GM's core profit slides in second quarter as Trump's tariffs bite
The automaker's revenue in the quarter ended June 30 fell nearly two per cent to about US$47 billion from a year ago. Its quarterly adjusted earnings per share fell to US$2.53 compared with US$3.06 a year earlier.
Analysts on average expected the company to notch a quarterly adjusted profit of US$2.44 per share, according to data compiled by LSEG.
The largest US automaker by sales said it expects the tariff impact to worsen in the third quarter and stuck to a previous estimate that trade headwinds threaten to hit the bottom line by US$4 billion to US$5 billion. GM said it could take steps to mitigate at least 30 per cent of that impact.
GM was among the many corporations to pull its annual guidance as it evaluated the impact of US President Donald Trump's tariffs, but eventually reinstated it to a lower annual adjusted core profit of between US$10 billion and US$12.5 billion.
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The Star
3 hours ago
- The Star
Trump tariffs leave costly China supply question unanswered; Indonesia among countries deeply affected
JAKARTA (Bloomberg): President Donald Trump's recent flurry of trade deals have given Asian exporters some clarity on tariffs, but missing are key details on how to avoid punitive rates that target China's supply chains. Trump unveiled tariffs of 20% for Vietnam and 19% for Indonesia and the Philippines, signaling those are the levels the US will likely settle on for most of Southeast Asia, a region that ships US$352 billion worth of goods annually to the US. He's also threatened to rocket rates up to 40% for products deemed to be transshipped, or re-routed, through those countries - a move largely directed at curbing Chinese goods circumventing higher US tariffs. But still unclear to manufacturers is how the US will calculate and apply local-content requirements, key to how it will determine what constitutes transshipped goods. South-East Asian nations are highly reliant on Chinese components and raw materials, and US firms that source from the region would bear the extra tariff damage. That's left companies, investors and economists facing several unanswered questions about Trump's tariffs that appear aimed at squeezing out Chinese content, according to Deborah Elms, head of trade policy at the Hinrich Foundation in Singapore. "Is that raw materials? All raw materials? Above a certain percentage?' she said. "How about parts? What about labor or services? What about investment?' In an agreement with Indonesia last week, the White House said the two countries would negotiate "rules of origin' to ensure a third country wouldn't benefit. The deal with Vietnam earlier this month outlined a higher 40% tariff rate for transshipped goods. And Thai officials, who have yet to secure a deal, detailed that they likely need to boost local content in exports to the US. Missing Details The Trump administration isn't providing much clarity on the matter right now. US officials are still working out details with trading partners and looking at value-based local content requirements, to ensure exports are more than just assembled imported parts, according to a person familiar with the matter, who didn't want to be identified discussing private talks. A senior Trump administration official also said this week that details on the approach to transshipment are expected to be released before Aug. 1, the deadline for when higher US tariffs kick in. Some factories are already adjusting their supply chains to comply with rules that will require more locally-made components in production. Frank Deng, an executive at a Shanghai-based furniture exporter with operations in Vietnam - and which gets about 80% of business from the US - said in an interview his firm is making adjustments as authorities appear to be more strictly enforcing country-of-origin rules. Vietnam has always had specific local content requirements for manufacturers, Deng added, including that a maximum of 30% of the volume of raw materials originates from China, and the value after production in Vietnam must be 40% higher than the imported raw materials. "We've been struggling to meet all the standards so that we can still stay in the game,' Deng said. "But I guess that's the only way to survive now.' For most of Southeast Asia, reducing the amount of Chinese-made components in manufacturing will require a complete overhaul of their supply chains. Estimates from Eurasia Group show that Chinese components make up about 60% to 70% of exports from Southeast Asia - primarily industrial inputs that go into manufacturing assembly. About 15% of the region's exports now head to the US, up about four percentage points from 2018. Local Content The US has become increasingly vigilant about China's ability to bypass US trade tariffs and other restrictions through third countries since Trump's first trade war in 2017. Thailand signaled its frustration over the lack of clarity for how much local content is needed in goods exported to the US to avert transshipment rates, but noted it will likely be much higher than a traditional measure of 40%. "From what we've heard, the required percentage could be significantly higher, perhaps 60%, 70%, or even 80%,' Deputy Prime Minister Pichai Chunhavajira said July 14. "Emerging countries or new production bases are clearly at a disadvantage,' he said, as their manufacturing capabilities are still at an early stage and must rely on other countries for raw goods. Vietnam, Thailand and Malaysia have all taken steps this year to address Trump's concerns, increasing scrutiny of trade that passes through their ports including new rule-of-origin policies that centralize processing and imposing harsh penalties on transshippers. Developing nations may still struggle to enforce Trump's rules or comply with the rules if it means going up against China, their largest trading partner and geopolitical partner. "The reality is it's not enforceable at all,' said Dan Wang, China director at Eurasia Group. "Chinese companies have all kinds of ways to get around it and those other countries have no incentive to enforce those measures, or capacity to collect the data and determine local content.' -- Reports from Patpicha Tanakasempipat, Skylar Woodhouse and Nguyen Dieu Tu Uyen. -- ©2025 Bloomberg L.P.
The Star
4 hours ago
- The Star
US drops sanctions on Myanmar junta allies after Trump praise
A trishaw driver rides as his passenger uses an umbrella to cover themselves from the rain in Yangon on July 21, 2025. -- Photo by Sai Aung MAIN / AFP YANGON (AFP): The United States has lifted sanctions on several allies of Myanmar's ruling general and their military-linked firms, a US Treasury notice shows, after the junta chief sent a glowing letter of praise to President Donald Trump. Junta chief Min Aung Hlaing seized power in a 2021 coup, deposing the civilian government and sparking a civil war that has killed thousands, leaving 3.5 million displaced and half the nation in poverty. Two weeks ago, the top general sent a letter to Trump, responding to his threat of tariffs by lauding his presidency with praise, including for shutting down US-funded media outlets covering the conflict. A US Treasury notice on Thursday said sanctions were dropped against KT Services and Logistics, the Myanmar Chemical and Machinery Company, and Suntac Technologies -- as well as their managers. In a statement, a US Treasury Department spokesperson denied there was an "ulterior motive" in the move, although the notice did not provide a reason for the removals. "Anyone suggesting these sanctions were lifted for an ulterior motive is uninformed and peddling a conspiracy theory driven by hatred for President Trump," said the spokesperson, on condition of anonymity. They added that individuals were "regularly added and removed" from the sanctions list "in the ordinary course of business." KT Services and Logistics and its CEO Jonathan Myo Kyaw Thaung were described as junta "cronies" when they were sanctioned in 2022 for leasing Yangon's port from a military firm for $3 million a year. The Myanmar Chemical and Machinery Company and its owner, Aung Hlaing Oo, and Suntac Technologies owner Sit Taing Aung were sanctioned later that year for producing arms, including tanks and mortars. A third Myanmar national, Tin Latt Min -- who the US previously described as owning "various companies that are closely related to the regime" -- was also removed from the sanctions list. Trump sent a letter to junta chief Min Aung Hlaing earlier this month, one among a raft of missives despatched to foreign leaders during his global tariff blitz. The letter -- believed to be Washington's first public recognition of the junta's rule since the coup -- threatened Myanmar with a 40 percent levy unless a trade deal was struck. Min Aung Hlaing responded with a multi-page letter expressing his "sincere appreciation" for Trump's message and praising his "strong leadership". - AFP
The Star
7 hours ago
- The Star
Trump administration issues plan to limit AI exports to China
The White House on Wednesday released proposals to restrict exports of American AI equipment and limit the spread of Chinese AI models as part of a sweeping plan to shape the rules governing the fast-moving technology. The 28-page AI Action Plan marks US President Donald Trump's administration's first comprehensive strategy on the topic and comes as national security hawks have raised concerns that superior American chips may reach China – including through third countries – and advance its AI and military development. Under the plan, the US Commerce Department will lead an effort to develop new export controls on chipmaking components to close 'loopholes' in current restrictions that now focus on major systems. The department will also lead efforts to increase the monitoring of exported US chip end users and to explore using new chip location verification features to keep them out of 'countries of concern' – a term often used to refer to China, Iran, North Korea and Russia, among others. The plan also directs the Defence and Commerce departments to coordinate with allies on adopting US export controls and to prohibit American adversaries from being involved in their defence supply chains. 'Artificial intelligence is a revolutionary technology with the potential to transform the global economy and alter the balance of power in the world,' White House AI tsar David Sacks said in a written statement. 'To win the AI race, the US must lead in innovation, infrastructure, and global partnerships ... This Action Plan provides a road map for doing that,' he added. The Trump administration decision last week to allow American chipmaker Nvidia to sell its H20 chips to China reinvigorated furious debate about how to extend the US technological lead without compromising national security. That came months after the administration revoked a rule put in place under former President Joe Biden that limited how much US AI computing capability certain countries could access through imported US chips. American AI companies face increased competition from such Chinese rivals as Hangzhou-based DeepSeek, which sent global shock waves earlier this year when it released powerful AI models built far more cheaply than many had thought possible. Trump has previously warned of China's potential to surpass the US in the race for AI dominance. Speaking about the White House plan at an AI summit on Wednesday, Trump said he wants to make the US an 'AI export powerhouse' while maintaining 'necessary protections for our national security'. Commerce Secretary Howard Lutnick and Secretary of State Marco Rubio 'will work to rapidly expand American AI exports of all kinds, from chips to software to data storage', he said, before signing executive orders to fast-track AI development and promote exports. Ryan Fedasiuk, a former technology policy advisor in the State Department's Office of China Coordination, said that taken together, the export control proposals 'thread a difficult needle' in the lead-up to US-China trade talks in Stockholm next week. 'They tighten technology controls without risking an existential blow to the provisional trade deal struck in London, and they focus on enforcement gaps rather than adding sweeping new restrictions,' he said. The real impact of the plan will depend 'entirely' on its execution, Fedasiuk added. 'Allied coordination is where the rubber meets the road. Export controls only work if they're multilateral, and we've seen too many cases where US restrictions just pushed business to Dutch or Japanese competitors.' The new administration blueprint also makes several recommendations focused on countering the spread of Chinese models. To ensure 'that free speech flourishes in the era of AI', the Commerce Department is to evaluate advanced Chinese AI models for alignment with Communist Party talking points and censorship practices. Along with the US State Department, Commerce will lead a campaign to 'vigorously advocate' for international AI governance approaches that 'counter Chinese influence' at diplomatic and standard-setting bodies. Too many existing efforts 'have advocated for burdensome regulations, vague 'codes of conduct' that promote cultural agendas that do not align with American values, or have been influenced by Chinese companies attempting to shape standards for facial recognition and surveillance', the plan said. The two departments will also lead a new initiative to share technology protection measures, including measures in basic research and higher education, with allies and partners. To promote the use of American AI technology rather than that of adversaries, the Commerce Department will gather industry proposals for 'full-stack AI export packages' – bundled systems that include AI hardware, software, and related services intended for export. In recent years, the US has pushed its European and Asian allies to stop exports of advanced chipmaking equipment to China. Wednesday's document carries a thinly veiled threat to allies, warning that failure to align with US export controls could trigger punitive trade measures through secondary tariffs. - SOUTH CHINA MORNING POST
