Trump to proceed with extra 50% China tariff...China LGFV Q1 net financing falls...US considers adjusting Chinese vessel port fee plan
Trump to proceed with extra 50% China tariff
Donald Trump is pushing ahead with another 50% tariff on Chinese goods, escalating his trade war with Beijing in a move that will cascade across supply chains between the world’s two biggest economies, reports the Financial Times. Karoline Leavitt, White House press secretary, said the new tariffs would “be going into effect at 12.01am” eastern time on Wednesday.
The additional levies mean Chinese goods entering the US will face duties of more than 104%—a level that will be seen as a provocation by Beijing, which has vowed to “fight to the end” in its trade war with Washington.
The US president is moving ahead with the new taxes after Beijing rebuffed his call to rescind the 34% tariff it imposed on American goods in retaliation for the “reciprocal” duties he announced last week.
China LGFV Q1 net financing falls
China’s LGFVs’ quarterly net financing—new yuan bond issuance minus maturities—fell to RMB 95 billion ($13 billion) for the three months ended March from the same period last year, marking the lowest first-quarter since at least 2021, when Fitch Ratings began to track the data, reports Bloomberg.
While that figure was higher than the previous three quarters, it underscores a longer-term decline given first quarters are often the busiest period for China’s debt markets as borrowing clusters at the start of the year. The data came in before Trump threatened fresh levies of 50% on imports from China as well as a 34% “reciprocal” duty set to kick in on April 9.
The funding environment for LGFVs has been tightening as China presses on with its deleveraging efforts amid slumping land sales and declining tax revenue, though any fresh stimulus to cushion the economy from the trade war could complicate broader efforts to rein in debt. LGFVs are also under pressure to curb their borrowing as authorities vow to deal with off-balance sheet borrowings.
US considers adjusting Chinese vessel port fee plan
President Donald Trump's administration is considering softening its proposed fee on China-linked ships visiting US ports after a flood of negative feedback from industries that said the idea could be economically devastating, according to six sources, reports Reuters. Among the changes under consideration are delayed implementation and new fee structures designed to reduce the overall cost to visiting Chinese vessels, according to the six sources with knowledge of the matter. The sources asked not to be named due to the sensitivity of the issue.
The White House and the Office of the US Trade Representative (USTR), the government department involved in the drafting the proposal, did not respond to requests for comment.
Not all of the agency's proposed multimillion-dollar fees for Chinese-built ships to dock at US ports will be implemented and may not be cumulative, US Trade Representative Jamieson Greer told a US Senate Finance Committee hearing on Tuesday.
Europe to struggle in China rare earths competition
Europe will probably be able to produce only a small portion of rare earths it needs for electric vehicles and wind turbines by 2030, mainly due to cheap competition from dominant producer China, a consultant said on Tuesday, reports Reuters. Europe and the US have been scrambling in recent years to boost domestic production and processing of rare earths to cut dependence on China, which accounts for about 90% of processed rare earths globally.
"Today there's a cost gap of 20% to 40% between a value chain in China and a potential value chain in Europe," said Laurent Migom of consultancy Bain.
"And that is why we do not expect sufficient permanent magnet making in Europe in the current environment," Migom told an event where chemical group Solvay launched an expansion of its rare earth processing in La Rochelle, France.
China narrowing gap with US in AI models - Stanford report
China has rapidly narrowed the gap with the US in producing cutting-edge artificial intelligence (AI) models, according to research published by Stanford University in California, reports the South China Morning Post. When measured using major AI evaluating benchmarks, the performance difference of Chinese models compared with their US counterparts shrank from double digits in 2023 to near parity last year, according to the latest Artificial Intelligence Index report from the Stanford Institute for Human-Centred AI.
For example, the performance gap between Chinese and US models in MMLU, or measuring massive multitask language understanding, narrowed from 17.5 points two years ago to 0.3 by the end of 2024, underscoring the relentless drive by Chinese tech firms to push the frontiers of the technology.
China’s Big Tech firms—including Alibaba Group Holding, ByteDance and Tencent Holdings, as well as AI start-ups such as DeepSeek and Zhipu AI—were ranked in the global top 15 in terms of notable AI models released last year. They included Alibaba’s Qwen series and DeepSeek’s V3 foundational model and its R1 reasoning model.
Double down
US President Donald Trump is pushing ahead with a further 50% tariff on Chinese goods after China responded to the US’ initial 34% tariff with a similar tariff of their own. The new tariff brings the total charges on Chinese goods imports into the US to 104%, with impacts expected to cascade across supply chains globally.
The double down from Trump means that we are very much in the middle of a game of chicken between the world’s two largest economies. And the big question now is who is going to blink first.