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Mint
3 days ago
- Business
- Mint
US and China to talk tariffs. Hopes are rising that truce lasts.
The hope, and the expectation, is that when U.S. officials meet their Chinese counterparts in Stockholm to talk economics and trade next week, they will build on a recent lessening of tensions as the U.S. tries to set up a fall meeting between the countries' leaders and lay the groundwork for another loosely defined trade pact. While the Trump administration has the hardest of hard-liners who want to decouple from China, as well as those who want to cut big deals, some of the hawks now look to be on the run, says Kurt Campbell, formerly the top Asia advisor in the Biden administration and co-founder of the strategic advisory firm The Asia Group. The more commercially oriented faction now hold more sway, he says, although it is impossible to tell how the balance of power will develop. Campbell expects moves from Commerce and Defense Departments that could run counter to the more commercially-oriented efforts, adding to the fragility of the relationship.. A second positive indication is that the administration is looking for President Donald Trump to visit with Xi in China, possibly alongside U.S. corporate chiefs, in a trip akin to those in the 1990s, Campbell says. That was a time when globalization was in vogue and the relationship on a better footing. The recent truce between the two countries has calmed investors, allowing the S&P 500 to reach record highs, even as many Chinese imports still face levies of 55%—including 20% related to fentanyl flows imposed early in the administration. Another 34% in tariffs loom if an Aug. 12 deadline to reach a deal isn't extended. Analysts expect the two countries to not revisit the level of escalation seen in April, when China retaliated against Trump's far-reaching tariffs. The tit-for-tat spiraled into three-digit tariff rates that stifled trade and cut U.S. industrial companies off from critical rare-earth minerals such as those used to make magnets. After two meetings, officials were able to walk back the tensions. China agreed to allow export licenses that would give U.S. companies access to the magnets they need. The U.S. eased restrictions to allow Nvidia, for example, to sell its H20 AI chips to China. Treasury Secretary Scott Bessent, who will take part in the Stockholm talks, said on Fox Business this week that the two sides would discuss extending the Aug. 12 tariff deadline, as well as China's purchases of sanctioned oil from Russia and Iran. Commerce Secretary Howard Lutnick said this week that discussions would include export controls, which have become a focal point for tensions. The web of controls the U.S. has put into place to limit China's access to advanced technology, starting with the first Trump term and tightened during the Biden administration, has been a sore point for Beijing. 'They tell us every time that this is what they want—and they are getting traction," says Mary Lovely, a senior fellow at the Peterson Institute for International Economics. 'China flexed its muscle [with its own export controls on magnets]. It has other cards to pull." It's possible Beijing may not have to in the near term. In recent weeks, U.S. officials have taken a softer tone. Bessent this week described the relationship as reaching a 'very constructive" level and Lutnick spoke talking about kicking off a bigger trade discussion. 'The odds of a trade deal with China — while still low — appear to be rising," says Andy Rothman, head of the China-focused research firm Sinology, noting Trump's consistently positive comments about Xi and his relationship with the Chinese leader. He formerly served as a U.S. diplomat in Asia. Rothman sees little incentive for Xi to sign any trade pact where China is stuck with levies higher than others, considering Japan just signed a deal for 15% tariffs. 'If Trump wants a 25% or higher tariff on Chinese goods, Xi can't stop him, but would decline to sign a deal," Rothman says. Trump though may have something else on offer—retreating from other export controls if it gets to a 'big, beautiful trade deal," says Rothman, arguing that the president views export controls as form of negotiating leverage, rather than as a critical tool to protect national security. Indeed, in the first term, Trump canceled sanctions that had been imposed by his Commerce Department on the Chinese telecom ZTE, noting at the time that the company bought many of the parts it uses from U.S. companies. The takeaway at this point is that the administration could eventually emerge with a deal similar to the one it struck with Beijing in the first term. For now, most analysts are looking for the two sides to kick the can down the road, keep tariffs from going higher—and possibly lower the 20% fentanyl-oriented tariffs Trump imposed early in this term. One possible way the tariffs could be reduced emerged in the latest U.S.-Japan trade pact, in which Tokyo agreed to invest $550 billion in the U.S. Many trade watchers are focusing on Trump's suggestion Friday that countries may be able to 'buy down" their tariff rate with commitments to invest in the U.S. or buy U.S. goods. While there are questions about the nature of Japan's investment and purchase commitments, analysts say Trump would likely welcome Chinese offers to buy U.S. goods—whether that is Boeing planes, liquefied natural gas, soybeans, or pork. One caveat is that Beijing didn't make good on similar purchase agreements during Trump's first term.
Nikkei Asia
6 days ago
- Business
- Nikkei Asia
Biopharma supply chain plans must navigate contradictory US policies
An employee checks capsules inside a Cadila Pharmaceutical company manufacturing unit in Ahmedabad, India. Not all countries and segments of the biopharmaceutical supply chain will be impacted equally by geopolitical uncertainties. © Reuters Gopal Nadadur is senior vice president for South Asia, Sam Ide is vice president for China, and Alex Melillo is associate vice president for Japan at The Asia Group, a strategic advisory firm headquartered in Washington, D.C. Gopal is based in New Delhi and Sam and Alex are based in Washington, D.C. Asia-based biopharmaceutical supply chains are facing a peak period of geopolitically induced uncertainty. Washington is the key source of this upheaval, with industry strategies simultaneously upended by President Donald Trump's tariffs and onshoring policies, national security-focused regulations and pharmaceutical pricing pressure.
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Nikkei Asia
20-07-2025
- Business
- Nikkei Asia
Japan election live: Ishiba vows to carry on for now
TOKYO -- The Japanese public voted on Sunday to determine the makeup of the nation's upper house, in a crucial vote for Prime Minister Shigeru Ishiba, whose coalition is fighting to hold on to its majority -- one that it lost in the lower chamber last autumn. The race is set to be very unpredictable, with issues such as inflation, tax and immigration having dominated the campaign. Here are some of our recent articles on this key election: - Japan's ruling coalition set to suffer big loss in upper house poll - What the upper house election means for Japan: 5 things to know - Sanseito brings far-right populism to Japan - Immigration becomes election issue in Japan amid tough economy - Japan's rice price shock exposes PM Ishiba to voter anger as election looms Here's the latest: (Japan time) Sunday, July 20 10:25 p.m. Prime Minister Shigeru Ishiba, speaking to media on NHK, acknowledged that his ruling bloc is facing a tough race. The LDP-leader had set a goal of reaching a simple majority together with its junior coalition partner Komeito. However, Ishiba avoided saying whether he would take responsibility and resign if that goal is not achieved. "Votes are still being counted and we must see what the results are," he said. On why the LDP has struggled to gain seats, Ishiba stated that the party has sought long-term goals such as realizing wage increases that exceed inflation while also trying to react swiftly and help struggling households through cash handouts. Many of the opposition camps have launched promises to cut the consumption tax, but Ishiba argued that "medical and nursing care will become even more important in the future and our fiscal situation will be under pressure. Long-term interest rates rising further and our fiscal conditions becoming even tighter is not ideal." He added: "At present, we are the party with the largest number of seats. We must respond to the nationwide issues we have advocated for during the campaign, such as wage increases that exceed inflation and our critical national security environment. We have responsibilities to fulfill for the nation." 9:57 p.m. Rintaro Nishimura of The Asia Group spoke with Nikkei Asia about the results so far. Some quotes here: "It's a clear rebuke from the voters of Ishiba and his government, and it will be very challenging going forward to see whether the ruling parties can muster a majority, not through a coalition, maybe, but through policy by policy coordination with parties." "There's definitely a sense that these established parties like the LDP, and also even the DPJ, are not really doing what the people want them to do, what they want to see from the parties." "A lot of the younger voters seem to like the Sanseito platform. Maybe because their social media game is better, but I think the large part was that there's a sense that the economy, especially for the younger generations, is not really doing well for them. I think they see that foreign tourists and also immigrants, maybe are having a better life than them." 9:52 p.m. Sohei Kamiya, the leader of the right-wing Sanseito, told an online election results program that "if there are issues that are important to the national interest and must be passed at all costs, we would not hesitate considering cooperating with the LDP or other parties on a topic or bill basis. But we have no intention of nestling up to obtain official posts in the administration." 9:42 p.m. Akira Nagatsuma of the CDP said: "There will be no grand coalition, whatsoever. Changing the structure of national politics is a very high priority, so a grand coalition is not possible." 9:33 p.m. According to NHK, it could be the first time since its formation in 1955 that an LDP-led government loses its majority in both the upper and lower houses. The ruling bloc could secure fewer than 46 seats -- a new low since the formation of the coalition between the LDP and Komeito. 9:30 p.m. As of 7:30 p.m., the national turnout figure stood at 29.93%, down 0.65 percentage point from the previous upper house election. 9:22 p.m. Ryohei Iwatani, the secretary-general of Japan Innovation Party, which has a strong foothold around Osaka, said at a press conference: "We continued to appeal for realistic reforms, including lowering social insurance premiums and that gradually gained the understanding of voters throughout the campaign period." 9:14 p.m. Here are some photos from the evening so far: 9:08 p.m. Itsunori Onodera, the LDP's policy chief, spoke to NHK: "The election results clearly show that our policies did not go down well with the voters. I have to acknowledge this as the party's policy chief." When he was asked about whether the party will go for tax cuts or cash handouts as an economic relief measure, Onodera said, "The consumption tax is an important revenue source for the country's social security programs. We need to discuss with the opposition what it intends to do with these programs." During the campaign, the LDP promised cash handouts as a relief measure for inflation, while opposition parties called for consumption tax cuts, either permanent or temporary. 8:59 p.m. Kiyomi Tsujimoto of the CDP told a radio station that "I think criticism against the LDP was very strong." NHK projects that the CDP, the main opposition party, will likely increase its seats in the chamber. Meanwhile, the DPFP, which held four seats before the election, is also projected to boost its presence in the chamber. Secretary-general Kazuya Shimba said he does not think there will be a grand coalition between his party and the ruling bloc, claiming that the parties have been unable to reach an agreement on the issue of raising the ceiling on the so-called "1.03 million yen wall," where individuals limit their part-time income to avoid certain taxes and social security burdens. 8:45 p.m. Right-wing Sanseito appears to have shaken up this election, and could win more than 20 seats in the chamber. It had just two before today's election. Sanseito candidate Saya, who was elected in the Tokyo constituency, talked on TV about why she thought her party had been successful. "I think us maintaining the 'Japanese First' policy and advocating for the gradual abolition of the consumption tax resonated with voters who are struggling as wage increases stagnate and the cost of living rises." Saya's win comes despite a viral video of her speaking to Russian news agency Sputnik. 8:35 p.m. Hiroshi Moriyama, the LDP's secretary-general, avoided giving concrete comments on TV, saying that "Vote counts are still on going and I would like to refrain from commenting on the nature of responsibility at this time." 8:26 p.m. The ruling coalition is projected to gain between 32~51 seats, according to NHK. Remember they need 50 to keep their majority. The range of seats won for each party is: Liberal Democratic Party (LDP): 27~41 Constitutional Democratic Party (CDP): 18~30 Japan Innovation Party: 6~9 Komeito: 5~12 Democratic Party For the People (DPFP): 14~21 Japanese Communist Party: 3~5 Reiwa: 2~4 Sanseito: 10~22 Conservative Party of Japan: 1~3 8 p.m. Voting ends. The ruling bloc is at risk of losing their upper house majority, national broadcaster NHK projected immediately after polls closed. 7:37 p.m. The latest data on voter turnout is out. As of 6 p.m., the national figure stood at 26.65%, down 0.71 percentage points from the 2022 upper house election. 7:13 p.m. Some errors have been made at polling stations, according to national broadcaster NHK. In Tokyo's Ota ward, 25 voters were handed the wrong ballot sheets. In Saitama Prefecture's Kasukabe city, there was a similar error involving ballot sheets for constituencies and proportional representation being mixed up. The affected votes could become invalid. 7:00 p.m. Just an hour to go now. 6:54 p.m. Japan's lead tariff negotiator Ryosei Akazawa on Sunday told reporters that the election results will not affect talks with the U.S., according to Kyodo News. The upper house vote comes amid Tokyo's continued efforts to reach a trade deal with Washington, which has slapped a 25% "reciprocal" tariff that goes into effect on Aug. 1. 6:30 p.m. Here's a few photos from today: 6:15 p.m. The national voter turnout as of 4 p.m. stood at 22.42%, 0.57 percentage point lower than the previous upper house election three years ago, according to the Ministry of Internal Affairs and Communications. For Tokyo, it was 22.87% -- 2.6 percentage points down. According to government data, an estimated 26.18 million people participated in early voting, a record high and over 6.5 million more than in the previous upper house poll. 6 p.m. Just two hours now until voting ends. Exit polls and projections by major broadcasters will start coming in at 8 p.m., and will be updated frequently during the course of the evening as votes are counted.
Bloomberg
14-07-2025
- Business
- Bloomberg
The Asia Group's Tong on Trade Tariffs
The Asia Trade Kurt Tong, Managing Partner at The Asia Group, discusses the latest developments on the US trade tariffs. He speaks with Shery Ahn and Haidi Stroud-Watts on "Bloomberg: The Asia Trade" on July 11. (Source: Bloomberg)
CNBC
08-07-2025
- Business
- CNBC
Southeast Asia needn't take sides in US-China tech rivalry. It can learn from both, experts say
As China and the U.S. compete in artificial intelligence, Southeast Asia should draw from the best of both countries while building its own technologies, panelists said at CNBC's East Tech West 2025 conference on June 27 in Bangkok, Thailand. Julian Gorman, head of Asia-Pacific at mobile network trade organization GSMA, said it would be a negative development if Southeast Asia was forced to pick a side. "Southeast Asia is very dependent on both economies, both China and America. I think it's pretty hard to consider that they would go one way or the other," Gorman said. "It's very important that we continue to focus on not fragmenting the technology, standardizing it, and working so that technology transcends geopolitics and ultimately is used for good," he added. The spread of U.S. and Chinese AI companies into new global markets has been a big trend this year as both Beijing and Washington seek more global influence in advanced technologies. According to George Chen, managing director and co-chair of digital practice for The Asia Group, Southeast Asia had initially been leaning towards AI models from the U.S., such as those from Google and Microsoft. However, the emergence of China's DeepSeek has propelled the popularity of the company's models in Southeast Asia due to its low cost and open-source licensing, which can be used to build on and adapt models to regional priorities. Open-source generally refers to software in which the source code is made freely available, allowing anyone to view, modify and redistribute it. Large language model players in China have been leaning into this business model since DeepSeek's debut. Previous panels at East Tech West have flagged open-source models as an important tool for regions outside of China and the U.S. to build their own sovereign AI capabilities. Meanwhile, on the hardware side, the U.S. remains a leader in AI processors through chip giant Nvidia. While the U.S. has restricted China's access to these chips, they remain on the market for Southeast Asia – which Chen suggested the region continue to take advantage of. However, Chen noted that there is a possibility that the AI landscape could change dramatically in a decade, with China being able to provide more affordable alternatives to Nvidia. "Don't take a side easily and too quickly. Think about how to maximize your economic potential," he suggested. GSMA's Gorman pointed out that facing this "balancing act" between the superpowers is not new for Southeast Asia. For example, the region's mobility industry heavily relies on Chinese tech manufacturing and hardware, as well as the U.S. for other areas such as telecommunications. Though the U.S. and China are clearly ahead in building advanced AI models, Southeast Asia has its own edge in the global AI space, panelists said. "If you think about AI as a technology, eventually you need to apply it to a real product to service. That's how people can use it," said The Asia Group's Chen. The region has a strong app environment which offers "great potential," he added. "The demographic is young, which means the potential for talent is always there, and R&D cost is relatively cheaper than other places." Cost considerations have already contributed to Malaysia's growth as a global powerhouse in AI data centers and computing, particularly in the southern Johor region. Still, Southeast Asia should make sure to bring in companies which have advanced manufacturing that domestic industries can learn and benefit from – a strategy that China used to catch up to the West in advanced technologies, said Chen. According to GSMA's Gorman, Southeast Asia could also be a neutral ground between China and the U.S., where the two sides come together and have high-level dialogues on how to apply AI responsibly. Southeast Asia can also play a proactive role in AI regulation itself, he said, citing recent examples of regulatory leadership from the region, such as Singapore's Shared Responsibility Framework for tackling international scams and fraud. So far, there have been few global regulations on AI. While the EU has adopted a policy, the U.S. and ASEAN countries have yet to follow suit. Chen added that the region will need to band together and adopt common frameworks to gain a more prominent seat at the table of global AI development and regulation.
