Daily Buzz 17 April 2025

Top News

China tariff of 245 percent?

A White House fact sheet detailing a new probe into the import of critical minerals contained the line: "China now faces up to a 245 percent tariff on imports to the United States as a result of its retaliatory actions."

The figure immediately raised eyebrows in a trade war with no shortage of confusion, given that the current headline rate for US tariffs on China is 145 percent.

China's foreign ministry spokesperson Lin Jian, responding to a reporter's question about the higher figure, said, "You should ask the US about the exact tariff rate," adding "there is no winner in a trade war. China doesn't want a fight, but is not afraid of one."

A White House official trying to clarify the situation said the 245 percent figure is the maximum duty that some Chinese goods could face. The calculation combines President Donald Trump's reciprocal tariffs of 145 percent, a 20 percent tariff related to fentanyl and pre-existing Section 301 tariffs imposed before Trump began his second term. For example, electric cars have outstanding tariffs of 100 percent from the Biden administration.

A Chinese Ministry of Commerce spokesperson reiterated China's refusal to play a "meaningless tariff numbers game with the US." He added that China will resolutely retaliate if the US continues to substantially infringe upon China's rights and interests.

New trade negotiator

China on Wednesday appointed Li Chenggang, 58, as a top international trade representative. Elevated to vice minister of commerce, he will be a point man in any trade talks with the US, though none has been scheduled to date. The appointment signals that China will field a formidable team of negotiators if talks ever begin. Li has worked for the Ministry of Commerce since 2010 and served as China's representative to the World Trade Organization and several other international organizations.

Fed may face a dilemma

US Fed Chairman Jerome Powell said import tariffs imposed by President Donald Trump are larger than the central bank expected and may ultimately force the bank to face the conflicting choice of raising rates to combat inflation or lowering rates to support a flagging economy. He has warned that the tariffs may fuel inflation.

Top Business

Boeing deliveries halt

Responding to a reporter's question about reports that China has halted all Boeing deliveries, foreign ministry spokesperson Lin Jian said he is unclear about the situation. He was also asked if China would be strengthening collaborations with aviation companies in Brazil, given an expected price surge in Boeing aircraft due to the escalating trade war.

"China values pragmatic collaboration with Brazil in various sectors, including aviation, and welcomes Chinese airlines to engage in related cooperation with Brazil," Lin said.

Drop in freighter demand

International shipping companies are readjusting schedules as US tariffs bite into trans-Pacific trade. Container tracking site Vizion shows that container books set for the US dropped 67% in the last seven days, and down 40% out of the US. Honor Lane Shipping Group said 80 sailings scheduled out of China have been cancelled, and Ocean Network Express told US news outlet CNBC that it has "suspended until further notice" a route it planned to restore, involving the ports of Qingdao, Ningbo and Shanghai in China, Pusan in South Korea, Vancouver in Canada and Tacoma in the US.

Hyping smart driving systems

Chinese automakers have been directed to avoid exaggerated claims about their smart-driving systems. The directive followed a meeting between the Ministry of Industry and Information Technology and representatives from nearly 60 car manufacturers. There are six accepted category levels of "smart cars," from no autonomy to full autonomy. China's auto industry is currently moving from Level 2, or "partially automated," to Level 3, or "highly automated." The directive came after several accidents involved electric vehicles raised concerns that over-hyped driver-assisted systems were lulling motorists into a false sense of security.

Economy

China GDP beats forecast

China's economy grew 5.4 percent from a year earlier in the first quarter, beating expectations and signaling resilience despite United States tariff threats. The reading topped a Reuters poll forecast of 5.1 percent growth. March retail sales surged 5.9 percent and industrial output jumped 7.7 percent, both sharply above estimates. The stronger-than-expected figures come as major investment banks have lowered their annual growth outlooks for China, citing potential damage from US tariffs. Still, officials downplayed any long-term impact. "Short-term pressure won't change the economy's positive trajectory," said National Bureau of Statistics Deputy Director Sheng Laiyun.

Corporate

Nvidia hit by export ban

The US this week banned technology heavyweight Nvidia from exporting its China-focused H20 artificial intelligence chip. It means that California-based Nvidia must secure licenses to sell the H20, a chip designed to comply with earlier restrictions, amid US national security concerns over China's supercomputing capabilities. The move triggered a US$5.5 billion charge in Nvidia's upcoming earnings report and a 6 percent drop in its share price. Chinese tech giants like Tencent and Alibaba have relied on the H20 for development of artificial intelligence. Nvidia Chief Executive Jensen Huang warned the restriction would help domestic rivals like Huawei catch up.

ASML orders miss forecast

ASML, the world's biggest supplier of computer chipmaking equipment, reported a drop in first-quarter orders. The Dutch company said net bookings in the first three months fell to 3.9 billion euros (US$4.5 billion) from 7.1 billion euros in the previous quarter. Net income in the latest quarter increased to 2.36 billion euros from 1.22 billion euros a year earlier, on sales of 7.74 billion euros, generally in line with forecasts. Chief Executive Christophe Fouquet said tariff concerns have added to uncertainty, though he predicted customer demand this year and next will remain strong. The US accounted for 17 percent of ASML's 2024 revenue.