Economy

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Jacob Rothman, who has been making kitchenware in China sold by US retailers including Walmart for more than two decades, was “shocked and elated” when Washington and Beijing reached a truce in their tariff war.But the co-founder of Velong Enterprises said the deal, under which the US agreed to slash additional tariffs on Chinese goods from 145 per cent to 30 per cent for 90 days, offered little more than a temporary reprieve. “It’s exactly the percentage that keeps my categories of product viable,” said Rothman of the level of US tariffs on Chinese imports, which is now about 40 per cent. “We’ve gained a bit more breathing room . . . beyond that, it’s uncertain.”China-based exporters greeted the announcement on Monday of the tariff rollback with relief. Shipments to the US are expected to “significantly increase” in the coming few weeks, according to Wang Xin, head of the Shenzhen Cross-Border E-Commerce Association, which represents more than 2,000 Chinese merchants. The truce, negotiated by US Treasury secretary Scott Bessent and Chinese vice-premier He Lifeng in Geneva over two days of talks last weekend, averted a hard decoupling between the world’s two biggest economies.Chinese vice-premier He Lifeng, center left, and US treasury secretary Scott Bessent, centre right, met in Geneva More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.President Donald Trump’s administration has taken a tougher stance on Chinese technology advances, warning companies around the world that using artificial intelligence chips made by Huawei could trigger criminal penalties for violating US export controls.The commerce department issued guidance to clarify that Huawei’s Ascend processors were subject to export controls because they almost certainly contained, or were made with, US technology.Its Bureau of Industry and Security, which oversees export controls, said on Tuesday it was taking a more stringent approach to foreign AI chips, including “issuing guidance that using Huawei Ascend chips anywhere in the world violates US export controls”.  But people familiar with the matter stressed that the bureau had not issued a new rule, but was making it clear to companies that Huawei chips are likely to have violated a measure that requires hard-to-get licences to export US technology to the Chinese company.“The guidance is not a new control, but rather a public confirmation of an interpretation that even the mere use anywhere by anyone of a Huawei-designed advanced computing [integrated circuit] would violate export control rules,” said Kevin Wolf, a veteran export control lawyer at Akin Gump. The bureau said three Huawei Ascend chips — the 910B, 910C and 910D — were subject to the regulations, noting that such chips are likely to have been “designed with certain US software or technology or produced with semiconductor manufacturing equipment that is the direct produce of certain US-origin software or technology, or both”.The guidance comes as the US has becoming increasingly concerned at the speed at which Huawei has developed advanced chips and other AI hardware. Huawei has begun delivering AI chip “clusters” to clients in China that it claims outperform the leading US AI chipmaker Nvidia’s comparable product, on key metrics such as total compute and memory. The system relies on a large number of 910C chips, which individually fall short of Nvidia’s most advanced offering, but collectively deliver superior performance to a rival Nvidia cluster product.The Shenzhen-based conglomerate currently offers its Ascend series processors, mainly the 910B and 910C, to Chinese companies. Huawei is boosting production capacity by building its own advanced semiconductor production lines, as Chinese companies cut off from Nvidia’s products are increasing orders. There is growing US concern that China’s national champion will soon be selling AI processors in both China and foreign markets that can compete with Nvidia and other US companies’ products. Nvidia chief Jensen Huang said last month Huawei was “one of the most formidable technology companies in the world” and US policies should help his company compete on the global stage.Nvidia declined to comment on the bureau’s new rules. Huawei did not immediately respond to a request for comment.The commerce department also rescinded the AI Diffusion Rule on Tuesday, a measure the previous Biden administration had planned would take effect on May 15. It was designed to limit exports of AI chips to other countries and make it harder for China to circumvent existing US export controls. But the department said the rule was too bureaucratic — a view former Biden officials reject — and it would issue a replacement in the future.The announcement came on the day Trump visited Saudi Arabia, where he unveiled a raft of deals, including a commitment by the kingdom’s new state-owned AI company, Humain, to build AI infrastructure using hundreds of thousands of Nvidia chips.A source familiar with the situation said the scale of the proposed Gulf deals shocked many senior Trump administration officials. They were concerned about offshoring large-scale AI infrastructure, and also turning a blind eye towards Saudi and the United Arab Emirates’ collaborations with Beijing.Additional reporting by Michael Acton in San Francisco More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Ports and shipping lines are braced for a “whipsaw” in demand as businesses race to stockpile Black Friday and Christmas goods during the 90-day ceasefire in the US-China trade war.Analysts warned that the sharp drop-off in container ship bookings from China to the US following President Donald Trump’s April “liberation day” tariff announcements would now be followed by an equally rapid surge in imports that will test port handling capacity.“First we’ll see a massive drop in cargo arriving in US ports; then a massive surge as goods now waiting on the quayside in China are shipped to the US. It’s a carbon copy of the whipsaw effects we saw in the pandemic,” said Lars Jensen, chief executive of Vespucci Maritime consultancy.Logistics hub Freightos said it expected “a period of tight capacity and some equipment shortages” as shipping lines and ports try to manage what is expected to be a sudden increase in volumes following the announcement of the 90-day truce by Washington and Beijing on Monday.The ceasefire deal will slash the headline US tariff on Chinese imports from 145 per cent to 30 per cent for at least 90 days, pending further negotiations between the two sides.Normally US retailers would import goods for the key Black Friday sales period and Christmas between July and mid-October, but they are now expected to pull orders forward to beat the potential expiry of the trade truce on August 10.As a result, businesses could face increased container rates and some delays in the next few weeks “at both origins and US destinations”, wrote Judah Levine, head of research at Freightos, in a note to clients on Monday.The effects of the tariff cut announced on Monday will take time to show up in data, analysts said, with ships taking about 4-6 weeks to reach the US, meaning import freight volumes will continue to fall for the next few weeks. A wave of cancelled freight bookings in April resulted in almost 400,000 fewer containers booked on Asia-to-North America routes during the four weeks from May 5 than planned, according to shipping data analysts Sea-Intelligence.Show video infoBefore Monday’s deal, the US National Retail Federation had forecast a 20 per cent year-on-year fall in container shipments to the US from China between June and September.Although shipping rates are expected to increase, Freightos forecasts that they will probably still remain below last year’s high season rates of $8,000 per 40ft equivalent container to the US West Coast, and more than $9,800/FEU to the East Coast. Before the trade wars broke out, large shipowners had ordered record numbers of new container vessels.“With rates already more than 30 per cent lower than a year ago due to fleet growth and increased competition between the new carrier alliances, peak season rates may not climb as high as last year’s peak season highs,” Freightos’s Levine added.However, the full impact of the 90-day truce remained difficult to predict given that US tariff rates on Chinese imports would still be higher than before Trump’s announcements in April, said Sea Intelligence chief executive Alan Murphy.“Under normal circumstances, an expectation of tariffs would see importers frontloading cargo. In this case though, with the pause still seeing 30 per cent tariffs on Chinese imports, higher than any previous tariffs on China, the incentives are less clear,” Murphy added.High levels of US stockpiling after Trump was elected in November last year may also ease pressures, some analysts added. US import volumes were 11 per cent higher between November 2024 and April 2025 compared with a year previously, according to National Retail Federation data.Revolution Beauty plc, a UK-listed mass beauty brand, said in a trading update on Tuesday that it had benefited from stockpiling “significant volumes” of products of Chinese origin in the US before tariffs hit in April, and it was now starting to reauthorise shipments where needed.  More

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As President Trump guts American research institutions, world leaders see a “once-in-a-century brain gain opportunity.”Help Wanted. Looking for American researchers.As President Trump cuts billions of federal dollars from science institutes and universities, restricts what can be studied and pushes out immigrants, rival nations are hoping to pick up talent that has been cast aside or become disenchanted.For decades, trying to compete with American institutions and companies has been difficult. The United States was a magnet for top researchers, scientists and academics. In general, budgets were bigger, pay was bigger, labs and equipment were bigger. So were ambitions.In 2024, the United States spent nearly $1 trillion — roughly 3.5 percent of total economic output — on research and development. When it came to the kind of long-term basic research that underpins American technological and scientific advancements, the government accounted for about 40 percent of the spending.That’s the reason political, education and business leaders in advanced countries and emerging economies have long fretted over a brain drain from their own shores. Now they are seizing a chance to reverse the flow.In 2024, the United States invested nearly $1 trillion in research and development.Hilary Swift for The New York Times“This is a once-in-a-century brain gain opportunity,” the Australian Strategic Policy Institute declared, as it encouraged its government to act.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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The chief executive of Carvana, which sells used cars online, said President Trump’s tariffs could help his company by increasing demand for its vehicles.Automakers are worried that President Trump’s tariffs on imported cars and auto parts will soon increase their costs and start eating into profits.But at least one business in the auto industry thinks the tariffs could give it a lift. That company is Carvana, an online retailer of used cars that has gained fame for storing vehicles in distinctive “vending machine” towers.The Trump tariffs, which include levies of 25 percent on vehicles made in Mexico, Canada, Germany and many other nations, are widely expected to raise the prices new cars and trucks, forcing more car shoppers to opt for a used vehicle. An agreement to lower tariffs on Chinese imports that the administration announced on Monday will not change the tariffs on cars and auto parts.“To the extent that car prices go up, Carvana is probably positioned to be relatively advantaged as consumers look for high-quality cars at a lower price,” the company’s founder and chief executive, Ernie Garcia, said in an interview last week. “We think that will cause them to shift into used vehicles and into the savings that are available via online buying.”Mr. Trump has said he imposed tariffs in hopes of forcing manufacturers to make more goods and create more factory jobs in the United States, although he has also claimed that tariffs would help achieve other goals like reducing unauthorized immigration and drug smuggling.Automakers are bracing for the impact.In the past several days, General Motors said the tariffs would increase its costs by $2.8 billion to $3.5 billion this year, even accounting for measures the company is taking to adapt. Ford Motor, which makes more vehicles domestically than G.M., estimated the tariffs would cost it $1.5 billion on a net basis. Toyota Motor, which imports many vehicles from its home country of Japan, said the tariffs would cost it $1.3 billion in March and April alone.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More