Donald Trump

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.

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Here are the reasons SpaceX won nearly all recent military launch contracts

Donald Trump, elon musk, Space, spacex, united launch alliance / Paul Patrick / April 10, 2025

“I expect that the government will follow all the rules and be fair and follow all the laws.”

President Donald Trump and Elon Musk, CEO of Tesla and SpaceX, speak to the press as they stand next to a Tesla vehicle on the South Portico of the White House on March 11, 2025. Credit: Photo by Mandel Ngan/AFP

In the last week, the US Space Force awarded SpaceX a $5.9 billion deal to make Elon Musk’s space company the Pentagon’s leading launch provider, and then it assigned the vast majority of this year’s most lucrative launch contracts to SpaceX.

On top of these actions, the Space Force reassigned the launch of a GPS navigation satellite from United Launch Alliance’s long-delayed Vulcan rocket to fly on SpaceX’s Falcon 9. ULA, a joint venture between Boeing and Lockheed Martin, is SpaceX’s chief US rival in the market for military satellite launches.

Given the close relationship between Musk and President Donald Trump, it’s not out of bounds to ask why SpaceX is racking up so many wins. Some plans floated by the Trump administration involving SpaceX in recent months have raised concerns over conflicts of interest.

Tory Bruno, ULA’s president and CEO, doesn’t seem too worried in his public statements. In a roundtable with reporters this week at the annual Space Symposium conference in Colorado, Bruno was asked about Musk’s ties with Trump.

“We have not been impacted by our competitor’s position advising the president, certainly not yet,” Bruno said. “I expect that the government will follow all the rules and be fair and follow all the laws, and so we’re behaving that way.”

It’s a separate concern whether the Pentagon should predominantly rely on a single provider for access to space, be it a launch company like SpaceX led by a billionaire government insider or a provider like ULA that, so far, hasn’t proven its new Vulcan rocket can meet the Space Force’s schedules.

Military officials are unanimous in the answer to that question: “No.” That’s why the Space Force is keen on adding to the Pentagon’s roster of launch providers. In the last 12 months, the Space Force has brought Blue Origin, Rocket Lab, and Stoke Space to join SpaceX and ULA in the mix for national security launches.

Results matter

The reason Bruno can say Musk’s involvement in the Trump administration so far hasn’t affected ULA is simple. SpaceX is cheaper and has a ready-made line of Falcon 9 and Falcon Heavy rockets available to launch the Pentagon’s satellites. ULA’s Vulcan rocket is now certified to launch military payloads, but it reached this important milestone years behind schedule.

The Pentagon announced Friday that SpaceX, ULA, and Blue Origin—Jeff Bezos’ space company—won contracts worth $13.7 billion to share responsibilities for launching approximately 54 of the military’s most critical space missions from 2027 through 2032. SpaceX received the lion’s share of the missions with an award for 28 launches, while ULA got 19. Blue Origin, a national security launch business newcomer, will fly seven missions.

This comes out to a 60-40 split between SpaceX and ULA, not counting Blue Origin’s seven launches, which the Space Force set aside for a third contractor. It’s a reversal of the 60-40 sharing scheme in the last big military launch competition in 2020, when ULA took the top award over SpaceX. Space Force officials anticipate Blue Origin’s New Glenn rocket will be certified for national security missions next year, allowing it to begin winning launch task orders.

Tory Bruno, president and CEO of United Launch Alliance, speaks with reporters at NASA’s Kennedy Space Center in Florida on May 6, 2024. Credit: Paul Hennessy/Anadolu via Getty Images

Bruno said he wasn’t surprised with the outcome of this year’s launch competition, known as Phase 3 of the National Security Space Launch (NSSL) program. “We’re happy to get it,” he said Monday.

“I felt that winning 60 percent the first time was a little bit of an upset,” Bruno said of the 2020 competition with SpaceX. “I believe they expected to win 60 then … Therefore, I believed this time around that they would compete that much harder, and that I was not going to price dive in order to guarantee a win.”

While we know roughly how many launches each company will get from the Space Force, the military hasn’t determined which specific missions will fly with ULA, SpaceX, or Blue Origin. Once per year, the Space Force will convene a “mission assignment board” to divvy up individual task orders.

Simply geography

Officials announced Monday that this year’s assignment board awarded seven missions to SpaceX and two launches to ULA. The list includes six Space Force missions and three for the National Reconnaissance Office (NRO).

SpaceX’s seven wins are worth a combined $845.8 million, with an average price of $120.8 million per launch. Three will fly on Falcon 9 rockets, and four will launch on SpaceX’s Falcon Heavy.

NROL-97 on a Falcon Heavy from Cape Canaveral
USSF-15 (GPS IIIF-3) on a Falcon Heavy from Cape Canaveral
USSF-174 on a Falcon Heavy from Cape Canaveral
USSF-186 on a Falcon Heavy from Cape Canaveral
USSF-234 on a Falcon 9 from Cape Canaveral
NROL-96 on a Falcon 9 from Vandenberg
NROL-157 on a Falcon 9 from Vandenberg

The Space Force’s two orders to ULA are valued at $427.6 million, averaging $213.8 million per mission. Both missions will launch from Florida, one with a GPS navigation satellite to medium-Earth orbit and another with a next-generation geosynchronous missile warning satellite named NGG-2.

USSF-49 (GPS IIIF-2) on a Vulcan from Cape Canaveral
USSF-50 (NGG-2) on a Vulcan from Cape Canaveral

So, why did ULA only get 22 percent of this year’s task orders, instead of something closer to 40 percent? It turns out ULA was not eligible for two of these missions because the company’s West Coast launch pad for the Vulcan rocket is still under construction at Vandenberg Space Force Base. The Space Force won’t assign specific West Coast missions to ULA until the launch pad is finished and certified, according to Brig. Gen. Kristin Panzenhagen, chief of the Space Force’s “Assured Access to Space” office.

Vandenberg, a military facility on the Southern California coast, has a wide range of open ocean to the south, perfect for rockets delivering payloads into polar orbits. Rockets flown out of Cape Canaveral typically fly to the east on trajectories useful for launching satellites into the GPS network or into geosynchronous orbit.

“A company can be certified for a subset of missions while it continues to work on meeting the certification criteria for the broader set of missions,” Panzenhagen said. “In this case, ULA was not certified for West Coast launches yet. They’re working on that.”

Because of this rule, SpaceX won task orders for the NROL-96 and NROL-157 missions by default.

The Space Force’s assignment of the USSF-15 mission to SpaceX makes some sense, too. Going forward, the Space Force wants to have Vulcan and Falcon Heavy as options for adding to the GPS network. This will be the first GPS payload to launch on Falcon Heavy, allowing SpaceX engineers to complete a raft of up-front analysis and integration work. Engineers won’t have to repeat this work on future Falcon Heavy flights carrying identical GPS satellites.

From monopoly to niche

A decade ago, ULA was the sole launch provider to deploy the Pentagon’s fleet of surveillance, communication, and navigation satellites. The Air Force certified SpaceX’s Falcon 9 rocket for national security missions in May 2015, opening the market for competition for the first time since Boeing and Lockheed Martin merged their rocket divisions to create ULA in 2006.

ULA’s monopoly, which Bruno acknowledged, has now eroded into making the company a niche player in the military launch market.

“A monopoly is not healthy,” he said. “We were one for a few years before I came to ULA, and that was because no one else had the capability, and there weren’t that many missions. There weren’t enough to support many providers. There are now, so this is better.”

There are at least a couple of important reasons the Space Force is flying more missions than 10 or 20 years ago.

One is that Pentagon officials believe the United States is now in competition with a near-peer great power, China, with a rapidly growing presence in space. Military leaders say this requires more US hardware in orbit. Another is that the cost of launching something into space is lower than it was when ULA enjoyed its dominant position. SpaceX has led the charge in reducing the cost of accessing space, thanks to its success in pioneering reusable commercial rockets.

Many of the new types of missions the Space Force plans to launch in the next few years will go to low-Earth orbit (LEO), a region of space a few hundred miles above the planet. There, the Space Force plans to deploy hundreds of satellites for a global missile detection, missile tracking, and data relay network. Eventually, the military may place hundreds or more space-based interceptors in LEO as part of the “Golden Dome” missile defense program pushed by the Trump administration.

United Launch Alliance’s second Vulcan rocket underwent a countdown dress rehearsal last year. Credit: United Launch Alliance

Traditionally, the military has operated missile tracking and communications satellites in much higher geosynchronous orbits some 22,000 miles (36,000 kilometers) over the equator. At that altitude, satellites revolve around the Earth at the same speed as the planet’s rotation, allowing a spacecraft to maintain a constant vigil over the same location.

The Space Force still has a few of those kinds of missions to launch, along with mobile, globe-trotting surveillance satellites and eavesdropping signals intelligence spy platforms for the National Reconnaissance Office. Bruno argues ULA’s Vulcan rocket, despite being more expensive, is best suited for these bespoke missions. So far, the Space Force’s awards seem to bear it out.

“Our rocket has a unique niche within this marketplace,” Bruno said. “There really are two kinds of missions from the rocket’s standpoint. There are ones where you drop off in LEO, and there are ones where you drop off in higher orbits. You design your rockets differently for that. It doesn’t mean we can’t drop off in LEO, it doesn’t mean [SpaceX] can’t drop off in a higher energy orbit, but we’re more efficient at those because we designed for that.”

There’s some truth in that argument. The Vulcan rocket’s upper stage, called the Centaur V, burns liquid hydrogen fuel with better fuel efficiency than the kerosene-fueled engine on SpaceX’s upper stage. And SpaceX must use the more expensive Falcon Heavy rocket for the most demanding missions, expending the rocket’s core booster to devote more propellant toward driving the payload into orbit.

SpaceX has launched at a rate nearly 34 times higher than United Launch Alliance since the start of 2023, but ULA has more experience with high-energy missions, featuring more complex maneuvers to place military payloads directly into geosynchronous orbit, and sometimes releasing multiple payloads at different locations in the geosynchronous belt.

This is one of the most challenging mission profiles for any rocket, requiring a high-endurance upper stage, like Vulcan’s Centaur V, capable of cruising through space for eight or more hours.

SpaceX has flown a long-duration version of its upper stage on several missions by adding an extended mission kit. This gives the rocket longer battery life and a custom band of thermal paint to help ensure its kerosene fuel does not freeze in the cold environment of space.

A SpaceX Falcon Heavy rocket rolls to the launch pad in Florida in June 2024. The rocket’s upper stage sports a strip of gray thermal paint to keep propellants at the proper temperature for a long-duration cruise through space. Credit: SpaceX

On the other hand, the overwhelming majority of SpaceX’s missions target low-Earth orbit, where Falcon 9 rockets deploy Starlink Internet satellites, send crews and cargo to the International Space Station, and regularly launch multi-payload rideshare missions. These launches maximize the Falcon 9’s efficiencies with booster recovery and reuse. SpaceX is proficient and prolific with these missions, launching them every couple of days. Launch, land, repeat.

“They tend to be more efficient at the LEO drop-offs, I’ll be honest about that,” Bruno said. “That means there’s a competitive space in the middle, and then there’s kind of these end cases. So, we’ll keep winning when it’s way over in our space, they will win when it’s way over in theirs, and then in the middle it’s kind of a toss-up for any given mission.”

Recent history seems to support Bruno’s hypothesis. Last year, SpaceX and ULA competed head-to-head for nine specific launch contracts, or task orders, in a different Space Force competition. The launches will place national security satellites into low-Earth orbit, and SpaceX won all nine of them. Since 2020, ULA has won more Space Force task orders than SpaceX for high-energy missions, although the inverse was true in this year’s round of launch orders.

The military’s launch contracting strategy gives the Space Force flexibility to swap payloads between rockets, add more missions, or deviate from the 60-40 share to SpaceX and ULA. This has precedent. Between 2020 and 2024, ULA received 54 percent of military launches, short of the 60 percent anticipated in their original contract. This amounted to ULA winning three fewer task orders, or a lost value of about $350 million, because of delays in development of the Vulcan rocket.

That’s the cost of doing business with the Pentagon. Military officials don’t want their satellites sitting on the ground. The national policy of assured access to space materialized after the Challenger accident in 1986. NASA grounded the Space Shuttle for two-and-a-half years, and the military had no other way to put its largest satellites into orbit, leading the Pentagon to accelerate development of new versions of the Atlas, Delta, and Titan rockets dating back to the 1960s.

Military and intelligence officials were again stung by a spate of failures with the Titan IV in the 1990s, when it was the only heavy-lift launcher in the Pentagon’s inventory. Then, ULA’s Delta IV Heavy rocket was the sole heavy-lifter available to the military for nearly two decades. Today, the Space Force has two heavy-lift options, and may have a third soon with Blue Origin’s New Glenn rocket.

This all has the added benefit of bringing down costs, according to Col. Doug Pentecost, deputy director of the Space Force’s Assured Access to Space directorate.

“If you bundle a bunch of missions together, you can get a better price point,” he said. “We awarded $13.7 billion. We thought this was going to cost us 15.5, so we saved $1.7 billion with this competition, showing that we have great industry out there trying to do good stuff for us.”

Stephen Clark is a space reporter at Ars Technica, covering private space companies and the world’s space agencies. Stephen writes about the nexus of technology, science, policy, and business on and off the planet.

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Trump boosts China tariffs to 125%, pauses tariff hikes on other countries

china tariffs, consumer technology, Donald Trump, Policy, tariffs, us-china trade war / Rejus Almole / April 10, 2025

On Wednesday, Donald Trump, once again, took to Truth Social to abruptly shift US trade policy, announcing a 90-day pause “substantially” lowering reciprocal tariffs against all countries except China to 10 percent.

Because China retaliated—raising tariffs on US imports to 84 percent on Wednesday—Trump increased tariffs on China imports to 125 percent “effective immediately.” That likely will not be received well by China, which advised the Trump administration to cancel all China tariffs Wednesday, NPR reported.

“The US’s practice of escalating tariffs on China is a mistake on top of a mistake,” the Chinese finance ministry said, calling for Trump to “properly resolve differences with China through equal dialogue on the basis of mutual respect.”

For tech companies, trying to keep up with Trump’s social media posts regarding tariffs has been a struggle, as markets react within minutes. It’s not always clear what Trump’s posts mean or how the math will add up, but after Treasury Secretary Scott Bessent clarified Trump’s recent post, the stock market surged, CNBC reported, after slumping for days.

But even though the stock market may be, for now, recovering, tech companies remain stuck swimming in uncertainty. Ed Brzytwa, vice president of international trade for the Consumer Technology Association (CTA)—which represents the $505 billion US consumer technology industry—told Ars that for many CTA members, including small businesses and startups, “the damage has been done.”

“Our small business and startup members were uniquely exposed to these reciprocal tariffs and the whipsaw effect,” Brzytwa told Ars. “There’s collateral damage to that.”

In a statement, CTA CEO Gary Shapiro suggested that the pause was “a victory for American consumers,” but ultimately the CTA wants Trump to “fully revoke” the tariffs.

“While this is great news, we are hearing directly from our members that the ongoing additional 10 percent universal baseline tariffs and this continued uncertainty, are already hurting American small businesses,” Shapiro said. “CTA urges President Trump to focus his efforts on what he does best, dealmaking. Now is the time to reposition the United States with our allies as a reliable trading partner while growing the American and global economy.”

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Trump gives China one day to end retaliations or face extra 50% tariffs

china tariffs, consumer technology, Donald Trump, Policy, trump tariffs, us-china trade war / Kris Guyer / April 8, 2025

China expects to outlast US in trade war, alarming Big Tech.

Tech companies’ worst nightmare ahead of Donald Trump’s election has already come true, as the US and China are now fully engaged in a tit-for-tat trade war, where China claims it expects to be better positioned to withstand US blows long-term.

Trump has claimed that Americans must take their “medicine,” bearing any pains from tariffs while waiting for supposed long-term gains from potentially pressuring China—and every other country, including islands of penguins—into a more favorable trade deal. On Monday, tech companies across the US likely winced when Trump threatened to heap “additional” 50 percent tariffs on China, after China announced retaliatory 34 percent tariffs on US imports and restricted US access to rare earth metals.

Posting on Truth Social, Trump gave China one day to withdraw tariffs to avoid higher US tariffs.

As of this writing, the trade rivals remain in a stand-off, with US tech companies taking hits in the form of higher costs and supply chain disruptions from both sides.

Trump is apparently hoping that his threat will send China cowering before their retaliatory tariffs kick in April 10, while China appears to feel that it has little reason to back down. According to CNN, “a flurry of state media coverage and government statements” flooded Chinese news sites over the weekend, reassuring Chinese citizens and businesses that “US tariffs will have an impact (on China), but ‘the sky won’t fall.'”

“Since the US initiated the (first) trade war in 2017—no matter how the US fights or presses—we have continued to develop and progress, demonstrating resilience—’the more pressure we get, the stronger we become,'” a Sunday story in the “Chinese Communist Party’s mouthpiece People’s Daily read,” CNN reported.

For China, the bet seems to be that by imposing tariffs broadly, the US will drive other countries to deepen their investments in China. If the US loses too much business, while China potentially gains, then China could potentially emerge as the global leader, possibly thwarting Trump’s efforts to use tariffs as a weapon driving investment into the US.

Trump has no plans to pause tariffs

Currently, duties on all Chinese imports coming into the US are over 54 percent, CNN reported. And Trump’s threat of additional tariffs, while unclear precisely how much it would move the needle, would certainly push that figure above the 60 percent threshold that had US tech companies scrambling last year to warn of potentially dire impacts to the US economy.

At that time, the Consumer Technology Association (CTA) warned that laptop prices could nearly double, game console prices could rise by 40 percent, and smartphone prices by 26 percent. Now, the CTA has joined those warning that Trump’s tariffs could not only spark price hikes but also potentially cause a recession.

“These tariffs will raise consumer prices and will force our trade partners to retaliate,” Gary Shapiro, CTA’s CEO and vice chair, wrote in a press statement. “Americans will become poorer because of these tariffs.”

Various reports following Trump’s tariffs announcement signal prices could soon match CTA’s forecast or go even higher. PC vendors told PCMag they’re already preparing for prices economists estimate could increase by 45 percent by this time the next year. And Apple products like iPhones, iPads, MacBooks, and AirPods could increase by 40 percent, a financial planning analyst told CNET. Meanwhile, the entire game industry is apparently bracing, as China is one of two countries where most console hardware is produced.

With stocks plummeting, Trump has refused to back down, seeming particularly unwilling to relent from his hard stance against China. He has branded rumors that he might pause tariffs “fake news,” even as his aggressive tariff regime has disrupted markets for the US and many allies, like Australia, Japan, South Korea, and India. Commerce Secretary Howard Lutnick even defended imposing tariffs on the islands of penguins by insisting that any path any country may take to dodge tariffs by diverting shipments must be cut off.

“The idea is that there are no countries left off,” Lutnick told CBS News.

According to Lutnick, Trump is “resetting global trade,” and controversial tariffs will remain in place for potentially weeks, while Trump hopes to push more companies to manufacture products in the US.

Americans “will feel real pain,” tech group warned

Back in February, economist and trade expert Mary Lovely warned in a New York Times op-ed that Trump’s push for an “arbitrary” trade policy might make investing in the US “less attractive” by creating too much instability. Imagine a tech company diverts manufacturing into the US, only to have its supply chain disrupted by arbitrary tariffs. They might “think twice” about building here, Lovely suggested, which could possibly push US allies to find other partners—perhaps even benefiting China, if commercial ties are deepened there instead of in the US.

Economists told Chinese media that countries hit by US tariffs are already looking to deepen ties with China, CNN reported. According to those experts, China is “ready to compete with the US in redefining the new global trade system” and cannot afford to “tolerate US bullying.”

In her op-ed, Lovely suggested that Congress could intervene to possibly disrupt Trump’s trade policy in pursuit of “a fairer, more resilient economy.”

Last week, Politico reported that some top Republicans are pushing to reassert Congress’ power over tariffs as the trade war escalates. They’ve introduced a bill that would force Trump to give Congress 48 hours’ notice before imposing tariffs and to get congressional approval 60 days before tariffs could kick in. That could help companies avoid experiencing whiplash but wouldn’t necessarily change the trade policy. And lawmakers may entertain the bill, since the CTA warned that Republicans may lose voters if they don’t intervene.

“Make no mistake: American consumers, families, and workers will feel real pain, and elected policymakers in Washington will be held accountable by voters,” Shapiro said.

However, “it’s highly unlikely this proposal will ever become law,” Politico noted, as the majority of Republicans who control both chambers appear unlikely to support it.

In the meantime, Trump’s use of tariffs as a weapon could stoke never-before-seen retaliations from China, the CTA’s VP of International Trade, Ed Brzytwa, told Ars last year. That could include retaliation outside the economic arena, Brzytwa said, if China runs out of ways to strike back to hurt the US’s bottomline.

Panicked by the trade war, many Americans are rushing to make big-ticket purchases before prices shift, Fortune reported, perhaps hurting future demand for tech companies’ products.

For tech companies like Apple—which promised to invest $500 billion in the US, likely to secure tariff exemptions—Trump’s trade war threatens long-term supply chain disruptions, spiked costs, and unhappy customers potentially suddenly unable to afford even their latest devices. (Elsewhere, Switch 2 fans were recently dismayed when tariffs delayed deliveries of their preorders.)

And it kind of goes without saying that Trump’s long-term plan to push investments and supply chains into the US needs more than weeks to fulfill. Even if all companies strove to quickly move manufacturing into the US and blocked all imports from China within the next decade, Lovely told Ars last year, “we would still have a lot of imports from China because Chinese value added is going to be embedded in things we import from Vietnam and Thailand and Indonesia and Mexico.”

Ultimately, the US may never be able to push China out of global markets, and even coming close would likely require coordination across several presidential terms, Lovely suggested.

“The tariffs can be effective in changing these direct imports, as we’ve seen, yeah, but they’re not going to really push China out of the global economy,” Lovely told Ars.

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.

Trump gives China one day to end retaliations or face extra 50% tariffs Read More »

$critics-suspect-trump’s-weird-tariff-math-came-from-chatbots$

Critics suspect Trump’s weird tariff math came from chatbots

AI, chatgpt, Claude, Donald Trump, Gemini, Google, grok, Policy, tariffs / Paul Patrick / April 4, 2025

Rumors claim Trump consulted chatbots

On social media, rumors swirled that the Trump administration got these supposedly fake numbers from chatbots. On Bluesky, tech entrepreneur Amy Hoy joined others posting screenshots from ChatGPT, Gemini, Claude, and Grok, each showing that the chatbots arrived at similar calculations as the Trump administration.

Some of the chatbots also warned against the oversimplified math in outputs. ChatGPT acknowledged that the easy method “ignores the intricate dynamics of international trade.” Gemini cautioned that it could only offer a “highly simplified conceptual approach” that ignored the “vast real-world complexities and consequences” of implementing such a trade strategy. And Claude specifically warned that “trade deficits alone don’t necessarily indicate unfair trade practices, and tariffs can have complex economic consequences, including increased prices and potential retaliation.” And even Grok warns that “imposing tariffs isn’t exactly ‘easy'” when prompted, calling it “a blunt tool: quick to swing, but the ripple effects (higher prices, pissed-off allies) can complicate things fast,” an Ars test showed, using a similar prompt as social media users generally asking, “how do you impose tariffs easily?”

The Verge plugged in phrasing explicitly used by the Trump administration—prompting chatbots to provide “an easy way for the US to calculate tariffs that should be imposed on other countries to balance bilateral trade deficits between the US and each of its trading partners, with the goal of driving bilateral trade deficits to zero”—and got the “same fundamental suggestion” as social media users reported.

Whether the Trump administration actually consulted chatbots while devising its global trade policy will likely remain a rumor. It’s possible that the chatbots’ training data simply aligned with the administration’s approach.

But with even chatbots warning that the strategy may not benefit the US, the pressure appears to be on Trump to prove that the reciprocal tariffs will lead to “better-paying American jobs making beautiful American-made cars, appliances, and other goods” and “address the injustices of global trade, re-shore manufacturing, and drive economic growth for the American people.” As his approval rating hits new lows, Trump continues to insist that “reciprocal tariffs are a big part of why Americans voted for President Trump.”

“Everyone knew he’d push for them once he got back in office; it’s exactly what he promised, and it’s a key reason he won the election,” the White House fact sheet said.

Critics suspect Trump’s weird tariff math came from chatbots Read More »

Even Trump may not be able to save Elon Musk from his old tweets

Donald Trump, elon musk, fraud, Policy, SEC, Securities and Exchange Commission, Twitter, X / Mike M. / April 1, 2025

A loss in the investors’ and SEC’s suits could force Musk to disgorge any ill-gotten gains from the alleged scheme, estimated at $150 million, as well as potential civil penalties.

The SEC and Musk’s X (formerly Twitter) did not respond to Ars’ request to comment. Investors’ lawyers declined to comment on the ongoing litigation.

SEC purge may slow down probes

Under the Biden administration, the SEC alleged that “Musk’s violation resulted in substantial economic harm to investors selling Twitter common stock.” For the lead plaintiffs in the investors’ suit, the Oklahoma Firefighters Pension and Retirement System, the scheme allegedly robbed retirees of gains used to sustain their quality of life at a particularly vulnerable time.

Musk has continued to argue that his alleged $200 million in savings from the scheme was minimal compared to his $44 billion purchase price. But the alleged gains represent about two-thirds of the $290 million price the billionaire paid to support Trump’s election, which won Musk a senior advisor position in the Trump administration, CNBC reported. So it’s seemingly not an insignificant amount of money in the grand scheme.

Likely bending to Musk’s influence, one of Trump’s earliest moves after taking office, CNBC reported, was reversing a 15-year-old policy allowing the SEC director of enforcement to launch probes like the one Musk is currently battling. It allowed the Tesla probe, for example, to be launched just seven days after Musk’s allegedly problematic tweets, the SEC boasted in a 2020 press release.

Now, after Trump’s rule change, investigations must be approved by a vote of SEC commissioners. That will likely slow down probes that the SEC had previously promised years ago would only speed up over time in order to more swiftly protect investors.

SEC expected to reduce corporate fines

For Musk, the SEC has long been a thorn in his side. At least two top officials (1, 2) cited the Tesla settlement as a career highlight, with the agency seeming especially proud of thinking “creatively about appropriate remedies,” the 2020 press release said. Monitoring Musk’s tweets, the SEC said, blocked “potential harm to investors” and put control over Musk’s tweets into the SEC’s hands.

Even Trump may not be able to save Elon Musk from his old tweets Read More »

UK online safety law Musk hates kicks in today, and so far, Trump can’t stop it

content moderation, Donald Trump, elon musk, online safety act, Policy, tariffs, Twitter, united kingdom, X / Tim Belzer / March 18, 2025

Enforcement of a first-of-its-kind United Kingdom law that Elon Musk wants Donald Trump to gut kicked in today, with potentially huge penalties possibly imminent for any Big Tech companies deemed non-compliant.

UK’s Online Safety Act (OSA) forces tech companies to detect and remove dangerous online content, threatening fines of up to 10 percent of global turnover. In extreme cases, widely used platforms like Musk’s X could be shut down or executives even jailed if UK online safety regulator Ofcom determines there has been a particularly egregious violation.

Critics call it a censorship bill, listing over 130 “priority” offenses across 17 categories detailing what content platforms must remove. The list includes illegal content connected to terrorism, child sexual exploitation, human trafficking, illegal drugs, animal welfare, and other crimes. But it also broadly restricts content in legally gray areas, like posts considered “extreme pornography,” harassment, or controlling behavior.

Matthew Lesh, a public policy fellow at the Institute of Economic Affairs, told The Telegraph that “the idea that Elon Musk, or any social media executive, could be jailed for failing to remove enough content should send chills down the spine of anyone who cares about free speech.”

Musk has publicly signaled that he expects Trump to intervene, saying, “Thank goodness Donald Trump will be president just in time,” regarding the OSA’s enforcement starting in March, The Telegraph reported last month. The X owner has been battling UK regulators since last summer after resisting requests from the UK government to remove misinformation during riots considered the “worst unrest in England for more than a decade,” The Financial Times reported.

According to Musk, X was refusing to censor UK users. Attacking the OSA, Musk falsely claimed Prime Minister Keir Starmer’s government was “releasing convicted pedophiles in order to imprison people for social media posts,” FT reported. Such a post, if seen as spreading misinformation potentially inciting violence, could be banned under the OSA, the FT suggested.

Trump’s UK deal may disappoint Musk

Musk hopes that Trump will strike a deal with the UK government to potentially water down the OSA.

UK online safety law Musk hates kicks in today, and so far, Trump can’t stop it Read More »

The same day Trump bought a Tesla, automaker moved to disrupt trade war

Donald Trump, Electric vehicles, elon musk, EVs, Policy, tariffs, Tesla / Rejus Almole / March 15, 2025

Tesla hopes to slow down Trump’s tit-for-tat tariffs amid financial woes.

Donald Trump and White House Senior Advisor, Tesla and SpaceX CEO Elon Musk deliver remarks next to a Tesla Model S on the South Lawn of the White House on March 11, 2025 in Washington, DC. Credit: Andrew Harnik / Staff | Getty Images News

Elon Musk’s Tesla is waving a red flag, warning that Donald Trump’s trade war risks dooming US electric vehicle makers, triggering job losses, and hurting the economy.

In an unsigned letter to the US Trade Representative (USTR), Tesla cautioned that Trump’s tariffs could increase costs of manufacturing EVs in the US and forecast that any retaliatory tariffs from other nations could spike costs of exports.

“Tesla supports a robust and thorough process” to “address unfair trade practices,” but only those “which, in the process, do not inadvertently harm US companies,” the letter said.

The carmaker recommended that the USTR—in its ongoing review of unfair trade practices and investigation into harms of non-reciprocal trade agreements—”consider the downstream impacts of certain proposed actions taken to address unfair trade practices.”

According to Tesla, the current process to address unfair trade threatens to harm its more than 70,000 employees, and more broadly could trigger job losses and revenue dips in the US auto industry. It could also disrupt supply chains, as Tesla claims that even its best efforts prove it would be “impossible” to source all parts from the US currently.

“Even with aggressive localization of the supply chain, certain parts and components are difficult or impossible to source within the United States,” the letter said, asking the USTR to “evaluate domestic supply chain limitations.”

If left unchanged, the process could make the US less competitive in global auto markets, Tesla warned, recommending that the “USTR should investigate ways to avoid these pitfalls in future actions.”

Moving forward, Tesla recommends that the USTR “take into account” how the trade war could hurt US exporters, as “US exporters are inherently exposed to disproportionate impacts when other countries respond to US trade actions.”

In the letter, Tesla appears to suggest that Trump’s tariffs were rushed, suggesting that “US companies will benefit from a phased approach that enables them to prepare accordingly and ensure appropriate supply chain and compliance measures are taken.”

Tesla was not alone in submitting comments to the USTR. So far, hundreds of companies have chimed in, many hoping to push back on Trump’s aggressive tariffs regime.

Among them was a trade group representing major foreign automakers like BMW, Honda, and Toyota—Autos Drive America—which agreed with Tesla that the USTR should slow Trump down and require considerations about long-term impacts of sudden actions to address unfair trade. They similarly warned that imposing “broad-based tariffs will disrupt production at US assembly plants,” Reuters reported.

“Automakers cannot shift their supply chains overnight, and cost increases will inevitably lead to some combination of higher consumer prices, fewer models offered to consumers and shut-down US production lines, leading to potential job losses across the supply chain,” the group said.

Disrupting Trump trade war may be tough

Last week, Trump’s 25 percent tariffs on Canada and Mexico took effect, likely frustrating Tesla, which relies on a small parts manufacturer in Canada, Laval Tool, to source parts for the already costly molds for its Cybertrucks. Those tariffs threatened to spike costs beyond the current rate of nearly $500,000 per mold at a time when the Cybertruck hasn’t been selling well, InsideEVs reported. And for Tesla, Trump’s China tariffs may hit even harder, as China is Tesla’s second biggest market.

On the day that those tariffs kicked in, the head of the Alliance for Automotive Innovation—which represents all the major US automakers, except Tesla—John Bozzella warned that “all automakers will be impacted by these tariffs on Canada and Mexico,” Reuters reported. He joined others predicting price hikes on cars coming soon, perhaps as high as 25 percent.

Tesla’s letter to the USTR is notably unsigned, despite CEO Musk’s close allyship with Trump as a senior advisor in his administration—suggesting Musk may be hesitant to directly criticize Trump’s trade war or his opposition to EVs.

Many have questioned how long Musk’s friendship with Trump can possibly last, given their strong personalities and seeming unwillingness to bend to critics. At the beginning of this administration, Musk seemed unafraid to question Trump despite teaming up with him. Perhaps most notably, Trump’s team was supposedly “furious” after Musk trashed Trump’s $500 billion “Stargate” project with OpenAI, Politico reported, which Trump had hyped as “tremendous” and “monumental.”

“It’s clear he has abused the proximity to the president,” a Trump ally granted anonymity told Politico. “The problem is the president doesn’t have any leverage over him and Elon gives zero fucks.”

Officially, Trump downplayed Musk’s public criticism of his major announcement, seeming to understand that Musk views OpenAI CEO Sam Altman—whom Musk is suing for making a “fool” out of him—as an enemy.

“He hates one of the people in the deal,” Trump told a reporter who asked if Musk’s comments had bothered him, confirming, “it doesn’t.”

Despite a long history of harsh comments about EVs, Trump has recently hyped Tesla cars, which Tesla noted in its letter to the USTR, further its mission “to accelerate the world’s transition to sustainable energy.” The BBC noted Tesla’s letter was sent the same day that Trump hosted a White House event where the president vowed to purchase a Tesla in defiance of Tesla boycotts and protests that some believe are driving a steep Tesla stock fall and even degrading the price of used Teslas. In a Truth Social post, Trump claimed that he was buying a Tesla to support “one of the World’s great automakers” and “Elon’s ‘baby,'” alleging that protests and boycotts were somehow illegal.

The Hill suggested that their friendship isn’t likely to end soon, even though Trump has supposedly complained in private about taunts suggesting that Musk is really the president or somehow pulling the strings, The Independent reported.

Musk may be settling into a good dynamic with Trump after spending ample time at the president’s side, reportedly even joining meetings and sensitive calls. Or perhaps Musk is giving Trump space to call the shots, after Musk’s Department of Government Efficiency’s aggressive cuts at federal agencies sparked backlash that finally pushed Trump to rein in Musk’s power a little.

Musk’s proximity to Trump was predicted to be a boon to his businesses, but Tesla has been stuck in a slump that seemingly some Trump allies think Trump might fear makes him look weak, The New Republic reported. But Trump has made tariffs the core of his trade policy, hoping aggressive taxes will force more industry into the US, and it’s hard to see how Musk could easily influence him to shift gears.

In Tesla’s letter, the automaker told the USTR that it was “essential to support US manufacturing jobs” by ensuring that cost-prohibitive tariffs or other import restrictions don’t disrupt critical auto industry supply chains. For Tesla, the stakes couldn’t be higher, as the company reminded the USTR that “Tesla was ranked as the world leader in the transition to vehicle electrification,” manufacturing “the best-selling car in the world (EV or otherwise).”

“Tesla’s US facilities support over 70,000 employees and are responsible for billions of dollars of US investment and economic activity each year,” Tesla’s letter said.

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.

The same day Trump bought a Tesla, automaker moved to disrupt trade war Read More »

OpenAI declares AI race “over” if training on copyrighted works isn’t fair use

agi, ai action plan, copyright infringement, copyright law, Donald Trump, generative ai, national security, openai, Policy / Paul Patrick / March 14, 2025

OpenAI is hoping that Donald Trump’s AI Action Plan, due out this July, will settle copyright debates by declaring AI training fair use—paving the way for AI companies’ unfettered access to training data that OpenAI claims is critical to defeat China in the AI race.

Currently, courts are mulling whether AI training is fair use, as rights holders say that AI models trained on creative works threaten to replace them in markets and water down humanity’s creative output overall.

OpenAI is just one AI company fighting with rights holders in several dozen lawsuits, arguing that AI transforms copyrighted works it trains on and alleging that AI outputs aren’t substitutes for original works.

So far, one landmark ruling favored rights holders, with a judge declaring AI training is not fair use, as AI outputs clearly threatened to replace Thomson-Reuters’ legal research firm Westlaw in the market, Wired reported. But OpenAI now appears to be looking to Trump to avoid a similar outcome in its lawsuits, including a major suit brought by The New York Times.

“OpenAI’s models are trained to not replicate works for consumption by the public. Instead, they learn from the works and extract patterns, linguistic structures, and contextual insights,” OpenAI claimed. “This means our AI model training aligns with the core objectives of copyright and the fair use doctrine, using existing works to create something wholly new and different without eroding the commercial value of those existing works.”

Providing “freedom-focused” recommendations on Trump’s plan during a public comment period ending Saturday, OpenAI suggested Thursday that the US should end these court fights by shifting its copyright strategy to promote the AI industry’s “freedom to learn.” Otherwise, the People’s Republic of China (PRC) will likely continue accessing copyrighted data that US companies cannot access, supposedly giving China a leg up “while gaining little in the way of protections for the original IP creators,” OpenAI argued.

OpenAI declares AI race “over” if training on copyrighted works isn’t fair use Read More »

FTC can’t afford to fight Amazon’s allegedly deceptive sign-ups after DOGE cuts

Amazon, Amazon Prime, Consumer protection, dark patterns, department of government efficiency, doge, Donald Trump, elon musk, federal trade commission, ftc, Policy / Rejus Almole / March 13, 2025

The Federal Trade Commission is moving to push back a trial set to determine if Amazon tricked customers into signing up for Prime subscriptions.

At a Zoom status hearing on Wednesday, the FTC officially asked US District Judge John Chun to delay the trial. According to the FTC’s attorney, Jonathan Cohen, the agency needs two months to prepare beyond the September 22 start date, blaming recent “staffing and budgetary shortfalls” stemming from the Trump administration’s Department of Government Efficiency (DOGE), CNBC reported.

“We have lost employees in the agency, in our division, and on our case team,” Cohen said, explaining that “there is an extremely severe resource shortfall in terms of money and personnel,” Bloomberg reported. Cuts are apparently so bad, Cohen told Chun that the FTC is stuck with a $1 cap on any government credit card charges and “may not be able to purchase the transcript from Wednesday’s hearing,” Bloomberg reported.

Further threatening to scramble the agency’s trial preparation, the FTC anticipates that downsizing may require a move to another office “unexpectedly,” Cohen told Chun.

Amazon does not agree that a delay is necessary. The e-commerce giant’s attorney, John Hueston, told Chun that “there has been no showing on this call that the government does not have the resources to proceed to trial with the trial date as presently set.”

FTC can’t afford to fight Amazon’s allegedly deceptive sign-ups after DOGE cuts Read More »

Trump says bitcoin reserve will change everything. Crypto fans aren’t so sure.

Bitcoin, bitcoin reserve, Cryptocurrency, digital assets, Donald Trump, Policy / Tim Belzer / March 9, 2025

Ahead of the first-ever White House Crypto Summit Friday, President Donald Trump signed an executive order establishing a strategic bitcoin reserve that a factsheet claimed delivers on his promise to make America the “crypto capital of the world.”

Trump’s order requires all federal agencies currently holding bitcoins seized as part of a criminal or civil asset forfeiture proceeding to transfer those bitcoins to the Treasury Department, which itself already has a store of bitcoins. Additionally, any other digital assets forfeited will be collected in a separate Digital Assets Stockpile.

But while Trump likely anticipates that bitcoin fans will be over the moon about this news—his announcement of the reserve and looser crypto regulations helped send bitcoin’s price to its all-time high of $109,000 in January, Reuters noted—some cryptocurrency enthusiasts were clearly disappointed that Trump’s order confirmed that the US currently has no plans to buy any more bitcoins at this time.

Bitcoin’s price briefly dropped by about 5 percent to $85,000 on the news, Reuters reported. Charles Edwards, the founder of a bitcoin-focused hedge fund called Capriole Investments, took to X (formerly Twitter) to declare that Trump’s order is “a pig in lipstick.” Currently, bitcoin’s price is around $90,500.

“This is the most underwhelming and disappointing outcome we could have expected for this week,” Edwards wrote. “No active buying means this is just a fancy title for Bitcoin holdings that already existed” with the government.

A digital assets managing director at S&P Global Ratings, Andrew O’Neill, agreed, telling Reuters that the “significance” of Trump’s order was “mainly symbolic” and provides no timeline for when more bitcoin might be acquired by the US.

In the factsheet, the White House insisted that the strategic reserve and digital assets stockpile would harness “the power of digital assets for national prosperity rather than letting them languish in limbo.”

Trump says bitcoin reserve will change everything. Crypto fans aren’t so sure. Read More »

China aims to recruit top US scientists as Trump tries to kill the CHIPS Act

Chips Act, department of government efficiency, doge, Donald Trump, intel, Micron, NSF, NVIDIA, Policy, samsung, semiconductors, TSMC / Mike M. / March 6, 2025

Tech innovation in US likely to stall if Trump ends the CHIPS Act.

On Tuesday, Donald Trump finally made it clear to Congress that he wants to kill the CHIPS and Science Act—a $280 billion bipartisan law Joe Biden signed in 2022 to bring more semiconductor manufacturing into the US and put the country at the forefront of research and innovation.

Trump has long expressed frustration with the high cost of the CHIPS Act, telling Congress on Tuesday that it’s a “horrible, horrible thing” to “give hundreds of billions of dollars” in subsidies to companies that he claimed “take our money” and “don’t spend it,” Reuters reported.

“You should get rid of the CHIPS Act, and whatever is left over, Mr. Speaker, you should use it to reduce debt,” Trump said.

Instead, Trump potentially plans to shift the US from incentivizing chips manufacturing to punishing firms dependent on imports, threatening a 25 percent tariff on all semiconductor imports that could kick in as soon as April 2, CNBC reported.

The CHIPS Act was supposed to be Biden’s legacy, and because he made it a priority, much of the $52.7 billion in subsidies that Trump is criticizing has already been finalized. In 2022, Biden approved $39 billion in subsidies for semiconductor firms, and in his last weeks in office, he finalized more than $33 billion in awards, Reuters noted.

Among the awardees are leading semiconductor firms, including the Taiwan Semiconductor Manufacturing Co. (TSMC), Micron, Intel, Nvidia, and Samsung Electronics. Although Trump claims the CHIPS Act is one-sided and only serves to benefit firms, according to the Semiconductor Industry Association, the law sparked $450 billion in private investments increasing semiconductor production across 28 states by mid-2024.

With the CHIPS Act officially in Trump’s crosshairs, innovation appears likely to stall the longer that lawmakers remain unsettled on whether the law stays or goes. Some officials worried that Trump might interfere with Biden’s binding agreements with leading firms already holding up their end of the bargain, Reuters reported. For example, Micron plans to invest $100 billion in New York, and TSMC just committed to spending the same over the next four years to expand construction of US chips fabs, which is already well underway.

So far, Commerce Secretary Howard Lutnick has only indicated that he will review the finalized awards, noting that the US wouldn’t be giving TSMC any new awards, Reuters reported.

But the CHIPS Act does much more than provide subsidies to lure leading semiconductor companies into the US. For the first time in decades, the law created a new arm of the National Science Foundation (NSF)—the Directorate of Technology, Innovation, and Partnerships (TIP)—which functions unlike any other part of NSF and now appears existentially threatened.

Designed to take the country’s boldest ideas from basic research to real-world applications as fast as possible to make the US as competitive as possible, TIP helps advance all NSF research and was supposed to ensure US leadership in breakthrough technologies, including AI, 6G communications, biotech, quantum computing, and advanced manufacturing.

Biden allocated $20 billion to launch TIP through the CHIPS Act to accelerate technology development not just at top firms but also in small research settings across the US. But as soon as the Department of Government Efficiency (DOGE) started making cuts at NSF this year, TIP got hit the hardest. Seemingly TIP was targeted not because DOGE deemed it the least consequential but simply because it was the youngest directorate at NSF with the most workers in transition when Trump took office and DOGE abruptly announced it was terminating all “probationary” federal workers.

It took years to get TIP ready to flip the switch to accelerate tech innovation in the US. Without it, Trump risks setting the US back at a time when competitors like China are racing ahead and wooing US scientists who suddenly may not know if or when their funding is coming, NSF workers and industry groups told Ars.

Without TIP, NSF slows down

Last month, DOGE absolutely scrambled the NSF by forcing arbitrary cuts of so-called probationary employees—mostly young scientists, some of whom were in transition due to promotions. All those cuts were deemed illegal and finally reversed Monday by court order after weeks of internal chaos reportedly stalling or threatening to delay some of the highest-priority research in the US.

“The Office of Personnel Management does not have any authority whatsoever under any statute in the history of the universe to hire and fire employees at another agency,” US District Judge William Alsup said, calling probationary employees the “life blood” of government agencies.

Ars granted NSF workers anonymity to discuss how cuts were impacting research. At TIP, a federal worker told Ars that one of the probationary cuts in particular threatened to do the most damage.

Because TIP is so new, only one worker was trained to code automated tracking forms that helped decision-makers balance budgets and approve funding for projects across NSF in real time. Ars’ source likened it to holding the only key to the vault of NSF funding. And because TIP is so different from other NSF branches—hiring experts never pulled into NSF before and requiring customized resources to coordinate projects across all NSF fields of research—the insider suggested another government worker couldn’t easily be substituted. It could take possibly two years to hire and train a replacement on TIP’s unique tracking system, the source said, while TIP’s (and possibly all of NSF’s) efficiency is likely strained.

TIP has never been fully functional, the TIP insider confirmed, and could be choked off right as it starts helping to move the needle on US innovation. “Imagine where we are in two years and where China is in two years in quantum computing, semiconductors, or AI,” the TIP insider warned, pointing to China’s surprisingly advanced AI model, DeepSeek, as an indicator of how quickly tech leadership in global markets can change.

On Monday, NSF emailed all workers to confirm that all probationary workers would be reinstated “right away.” But the damage may already be done as it’s unclear how many workers plan to return. When TIP lost the coder—who was seemingly fired for a technicality while transitioning to a different payscale—NSF workers rushed to recommend the coder on LinkedIn, hoping to help the coder quickly secure another opportunity in industry or academia.

Ars could not reach the coder to confirm whether a return to TIP is in the cards. But Ars’ source at TIP and another NSF worker granted anonymity said that probationary workers may be hesitant to return because they are likely to be hit in any official reductions in force (RIFs) in the future.

“RIFs done the legal way are likely coming down the pipe, so these staff are not coming back to a place of security,” the NSF worker said. “The trust is broken. Even for those that choose to return, they’d be wise to be seeking other opportunities.”

And even losing the TIP coder for a couple of weeks likely slows NSF down at a time when the US seemingly can’t afford to lose a single day.

“We’re going to get murdered” if China sets the standard on 6G or AI, the TIP worker fears.

Rivals and allies wooing top US scientists

On Monday, six research and scientific associations, which described themselves as “leading organizations representing more than 305,000 people in computing, information technology, and technical innovation across US industry, academia, and government,” wrote to Congress demanding protections for the US research enterprise.

The groups warned that funding freezes and worker cuts at NSF—and other agencies, including the Department of Energy, the National Institute of Standards & Technology, the National Aeronautics and Space Administration, the National Institutes of Health—”have caused disruption and uncertainty” and threaten “long-lasting negative consequences for our competitiveness, national security, and economic prosperity.”

Deeming America’s technology leadership at risk, the groups pointed out that “in computing alone, a federal investment in research of just over $10 billion annually across 24 agencies and offices underpins a technology sector that contributes more than $2 trillion to the US GDP each year.” Cutting US investment “would be a costly mistake, far outweighing any short-term savings,” the groups warned.

In a separate statement, the Computing Research Association (CRA) called NSF cuts, in particular, a “deeply troubling, self-inflicted setback to US leadership in computing research” that appeared “penny-wise and pound-foolish.”

“NSF is one of the most efficient federal agencies, operating with less than 9 percent overhead costs,” CRA said. “These arbitrary terminations are not justified by performance metrics or efficiency concerns; rather, they represent a drastic and unnecessary weakening of the US research enterprise.”

Many NSF workers are afraid to speak up, the TIP worker told Ars, and industry seems similarly tight-lipped as confusion remains. Only one of the organizations urging Congress to intervene agreed to talk to Ars about the NSF cuts and the significance of TIP. Kathryn Kelley, the executive director of the Coalition for Academic Scientific Computation, confirmed that while members are more aligned with NSF’s Directorate for Computer and Information Science and Engineering and the Office of Advanced Cyberinfrastructure, her group agrees that all NSF cuts are “deeply” concerning.

“We agree that the uncertainty and erosion of trust within the NSF workforce could have long-lasting effects on the agency’s ability to attract and retain top talent, particularly in such specialized areas,” Kelley told Ars. “This situation underscores the need for continued investment in a stable, well-supported workforce to maintain the US’s leadership in science and innovation.”

Other industry sources unwilling to go on the record told Ars that arbitrary cuts largely affecting the youngest scientists at NSF threatened to disrupt a generation of researchers who envisioned long careers advancing US tech. There’s now a danger that those researchers may be lured to other countries heavily investing in science and currently advertising to attract displaced US researchers, including not just rivals like China but also allies like Denmark.

Those sources questioned the wisdom of using the Elon Musk-like approach of breaking the NSF to rebuild it when it’s already one of the leanest organizations in government.

Ars confirmed that some PhD programs have been cancelled, as many academic researchers are already widely concerned about delayed or cancelled grants and generally freaked out about where to get dependable funding outside the NSF. And in industry, some CHIPS Act projects have already been delayed, as companies like Intel try to manage timelines without knowing what’s happening with CHIPS funding, AP News reported.

“Obviously chip manufacturing companies will slow spending on programs they previously thought they were getting CHIPS Act funding for if not cancel those projects outright,” the Semiconductor Advisors, an industry group, forecasted in a statement last month.

The TIP insider told Ars that the CHIPS Act subsidies for large companies that Trump despises mostly fuel manufacturing in the US, while funding for smaller research facilities is what actually advances technology. Reducing efficiency at TIP would likely disrupt those researchers the most, the TIP worker suggested, proclaiming that’s why TIP must be saved at all costs.

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.

China aims to recruit top US scientists as Trump tries to kill the CHIPS Act Read More »