truce
BEIJING: After stepping back this month from an escalating and dangerous war of tariffs, the United States and China are now threatening to undermine their uneasy truce. On May 12, the countries announced after weekend meetings in Geneva that they would suspend most of their recently imposed tariffs. Since then, however, both governments have shown that they are still prepared to wield controls over critical exports as weapons against one another, with moves that are potentially even more damaging to trade and global supply chains. China has restricted its exports of rare earth magnets, which are crucial for cars, semiconductors, aircraft and many other applications. Close to 90% of the world's rare earth metals, including magnets, are produced in China. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Play War Thunder now for free War Thunder Play Now Undo And the United States on May 13 banned the latest semiconductors from Huawei, a Chinese electronics giant. Then on Wednesday, President Donald Trump suspended the shipment of American semiconductors and some aerospace equipment needed for China's commercial aircraft, the C919, a signature project in China's push toward economic self-reliance. The increasing use of export controls by both countries amounts to supply chain warfare, interrupting the flow of key components that the other country must have to operate huge industries that employ large numbers of workers. Live Events Last week, Ford Motor temporarily closed a factory in Chicago that makes Ford Explorer sport utility vehicles after one of its suppliers ran out of the magnets. In most new cars, the magnets are used in dozens of electric motors that operate brake and steering systems, fuel injectors and even power seats. On Monday, China granted some export licenses for rare earth magnets to be shipped to the United States and Europe, according to two industry executives who spoke on the condition of anonymity to discuss a sensitive matter. But many more factories in both regions will have to close in the coming days and weeks if China does not resume full exports of rare earth metals, corporate executives and business leaders said. "Hundreds of EU companies are impacted, and we expect that this may lead to production stoppages already this week for some companies," said Jens Eskelund, the president of the European Union Chamber of Commerce in China. American companies are feeling the effect even more. Several companies in Europe, including Volkswagen, were granted permission by Beijing to continue procuring rare earth magnets soon after China began enforcing export controls on them in April. American companies have been juggling factory schedules, reassigning their dwindling magnet supplies to continue making their most profitable products. A Ford spokesperson confirmed that the Explorer factory had been closed last week because of a disruption in rare earth magnet supplies, but said that it had reopened this week. Ford had been planning to not run the factory for a week anyway in the coming months, and shifted that down time to last week when the magnet supply ran short, he said. The agreement reached in Geneva by U.S. and Chinese officials to de-escalate their confrontation over tariffs has been cheered by investors. The two sides said they would take a 90-day pause on tariffs and set up working groups of top officials to try to reach agreements on trade. That made the timing of the U.S. Commerce Department's decision a day later to ban Americans from using or financing Huawei artificial intelligence chips noteworthy. The department contended that the AI chips were based on a prohibited export of U.S. technology, which Huawei has denied. The restrictions were the latest in a long series of American blows aimed at Huawei, which is one of China's best-known success stories. Its hundreds of thousands of workers produce everything from cellphone base stations to autonomous driving systems for cars. Chinese officials have reacted with growing anger at the U.S. use of export controls. "China once again urges the U.S. to immediately correct its wrong practices, stop discriminatory restrictive measures against China, and jointly maintain the consensus reached at the Geneva high-level talks," He Yongqian, the Ministry of Commerce spokesperson, said at a news briefing Thursday. American restrictions on sales to COMAC, a state-owned enterprise, represent a setback to the Chinese government's long-term project to shed its dependence on Boeing and Airbus. The C919 aircraft is heavily dependent on American and European components, with the company's miles-long complex of hangars and design labs in Shanghai mainly installing components from foreign companies in Chinese-built air frames. COMAC did not respond to a phone call and fax for comment. In a reply to questions early Thursday, Kush Desai, a White House spokesperson, said, "The Geneva agreement was a major first step towards securing a final, comprehensive trade deal with China. Discussions continue, and the administration is monitoring compliance with the agreement." The United States has been gradually tightening export controls on semiconductors for a decade, contending that China has used American computer chip technology to improve a wide range of military hardware. Chinese government officials and industry executives have denied this, and contend that the United States is trying instead to limit China's economic development. Two days after Trump imposed steep tariffs on April 2 on imports from China and many other countries, China imposed its own export controls on some kinds of rare earths and heat-resistant magnets made from them. The Geneva trade agreement had also called for China to "adopt all necessary administrative measures to suspend or remove the non-tariff countermeasures taken against the United States since April 2, 2025." But China's Commerce Ministry has contended that rare earths have military applications, and it has avoided describing its export controls as a trade countermeasure. Although most rare earth magnets are used in civilian industries, they are also essential for electric motors in advanced fighter jets and the guidance systems of intercontinental ballistic missiles. "It is a common international practice to impose export controls on items with obvious dual-use military and civilian attributes," He said Thursday. Experts in China have begun defending export controls on rare earth magnets as appropriate while the United States maintains export controls on semiconductors. "China sees export controls on rare earths as a counterstrike to U.S. export controls on semiconductors," said Zhu Ning, deputy dean at the Shanghai Advanced Institute of Finance. Yet if China maintains export controls on rare earths, many multinational companies may conclude that their supply chains are too reliant on China, Eskelund said. "The risk of production stoppages due to export controls will only increase calls in Europe for de-risking from China." The question now is how much longer both sides maintain their export controls. "It would be unfortunate if one or both sides overestimates its own leverage and feels like it needs to prove that to the other side," said Chris Adams, a former Treasury official who is now a partner at the Covington and Burling law firm.
Qatar Tribune
3 days ago
- Business
- Qatar Tribune
European companies face 'difficult' China market
Agencies European companies are cutting costs and scaling back investment plans in China as its economy slows and fierce competition drives down prices, according to an annual survey released Wednesday. Their challenges reflect broader ones faced by a Chinese economy hobbled by a prolonged real estate crisis that has hurt consumer spending. Beijing also faces growing pushback from Europe and the United States over surging exports. 'The picture has deteriorated across many key metrics,' the European Union Chamber of Commerce in China said in the introduction to its Business Confidence Survey 2025. The same forces that are driving up Chinese exports are depressing the business outlook in the Chinese market. Chinese companies, often enticed by government subsidies, have invested so much in targeted industries such as electric vehicles that factory capacity far outpaces overcapacity has resulted in fierce price wars that cut into profits and a parallel push by companies into overseas Europe, that has created fears that growing imports from China could undermine its own factories and the workers they employ. The EU slapped tariffs on Chinese EVs last year, saying China had unfairly subsidized electric vehicle production. 'I think there's a clear perception that the benefits of the bilateral trade and investment relationship are not being distributed in an equitable manner,' Jens Eskelund, the president of the EU Chamber in China, told reporters earlier this week. He applauded efforts by China to boost consumer spending but said the government must also take steps to ensure that supply growth doesn't outpace that in demand. The survey results show that the downward pressure on profits increased over the past year and that a fall in business confidence has yet to bottom out, Eskelund said. About 500 member companies responded to the survey between mid-January to mid-February. 'It is just very difficult for everyone right now in an environment of declining margins,' he said.
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Business Standard
4 days ago
- Business
- Business Standard
Export controls are endangering the fragile US-China truce
After stepping back this month from an escalating and dangerous war of tariffs, the United States and China are now threatening to undermine their uneasy truce. On May 12, the countries announced after weekend meetings in Geneva that they would suspend most of their recently imposed tariffs. Since then, however, both governments have shown that they are still prepared to wield controls over critical exports as weapons against one another, with moves that are potentially even more damaging to trade and global supply chains. China has restricted its exports of rare earth magnets, which are crucial for cars, semiconductors, aircraft and many other applications. Close to 90 percent of the world's rare earth metals, including magnets, are produced in China. And the United States on May 13 banned the latest semiconductors from Huawei, a Chinese electronics giant. Then on Wednesday, President Trump suspended the shipment of American semiconductors and some aerospace equipment needed for China's commercial aircraft, the C919, a signature project in China's push toward economic self-reliance. The increasing use of export controls by both countries amounts to supply chain warfare, interrupting the flow of key components that the other country must have to operate huge industries that employ large numbers of workers. Last week, Ford Motor temporarily closed a factory in Chicago that makes Ford Explorer sport utility vehicles after one of its suppliers ran out of the magnets. In most new cars, the magnets are used in dozens of electric motors that operate brake and steering systems, fuel injectors and even power seats. On Monday, China granted some export licenses for rare earth magnets to be shipped to the United States and Europe, according to two industry executives who spoke on the condition of anonymity to discuss a sensitive matter. But many more factories in both regions will have to close in the coming days and weeks if China does not resume full exports of rare earth metals, corporate executives and business leaders said. 'Hundreds of EU companies are impacted, and we expect that this may lead to production stoppages already this week for some companies,' said Jens Eskelund, the president of the European Union Chamber of Commerce in China. American companies are feeling the effect even more. Several companies in Europe, including Volkswagen, were granted permission by Beijing to continue procuring rare earth magnets soon after China began enforcing export controls on them in April. American companies have been juggling factory schedules, reassigning their dwindling magnet supplies to continue making their most profitable products. A Ford spokesman confirmed that the Explorer factory had been closed last week because of a disruption in rare earth magnet supplies, but said that it had reopened this week. Ford had been planning to not run the factory for a week anyway in the coming months, and shifted that down time to last week when the magnet supply ran short, he said. The agreement reached in Geneva by US and Chinese officials to de-escalate their confrontation over tariffs has been cheered by investors. The two sides said they would take a 90-day pause on tariffs and set up working groups of top officials to try to reach agreements on trade. That made the timing of the US Commerce Department's decision a day later to ban Americans from using or financing Huawei artificial intelligence chips noteworthy. The department contended that the A.I. chips were based on a prohibited export of American technology, which Huawei has denied. The restrictions were the latest in a long series of American blows aimed at Huawei, which is one of China's best-known success stories. Its hundreds of thousands of workers produce everything from cellphone base stations to autonomous driving systems for cars. Chinese officials have reacted with growing anger at the US use of export controls. 'China once again urges the US to immediately correct its wrong practices, stop discriminatory restrictive measures against China, and jointly maintain the consensus reached at the Geneva high-level talks,' He Yongqian, the Ministry of Commerce spokeswoman, said at a news briefing on Thursday. American restrictions on sales to COMAC, a state-owned enterprise, represent a setback to the Chinese government's long-term project to shed its dependence on Boeing and Airbus. The C919 aircraft is heavily dependent on American and European components, with the company's miles-long complex of hangars and design labs in Shanghai mainly installing components from foreign companies in Chinese-built air frames. COMAC did not respond to a phone call and fax for comment. In a reply to questions early Thursday, Kush Desai, a White House spokesman said: 'The Geneva agreement was a major first step towards securing a final, comprehensive trade deal with China. Discussions continue, and the administration is monitoring compliance with the agreement.' The United States has been gradually tightening export controls on semiconductors for a decade, contending that China has used American computer chip technology to improve a wide range of military hardware. Chinese government officials and industry executives have denied this, and contend that the United States is trying instead to limit China's economic development. Two days after Trump imposed steep tariffs on April 2 on imports from China and many other countries, China imposed its own export controls on some kinds of rare earths and heat-resistant magnets made from them. The Geneva trade agreement had also called for China to 'adopt all necessary administrative measures to suspend or remove the non-tariff countermeasures taken against the United States since April 2, 2025.' But China's Commerce Ministry has contended that rare earths have military applications, and it has avoided describing its export controls as a trade countermeasure. Although most rare earth magnets are used in civilian industries, they are also essential for electric motors in advanced fighter jets and the guidance systems of intercontinental ballistic missiles. Experts in China have begun defending export controls on rare earth magnets as appropriate while the United States maintains export controls on semiconductors. 'China sees export controls on rare earths as a counterstrike to US export controls on semiconductors,' said Zhu Ning, deputy dean at the Shanghai Advanced Institute of Finance. Yet if China maintains export controls on rare earths, many multinational companies may conclude that their supply chains are too reliant on China, Eskelund said. 'The risk of production stoppages due to export controls will only increase calls in Europe for de-risking from China.' The question now is how much longer both sides maintain their export controls. 'It would be unfortunate if one or both sides overestimates its own leverage and feels like it needs to prove that to the other side,' said Chris Adams, a former Treasury official who is now a partner at the Covington and Burling law firm.
Japan Today
5 days ago
- Business
- Japan Today
European companies cut costs, scale back investments in China as its economy slows
By KEN MORITSUGU European companies are cutting costs and scaling back investment plans in China as its economy slows and fierce competition drives down prices, according to an annual survey released Wednesday. Their challenges reflect broader ones faced by a Chinese economy hobbled by a prolonged real estate crisis that has hurt consumer spending. Beijing also faces growing pushback from Europe and the United States over surging exports. 'The picture has deteriorated across many key metrics,' the European Union Chamber of Commerce in China said in the introduction to its Business Confidence Survey 2025. The same forces that are driving up Chinese exports are depressing the business outlook in the Chinese market. Chinese companies, often enticed by government subsidies, have invested so much in targeted industries such as electric vehicles that factory capacity far outpaces demand. The overcapacity has resulted in fierce price wars that cut into profits and a parallel push by companies into overseas markets. In Europe, that has created fears that growing imports from China could undermine its own factories and the workers they employ. The EU slapped tariffs on Chinese EVs last year, saying China had unfairly subsidized electric vehicle production. 'I think there's a clear perception that the benefits of the bilateral trade and investment relationship are not being distributed in an equitable manner,' Jens Eskelund, the president of the EU Chamber in China, told reporters earlier this week. He applauded efforts by China to boost consumer spending but said the government must also take steps to ensure that supply growth doesn't outpace that in demand. The survey results show that the downward pressure on profits increased over the past year and that a fall in business confidence has yet to bottom out, Eskelund said. About 500 member companies responded to the survey between mid-January to mid-February. 'It is just very difficult for everyone right now in an environment of declining margins,' he said. © Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
5 days ago
- Business
European companies cut costs, scale back investments in China as its economy slows
BEIJING -- European companies are cutting costs and scaling back investment plans in China as its economy slows and fierce competition drives down prices, according to an annual survey released Wednesday. Their challenges reflect broader ones faced by a Chinese economy hobbled by a prolonged real estate crisis that has hurt consumer spending. Beijing also faces growing pushback from Europe and the United States over surging exports. 'The picture has deteriorated across many key metrics,' the European Union Chamber of Commerce in China said in the introduction to its Business Confidence Survey 2025. The same forces that are driving up Chinese exports are depressing the business outlook in the Chinese market. Chinese companies, often enticed by government subsidies, have invested so much in targeted industries such as electric vehicles that factory capacity far outpaces demand. The overcapacity has resulted in fierce price wars that cut into profits and a parallel push by companies into overseas markets. In Europe, that has created fears that growing imports from China could undermine its own factories and the workers they employ. The EU slapped tariffs on Chinese EVs last year, saying China had unfairly subsidized electric vehicle production. 'I think there's a clear perception that the benefits of the bilateral trade and investment relationship are not being distributed in an equitable manner,' Jens Eskelund, the president of the EU Chamber in China, told reporters earlier this week. He applauded efforts by China to boost consumer spending but said the government must also take steps to ensure that supply growth doesn't outpace that in demand. The survey results show that the downward pressure on profits increased over the past year and that a fall in business confidence has yet to bottom out, Eskelund said. About 500 member companies responded to the survey between mid-January to mid-February. 'It is just very difficult for everyone right now in an environment of declining margins,' he said.
