Who could win and lose on tighter Trump AI controls? UBS weighs in
'The Trump administration is preparing new restrictions on AI chip exports to Malaysia and Thailand,' UBS noted, citing Bloomberg, 'with the aim of preventing advanced processors from reaching China via third countries.'
Malaysia is said to now account for nearly 12% of NVIDIA's global sales, making it a key AI data center hub. The proposed Commerce Department rule would target chipmakers like NVIDIA (NASDAQ:NVDA).
UBS highlighted that 'new regulations, on the heels of the June rally, could trigger volatility,' especially as recent tech gains were driven more by 'price-to-earnings multiple expansion than by positive earnings revisions.'
With companies now in their earnings blackout period, UBS believes 'there is less room for any misses in second-quarter results.'
Despite the regulatory overhang, UBS sees some potential winners. 'American data center operators will still be allowed to import US AI chips,' meaning that U.S. hyperscalers like Google (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) can continue regional expansion.
UBS added that 'Malaysian companies primarily serving US-backed projects should remain relatively insulated.'
However, firms building data centers 'speculatively or targeting Chinese demand may be more exposed to order cancelations or project delays.' UBS also noted that 'data center stocks in Southeast Asia may be more sensitive in the near term to headline risk.'
Overall, UBS remains constructive on the long-term outlook. 'We believe the robust secular trends in AI will continue to drive long-term gains in the tech sector,' the analysts wrote, even as they advise a 'balanced portfolio stance within tech and the AI value chain.'
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The Hill
31 minutes ago
- The Hill
Democrats see political gift in Trump's ‘big, beautiful bill'
Democrats say Republicans have given them a political gift with President Trump's 'Big Beautiful Bill.' They say they can easily sell the bill to the public as a threat to working class voters, given its cuts to Medicaid and food stamps and significant tax breaks for the ultra-wealthy. 'This is a rare policy gift to Democrats in that it was perpetrated by Republicans, harms almost everybody, and it's actually relatively easy to talk about,' said Democratic strategist Christy Setzer. With that in mind, Democratic campaign operatives — with a big assist from liberal advocacy groups — have kicked off a messaging blitz that's likely to continue until Election Day. On Monday, the House Democrats' campaign arm launched its first national digital ad campaign of the year targeting 35 battleground Republicans who voted for Trump's bill despite reservations over Medicaid cuts. The House Democrats' top super PAC is finalizing another slate of ads — a six-figure mix of television and digital — that will launch in the coming weeks. And Unrig the Economy, an outside advocacy group, wasted no time complementing the effort. They've launched a seven-figure ad blitz targeting 12 vulnerable Republicans, with plans to spend an additional $10 million in the coming months. The ads highlight three of the most contentious provisions of the GOP bill: the cuts to health and nutrition programs, combined with a rollback of green-energy subsidies that's expected to spike utility costs across large parts of the country. 'Those are the three arguments that we see as the ones that hurt people the most, and the place that Republicans are most vulnerable to accountability,' a spokesperson for the group said Tuesday. The strategy is reminiscent of the Republican attacks on the Affordable Care Act, another wildly contentious bill that was broadly unpopular when Democrats passed it under President Obama in 2010. Months later, Republicans would pick up 63 House seats and flip control of the chamber — the same goal Democrats have set for next year's midterms. And the campaign extends far beyond Capitol Hill. Kentucky Gov. Andy Beshear (D), who says he is weighing a 2028 presidential bid, has already begun using the controversial legislation as a talking point as he looks toward next year's elections. 'Next year, I'll also be the head of the Democratic Governors Association, and especially in these rural states, where Republican governors have not spoken up whatsoever to stop this devastating bill, we're going to have strong candidates, we're going to win a lot of elections,' Beshear said in a CNN interview on Sunday. Republicans are also vowing to go on the offensive, highlighting the tax cuts as a windfall for workers and the immigration crackdown as a boon for public safety. If anyone should be on the defensive, they say, it's Democrats for opposing the legislation. 'National Democrats' desperate and disgusting fear-mongering tactics are nothing more than a lame attempt to distract voters from the fact that they just voted to raise taxes, kill jobs, gut national security, and allow wide open borders,' Mike Marinella, a spokesman for the House Republicans' campaign arm, said Tuesday. 'We will use every tool to show voters that the provisions in this bill are widely popular and that Republicans stood with them while House Democrats sold them out.' But some Republicans have already handed Democrats easy soundbites to put in their ads in the lead-up to 2026 midterms. 'What do I tell 663,000 people in two years or three years when President Trump breaks his promise by pushing them off of Medicaid because the funding isn't there anymore?' Sen. Thom Tillis (R-N.C.), one of the three GOP senators to oppose the bill, said last week on the chamber floor. The criticisms were not overlooked by Democrats, who see Tillis as an asset to their messaging efforts. Senate Minority Leader Chuck Schumer (D-N.Y.) cited Tillis in arguing against the bill last week, and Tillis himself warned his colleagues about an Obamacare-style backlash to the bill. 'When you have even Republicans saying it on the record, it kind of rebuts any argument that the NRCC's gonna try to make,' said a Democratic operative. 'I think you will definitely see Thom Tillis in campaign ads — or his words, at minimum.' On the heels of the bill's passage, Democrats are already pointing to polling foreshadowing favorable outcomes in 2026. A Quinnipiac University poll out in late June revealed that 55 percent of voters oppose the 'Big Beautiful Bill,' and a Fox News poll out last month showed 59 percent of voters oppose it. But some Democrats worry that merely defining Republicans with the bill may not be enough, saying that the party needs to coalesce around an agenda of their own for voters to turn to. 'Democrats have done a good job defining the bill as being bad for regular people. The Democrats have to do better at making an argument that they have an agenda that will challenge the status quo on behalf of working people to make their lives better,' said Democratic strategist Jamal Simmons. 'It's something Democrats need to start doing now because it's a long term problem that needs a long term solution.' A further challenge facing Democrats involves the timing of some of the law's provisions. While benefits like the tax cuts take effect long before the midterms, the cuts to Medicaid and food stamps are delayed until January of 2027 — after voters go to the polls. 'It will be harder to show someone who has lost his or her health care. Instead, they'll have to talk about who's at risk,' said Simmons. 'From a messaging perspective, it's more compelling to show someone who has…already lost their benefits than to discuss someone in jeopardy of losing their benefits.' Regardless, Democrats agree that the bill's impacts must be told at the local level with the stories of voters who are at risk or already affected. They're already pointing, for instance, at a rural hospital in Nebraska that's closing its doors as a direct result of the coming Medicaid cuts. 'You might see rural hospitals closing a little bit sooner. It's got to be about rural hospitals that were open and this month they're closed because of what Donald Trump and Republicans did,' said Democratic strategist Joel Payne. 'It's got to be an effect. It's got to be stories. It's got to be individuals and real people.' '…This can't be a Washington, inside-the-Beltway story. This has to be a story that's told all around the country,' Payne added. In recent years, political observers say Democrats have struggled to reach broader audiences, the latest example being their inability to connect with middle-income voters in the 2024 presidential election. But they say the time is ripe for Democrats to push beyond their 'very same tried and true tactics,' as Setzer put it. 'We have a messengers problem. We have a message problem. We don't actually have a substance problem right now,' Setzer said. 'We have a very important piece of legislation to run against right now that is very wide-ranging in its impact. So they need to expand who they are talking to…and expand the platforms on which we are talking to people.' 'In every electoral victory that we've seen lately, whether it is Donald Trump or Mamdani, you see someone who is willing to branch out in the platforms that they're going to,' Setzer added.
Bloomberg
31 minutes ago
- Bloomberg
China Wants 115,000 Nvidia Chips to Power Data Centers in the Desert
By Andy Lin Mackenzie Hawkins Colum Murphy James Mayger Graphics by Jin Wu Adrian Leung July 8, 2025 Yiwu Advanced Computing Cluster There's a construction boom under way on the edge of the Gobi desert in Xinjiang, where cranes are at work in fields of rock and the sound of jackhammers fills the air. Here in the modest county of Yiwu, China is building out its ambitions to lead the world in artificial intelligence. The futuristic structures are data centers that the operators seek to equip with high-end American semiconductors — chips that the US government doesn't want its geopolitical rival to obtain. A Bloomberg News analysis of investment approvals, tender documents and company filings shows that Chinese firms aim to install more than 115,000 Nvidia Corp. AI chips in some three dozen data centers across the country's western deserts. Operators in Xinjiang intend to house the lion's share of those processors in a single compound — which, if they can pull it off, could be used to train foundational large-language models like those of Chinese AI startup DeepSeek. The complex as envisioned would still be dwarfed by the scale of AI infrastructure in the US, but it would significantly boost China's computing prowess as President Xi Jinping pushes for technological breakthroughs. Such a project also would raise serious concerns for officials in Washington, who restricted leading-edge Nvidia chip sales to China in 2022 over worries that advanced AI could give Beijing a military edge. Yet the Chinese documents contain no explanation of how companies plan to acquire the chips, which cannot be legally purchased without licenses from the US government, permits that haven't been given. The companies listed in the filings, state officials and central government representatives in Beijing declined to comment when asked to explain. To gauge whether Chinese entities could realistically procure that quantity of restricted processors, Bloomberg News spoke with more than a dozen people who've been involved in or privy to US government investigations into the matter, as well as several people with direct knowledge of the black market in China. None of those familiar with the US probes said they previously knew of the data center buildout in Xinjiang. All said that while they believe there are indeed banned chips in China, they're not aware of an illicit trade network sophisticated enough to procure more than 100,000 such processors and direct that hardware to a centralized location. But the US government doesn't appear to have reached a consensus on the number of restricted Nvidia chips currently in the Asian country. Most of the people interviewed for this story said they were unaware of an agreed-upon estimate, while some offered rough numbers that differed by tens of thousands of processors. Two senior Biden administration officials said they believe there are around 25,000 banned Nvidia chips in China — a number that, one of them added, would not be terribly concerning. That volume of semiconductors, assuming they are integrated into servers and designated for the same facility, could power at most one mid-sized data center. The US Commerce Department — whose Bureau of Industry and Security, known as BIS, is tasked with implementing and enforcing chip trade restrictions — did not answer detailed questions for this story, including how many banned Nvidia chips the Trump administration believes are in China, nor whether Trump officials were previously aware of the projects in Xinjiang. 'Posting a web page asking about restricted products is not the same as successfully licensing, building, and operating a datacenter,' Nvidia said in an emailed response to questions about the Chinese companies' claims. 'Datacenters are massive and complex systems, making smuggling extremely difficult, and we do not provide any support or repairs for restricted products.' The California-based company also said that 'trying to cobble together a datacenter from smuggled, previous-generation products makes no business or engineering sense,' especially since chips and servers made by Huawei Technologies Co. are widely available in China. Jensen Huang, Nvidia's chief executive officer, made his position clear at a May conference in Taipei: 'There's no evidence of any AI chip diversion,' he said. Yet the head of BIS pointedly contradicted that assertion just weeks later, telling US lawmakers that there is clearly a problem with AI chip smuggling. 'It's happening,' said Commerce Under Secretary Jeffrey Kessler. 'It's a fact.' Although Kessler didn't mention Nvidia by name, the company is by far the dominant provider of such semiconductors. Kessler also said that US efforts to restrict Huawei's chipmaking capabilities will keep China's output at just 200,000 AI processors this year — a number far short of domestic demand. To be sure, Bloomberg News has not found evidence that China has amassed, or can amass, 115,000 banned Nvidia chips — nor evidence that smaller volumes of restricted semiconductors that US officials believe are in the country have been directed to centralized locations. And yet in Yiwu, the construction goes on. Looming out of the desert, a tower the height of the Golden Gate Bridge radiates an intense light that pierces the surrounding dust clouds. Arrays of reflectors focus the sun's energy onto a receiver that allows the daytime heat of the arid plains to be stored, ensuring continuous power generation. It's one main reason for the choice of Yiwu, just to the south over a mountain pass. On the barren hill behind one new building stands a wall with a slogan picked out in red Chinese letters two meters high: 'Data-electricity fusion shows great promise.' Xinjiang, and especially the Hami region which includes Yiwu County, is rich in wind and solar energy, as well as abundant in coal, offering a ready source of affordable power. Local governments there are at the forefront of a state strategy to take advantage of those energy resources — along with cheap land and cool weather at altitude, helping counter the heat generated by racks of servers — to meet the AI computing-power demand of more economically developed regions such as Shanghai and Shenzhen. Xinjiang, China's Major Hub for Renewable Energy Rich in wind and solar energy resources, Hami in eastern Xinjiang has become one of China's largest renewable power bases On a midweek day in March, workers loaded windmill blades onto the back of trucks traveling the road between the prefectural capital of Hami City and Yiwu, over bleak terrain past occasional camels grazing, and through a new tunnel leading out to a plain with views of snow-capped mountains. The main road into town leads past the first data center, still under construction, with a man welding from his perch on metal scaffolding. Hami is best known for its sweet melons, and Yiwu claims to be the site of the last battle on the mainland of the Chinese civil war in 1949. There's a monument downtown dedicated to a horse that played a role in the final engagement between Communist forces and nationalists loyal to Chiang Kai-shek. The authorities in Xinjiang are particularly suspicious of foreigners due to Western allegations of human-rights abuses against ethnic Uyghurs. Interview requests sent to eight data center operators in Yiwu were ignored, rejected or agreed to and then cancelled at short notice. The Xinjiang government and Ministry of Industry and Information Technology (MIIT), the central government ministry overseeing data center development, didn't reply to Bloomberg requests for comment. The most important part of a giant data center is relatively small. Nvidia dominates the market for so-called AI accelerators, highly coveted components that have propelled the chipmaker's valuation to nearly $4 trillion. The processors are connected together in giant arrays numbering tens of thousands and used to sift through mountains of data to create new computer code that can in many ways approximate human intelligence. The US barred China from importing Nvidia's best chips in October 2022, a month before OpenAI's ChatGPT debut roiled the tech industry and sparked a global race that now includes DeepSeek among its top players. Washington several times has ratcheted up those curbs, restricting sales to China of a variety of advanced semiconductors and the machines used to make them — with additional sanctions levied on specific Chinese tech companies. That sweeping effort, which dates back to Trump's first term, has become a primary source of tension with Beijing — one that Chinese officials repeatedly raised in recent trade talks with the US after the Trump administration imposed punitive tariffs. 'All the greatest chips in the world are American, right? So of course they want them,' Commerce Secretary Howard Lutnick told CNBC last month, speaking about China's position during negotiations in London. 'And of course we said 'absolutely not.'' The Xinjiang effort suggests that China's AI ambitions — which hinge in large part on locally produced chips from the likes of Huawei — still include some hope of accessing restricted Nvidia hardware too. Project approval documents show that in the fourth quarter of 2024, local governments in Xinjiang and in neighboring Qinghai province green-lit a total of 39 data centers that intend to use more than 115,000 Nvidia processors. All of the companies stated in their investment plans that they aim to obtain H100 or H200 chips, two Nvidia GPUs, or graphics processing units, that were the industrial standard for training large language models such as OpenAI's GPT4o and Google's Gemini through last year. Nvidia this year debuted a new, more advanced model — dubbed the Grace Blackwell — that is banned along with the H100 and H200 from export to China without a US government license. Seven Xinjiang projects that aim to use those processors had started construction or won open tenders for AI computing service as of June 2025, according to tender documents obtained by Bloomberg. One operator says it's already using advanced hardware facilities to support cloud access to DeepSeek's R1 model, according to local news reports. Still, the provincial projects' description of their intended computing capabilities may be somewhat aspirational: Local party officials try to signal to Beijing that they are working toward national priorities, but Chinese companies frequently launch initiatives that are never completed. One of the largest projects involves a company ultimately controlled by Nyocor Co., a Tianjin-based energy firm mainly engaged in solar and wind power. It proposes to build a data center powered by 625 H100 servers, one of the banned Nvidia models. It would start with 250 servers in the first phase. That's 2,000 H100 chips. Tender documents show the Nyocor project has started installing servers and other equipment at the data center building, and has asked China Bester Group, a Hubei-based IT company, to supply the hardware. Unlike the investment approval documents, which explicitly state the company wants to use H100s, the tenders don't specify whether the installed servers run on Nvidia chips or some alternative. The amount of the investment was not disclosed. Nyocor is selling its computing power to Infinigence AI, one of the largest AI infrastructure companies in China. The company has raised one billion yuan since creation. "Our goal is to turn computing service into facilities like water and gas, readily available when developers turn on the switch," said Infinigence's CEO in an interview with local media in September 2024. Bloomberg estimates that in order to complete all of the 39 projects as outlined, companies would need to figure out a way to purchase more than 14,000 data servers or 115,000 Nvidia H100 or H200 chips, both banned for China-based entities. Bloomberg estimates these chips would be worth billions of dollars based on black market prices in China. Nyocor declined to comment. China Bester and China Energy Investment didn't reply to requests for comment. Infinigence AI couldn't be reached for a response. Around 70% of computing power planned by the identified projects is in a single compound set up by the local government in Xinjiang. That makes the region — the epicenter of Western charges of Chinese rights abuses including forced labor and religious persecution — pivotal to China's efforts to seize the lead from the US in a sphere seen as key to future global technological, and geopolitical, dominance. Even if successful, the Xinjiang complex would only involve the number of Nvidia chips that one major hyperscaler — a term for massive data center operators like Microsoft Corp. and Amazon Web Services — deploys in a single week, according to data Nvidia provided on a recent earnings call. Still, Chinese companies like DeepSeek are beginning to show they can do more with less. 'The gap between leading US and Chinese AI labs is closing,' said Kevin Xu, a tech investor and founder of US-based Interconnected Capital, who put it at around three months. Players like DeepSeek, which says it trained its R1 model using less-advanced Nvidia chips, are 'very serious and sincere' about pursuing artificial general intelligence, Xu said. The fact that leading Chinese models are open source means they spread faster globally, he added, while noting that diffusion is hard to track: 'Beijing sees this trend as a source of technological soft power worth embracing.' DeepSeek and other Chinese AI startups have already expressed interest in collaborating with the data center projects in Xinjiang, according to an employee of one of the largest investors in the Yiwu sites. That employee, whose name has been withheld to protect their identity, said in a message exchange that their company will invest more than 5 billion yuan ($700 million) in data center projects there in 2025 and 2026. China's data center industry is expected to surpass 300 billion yuan in scale this year, according to the Securities Times. Chinese entities are collectively expected to invest nearly that amount on an annual basis by 2028, according to the China Communications Industry Association — a more than threefold increase from a half-decade prior. Xinjiang has already brought its first 'intelligent computing center' online, and constructed 24,000 petaflops of computing power for demand from the logistics hub of Chongqing, Chairman of the People's Government of Xinjiang Erkin Tuniyaz said in an annual government work report in January, without specifying the type of chips installed. The cited computing power is equivalent to roughly 12,000 server-integrated Nvidia H100s. Prospective investors in such projects are attracted with the promise of free electricity worth up to 20% of total power costs. Data center operators also can access government support ranging from one-off payments for construction to operation incentives for up to five years, depending on company size, according to local government documents reviewed by Bloomberg. Experts in 'green computing' areas are also eligible for favorable terms on accommodation, children's education and research funding. From a standing start, 'Xinjiang's intelligent computing has achieved a historic breakthrough,' Tuniyaz said in January. China's Planned Computing Power Corridors China's East Data West Computing initiative brings together AI data centers and computing power demands Policymakers in Washington for years have been aware that limiting China's access to US technology is not as simple as writing a regulation. Not two months after the chip restrictions took effect, Chinese officials caught a woman hiding forbidden hardware in a baby bump. The American AI company Anthropic recently said smugglers have packed GPUs next to live lobsters. Nvidia has dismissed both examples as 'tall tales' that ignore the complexity of building data centers, which require operational support to run properly — support that Nvidia does not provide for restricted products in China. Still, conversations with people privy to illicit semiconductor transactions, as well as media reports from a range of outlets, indicate that smuggling networks have gotten more sophisticated over time. Those stories — which have helped inform US investigations, people familiar with the matter said — have cited examples ranging from dozens of illicit processors to more than a thousand. Potential smuggling in Malaysia has become a big concern for the Trump administration, which plans to restrict Nvidia sales there to halt possible diversion to China, and also has asked Malaysian authorities to crack down on the issue — a request the government has said it'll heed. Officials in Singapore, meanwhile, are prosecuting three men for alleged fraud in exports to Malaysia of AI servers that likely contained advanced Nvidia processors — bound for an unknown final destination. In response to queries about Washington's export control plans, Malaysia's Ministry of Investment, Trade & Industry said the country will 'act firmly against any company or individual should there be strong evidence' of misuse or diversion of advanced tech. The ministry added that Malaysia welcomes a dialogue with the US and other nations to 'clarify any misunderstandings and to strengthen mutual trust.' Trump officials are separately investigating whether DeepSeek may have accessed restricted chips through intermediaries in Singapore, and a bipartisan congressional committee focused on China recently requested Nvidia's customer data for 11 Asian countries, related to concerns that DeepSeek may have circumvented US export controls. (None of the documents viewed or interviews conducted through the course of this investigation indicated any link between the Xinjiang projects and supply chains in Singapore or Malaysia. Nvidia is not accused of any wrongdoing in Singapore's probe or in the US investigation into DeepSeek.) Read More: Lutnick Urges Tougher Enforcement of Export Curbs on China Nvidia consistently has said it abides by all US rules, but Huang has made no secret that he doesn't like Washington's strategy. Years of curbs — including on crucial semiconductor manufacturing equipment — have 'failed' to contain Huawei's rise, he said at the May conference in Taipei. Nvidia now sees Huawei as a formidable competitor, and the company worries its Chinese rival will continue to improve and gain market share — unless the US government allows Nvidia to compete on Huawei's home turf. Washington isn't buying it. The Trump administration has already further limited the types of chips Nvidia can sell in China, at a $5.5 billion hit to the company. White House AI Advisor Sriram Krishnan, asked about Huang's urge to lift those curbs, said that 'there is still bipartisan and broad concern about what can happen to these GPUs once they're physically inside' the Asian country. Meanwhile, Chinese companies continue to build their data centers, a sign they expect to receive AI chips from somewhere. Two such construction projects were approved by the Qinghai government in December 2024, with a total investment of 13.5 billion yuan, documents from Qinghai's investment review website show. The companies applying for construction permits for both projects were founded that same month. China's company registry services show both entities can be traced by shareholding data to the same group of controlling companies: one real estate firm in Qinghai named Qinghai Borong Group and one AI tech company in Sichuan called Chengdu Qingshu Technology. They didn't respond to requests for comment. Neither is on Nvidia's official resellers list. Related tickers: NVDA:US (NVIDIA Corp) 40978Z:CH (Huawei Technologies Co Ltd) 600821:CH (NYOCOR Co Ltd) 603220:CH (China Bester Group Telecom Co Ltd) Additional reporting by Ian KingYuan GaoEdwin ChanJenny Leonard Edited by Alan CrawfordJane PongPeter Elstrom Photos edited by Yuki Tanaka Methodology Bloomberg News obtained the investment plan documents from Xinjiang and Qinghai's government websites exhibiting investment approvals, the description of which specify the investing company's name, date of approval and how many H100/200 servers are to be installed or the planned total computing power. Bloomberg cross-checked the company details in the documents with China's company registry information to identify their ultimate parents, and looked them up in the tender databases in China for announced procurement and tender information. Bloomberg reporters also found details of Yiwu's AI development project when conducting reporting in the town, with billboards showcasing the industrial park's master plan. Terms of Service Do Not Sell or Share My Personal Information Trademarks Privacy Policy Careers Made in NYC Advertise Ad Choices Help ©2025 Bloomberg L.P. All Rights Reserved.
Yahoo
31 minutes ago
- Yahoo
Fact check: Debunking 11 of Trump's false claims at Cabinet meeting
President Donald Trump again turned a Cabinet meeting into a wide-ranging conversation with reporters – and again uttered a whole bunch of false claims in the process. Trump's Tuesday remarks at the White House included inaccurate assertions about inflation, immigration, his tariff policy, the massive domestic policy bill he signed last week, China's use of wind energy, US and European aid to Ukraine, the US relationship with South Korea, and other subjects. Here is a fact check of 11 of the president's false claims. This is not a comprehensive list. Inflation: As he has repeatedly, Trump falsely claimed Tuesday, 'We have no inflation.' The US does have inflation – an annual inflation rate of 2.4% in May, an uptick from a 2.3% annual rate in April. That April rate was the lowest since early 2021, and lower than some economists expected for April after Trump imposed significant new tariffs, but it's not 'no inflation' whatsoever. (And on a month-to-month basis, US consumer prices increased 0.1% in May and 0.2% in April.) Tax on Social Security: Touting the new domestic policy legislation, Trump repeated his false claim that it achieves his campaign promise of 'no tax on Social Security.' It does not. The legislation does create an additional, temporary $6,000-per-year tax deduction for individuals age 65 and older (with a smaller deduction for individuals earning $75,000 per year or more), but the White House itself has implicitly acknowledged that millions of Social Security recipients age 65 and older will continue to pay taxes on their benefits – and that new deduction, which expires in 2028, doesn't even apply to the Social Security recipients who are younger than 65. Trump's tariff letters: Trump spoke of the letters he sent to various foreign leaders announcing the tariff rates he plans to impose on their countries beginning in August – and said, 'I just want you to know - a letter means a deal.' That's just not true. Multiple letters the White House revealed on Monday announced tariff rates Trump said he plans to unilaterally place on imports from foreign countries; those letters did not describe negotiated deals. Who pays tariffs: Trump repeatedly spoke of how his new tariffs mean other countries will have to 'pay' the US for the privilege of doing business in the US. Contrary to Trump's frequent assertions, it is the US importers who buy foreign products, not foreign countries themselves, who make the tariff payments to the US government. Tariff history: Trump repeated his regular false claim that the US was 'proportionately' at its 'wealthiest' between 1870 and 1913, when tariff revenue made up a much larger share of federal revenue before the reintroduction of the income tax. Trump didn't explain what he meant by 'proportionately' or 'the wealthiest,' but economists say that by any standard measure, the US is far wealthier today than it was in the early 20th century and prior; per capita gross domestic product is now many times higher than it was then. China and wind power: Trump, asserting that 'smart countries' don't use wind and solar energy, repeated his recent false claim that China, the world's biggest manufacturer of wind turbines, barely uses such equipment itself - wrongly saying, 'They don't have a lot of wind farms, I'll tell you; very, very few.' In reality, China is the world leader in the generation of wind power and has massive wind farms onshore and offshore; it continues to install additional wind capacity much faster than the US. California and energy: Trump, reviving a previous inaccurate complaint about California's use of renewable energy sources, falsely claimed: 'They have blackouts and brownouts every week.' The state simply does not; its power system has improved significantly since the rolling blackouts of a 2020 heat wave. Daniel Villasenor, a spokesperson for Gov. Gavin Newsom, said in a Tuesday email that Trump is again 'lying about California.' Villasenor wrote: 'The state has not experienced any rotating outages since 2020 – and in the last three years, no Flex Alert calling to conserve power has even been issued. Not only has our grid been increasingly resilient, it's also cleaner than ever – clean energy provided for 100% of demand on our grid for at least some part of the day 167 out of the first 180 days of the year.' US and European aid to Ukraine: Trump repeated his frequent false claim that the US has provided 'far more' wartime aid to Ukraine that Europe has, saying the US is 'in there for over $300 billion; Europe's in there for over $100 billion.' Those numbers are not close to accurate. According to the Kiel Institute for the World Economy, a German think tank that closely tracks international aid to Ukraine, the US had committed about $139 billion in military, financial and humanitarian aid to Ukraine from late January 2022, just prior to Russia's full-scale invasion, through April 2025 – well short of about $298 billion committed by European countries and the European Union. The gap was much narrower in terms of aid actually allocated through April 2025 – about $183 billion for Europe to about $134 billion for the US – but even those figures clearly disprove Trump's claim. South Korea's military cost-sharing: Trump repeated his false claim that South Korea convinced former President Joe Biden to let it stop making payments to help cover the cost of the US military presence in South Korea, saying Biden 'cut it down to nothing.' In fact, Biden's administration signed two cost-sharing agreements with South Korea, one in 2021 and one in 2024, that included South Korean spending increases – meaning South Korea agreed to pay more than it did during Trump's first term. US troops in South Korea: Trump again exaggerated the US troop presence in South Korea, falsely saying, 'You know, we have 45,000 soldiers in South Korea.' Official Defense Department data, published online, says the US had 26,206 military personnel in South Korea as of March 31, 2025, with 22,844 on active duty. Migration and mental health: Trump falsely claimed that unnamed foreign countries 'released their insane asylum – the insane asylum population into our country.' Even Trump's own presidential campaign could not produce any evidence for his frequent claims, which he has repeated for more than two years, that foreign countries deliberately emptied their mental health facilities to somehow get patients to migrate to the United States.
