CX Daily: Trump 2.0 Means Reboot of Aggressive Tariff Policy Toward China
TOP STORIES
China-U.S.?/
At around noon on Jan. 20, Donald J. Trump will once again stand outside the U.S. Capitol, place his hand on a Bible and recite the oath of office, this time becoming the 47th president of the United States. His remarkable comeback, punctuated by a resounding electoral victory on Nov. 5, marks the first time in 132 years a former president reclaimed the White House after a term away.?
But as the 78-year-old Republican prepares to lead a deeply divided nation, all eyes are on the critical decisions shaping his second-term agenda—starting with the assembly of a cabinet and the rollout of aggressive trade policies toward China. ?
Caixin Summit?/
Economist Liu Shijin underscored that economic stimulus and structural reform should go hand in hand.
“The purpose of stimulus is to create time and space for structural reform,” Liu said. “China needs to address the root cause that constrains its domestic demand.”
In his view, measures to boost consumption should target three aspects: developing essential public services, improving urbanization and boosting the livelihoods of middle- and low-income people with a focus on migrant workers. ?
BUSINESS & TECH
Chips?/
Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) will temporarily stop shipping some of its artificial intelligence (AI) chips made with 7-nanometer or more advanced process technology to its Chinese mainland clients, sources told Caixin, in a move that could presage an escalation in the China-U.S. tech war.
The Taiwan-based TSMC has sent word to several AI chip designers on the mainland that it will suspend its contract manufacturing services for them, without providing further details, according to executives at a handful of the companies. ?
Quick hit?/
BRIEFING
A rundown of the news making headlines in and around China:
FDI: Net foreign direct investment withdrawals from China hit $8.1 billion in the third quarter, preliminary official data showed Friday, marking the third net FDI outflow in available data dating back to 1998. However, the figure was only about half of the $14.9 billion record seen in the previous quarter, indicating reduced pessimism among foreign investors, which followed multiple government efforts to stabilize inward FDI.
Deflationary pressure: China’s deflationary pressure persisted in October as year-on-year growth in the consumer price index slowed to 0.3% from 0.4% the previous month, lower than market expectations and marking the second straight monthly deceleration. The slowdown was primarily due to sluggish food prices, which saw year-on-year growth narrow by 0.4 of a percentage point. Beijing is attempting to stem the pressure on prices, having recently announced a slew of stimulus measures to boost the stock market, property sector and consumer spending.
Luxury: Burberry Group PLC will continue increasing investment in the Chinese market, Josie Zhang, president of Burberry China, told Caixin, as the British fashion powerhouse bets that Chinese consumers will help it buck the global luxury industry slowdown. Despite a 22% decline in revenue for the quarter that ended on June 29, Burberry, like other major European luxury brands, has been building new flagship stores and upgrading existing outlets in an effort to attract ultra-rich clients.
Auto: Hozon New Energy Automobile Co. Ltd. is being sued by a supplier after defaulting on nearly 50 million yuan ($7 million) in payments. The lawsuit adds to the woes of the Chinese electric-vehicle maker, which is already suffering a cash crunch due to falling sales. The owner of EV brand Neta Auto is also planning layoffs after encountering difficulties in paying employees on time, Caixin has learned. Its predicament reflects the intense competition in China’s overcrowded auto market amid a protracted price war. In 2024 alone, Hozon has issued over 1 billion yuan in convertible bonds and raised a further 1.2 billion yuan from share placements. The automaker has also been planning a Hong Kong IPO.
Shipping: State-owned China COSCO Shipping Corp. Ltd. has opened a new sea-land route that reduces the time it takes to transport goods from China to Europe by one-fifth compared with the shipping route via Africa’s Cape of Good Hope. The new route is along what is known as the “southern corridor,” which has gained traction among Chinese and European traders looking for ways to avoid transporting goods through Russia and the Red Sea. On the route, cargo is taken by train out of the eastern Chinese city of Qingdao, through Kazakhstan?and on to a ship to cross the Caspian Sea. It is then hauled overland through Azerbaijan and Georgia to the port of Poti on the Black Sea, where it is loaded on a freighter to Serbia and other parts of Europe. ?
Long Read?/