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Nvidia announced plans to resume sales of its H20 AI chip to China, following U.S. export restrictions that previously halted sales due to national security concerns, costing the company $15 billion in revenue and a $5.5 billion inventory write-off. The company is seeking U.S. government licenses to restart deliveries and has developed a new, compliant AI chip, the RTX Pro GPU, for the Chinese market. CEO Jensen Huang, visiting Beijing, underscored China’s critical role as a massive and innovative market during a supply chain expo. Despite facing competition from Chinese firms like Huawei and ongoing geopolitical uncertainties, Nvidia remains committed to the region, which accounted for 13% of its $17 billion revenue last fiscal year. Huang’s visit coincides with easing U.S.-China tensions, including relaxed rare earth export controls by China and resumed U.S. chip design software services. However, U.S. senators have urged caution regarding engagements with Chinese military or intelligence-linked entities. Analysts note that while the H20 ban pause offers relief, Chinese companies are diversifying supply chains to safeguard against future disruptions.
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A Bloomberg article highlights escalating trade tensions between the EU and the US as Donald Trump threatens 30% tariffs on EU exports by August 1, alongside existing duties on cars, steel, and aluminum. In response, a French-led coalition of over half a dozen EU member states advocates for deploying the anti-coercion instrument (ACI), a powerful trade tool that could impose retaliatory measures like taxes on US tech giants or restrictions on investments and market access. While negotiations continue, with EU trade chief Maros Sefcovic traveling to Washington, the European Commission deems ACI use premature, favoring dialogue and proportional countermeasures. French Minister Benjamin Haddad stresses the need for strength and unity in negotiations, warning of a potential transatlantic trade war if the ACI is activated. Despite Trump's escalating rhetoric, including threats on pharmaceuticals, EU officials remain focused on reaching a deal, previously hoping for a framework with a reduced 10% levy on most exports. The ACI, designed as a deterrent against coercive trade actions, reflects the EU's bolstered trade defenses post previous US tariffs and actions like China’s restrictions on Lithuania.
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The article explores the conflicting interpretations of the stock market's muted response to President Trump's aggressive tariff threats. The White House sees this resilience as evidence of market support for rebalancing global trade, potentially emboldening Trump to stick to his Aug. 1 deadline for new tariffs. Conversely, many market analysts argue that traders remain opposed to tariffs but are skeptical of Trump’s threats materializing, a sentiment dubbed the "Trump always chickens out" (TACO) trade. Despite record-high stock prices, warnings from figures like JPMorgan Chase CEO Jamie Dimon highlight potential underestimation of economic risks, including inflation and growth slowdowns. Recent data showing a 2.7% annual CPI increase in June, alongside upcoming earnings reports, will provide further insight into tariffs’ impact. Trade developments, such as a deal with Indonesia reducing tariffs from 32% to 19%, add to the uncertainty, while Trump’s indifference to outcomes with regions like the EU raises the specter of higher tariffs. Critics argue the administration dismisses economic expertise, while Trump claims tariffs are fueling US economic strength, citing record stock highs and billions in tariff revenue. The coming weeks will be critical in determining whether markets are truly prepared for potential tariff-driven economic headwinds.
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Major Wall Street banks, including JPMorgan Chase and Citigroup, are pivoting toward digital assets as CEOs Jamie Dimon and Jane Fraser announced plans to issue stablecoins, reflecting a broader industry shift. This comes amid ongoing legislative debates in Congress, where efforts to pass comprehensive crypto regulation, including a federal framework for stablecoins, hit obstacles during "Crypto Week" due to GOP opposition to separate bill votes. Despite Dimon's historical skepticism, JPMorgan is developing a deposit token, while Bank of America and others explore collaborative stablecoin networks. The proposed legislation, already passed by the Senate, imposes strict oversight by federal and state regulators, mandates reserves in cash or Treasurys, and requires transparency. Stablecoins are touted for their stability and potential in cross-border payments, though concerns about risks like investor runs remain. Fraser noted that most stablecoin transactions currently settle crypto trades, with minimal use in payments. As banks prepare for potential federal approval, stablecoins could challenge traditional payment systems like Visa and Mastercard, reshaping financial landscapes if legislation advances.
