china – Page 5

Apple silent as Trump promises “impossible” US-made iPhones

Apple, china, china tariffs, Donald Trump, Foxconn, IPhone, Policy, tariffs, tim cook, us, us-china trade war / Rejus Almole / April 12, 2025

How does Apple solve a problem like Trump’s trade war?

Despite a recent pause on some tariffs, Apple remains in a particularly thorny spot as Donald Trump’s trade war spikes costs in the tech company’s iPhone manufacturing hub, China.

Analysts predict that Apple has no clear short-term options to shake up its supply chain to avoid tariffs entirely, and even if Trump grants Apple an exemption, iPhone prices may increase not just in the US but globally.

The US Trade Representative, which has previously granted Apple an exemption on a particular product, did not respond to Ars’ request to comment on whether any requests for exemptions have been submitted in 2025.

Currently, the US imposes a 145 percent tariff on Chinese imports, while China has raised tariffs on US imports to 125 percent.

Neither side seems ready to back down, and Trump’s TikTok deal—which must be approved by the Chinese government—risks further delays the longer negotiations and retaliations drag on. Trump has faced criticism for delaying the TikTok deal, with Senate Intelligence Committee Vice Chair Mark Warner (D-Va.) telling The Verge last week that the delay was “against the law” and threatened US national security. Meanwhile, China seems to expect more business to flow into China rather than into the US as a result of Trump’s tough stance on global trade.

With the economy and national security at risk, Trump is claiming that tariffs will drive manufacturing into the US, create jobs, and benefit the economy. Getting the world’s most valuable company, Apple, to manufacture its most popular product, the iPhone, in the US, is clearly part of Trump’s vision. White House Press Secretary Karoline Leavitt told reporters this week that Apple’s commitment to invest $500 billion in the US over the next four years was supposedly a clear indicator that Apple believed it was feasible to build iPhones here, Bloomberg reported.

“If Apple didn’t think the United States could do it, they probably wouldn’t have put up that big chunk of change,” Leavitt said.

Apple did not respond to Ars’ request to comment, and so far, it has been silent on how tariffs are impacting its business.

iPhone price increases expected globally

For Apple, even if it can build products for the US market in India, where tariffs remain lower, Trump’s negotiations with China “remain the most important variable for Apple” to retain its global dominance.

Dan Ives, global head of technology research at Wedbush Securities, told CNBC that “Apple could be set back many years by these tariffs.” Although Apple reportedly stockpiled phones to sell in the US market, that supply will likely dwindle fast as customers move to purchase phones before prices spike. In the medium-term, consultancy firm Omdia forecasted, Apple will likely “focus on increasing iPhone production and exports from India” rather than pushing its business into the US, as Trump desires.

But Apple will still incur additional costs from tariffs on India until that country tries to negotiate a more favorable trade deal. And any exemption that Apple may secure due to its investment promise in the US or moderation of China tariffs that could spare Apple some pain “may not be enough for Apple to avoid adverse business effects,” co-founder and senior analyst at equity research publisher MoffettNathanson, Craig Moffett, suggested to CNBC.

And if Apple is forced to increase prices, it likely won’t be limited to just the US, Bank of America Securities analyst Wamsi Mohan suggested, as reported by The Guardian. To ensure that Apple’s largest market isn’t the hardest hit, Apple may increase prices “across the board geographically,” he forecasted.

“While Apple has not commented on this, we expect prices will be changed globally to prevent arbitrage,” Mohan said.

Apple may even choose to increase prices everywhere but the US, vice president at Forrester Research, Dipanjan Chatterjee, explained in The Guardian’s report.

“If there is a cost impact in the US for certain products,” Chatterjee said, Apple may not increase US prices because “the market is far more competitive there.” Instead, “the company may choose to keep prices flat in the US while recovering the lost margin elsewhere in its global portfolio,” Chatterjee said.

Trump’s US-made iPhone may be an impossible dream

Analysts have said that Trump’s dream that a “made-in-the-USA” iPhone could be coming soon is divorced from reality. Not only do analysts estimate that more than 80 percent of Apple products are currently made in China, but so are many individual parts. So even if Apple built an iPhone factory in the US, it would still have to pay tariffs on individual parts, unless Trump agreed to a seemingly wide range of exemptions. Mohan estimated it would “likely take many years” to move the “entire iPhone supply chain,” if that’s “even possible.”

Further, Apple’s $500 billion commitment covered “building servers for its artificial intelligence products, Apple TV productions and 20,000 new jobs in research and development—not a promise to make the iPhone stateside,” The Guardian noted.

For Apple, it would likely take years to build a US factory and attract talent, all without knowing how tariffs might change. A former Apple manufacturing engineer, Matthew Moore, told Bloomberg that “there are millions of people employed by the Apple supply chain in China,” and Apple has long insisted that the US talent pool is too small to easily replace them.

“What city in America is going to put everything down and build only iPhones?” Moore said. “Boston is over 500,000 people. The whole city would need to stop everything and start assembling iPhones.”

In a CBS interview, Commerce Secretary Howard Lutnick suggested that the “army of millions and millions of human beings” could be automated, Bloomberg reported. But China has never been able to make low-cost automation work, so it’s unclear how the US could achieve that goal without serious investment.

“That’s not yet realistic,” people who have worked on Apple’s product manufacturing told Bloomberg, especially since each new iPhone model requires retooling of assembly, which typically requires manual labor. Other analysts agreed, CNBC reported, concluding that “the idea of an American-made iPhone is impossible at worst and highly expensive at best.”

For consumers, CNBC noted, a US-made iPhone would cost anywhere from 25 percent more than the $1,199 price point today, increasing to about $1,500 at least, to potentially $3,500 at most, Wall Street analysts have forecasted.

It took Apple a decade to build its factory in India, which Apple reportedly intends to use to avoid tariffs where possible. That factory “only began producing Apple’s top-of-the-line Pro and Pro Max iPhone models for the first time last year,” CNBC reported.

Analysts told CNBC that it would take years to launch a similar manufacturing process in the US, while “there’s no guarantee that US trade policy might not change yet again in a way to make the factory less useful.”

Apple CEO’s potential game plan to navigate tariffs

It appears that there’s not much Apple can do to avoid maximum pain through US-China negotiations. But Apple’s CEO Tim Cook—who is considered “a supply chain whisperer”—may be “uniquely suited” to navigate Trump’s trade war, Fortune reported.

After Cook arrived at Apple in 1998, he “redesigned Apple’s sprawling supply chain” and perhaps is game to do that again, Fortune reported. Jeremy Friedman, associate professor of business and geopolitics at Harvard Business School, told Fortune that rather than being stuck in the middle, Cook may turn out to be a key intermediary, helping the US and China iron out a deal.

During Trump’s last term, Cook raised a successful “charm offensive” that secured tariff exemptions without caving to Trump’s demand to build iPhones in the US, CNBC reported, and he’s likely betting that Apple’s recent $500 billion commitment will lead to similar outcomes, even if Apple never delivers a US-made iPhone.

Back in 2017, Trump announced that Apple partner Foxconn would be building three “big beautiful plants” in the US and claimed that they would be Apple plants, CNBC reported. But the pandemic disrupted construction, and most of those plans were abandoned, with one facility only briefly serving to make face masks, not Apple products. In 2019, Apple committed to building a Texas factory that Trump toured. While Trump insisted that a US-made iPhone was on the horizon due to Apple moving some business into the US, that factory only committed to assembling the MacBook Pro, CNBC noted.

Morgan Stanley analyst Erik Woodring suggested that Apple may “commit to some small-volume production in the US (HomePod? AirTags?)” to secure an exemption in 2025, rather than committing to building iPhones, CNBC reported.

Although this perhaps sounds like a tried-and-true game plan, for Cook, Apple’s logistics have likely never been so complicated. However, analysts told Fortune that experienced logistics masterminds understand that flexibility is the priority, and Cook has already shown that he can anticipate Trump’s moves by stockpiling iPhones and redirecting US-bound iPhones through its factory in India.

While Trump negotiates with China, Apple hopes that an estimated 35 million iPhones it makes annually in India can “cover a large portion of its needs in the US,” Bloomberg reported. These moves, analysts said, prove that Cook may be the man for the job when it comes to steering Apple through the trade war chaos.

But to keep up with global demand—selling more than 220 million iPhones annually—Apple will struggle to quickly distance itself from China, where there’s abundant talent to scale production that Apple says just doesn’t exist in the US. For example, CNBC noted that Foxconn hired 50,000 additional workers last fall at its largest China plant just to build enough iPhones to meet demand during the latest September launches.

As Apple remains dependent on China, Cook will likely need to remain at the table, seeking friendlier terms on both sides to ensure its business isn’t upended for years.

“One can imagine, if there is some sort of grand bargain between US and China coming in the next year or two,” Friedman said, “Tim Cook might as soon as anybody play an intermediary role.”

Ashley is a senior policy reporter for Ars Technica, dedicated to tracking social impacts of emerging policies and new technologies. She is a Chicago-based journalist with 20 years of experience.

Apple silent as Trump promises “impossible” US-made iPhones Read More »

Trump tariffs terrify board game designers

Board games, china, culture, tariffs / Paul Patrick / April 5, 2025

Placko called the new policy “not just a policy change” but “a seismic shift.”

Rob Daviau, who helps run Restoration Games and designed hit games like Pandemic Legacy, has been writing on social media for months about the fact that every meeting he’s in “has been an existential crisis about our industry.”

Expanding on his remarks in an interview with BoardGameWire late last year, Daviau added that he was a natural pessimist who foresaw a “great collapse in the hobby gaming market in the US” if tariffs were implemented.

Gamers aren’t likely to stop playing, but they might stick with their back catalog (gamers are notorious for having “shelves of shame” featuring hot new games they purchased without playing them… because other hot new games had already appeared). Or they might, in search of a better deal, shop only online, which could be tough on already struggling local game stores. Or games might decline in quality to keep costs lower. None of which is likely to lead to a robust, high-quality board gaming ecosystem.

Stegmaier’s forecast is nearly as dark as Daviau’s. “Within a few months US companies will lose a lot of money and/or go out of business,” he wrote, “and US citizens will suffer from extreme inflation.”

The new tariffs can be avoided by shipping directly from the factories to firms in other countries, such as a European distributor, but the US remains a crucial market for US game makers; Stegmaier notes that “65 percent of our sales are in the US, so this will take a heavy toll.”

For games still in the production pipeline, at least budgetary adjustments can be made, but some games have already been planned, produced, and shipped. If the boat arrives after the tariffs go into effect—too bad. The US importer still has to pay the extra fees. Chris Solis, who runs Solis Game Studio in California, issued an angry statement yesterday covering exactly this situation, saying, “I have 8,000 games leaving a factory in China this week and now need to scramble to cover the import bill.”

GAMA, the trade group for board game publishers, has been lobbying against the new tariffs, but with little apparent success thus far.

Trump tariffs terrify board game designers Read More »

As NASA faces cuts, China reveals ambitious plans for planetary exploration

china, NASA, Planetary exploration, Space / Rejus Almole / March 28, 2025

All of these grand Chinese plans come as NASA faces budget cuts. Although nothing is final, Ars reported earlier this year that some officials in the Trump administration want to cut science programs at the US space agency by as much as 50 percent, and that would include significant reductions for planetary science. Such cuts, one planetary officials told Ars, would represent an “extinction level” event for space science and exploration in the United States.

This raises the prospect that the United States could cede the lead in space exploration to China in the coming decades.

So what will happen?

To date, the majority of China’s space science objectives have been successful, bringing credibility to a government that sees space exploration as a projection of its soft power. By becoming a major actor in space and surpassing the United States in some areas, China can both please its own population and become a more attractive partner to other countries around the world.

However, if there are high-profile (and to some in China’s leadership, embarrassing) failures, would China be so willing to fund such an ambitious program? With the objectives listed above, China would be attempting some unprecedented and technically demanding missions. Some of them, certainly, will face setbacks.

Additionally, China is also investing in a human lunar program, seeking to land its own astronauts on the surface of the Moon by 2030. Simultaneously funding ambitious human and robotic programs would very likely require significantly more resources than the government has invested to date. How deep are China’s pockets?

It’s probably safe to say, therefore, that some of these mission concepts and time frames are aspirational.

At the same time, the US Congress is likely to block some of the deepest cuts in planetary exploration, should they be proposed by the Trump administration. So NASA still has a meaningful future in planetary exploration. And if companies like K2 are successful in lowering the cost of satellite buses, the combination of lower-cost launch and planetary missions would allow NASA to do more with less in deep space.

The future, therefore, has yet to be won. But when it comes to deep space planetary exploration, NASA, for the first time since the 1960s, has a credible challenger.

As NASA faces cuts, China reveals ambitious plans for planetary exploration Read More »

The early 2000s capacitor plague is probably not just a stolen recipe

capacitor, capacitor plague, capacitors, china, CPUs, dell, HP, Japan, Motherboards, single-core CPU, Taiwan, Tech / Rejus Almole / March 21, 2025

It’s a widely known problem with roots in urban legend: Devices with motherboards failing in the early 2000s with a sudden pop, a gruesome spill, or sometimes a burst of flames. And it was allegedly all due to one guy who didn’t copy a stolen formula correctly.

The “capacitor plague” of the early 2000s was real and fairly widespread among devices, even if the majority of those devices didn’t go bad at the same time or even in the same year. The story of this widespread failure, passing between industry insider stories and media reports, had a specific culprit, but also a broad narrative about the shift from Japanese to Taiwanese manufacturers and about outsourcing generally.

The Asianometry channel on YouTube recently dug into the “capacitor plague” in a video that asks, “What happened to the capacitors in 2002?” and comes to some informed, broad, and layered answers. It explains the specifics of what’s happening inside both a working capacitor and the faulty models, relays the reporting on the companies blamed and affected, and, crucially, puts the plague in the wider context of hotter chips, complex supply chains, counterfeits, and, sure, some industrial sabotage.

“We will never know what exactly happened, but let’s try,” the host says at the start. It is recommended you follow along.

“What Happened to the Capacitors in 2002?” by Asianometry.

Without replicating too much of the video and larger mythos, the basic story is that, according to various disputed timelines, electrolytic capacitors put into electronics between 1999 and 2003 or so failed in dire ways from 2002 through (perhaps) 2007. Boards and computers bought from Abit, HP, IBM, and, infamously, Dell, among others, suffered these faulty capacitors and were handled with recalls, repairs, or, sometimes, silence.

A finely balanced cocktail

The “Low equivalent series resistance,” or “low impedance” aluminum capacitors at issue, contained an electrolyte solution that, when doing its job, served as a cathode and kept the paper separating two files inside the rolled-up capacitor saturated. Because the electrolyte is roughly 70 percent water, and the capacitor could take on wider fluctuations of voltage, it became a cheap, popular component in many devices.

The early 2000s capacitor plague is probably not just a stolen recipe Read More »

Trump should block Biden’s AI “gift” to China, Microsoft argues

AI chips, china, Donald Trump, Export controls, microsoft, national security, Policy / Rejus Almole / February 28, 2025

“Countries including Brazil, India, Israel, and the UAE are eminently capable of ramping up investments aimed at securing new ways to access increased computing capacity,” the Brookings Institute said. “Preventing companies in middle-tier countries from relying on the US to supply computing chips is a surefire way to push them into building non-US alliances that include stronger technology ties with China.”

The rule could also complicate the global AI landscape in ways the US may not anticipate, the Center for Strategic and International Studies (CSIS), a bipartisan, nonprofit policy research organization, forecast last week. It could “breed resentment, not cooperation” in tier-two countries that will likely “bristle at the fact that their AI ambitions depend on Washington’s goodwill and that they are being deliberately kept a generation behind the frontier,” CSIS wrote. And it could drive more open source AI like DeepSeek to be key to development in tier-two nations, perhaps further endangering US global leadership in AI, CSIS suggested.

“Ironically, the AI Diffusion Framework, meant to lock in American advantage, may instead midwife the very outcome it sought to prevent—an alternate AI stack and increased open-source development where China, as its most prolific contributor, emerges as the de facto leader,” CSIS reported.

China wooing countries targeted by rule, Microsoft says

But according to Smith, some parts of the rule should be preserved, like datacenter restrictions, including “qualitative provisions” that “ensure that AI technology components are deployed in certified, secure, and trusted datacenters.” That part of the rule, Smith suggested, “helps reduce the risk of chip diversion to China.”

And other parts of the rule can be strengthened, Smith wrote, such as ensuring the Commerce Department has resources to enforce it and “expedite approvals” for any countries in the middle tier who may appeal to either move into the top tier or limit tier-two restrictions.

Trump should block Biden’s AI “gift” to China, Microsoft argues Read More »

Privacy-problematic DeepSeek pulled from app stores in South Korea

AI, bytedance, china, DeepSeek, deepthink, infosec, llm, privacy / Kris Guyer / February 17, 2025

In a media briefing held Monday, the South Korean Personal Information Protection Commission indicated that it had paused new downloads within the country of Chinese AI startup DeepSeek’s mobile app. The restriction took effect on Saturday and doesn’t affect South Korean users who already have the app installed on their devices. The DeepSeek service also remains accessible in South Korea via the web.

Per Reuters, PIPC explained that representatives from DeepSeek acknowledged the company had “partially neglected” some of its obligations under South Korea’s data protection laws, which provide South Koreans some of the strictest privacy protections globally.

PIPC investigation division director Nam Seok is quoted by the Associated Press as saying DeepSeek “lacked transparency about third-party data transfers and potentially collected excessive personal information.” DeepSeek reportedly has dispatched a representative to South Korea to work through any issues and bring the app into compliance.

It’s unclear how long the app will remain unavailable in South Korea, with PIPC saying only that the privacy issues it identified with the app might take “a considerable amount of time” to resolve.

Western infosec sources have also expressed dissatisfaction with aspects of DeepSeek’s security. Mobile security company NowSecure reported two weeks ago that the app sends information unencrypted to servers located in China and controlled by TikTok owner ByteDance; the week before that, another security company found an open, web-accessible database filled with DeepSeek customer chat history and other sensitive data.

Ars attempted to ask DeepSeek’s DeepThink (R1) model about the Tiananmen Square massacre or its favorite “Winnie the Pooh” movie, but the LLM continued to have no comment.

Privacy-problematic DeepSeek pulled from app stores in South Korea Read More »

OpenAI’s secret weapon against Nvidia dependence takes shape

AI, AI chips, Biz & IT, Broadcom, chatgpt, chatgtp, china, GPUs, machine learning, NVIDIA, openai, Reuters, Richard Ho, sam altman, Taiwan, TSMC, US government / Mike M. / February 10, 2025

OpenAI is entering the final stages of designing its long-rumored AI processor with the aim of decreasing the company’s dependence on Nvidia hardware, according to a Reuters report released Monday. The ChatGPT creator plans to send its chip designs to Taiwan Semiconductor Manufacturing Co. (TSMC) for fabrication within the next few months, but the chip has not yet been formally announced.

The OpenAI chip’s full capabilities, technical details, and exact timeline are still unknown, but the company reportedly intends to iterate on the design and improve it over time, giving it leverage in negotiations with chip suppliers—and potentially granting the company future independence with a chip design it controls outright.

In the past, we’ve seen other tech companies, such as Microsoft, Amazon, Google, and Meta, create their own AI acceleration chips for reasons that range from cost reduction to relieving shortages of AI chips supplied by Nvidia, which enjoys a near-market monopoly on high-powered GPUs (such as the Blackwell series) for data center use.

In October 2023, we covered a report about OpenAI’s intention to create its own AI accelerator chips for similar reasons, so OpenAI’s custom chip project has been in the works for some time. In early 2024, OpenAI CEO Sam Altman also began spending considerable time traveling around the world trying to raise up to a reported $7 trillion to increase world chip fabrication capacity.

OpenAI’s secret weapon against Nvidia dependence takes shape Read More »

DeepSeek is “TikTok on steroids,” senator warns amid push for government-wide ban

AI, app ban, CCP, china, china mobile, Chinese Communist Party, DeepSeek, FCC, government ban, Policy / Kris Guyer / February 6, 2025

But while the national security concerns require a solution, Curtis said his priority is maintaining “a really productive relationship with China.” He pushed Lutnick to address how he plans to hold DeepSeek—and the CCP in general—accountable for national security concerns amid ongoing tensions with China.

Lutnick suggested that if he is confirmed (which appears likely), he will pursue a policy of “reciprocity,” where China can “expect to be treated by” the US exactly how China treats the US. Currently, China is treating the US “horribly,” Lutnick said, and his “first step” as Commerce Secretary will be to “repeat endlessly” that more “reciprocity” is expected from China.

But while Lutnick answered Curtis’ questions about DeepSeek somewhat head-on, he did not have time to respond to Curtis’ inquiry about Lutnick’s intentions for the US AI Safety Institute (AISI)—which Lutnick’s department would oversee and which could be essential to the US staying ahead of China in AI development.

Viewing AISI as key to US global leadership in AI, Curtis offered “tools” to help Lutnick give the AISI “new legs” or a “new life” to ensure that the US remains responsibly ahead of China in the AI race. But Curtis ran out of time to press Lutnick for a response.

It remains unclear how AISI’s work might change under Trump, who revoked Joe Biden’s AI safety rules establishing the AISI.

What is clear is that lawmakers are being pressed to preserve and even evolve the AISI.

Yesterday, the chief economist for a nonprofit called the Foundation for the American Innovation, Samuel Hammond, provided written testimony to the US House Science, Space, and Technology Committee, recommending that AISI be “retooled to perform voluntary audits of AI models—both open and closed—to certify their security and reliability” and to keep America at the forefront of AI development.

“With so little separating China and America’s frontier AI capabilities on a technical level, America’s lead in AI is only as strong as our lead in computing infrastructure,” Hammond said. And “as the founding member of a consortium of 280 similar AI institutes internationally, the AISI seal of approval would thus support the export and diffusion of American AI models worldwide.”

DeepSeek is “TikTok on steroids,” senator warns amid push for government-wide ban Read More »

Tariffs may soon spike costs of cars, household goods, consumer tech

auto industry, Canada, china, Donald Trump, mexico, Policy, tariffs, us-china trade war / Mike M. / February 3, 2025

“A little pain”: Trump finally admits tariffs heap costs on Americans.

Canadian and American flags are seen at the US/Canada border March 1, 2017, in Pittsburg, New Hampshire. Credit: DON EMMERT / Staff | AFP

Over the weekend, President Trump issued executive orders heaping significant additional tariffs on America’s biggest trading partners, Canada, China, and Mexico.

To justify the tariffs—”a 25 percent additional tariff on imports from Canada and Mexico and a 10 percent additional tariff on imports from China”—Trump claimed that all partners were allowing drugs and immigrants to illegally enter the US. Declaring a national emergency under the International Emergency Economic Powers Act, Trump’s orders seemed bent on “downplaying” the potential economic impact on Americans, AP News reported.

But very quickly, the trade policy sparked inflation fears, with industry associations representing major US firms from many sectors warning of potentially derailed supply chains and spiked consumer costs of cars, groceries, consumer technology, and more. Perhaps the biggest pain will be felt by car buyers already frustrated by high prices if car prices go up by $3,000, as Bloomberg reported. And as Trump eyes expanding tariffs to the European Union next, January research from the Consumer Technology Association showed that imposing similar tariffs on all countries would increase the cost of laptops by as much as 68 percent, game consoles by up to 58 percent, and smartphones perhaps by 37 percent.

With tariffs scheduled to take effect on Tuesday, Mexico moved fast to negotiate a one-month pause on Monday, ABC News reported. In exchange, Mexico promised to “reinforce” the US-Mexico border with 10,000 National Guard troops.

The pause buys Mexico a little time to convince the Trump administration—including Secretary of State Marco Rubio, Treasury Secretary Scott Bessent, and potentially Commerce Secretary nominee Howard Lutnick—to strike a “permanent” trade deal, ABC News reported. If those talks fall through, though, Mexico has indicated it will retaliate with both tariff and non-tariff measures, ABC News reported.

Even in the best-case scenario where no countries retaliate, the average household income in 2025 could drop by about $1,170 if this week’s new tariffs remain in place, an analysis from the Budget Lab at Yale forecast. With retaliation, average income could decrease by $1,245.

Canada has already threatened to retaliate by imposing 35 percent tariffs on US goods, although that could change, depending on the outcome of a meeting this afternoon between Trump and outgoing Prime Minister Justin Trudeau.

Currently, there’s seemingly tension between the Trump administration and Trudeau, however.

On Saturday, Trudeau called Trump’s rationale for imposing tariffs on Canada—which Trudeau noted is responsible for less than 1 percent of drugs flowing into the US—”the flimsiest pretext possible,” NBC News reported.

This morning, the director of the White House’s National Economic Council, Kevin Hassett, reportedly criticized Canada’s response on CNBC. While Mexico is viewed as being “very, very serious” about Trump’s tariffs threat, “Canadians appear to have misunderstood the plain language of the executive order and they’re interpreting it as a trade war,” Hassett said.

On the campaign trail, Trump promised to lower prices of groceries, cars, gas, housing, and other goods, AP News noted. But on Sunday, Trump clearly warned reporters while boarding Air Force One that tariffs could have the opposite effect, ABC News reported, and could significantly worsen inflation the longer the trade policy stands.

“We may have short term, some, a little pain, and people understand that, but, long term, the United States has been ripped off by virtually every country in the world,” Trump said.

Online shoppers, car buyers brace for tariffs

In addition to imposing new tariffs on these countries, Trump’s executive orders also took aim at their access to the “de minimus” exemption that allows businesses, including online retailers, to send shipments below $800 into the US without being taxed. That move could likely spike costs for Americans using popular Chinese retail platforms like Temu or Shein.

Before leaving office, Joe Biden had threatened in September to alter the “de minimus” rule, accusing platforms like Temu or Shein of flooding the US with “huge volumes of low-value products such as textiles and apparel” and making “it increasingly difficult to target and block illegal or unsafe shipments.” Following the same logic, it seems that Trump wants to exclude Canada, China, and potentially Mexico from the duty-free exemption to make it easier to identify illegal drug shipments.

Temu and Shein did not respond to Ars’ request to comment. But both platforms in September told Ars that losing the duty-free exemption wouldn’t slow their growth. And both platforms have shifted business to keep more inventory in the US, CNBC reported.

Canada is retaliating, auto industry will suffer

While China has yet to retaliate to defend such retailers, for Canada, the tariffs are considered so intolerable that the country immediately ordered tariffs on beverages, cosmetics, and paper products flowing from the US, AP News reported. Next up will be “passenger vehicles, trucks, steel and aluminum products, certain fruits and vegetables, beef, pork, dairy products, aerospace products, and more.”

If the trade wars further complicate auto industry trade in particular, it could hurt US consumers. Carmakers globally saw stocks fall on expectations that Trump’s tariffs will have a “profound impact” on the entire auto industry, CNBC reported. And if tariffs expand into the EU, an Oxford Economics analysis suggested, the cost of European cars in the US market would likely increase while availability decreases, perhaps crippling a core EU market and limiting Americans’ choice in vehicles.

EU car companies are already bracing for potential disruptions. A spokesperson for Germany-based BMW told CNBC that tariffs “hinder free trade, slow down innovation, and set a negative spiral in motion. In the end, they are detrimental to customers, making products more expensive and less innovative.” A Volkswagen spokesperson confirmed the company was “counting on constructive talks between the trading partners to ensure planning security and economic stability and to avoid a trade conflict.”

Right now, Canada’s auto industry appears most spooked by the impending trade war, with the president of Canada’s Automotive Parts Manufacturers’ Association, Flavio Volpe, warning that Canada’s auto sector could “shut down within a week,” Bloomberg reported.

“At 25 percent, absolutely nobody in our business is profitable by a long shot,” Volpe said.

According to Bloomberg, nearly one-quarter of the 16 million cars sold in the US each year will be hit with duties, adding about $60 billion in industry costs. Seemingly the primary wallet drain will be car components that cross the US-Canada and US-Mexico borders “as many as eight times during production” and, should negotiations fail, could be getting hit with tariffs both ways. Tesla, for example, relies on a small parts manufacturer in Canada, Laval Tool, to create the molds for its Cybertruck. It already costs up to $500,000 per mold, Bloomberg noted, and since many of the mold components are sourced from Canada currently, that cost could go up at a time when Cybertruck sales already aren’t great, InsideEVs reported.

Tariffs “necessary”

William Reinsch, senior adviser at the Center for Strategic and International Studies and a former US trade official, told AP News that Trump’s new tariffs on raw materials disrupting the auto industry and others don’t seem to “make much economic sense.”

“Historically, most of our tariffs on raw materials have been low because we want to get cheaper materials so our manufacturers will be competitive … Now, what’s he talking about? He’s talking about tariffs on raw materials,” Reinsch said. “I don’t get the economics of it.”

But Trump has maintained that tariffs are necessary to push business into the US while protecting national security. Industry experts have warned that hoping Trump’s tariffs will pressure carmakers to source all car components within the US is a “tough ask,” as shifting production could take years. Trump seems unlikely to back down any time soon, instead asking already cash-strapped Americans to be patient with any rising costs potentially harming businesses and consumers.

“We can play the game all they want,” Trump said.

But to countries threatening the US with tariffs in response to Trump’s orders, it likely doesn’t feel like a game. According to AP News, the Ministry of Commerce in China plans to file a lawsuit with the World Trade Organization for the “wrongful practices of the US.”

Ashley is a senior policy reporter for Ars Technica, dedicated to tracking social impacts of emerging policies and new technologies. She is a Chicago-based journalist with 20 years of experience.

Tariffs may soon spike costs of cars, household goods, consumer tech Read More »

In Apple’s first-quarter earnings, the Mac leads the way in sales growth

Apple, china, earnings, ipad, IPhone, Mac, Q1, Tech, tim cook / Paul Patrick / January 30, 2025

Apple fell slightly short of investor expectations when it reported its first-quarter earnings today. While sales were up 4 percent overall, the iPhone showed signs of weakness, and sales in the Chinese market slipped by just over 11 percent.

CEO Tim Cook told CNBC that the iPhone performed better in countries where Apple Intelligence was available, like the US—seemingly suggesting that the slip was partially because Chinese consumers do not see enough reason to buy new phones without Apple Intelligence. (He also said, “Half of the decline is due to a change in channel inventory.”) iPhone sales also slipped in China during this same quarter last year; this was the first full quarter during which the iPhone 16 was available.

In any case, Cook said the company plans to roll out Apple Intelligence in additional languages, including Mandarin, this spring.

Apple’s wearables category also declined slightly, but only by 2 percent.

Despite the trends that worried investors, Apple reported $36.33 billion in net revenue for the first quarter. That’s 7.1 percent more than last year’s Q1. This was driven by the Mac, the iPad, and Services (which includes everything from Apple Music to iCloud)—all of which saw slight upticks in sales. Services was up 14 percent, continuing a strong streak for that business, while the Mac and the iPad both jumped up 15 percent.

The uptick in Mac and iPad sales was likely helped by several new Mac models and a new iPad mini starting shipments last October.

Cook shared some other interesting numbers in the earnings call with investors and the press: The company has an active base of 2.35 billion devices, and it has more than 1 billion active subscriptions.

In Apple’s first-quarter earnings, the Mac leads the way in sales growth Read More »

Trump can save TikTok without forcing a sale, ByteDance board member claims

bytedance, china, china tariffs, Donald Trump, elon musk, Policy, tiktok, TikTok ban, us-china trade war, World Economic Forum / Mike M. / January 23, 2025

TikTok owner ByteDance is reportedly still searching for non-sale options to stay in the US after the Supreme Court upheld a national security law requiring that TikTok’s US operations either be shut down or sold to a non-foreign adversary.

Last weekend, TikTok briefly went dark in the US, only to come back online hours later after Donald Trump reassured ByteDance that the US law would not be enforced. Then, shortly after Trump took office, he signed an executive order delaying enforcement for 75 days while he consulted with advisers to “pursue a resolution that protects national security while saving a platform used by 170 million Americans.”

Trump’s executive order did not suggest that he intended to attempt to override the national security law’s ban-or-sale requirements. But that hasn’t stopped ByteDance, board member Bill Ford told World Economic Forum (WEF) attendees, from searching for a potential non-sale option that “could involve a change of control locally to ensure it complies with US legislation,” Bloomberg reported.

It’s currently unclear how ByteDance could negotiate a non-sale option without facing a ban. Joe Biden’s extended efforts through Project Texas to keep US TikTok data out of China-controlled ByteDance’s hands without forcing a sale dead-ended, prompting Congress to pass the national security law requiring a ban or sale.

At the WEF, Ford said that the ByteDance board is “optimistic we will find a solution” that avoids ByteDance giving up a significant chunk of TikTok’s operations.

“There are a number of alternatives we can talk to President Trump and his team about that are short of selling the company that allow the company to continue to operate, maybe with a change of control of some kind, but short of having to sell,” Ford said.

Trump can save TikTok without forcing a sale, ByteDance board member claims Read More »

Cutting-edge Chinese “reasoning” model rivals OpenAI o1—and it’s free to download

AI, AI censorship, AI reasoning, Biz & IT, china, Chinese AI, DeepSeek, deepseek R1, large language models, machine learning, o1, o3, openai, OpenAI o1, simulated reasoning, SR models / Tim Belzer / January 21, 2025

Unlike conventional LLMs, these SR models take extra time to produce responses, and this extra time often increases performance on tasks involving math, physics, and science. And this latest open model is turning heads for apparently quickly catching up to OpenAI.

For example, DeepSeek reports that R1 outperformed OpenAI’s o1 on several benchmarks and tests, including AIME (a mathematical reasoning test), MATH-500 (a collection of word problems), and SWE-bench Verified (a programming assessment tool). As we usually mention, AI benchmarks need to be taken with a grain of salt, and these results have yet to be independently verified.

A chart of DeepSeek R1 benchmark results, created by DeepSeek. Credit: DeepSeek

TechCrunch reports that three Chinese labs—DeepSeek, Alibaba, and Moonshot AI’s Kimi—have now released models they say match o1’s capabilities, with DeepSeek first previewing R1 in November.

But the new DeepSeek model comes with a catch if run in the cloud-hosted version—being Chinese in origin, R1 will not generate responses about certain topics like Tiananmen Square or Taiwan’s autonomy, as it must “embody core socialist values,” according to Chinese Internet regulations. This filtering comes from an additional moderation layer that isn’t an issue if the model is run locally outside of China.

Even with the potential censorship, Dean Ball, an AI researcher at George Mason University, wrote on X, “The impressive performance of DeepSeek’s distilled models (smaller versions of r1) means that very capable reasoners will continue to proliferate widely and be runnable on local hardware, far from the eyes of any top-down control regime.”

Cutting-edge Chinese “reasoning” model rivals OpenAI o1—and it’s free to download Read More »