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  • Climate change has ravaged India’s rice stock. Now its export ban could deepen a global food crisis | CNN Business

    Climate change has ravaged India’s rice stock. Now its export ban could deepen a global food crisis | CNN Business


    Harayana, India
    CNN
     — 

    Satish Kumar sits in front of his submerged rice paddy in India’s Haryana state, looking despairingly at his ruined crops.

    “I’ve suffered a tremendous loss,” said the third generation farmer, who relies solely on growing the grain to feed his young family. “I will not be able to grow anything until November.”

    The newly planted saplings have been underwater since July after torrential rain battered northern India, with landslides and flash floods sweeping through the region.

    Kumar said he has not seen floods of this scale in years and has been forced to take loans to replant his fields all over again. But that isn’t the only problem he’s facing.

    Last month, India, which is the world’s largest exporter of rice, announced a ban on exporting non-basmati white rice in a bid to calm rising prices at home and ensure food security. India then followed with more restrictions on its rice exports, including a 20% duty on exports of parboiled rice.

    The move has triggered fears of global food inflation, hurt the livelihoods of some farmers and prompted several rice-dependent countries to seek urgent exemptions from the ban.

    More than three billion people worldwide rely on rice as a staple food and India contributed to about 40% of global rice exports.

    Economists say the ban is just the latest move to disrupt global food supplies, which has suffered from Russia’s invasion of Ukraine as well as weather events such as El Niño.

    They warn the Indian government’s decision could have significant market reverberations with the poor in Global South nations in particular bearing the brunt.

    And farmers like Kumar say market price rises caused by poor harvests doesn’t result in a windfall for them either.

    “The ban is going to have an adverse effect on all of us. We won’t get a higher rate if rice isn’t exported,” Kumar said. “The floods were a death blow to us farmers. This ban will finish us.”

    Satish Kumar with whatever is left of his rice crops.

    The abrupt announcement of the export ban triggered panic buying in the United States, following which the price of rice soared to a near 12-year high, according to the United Nations Food and Agriculture Organization.

    It does not apply to basmati rice, which is India’s best-known and highest quality variety. Non-basmati white rice however, accounts for about 25% of exports.

    India wasn’t the first country to ban food exports to ensure enough supply for domestic consumption. But its move, coming just one week after Russia pulled out of the Black Sea grain deal — a crucial pact that allowed the export of grain from Ukraine — contributed to global concerns about the availability of grain staples and whether millions would go hungry.

    “The main thing here is that it is not just one thing,” Arif Husain, chief economist at the United Nations World Food Programme (WFP) told CNN. “[Rice, wheat and corn crops] make up bulk of the food which poor people around the world consume.”

    Workers in India sift through rice grains in capital New Delhi.

    Nepal has seen rice prices surge since India announced the ban, according to local media reports, and rice prices in Vietnam are the highest they have been in more than a decade, according to customs data.

    Thailand, the world’s second largest rice exporter after India, has also seen domestic rice prices jump significantly in recent weeks, according to data from the Thai Rice Exporters Association.

    Countries including Singapore, Indonesia and the Philippines, have appealed to New Delhi to resume rice exports to their nations, according to local Indian media reports. CNN has reached out to India’s Ministry of Agriculture but has not received a response.

    The International Monetary Fund (IMF) has encouraged India to remove the restrictions, with the organization’s chief economist, Pierre-Olivier Gourinchas, telling reporters last month that it was “likely to exacerbate” the uncertainty of food inflation.

    “We would encourage the removal of these types of export restrictions because they can be harmful globally,” he said.

    Now, there are fears that the ban has the world market bracing for similar actions by rival suppliers, economists warn.

    “The export ban is happening at a time when countries are struggling with high debt, food inflation, and declining depreciating currencies,” Husain from the WFP said. “It’s troubling for everyone.”

    Indian farmers account for nearly half of the country’s workforce, according to government data, with rice paddy mainly cultivated in central, southern, and some northern states.

    Summer crop planting typically starts in June, when monsoon rains are expected to begin, as irrigation is crucial to grow a healthy yield. The summer season accounts for more than 80% of India’s total rice output, according to Reuters.

    This year, however, the late monsoon arrival led to a large water deficit up until mid-June. And when the rains finally arrived, it drenched swathes of the country, unleashing floods that caused significant damage to crops.

    The heavy floods have affected the country's farmers.

    Surjit Singh, 53, a third generation farmer from Harayana said they “lost everything” after the rains.

    “My rice crops have been ruined,” he said. “The water submerged about 8-10 inches of my crops. What I planted (in early June) is gone… I will see a loss of about 30%.”

    The World Meteorological Organization last month warned that governments must prepare for more extreme weather events and record temperatures, as it declared the onset of the warming phenomenon El Niño.

    El Niño is a natural climate pattern in the tropical Pacific Ocean that brings warmer-than-average sea-surface temperatures and has a major influence on weather across the globe, affecting billions of people.

    The impact has been felt by thousands of farmers in India, some of whom say they will now grow crops other than rice. And it doesn’t just stop there.

    India's rice stock is piling up as a result of the ban.

    At one of New Delhi’s largest rice trading hubs, there are fears among traders that the export ban will cause catastrophic consequences.

    “The export ban has left traders with huge amounts of stock,” said rice trader Roopkaran Singh. “We now have to find new buyers in the domestic market.”

    But experts warn the effects will be felt far beyond India’s borders.

    “Poor countries, food importing countries, countries in West Africa, they are at the highest risk,” said Husain from the WFP. “The ban is coming on the back of war and a global pandemic… We need to be extra careful when it comes to our staples, so that we don’t end up unnecessarily rising prices. Because those increases are not without consequences.”

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  • Customs officers seize over $380,000 worth of cocaine off bus from Mexico | CNN

    Customs officers seize over $380,000 worth of cocaine off bus from Mexico | CNN



    CNN
     — 

    US customs officers in Texas discovered nearly two dozen packages of cocaine on a commercial bus coming from Mexico.

    Field operations officers with the US Customs and Border Protection seized the “significant amount” of narcotics at the Roma International Bridge in Roma, Texas, the agency reported. Roma is along the Rio Grande in South Texas, roughly 50 miles northwest of McAllen.

    Officers came across the drugs on August 12, according to a news release Tuesday. After the bus arrived, officers conducted a canine and non-intrusive inspection.

    The examination uncovered 22 packages that contained nearly 50 pounds of cocaine, the agency said.

    The seized narcotics had a street value of more than $380,000, CBP said.

    The agency has seized more than 65,000 pounds of cocaine since October 2022, CBP data shows.

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  • US Customs and Border Protection sends resources to remote Arizona area after increase in migrant crossings | CNN

    US Customs and Border Protection sends resources to remote Arizona area after increase in migrant crossings | CNN



    CNN
     — 

    US border officials are increasing personnel and transportation resources at Ajo, Arizona, one of the most isolated and dangerous areas on the Southwest border, to deal with a recent increase in migrants and an ongoing heat wave.

    “Border Patrol has prioritized the quick transporting of noncitizens encountered in this desert environment, which is particularly dangerous during current weather conditions, to Border Patrol facilities where individuals can receive medical care, food and water,” a spokesperson for US Customs and Border Protection said in a statement.

    An excessive heat warning is in effect for Ajo until Sunday evening. “Dangerously hot conditions” and high temperatures of 106 to 112 degrees are expected, according to the National Weather Service.

    The spike in migration at Ajo is driven by human smuggling organizations shifting the flow of migrants to some of the most dangerous terrain, including the Cabeza Prieta National Wildlife Refuge and the Organ Pipe Cactus National Monument near Ajo, according to the Border Patrol.

    Currently, the average time in custody at the Ajo station is 15 hours, with some migrants spending a portion of those hours outside waiting to be transported, according to the Border Patrol. The agency said the fenced-in outdoor space is covered by a large canopy and migrants have access to large fans, meals, water, and bathroom facilities. The outdoor area is only used for adult men, while women, children, and members of vulnerable populations are held inside the station.

    “USBP has utilized outdoor shaded areas only when necessary and for very short times while they await onward transportation to larger facilities,” said the agency’s spokesperson. “The Ajo Border Patrol Station is not equipped to hold large number of migrants due to historic trends in this area.”

    After arriving at Ajo Station, migrants are screened and then transported to other locations for immigration processing, with the closest large Border Patrol facility or shelter 2.5 hours away, according to the Border Patrol.

    The agency would not disclose the Ajo facility’s capacity to CNN, citing security concerns.

    The Tucson Border Patrol sector encountered more than 24,000 migrants in June, making it the second-busiest sector on the southern border during the month, according to Border Patrol data.

    Border Patrol officials report no deaths have occurred at Ajo station or the surrounding areas since the beginning of the heat wave and since the increase in migrant encounters.

    Across the state, Arizonans have experienced extreme heat over the past weeks, with Phoenix recording 31 consecutive days with a high temperature of 110 degrees or above. The streak of high temperatures made July the hottest month on record for the city.

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  • India restricts laptop, PC imports to boost local manufacturing | CNN Business

    India restricts laptop, PC imports to boost local manufacturing | CNN Business



    CNN
     — 

    India has placed restrictions on the import of computers and laptops in a surprise move from the government of Prime Minister Narendra Modi which has been trying to encourage domestic manufacturing in the tech sector.

    Importers will now need to apply for licenses in order to bring laptops, tablets, personal computers and other electronic devices into the country, according to a notice issued by the Ministry of Commerce and Industry on Thursday. Previously, the import of such items was unrestricted.

    The ministry didn’t provide a reason for the change in rules, however Modi has aggressively pushed his “Make in India” campaign, which promotes local manufacturing in a bid to create more jobs. It follows a similar curb on smart TV imports in 2020.

    India’s electronic imports stood at $19.7 billion in the April to June period, up 6.25% from the same period in 2022, according to Reuters.

    CNN has contacted Apple

    (AAPL)
    and Samsung

    (SSNLF)
    , top laptop sellers in the South Asian country, for comment but has not yet received responses.

    India’s push to manufacture domestically comes at a crucial time for the world’s most populous nation, as companies look beyond China to secure crucial supply chains.

    India’s working-age population is expected to hit one billion over the next decade, according to the Organisation for Economic Co-operation and Development. Its large and young labor force makes the country a big draw for global companies seeking alternative manufacturing hubs to China.

    Earlier this year, India’s commerce minister, Piyush Goyal, said Apple was already making between 5% and 7% of its products in India.

    “If I am not mistaken, they are targeting to go up to 25% of their manufacturing,” he said at an event in January.

    In June, US chipmaker Micron

    (MICR)
    announced a new factory in the western state of Gujarat, calling it the country’s first semiconductor assembly and test manufacturing facility.

    The venture will see Micron invest up to $825 million and create “up to 5,000 new direct Micron jobs and 15,000 community jobs over the next several years,” according to the company.

    Foxconn, the world’s largest contract electronics maker and a key supplier to Apple, is also looking to expand its manufacturing operations in India.

    Last month, it abruptly announced it was exiting an ambitious $19.4 billion joint venture with Vedanta

    (VEDL)
    , an Indian metals and energy conglomerate, to help build one of the country’s first chip factories.

    But, the company said it was still committed to investing in Indian chipmaking and was applying to a government program that subsidizes the cost of setting up semiconductor or electronic display production facilities in the country.

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  • China’s top chipmaker may be in hot water as US lawmakers call for further sanctions after Huawei ‘breakthrough’ | CNN Business

    China’s top chipmaker may be in hot water as US lawmakers call for further sanctions after Huawei ‘breakthrough’ | CNN Business

    Editor’s Note: Sign up for CNN’s Meanwhile in China newsletter which explores what you need to know about the country’s rise and how it impacts the world.


    Hong Kong
    CNN
     — 

    Shares in SMIC, China’s largest contract chipmaker, plunged on Thursday, after two US congressmen called on the White House to further restrict export sales to the company.

    The comments came after Huawei Technologies introduced the Mate 60 Pro, a Chinese smartphone powered by an advanced chip that is believed to have been made by SMIC.

    Last week’s launch shocked industry experts who didn’t understand how SMIC, which is headquartered in Shanghai, would have the ability to manufacture such a chip following sweeping efforts by the United States to restrict China’s access to foreign chip technology.

    TechInsights, a research organization based in Canada specializing in semiconductors, revealed shortly after the launch that the smartphone contained a new 5G Kirin 9000s processor developed specifically for Huawei by SMIC.

    This is a “big tech breakthrough for China,” Jefferies analysts said Tuesday in a research note.

    The development has fueled fears among analysts that the US-China tech war is likely to accelerate in the near future.

    US representative Mike Gallagher, chair of the US House of Representatives committee on China, called on the US Commerce Department on Wednesday to end all technology exports to Huawei and SMIC, according to Reuters.

    Gallagher was quoted as saying SMIC may have violated US sanctions, as this chip likely could not be produced without US technology.

    “The time has come to end all US technology exports to both Huawei and SMIC to make clear any firm that flouts US law and undermines our national security will be cut off from our technology,” he said.

    Shares in SMIC, which stands for Semiconductor Manufacturing International Corporation, sank 8.3% in Shanghai and 7.6% in Hong Kong on Thursday. Hua Hong Semiconductor, China’s second largest chip foundry, tumbled 5.8%.

    Texas Republican Michael McCaul, who chairs the House Foreign Affairs Committee, was quoted by Reuters as saying he was concerned about the possibility of China trying to “get a monopoly” in the manufacture of less-advanced computer chips.

    “We talked a lot about advanced semiconductor chips, but we also need look at legacy,” he reportedly said, referring to older computer chip technology which does not fall under export controls.

    “I think China is trying to get a monopoly on the market share of legacy semiconductor chips as well. And I think that’s a part of the discussion we’ll be having,” he said.

    Chinese state media have touted the development as a sign the country had successfully “broken US sanctions” and “achieved technological independence” in advanced chipmaking.

    Meme makers on the Chinese internet have even crowned US Commerce Secretary Gina Raimondo the unofficial brand ambassador for the Mate 60 series.

    The memes poke fun at the idea that that US sanctions, which are implemented and enforced by the US Commerce department, may have indirectly led to the launch of the new phone as China’s homegrown firms had to work with the available technology.

    Raimondo visited China last week, when the phone was launched. The memes have gone viral online and been reported on by state broadcaster CCTV.

    Before Thursday, SMIC’s shares in Hong Kong had rallied more than 20% within two weeks due to investor optimism. Huahong Semiconductor jumped 11%.

    CNN has reached out to Gallagher’s and McCaul’s offices for comment, but has yet to receive a response.

    Huawei was added to a blacklist in May 2019 by the US Commerce Department over national security concerns. That means companies have to apply for US export licenses to supply technology to Huawei.

    SMIC was also put on the same list in 2020, as US officials were concerned it could use American technology to aid the Chinese military. SMIC has denied having any relationship with the Chinese military.

    “The fact that China has achieved a big breakthrough in [semiconductor] tech will likely create more debate in the US about the effectiveness of sanctions,” said the Jefferies analysts.

    They expect the Biden administration to tighten chips ban on China, which was introduced in October 2022, in the next few months, further limiting China’s access to advanced US semiconductors.

    “Overall the US-China tech war is likely to escalate,” they said.

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  • China is huge for chip designer Arm. That’s a risk for its new investors | CNN Business

    China is huge for chip designer Arm. That’s a risk for its new investors | CNN Business


    Hong Kong
    CNN
     — 

    As British chip designer Arm prepares to raise about $5 billion in an initial public offering (IPO) on Thursday, its China business has become a serious point of concern.

    The SoftBank-owned firm used many pages of its IPO prospectus to warn investors of risks related to its exposure to China at a time of rising tension between Washington and Beijing over chip technology.

    Its regulatory filing last month revealed that a quarter of its sales come from China, through an unusual relationship with an entity it does not control and with which it has a complex history.

    Arm China is “an entity that operates independently of us and is our single largest customer,” the company said in its prospectus. “Neither we nor SoftBank Group control the operations of Arm China.”

    Arm, which is based in Cambridge, added that the scale of its business in China made it “particularly susceptible to economic and political risks,” which could be worsened by tensions between the country and the United States or the United Kingdom.

    The company has long been vulnerable in this area, which may have already contributed to a lower market valuation than SoftBank was expecting.

    Arm blamed an economic slowdown in China as well as “factors related to export control and national security matters” for slower growth in royalty revenues from China in its fiscal year to March. Total revenue from China did increase in that period, however.

    Royalties are hugely significant for Arm, which gets a fee from each chip developed using its products. The company relies on royalties and licensing for most of its income.

    Arm said Wednesday it priced its shares at $51 each, raising as much as $4.9 billion. The tally could rise to $5.2 billion if banks exercise an option to buy additional shares, valuing the chip designer at as much as $54.5 billion.

    That’s less than the $64 billion valuation implied when SoftBank bought a remaining 25% stake in the company from its Vision Fund unit just last month.

    Arm has declined to comment.

    Concerns about China are likely to have been “built into IPO pricing expectations already, although a worst-case scenario of increased US sanctions [or] trade restrictions probably is not,” Kirk Boodry, an investment advisor at Astris Advisory, a Japanese investment research firm, told CNN.

    Arm was publicly listed until 2016, when Japan’s SoftBank bought it for $32 billion.

    Four years later, SoftBank tried to sell Arm to Nvidia for $40 billion, in what would have been the biggest chip deal of all time. But it didn’t pass muster with global antitrust regulators, and was called off in February 2022.

    Now, Arm’s return to the stock market is being closely watched as it promises to be the biggest US IPO since 2021.

    SoftBank CEO Masayoshi Son has touted it as an AI company that could have “exponential growth,” and promised that ChatGPT-like services will eventually be offered on Arm-designed machines.

    “The value of chips, and Arm’s technology, has maybe never been more in demand from the global economy,” said Kyle Stanford, lead venture capital analyst at PitchBook.

    But Arm is a middleman in the semiconductor industry, which is a key source of tension in US-China relations. Both countries are racing to boost their prowess in the sector, and each side has recently enacted export controls aimed at limiting the other’s capacity.

    “Chip tensions will never go away,” Stanford argued. “Political and regulatory pressure is likely to increase.”

    On Tuesday, former US Securities and Exchange Commission Chairman Jay Clayton told US lawmakers that large public companies with major exposure to China should be prompted to disclose specific risks associated with the country, “and what type of scenario planning they have done in the event of abrupt decoupling.”

    Although US officials have insisted that America is not seeking to decouple from China, they have pointed to the importance of reducing its reliance on the world’s second largest economy.

    In its filing, Arm said it held just a “4.8% indirect ownership interest in Arm China,” through a 10% non-voting stake in a SoftBank-controlled entity that owns less than half of the Chinese company.

    While such convoluted corporate structures aren’t unique in China, “in my view, it is very problematic,” said Ivana Delevska, founder and chief investment officer of asset manager Spear Invest.

    “Investors of other companies are just waking up to this fact in light of increased tensions,” she added.

    Arm has had trouble with Arm China before. In its filing, it said the business has a record of late payments.

    “Although these historical issues did not have a material impact on our operations, any future failure to pay us the amounts we are owed … could have a material adverse effect on our business,” Arm said.

    Arm China has also been subject to a legal battle with its former CEO, Allen Wu.

    Since April 2022, Wu and entities effectively controlled by him have lodged several lawsuits in Chinese courts against Arm China, “seeking to challenge certain aspects of Arm China’s corporate governance and the actions of Arm China’s board of directors,” Arm said in its filing.

    As of August, the cases had been resolved in favor of Arm China, it said, but the outcome could still be appealed. potentially hurting the British firm in the future.

    That hasn’t stopped many of the biggest names in global tech from jumping on board.

    Companies including Apple (AAPL), Google (GOOGL), Nvidia (NVDA), AMD (AMD), Samsung and TSMC (TSM) have indicated interest in acting as cornerstone investors in the offering, according to a filing last week.

    Delevska said the interest reflected Arm’s strong position in the industry and had helped to prop up its overall valuation.

    “I believe it is good timing for the IPO,” she added. “Investors will just have to price in the China risk.”

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  • US says it has no evidence that Huawei can make advanced smartphones ‘at scale’ | CNN Business

    US says it has no evidence that Huawei can make advanced smartphones ‘at scale’ | CNN Business

    Editor’s Note: Sign up for CNN’s Meanwhile in China newsletter which explores what you need to know about the country’s rise and how it impacts the world.


    Hong Kong
    CNN
     — 

    Commerce Secretary Gina Raimondo says the US government has no evidence that Huawei can produce smartphones with advanced chips “at scale,” as it continues to investigate how the sanctioned Chinese manufacturer made an apparent breakthrough with its latest flagship device.

    On Tuesday, Raimondo told US lawmakers that she was “upset” by news of the launch of Huawei’s Mate 60 Pro during her visit to China last month.

    “The only good news, if there is any, is we don’t have any evidence that they can manufacture 7-nanometer [chips] at scale,” she told a US House of Representatives hearing.

    “Although I can’t talk about any investigations specifically, I promise you this: every time we find credible evidence that any company has gone around our export controls, we do investigate.”

    Analysts who have examined the smartphone said it represented a “milestone” achievement for China, suggesting Huawei may have found a way to overcome American export controls.

    US officials have long argued that the company poses a risk to US national security, using it as grounds to restrict trade with the company. Huawei has vehemently denied the claims.

    TechInsights, a research organization that specializes in semiconductors and took the phone apart for analysis, says it includes a 5G Kirin 9000s processor developed by China’s leading chipmaker, Semiconductor Manufacturing International Corporation (SMIC).

    That surprised many because SMIC, a partially state-owned Chinese company, has also been subject to US export restrictions for years. It has not responded to previous requests for comment from CNN.

    TechInsights also found two chips belonging to SK Hynix, a South Korean chipmaker, inside the handset.

    A SK Hynix spokesperson told CNN earlier this month that it was aware of the issue and investigating how that was possible, since the South Korean firm “no longer does business with Huawei” because of US export controls.

    Huawei declined to comment on the capabilities and components of its phone.

    Raimondo said Tuesday that US officials were “trying to use every single tool at our disposal … to deny the Chinese an ability to get intellectual property to advance their technology in ways that can hurt us.”

    In 2019, Huawei was added to the US “entity list,” which restricts exports to select organizations without a US government license. The following year, the US government expanded on those curbs by seeking to cut Huawei off from chip suppliers that use US technology.

    That left the company, once the world’s second largest smartphone seller, in bad shape.

    As of the second quarter of 2023, Huawei was no longer in the top five of mobile phone vendors in China, let alone globally, according to Counterpoint Research.

    But its new phone is a big help for the company — and may pose a challenge to Apple’s (AAPL) market share in China, according to Ivan Lam, a senior analyst at Counterpoint.

    Huawei is scheduled to hold a product launch event next Monday, where new phones are expected to be the main focus, according to Toby Zhu, a Canalys mobility analyst.

    Other devices, like tablets or earphones, may also be shown off. Huawei has not publicly released details of the event.

    In the coming months, the firm plans to release another 5G phone, possibly under Nova, its mid-range lineup, Chinese news outlet IT Times reported Tuesday, citing unidentified industry sources. Huawei declined to comment.

    Zhu said the phone was widely expected to come with 5G capability, powered either by the “Kirin 9000s chip or another chip.”

    If it does, the new model could become even more popular than the Mate 60 Pro, which starts at 6,999 yuan (about $959), because of its relative affordability, he added.

    While Raimondo was unhappy with the timing of Huawei’s launch, analysts say it was unlikely to have been arranged to coincide with her presence in China.

    It was likely “a marketing campaign aimed at winning over customer interest before the iPhone 15 hits the market,” analysts at Eurasia Group wrote in a report.

    The move helped the Shenzhen-based company capture the second spot in China’s smartphone market in the first week of September, ahead of Apple’s big event, said Lam of Counterpoint.

    — Rashard Rose and Mengchen Zhang contributed to this report.

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  • The world will pay a high price if China cuts off supplies of chipmaking materials | CNN Business

    The world will pay a high price if China cuts off supplies of chipmaking materials | CNN Business

    Editor’s Note: Sign up for CNN’s Meanwhile in China newsletter which explores what you need to know about the country’s rise and how it impacts the world.


    Hong Kong
    CNN
     — 

    Just one month after China announced it would curb exports of germanium and gallium, both essential for making semiconductors, its overseas shipments of the materials fell to zero.

    Beijing says it has since approved some export licenses but the restrictions are a stark warning that China has a powerful weapon it can deploy in the escalating trade war over the future of tech. The curbs came after the United States, Europe and Japan restricted sales of chips and chipmaking equipment to China to cut off its access to key technology that can be used by the military.

    “It is still early to tell how tight the restrictions would be. [But] if China ends up blocking a large amount of exports, it will cause a disruption in the supply chain for the immediate consumers,” said Xiaomeng Lu, director for geotechnology at Eurasia Group.

    China enjoys a near monopoly on the production of the two elements. Last year, it accounted for 98% of the global production of gallium and 68% of refined germanium production, according to the US Geological Survey (USGS).

    While there are alternatives for the United States and its allies, constructing an independent supply chain for gallium and germanium processing could require a “staggering” investment of over $20 billion, according to Marina Zhang, an associate professor at University of Technology Sydney. And it could take years to develop.

    “Refining technologies and facilities for processing gallium and germanium cannot be built overnight, particularly considering the environmental implications of their extraction and mining,” she wrote in July.

    But there may be no other option but to do so.

    Although the minerals account for only “several hundred million dollars” in global trade, according to Zhang, they are critical to the supply chains of the international semiconductor, defense, electrical vehicle and communications industries, which are each worth hundreds of billions of dollars.

    China has dominated the production of both elements for at least a decade.

    Gallium is a soft, silvery metal and is easy to cut with a knife. It’s commonly used to produce compounds that can make radio frequency chips for mobile phones and satellite communication.

    Germanium is a hard, grayish-white and brittle metalloid that is used in the production of optical fibers that can transmit light and electronic data.

    Neither is found on their own in nature. They are usually formed as a byproduct of mining more common metals: primarily aluminum, zinc and copper.

    The processing of the elements can be “costly, technically challenging, energy-intensive and polluting,” according to Ewa Manthey, a commodities strategist at ING Group.

    “China dominates production of these two metals not because they are rare, but because it has been able to keep their production costs fairly low and manufacturers elsewhere haven’t been able to match the country’s competitive costs,” he said.

    From 2005 to 2015, China’s production of low-purity gallium exploded from 22 metric tons to 444 metric tons, according to data compiled by the Center for Strategic and International Studies in Washington.

    Analysts from the think tank said China’s leading position in the aluminum industry has allowed it to establish a dominant share of global gallium production.

    Moreover, China’s government has implemented strategic policies to boost production, including a requirement for the country’s aluminum producers to create the capacity to extract gallium.

    This is why, over the past 10 years, manufacturing gallium has become essentially economically nonviable outside China.

    Between 2013 and 2016, Kazakhstan, Hungary, and Germany all ceased primary production of gallium. (Germany announced in 2021 it would restart production because of rising prices.)

    There are alternative suppliers, though.

    According to the USGS, Russia, Japan, and Korea produced a combined 1.8% of global gallium in 2022. For germanium, Canada’s Teck Resources is one of the world’s largest producers. American company Indium Corporation is also a top global manufacturer of germanium compounds and alloys.

    And Canada’s 5NPlus and Belgium’s Umicore produce both elements.

    But “it would take time to bring online alternative sources of supply,” Chris Miller, author of “Chip War” and an economic historian, told CNN.

    It could also be expensive.

    Global mining companies can get into the business of selling germanium and gallium if China seeks to choke off supply, said Gregory Allen, director of Wadhwani Center for AI & Advanced Technologies at CSIS.

    “This would not be instantaneous, but some global mining and refining firms have signaled their intent to do so.”

    In July, Russian state owned conglomerate Rostec told Reuters that it’s ready to boost output of germanium for domestic use after China announced curbs on exports.

    Netherlands-based Nyrstar also said it was looking at potential germanium and gallium projects in Australia, Europe and the United States.

    “Even if users run out of supplies of these minerals, gallium can be swapped for silicon or indium in the wafer making process,” Lu from Eurasia Group said.

    Zinc selenide is a lesser but functional substitute for germanium in certain applications, she added.

    Recycling is another option.

    Last year, the US Defense logistics Agency introduced a program to recycle optical-grade germanium used in weapon systems.

    “Factory floor scrap has already accounted for a source of supply. Germanium scrap is also recovered from decommissioned tanks and other military vehicles,” Lu said.

    In August, China didn’t sell any germanium or gallium outside its borders. The numbers could bounce back in September, as the Commerce Ministry said it had approved some export licenses for Chinese companies.

    Initially, prices for the two elements are likely to rise, Manthey said.

    Prices of gallium stood at 1,965 yuan ($269) per metric ton on Tuesday, up more than 17% from June 1, according to ebaiyin.com, a Chinese metal trading service website.

    Prices for germanium increased about 3% during the same period.

    “Higher prices will in turn increase competition by making production more cost-competitive again in countries like Japan, Canada and the US, which will in turn reduce China’s dominance in both markets,” Manthey said.

    “It will take time to build processing plants, but over time, the markets and supply chains will adjust,” he added.

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  • US escalates tech battle by cutting China off from AI chips | CNN Business

    US escalates tech battle by cutting China off from AI chips | CNN Business

    Editor’s Note: Sign up for CNN’s Meanwhile in China newsletter which explores what you need to know about the country’s rise and how it impacts the world.


    Hong Kong/Washington
    CNN
     — 

    The Biden administration is reducing the types of semiconductors that American companies will be able to sell to China, citing the desire to close loopholes in existing regulations announced last year.

    On Tuesday, the US Commerce Department unveiled new rules that further tighten a sweeping set of export controls first introduced in October 2022.

    The updated rules “will increase effectiveness of our controls and further shut off pathways to evade our restrictions,” US Commerce Secretary Gina Raimondo said in a statement. “We will keep working to protect our national security by restricting access to critical technologies, vigilantly enforcing our rules, while minimizing any unintended impact on trade flows.”

    Advanced artificial intelligence chips, such as Nvidia’s H800 and A800 products, will be affected, according to a regulatory filing from the US company.

    The regulations also expand export curbs beyond mainland China and Macao to 21 other countries with which the United States maintains an arms embargo, including Iran and Russia.

    The measures, which have affected the shares of major American chipmakers, are set to take effect in 30 days.

    The original rules had sought to hamper China’s ability to procure advanced computing chips and manufacture advanced weapons systems. Since then, senior administration officials have suggested they needed to be adjusted due to technological developments.

    Raimondo, who visited China in August, said the administration was “laser-focused” on slowing the advancement of China’s military. She emphasized that Washington had opted not to go further in restricting chips for other applications.

    Chips used in phones, video games and electric vehicles were purposefully carved out from the new rules, according to senior administration officials.

    But these assurances are unlikely to placate Beijing, which has vowed to “win the battle” in core technologies in order to bolster the country’s position as a tech superpower.

    China’s Foreign Ministry criticized the Biden administration’s new rules Monday, before they were officially unveiled.

    “The US needs to stop politicizing and weaponizing trade and tech issues and stop destabilizing global industrial and supply chains,” spokesperson Mao Ning told a press briefing. “We will closely follow the developments and firmly safeguard our rights and interests.”

    As part of ongoing dialogue established by Raimondo and other US officials with their Chinese counterparts, Beijing was informed of the impending updates, according to a senior administration official.

    “We let the Chinese know for clarity that these rules were coming, but there was no negotiation with them,” the official told reporters.

    The tech rivalry between the world’s two largest economies has been heating up. In recent months, the United States has enlisted its allies in Europe and Asia in restricting sales of advanced chipmaking equipment to China.

    In July, Beijing hit back by imposing its own curbs on exports of germanium and gallium, two elements essential for making semiconductors.

    Shares of US chipmakers fell Tuesday following the announcement of new export controls.

    Nvidia’s (NVDA) stock closed down 4.7%, while Intel (INTC) slipped 1.4%. AMD (AMD) shares ended 1.2% lower.

    In its filing, Nvidia said the rules imposed new licensing requirements for exports to China and other markets such as Saudi Arabia, the United Arab Emirates and Vietnam.

    The company said its A800 chip, which was reportedly created for Chinese customers in order to circumvent last year’s restrictions, would be among the components affected.

    However, “given the strength of demand for our products worldwide, we do not anticipate that the additional restrictions will have a near-term meaningful impact on our financial results,” Nvidia said.

    The broader US chipmaking industry is also examining the impact of the new rules.

    The Semiconductor Industry Association said in a statement Tuesday that while it recognized the need to protect national security, “overly broad, unilateral controls risk harming the US semiconductor ecosystem without advancing national security as they encourage overseas customers to look elsewhere.”

    “We urge the administration to strengthen coordination with allies to ensure a level playing field for all companies,” added the group, which represents 99% of the US chip sector.

    The measures are also being reviewed in Europe. On Tuesday, ASML, the Dutch chipmaking equipment manufacturer, said it was evaluating the implications of the rules, though it did not expect them “to have a material impact on our financial outlook for 2023.”

    During a call Wednesday about the company’s third-quarter results, ASML chief executive Peter Wennink said the updated export restrictions would affect between 10% and 15% of the firm’s sales to China.

    On Tuesday, the US Department of Commerce added 13 Chinese entities to a list of firms with which US companies may not do business for national security reasons.

    They include two Chinese startups, Biren Technology and Moore Thread Intelligent Technology, and their subsidiaries.

    The department alleges that these companies are “involved in the development of advanced computing chips that have been found to be engaged in activities contrary to US national security.”

    CNN has reached out to Biren and Moore Thread for comment.

    — Anna Cooban contributed reporting.

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  • Biden and G7 leaders prepare new Russia sanctions as Zelensky expected to attend Japan summit | CNN Politics

    Biden and G7 leaders prepare new Russia sanctions as Zelensky expected to attend Japan summit | CNN Politics


    Hiroshima, Japan
    CNN
     — 

    US President Joe Biden and fellow world leaders were unveiling tough new sanctions on Russia as they prepare to hear in-person later this weekend from Volodomyr Zelensky, who officials said was planning a dramatic trip to Japan as he continues to appeal for military assistance amid Russia’s invasion.

    The new sanctions are designed to plug loopholes and go after untapped industries as western leaders continue to work toward choking off Moscow’s war financing.

    A dedicated G7 session on Ukraine was set for Friday afternoon. The war was expected to be a central topic of discussion among leaders here as Ukrainian forces prepare for a counteroffensive.

    The high point will come when Zelensky addresses the group in person. Officials declined to say exactly when Zelensky would arrive or detail his travel arrangements. He has been traveling outside his country more as the war grinds onward, including a tour of Europe last week.

    The lengthy trip from Ukraine to Hiroshima, where leaders from the world’s most powerful democracies are gathering, underscores Zelensky’s desire to strengthen support fourteen months into the war.

    The menacing nuclear undertones to Russia’s invasion were placed into sharp relief as the summit got underway. Leaders laid wreaths at the Hiroshima Peace Memorial, the epicenter of the American atomic bomb dropped here in 1945 that wiped out the city and more than 100,000 of its inhabitants while hastening the end of World War II.

    In the background was the Atomic Bomb Dome, now a monument and UNESCO World Heritage Site. The dome was formerly the Hiroshima Prefectural Industrial Promotion Hall, and the atomic blast struck almost directly above it, leaving the frame of its iron dome largely intact.

    It was against that backdrop that Biden and his fellow leaders entered three days of talks.

    The US said Friday it would tighten export controls, including by “extensively restricting categories of goods key to the battlefield,” and will announce nearly 300 new sanctions against “individuals, entities, vessels, and aircraft.”

    Additionally, the US will place new designations across Europe, the Middle East and Asia, and expand its sanctions authorities to further target Russia’s economy.

    The United Kingdom said it will ban the import of Russian diamonds, as part of its latest sanctions against Moscow, Downing Street announced on Friday. The move aims to restrict one of Russia’s few remaining export industries that had been relatively untouched by the withering western sanctions already in place.

    Imports of Russian-origin copper, aluminum, and nickel will also be banned under the UK legislation, which will be introduced later this year, the prime minister’s office said in a statement.

    The Russian diamond industry was worth $4 billion in exports in 2021, according to Downing Street.

    Biden faces his fellow world leaders Friday in Japan under the shadow of a looming default on US debt, a scenario his advisers said risks subverting American leadership and sending the global economy into tailspin.

    The risk appears particularly acute as Biden works to rally fellow G7 officials behind a shared approach toward Russia and China. On the first day of the summit talks, the group is expected to unveil a new tightening of sanctions on Moscow – a response to the invasion of Ukraine that relies on the strength of the American financial system.

    Before arriving, Biden was briefed on the debt ceiling standoff by aides.

    “The President’s team informed him that steady progress is being made,” a White House official said.

    The call lasted 20-30 minutes, press secretary Karine Jean-Pierre told pool reporters traveling with the President. A separate source with knowledge of the talks said — despite the optimism and positive signals — there is a long way to go to get a deal and it’s unclear if negotiators reach one by this weekend or if it will slip into next week.

    How much the debt standoff arises in Biden’s talks in Hiroshima remains to be seen; some European officials said they had been down similar roads before as American leaders worked to avert financial disaster only to find a solution at the last moment.

    But even if it does not arise substantially in the many hours of leaders’ meetings spanning the next three days, the risk of default remains the backdrop against which Biden will attempt to project strength this week in Japan.

    “Debt ceiling brinkmanship that Republicans are driving in Washington, DC, undermines American leadership, undermines the trustworthiness that America can bring to not just our allies and partners but to the rest of the world,” a senior administration official said as Biden began the high-stakes G7 summit.

    Biden cut his trip to Asia short to return to Washington early as negotiations continue over raising the US borrowing limit ahead of June 1, the earliest date by which the country could run out of cash to pay its bills.

    An extensive agenda of issues, including Ukraine, China and artificial intelligence, are all up for discussion. But it was clear from Biden’s decision to cancel planned stops in Australia and Papua New Guinea – Secretary of State Antony Blinken will make a two-day visit to the latter instead – that other matters are weighing on the US president’s time.

    To that end, Biden brought with him to Japan a top domestic policy aide, Bruce Reed, to keep him continually updated on the status of talks between White House aides and congressional Republicans.

    Just the threat of default has the potential to weaken American diplomatic authority, the official said, citing a sanctions regime on Russia that relies on the strength of the US financial system.

    “All of those things reduce America’s capacity to lead,” the official said.

    Biden’s meetings with fellow leaders in Hiroshima will present “an opportunity to highlight just how essential it is that that the Republicans work to get this done expeditiously with the president, because a lot is riding on ensuring that the United States continues to lead and lead alongside the G7.”

    Nowhere is that more evident than Russia’s ongoing war in Ukraine. The conflict will be a key topic of discussion for world leaders Friday.

    “All G7 members are preparing to implement new sanctions and export controls,” the senior official said, framing the US package of sanctions as “substantial.”

    The official previewed a five-pronged plan of new steps G7 nations are taking more broadly to further economically isolate Russia, including efforts to disrupt Russia’s ability to source inputs for its war and to close loopholes that have allowed certain Russian entities to evade existing sanctions.

    The sanctions come 14 months after Russia launched its invasion and as Ukraine prepares for a counteroffensive using billions of dollars in Western military aid.

    Biden and fellow leaders were planning to discuss how much progress has been made on the battlefield, with an eye toward helping Ukraine regain territory and assume leverage in potential peace talks.

    While the US remains Ukraine’s largest contributor of military assistance, some leaders have begun calling for ever-more-advanced weapons, including fighter jets, to send Kyiv. Biden has resisted those calls as he works to prevent an escalation.

    This story has been updated with additional developments.

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  • 8-year-old girl dies in US Customs and Border Protection custody | CNN

    8-year-old girl dies in US Customs and Border Protection custody | CNN



    CNN
     — 

    An 8-year-old girl died while in US Customs and Border Protection custody in Harlingen, Texas, the agency said Wednesday.

    The girl and her family were in custody at a CBP facility when she “experienced a medical emergency,” the agency said in a news release Wednesday night, without providing details.

    “Emergency Medical Services were called to the station and transported her to the local hospital where she was pronounced dead,” the release said.

    The Office of Professional Responsibility is investigating her death, as is consistent with protocol, CBP officials said.

    The child’s death comes days after an unaccompanied Honduran 17-year-old housed at a Florida shelter died while under the care of the US Department of Health and Human Services’ Office of Refugee Resettlement, according to a congressional notice obtained by CNN last week.

    Last week, immigration officials said in a court filing that surging migration coupled with the termination of Title 42 “is overwhelming U.S. Customs and Border Protection (CBP) facilities, risking widespread health and safety risks to migrants, government employees, and the public.”

    Detention facilities along the US-Mexico border surpassed capacity after an uptick in migrant crossings ahead of the expiration of Title 42, a Covid-era border restriction that was lifted last week.

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  • China has not provided extensive assistance to Russia as part of its war against Ukraine even as the two countries forge closer ties, senior Treasury officials say | CNN Business

    China has not provided extensive assistance to Russia as part of its war against Ukraine even as the two countries forge closer ties, senior Treasury officials say | CNN Business



    CNN
     — 

    While China and Russia have strengthened ties since the Kremlin’s brutal invasion of Ukraine, the US has not seen evidence that China has provided systemic material support to the Kremlin as Russian President Vladimir Putin and his government look for avenues to evade Western sanctions and backfill its military, according to senior US Treasury officials.

    One senior Treasury official said that China is, as of now, unwilling to provide material support to Russia at scale and in a significant way, pointing instead to Russian efforts to source material from North Korea and Iran. The comments come almost one month after revelations of US intelligence that China has been open to providing Russian with requested military and financial assistance, and US national security adviser Jake Sullivan warned top Chinese diplomat Yang Jiechi about American concerns over such a move.

    With relations between Washington and Beijing at historic lows, the senior officials attributed the decision by China to hold off so far on more systemic help to efforts across the sanctions coalition – from public US comments to active and direct messages that the Europeans have given to China.

    With Russia’s brutal invasion of Ukraine into its second year, the Biden administration has continued to take steps to plug the gaps of the Western allies’ sanctions regime as they broaden intelligence sharing with US allies and jurisdictions where Russia has looked to sidestep sanctions and export controls.

    The US and its allies have also taken more direct action, sanctioning a Chinese satellite company providing intelligence to Russian forces in January and putting some Chinese companies on the US export control list.

    As part of that effort and as leaders of the global financial system descend on Washington D.C. next week for the Spring Meetings of the International Monetary Fund and World Bank, top US Treasury and intelligence officials will share information with relevant partners to help countries and businesses understand how the Kremlin continues to use its intelligence services to try and evade the unprecedented sanctions regime instituted by the US and its allies, these senior officials also said.

    The meetings next week with countries the US is concerned about are part of a broader push by the Treasury over the next month as senior officials continue to fan out across the world to strategize with US allies and partners to deepen cooperation and ramp up the pressure on countries key to Russia’s sanctions evasion and backfilling efforts.

    Two of Treasury’s top sanctions officials – Brian Nelson and Liz Rosenberg – will continue the US government’s ramped up efforts internationally to speak to specific countries and their businesses about the risks of providing support to Russia and share detailed information on sanctions evasion. Nelson will travel to Switzerland, Italy, Austria and Germany to compare notes with their counterparts and continue to share intelligence on the ways in which Russia is attempting to evade sanctions; and, Rosenberg will travel to Kazakhstan in Central Asia, a region with a long history of ties to Russia, and through which officials have raised concerns that Russia is sourcing materials.

    Despite the impact sanctions have had on the Russian economy, some observers have pointed to concerns over Moscow’s ability to evade sanctions and re-orient trade routes to continue to acquire some of the technologies and financing needed to fund its war machine through countries it borders and more permissive jurisdictions, such as the United Arab Emirates and Turkey.

    But in recent months officials have also begun to see some results from their public and private efforts. Turkish officials told the US last month that their government has been taking further action to block the transit of sanctioned goods directly to Russia, according to a source familiar with the discussion.

    Since Russia launched its bloody war against Ukraine, the US has imposed thousands of sanctions against Russian politicians, oligarchs and companies, cut off the Russian central bank from its dollar-denominated reserves as well as the global financial messaging system, undermined Russia’s defense-industrial base and imposed a price cap on Russian oil and petroleum products.

    One of the most successful efforts, the price cap, has already been having a demonstrable effect with the Russian Finance Ministry announcing Friday a $29 billion dollar deficit in the budget for the first quarter of 2023, according to Reuters.

    In a speech earlier this year on the anniversary of Russia’s invasion, US Deputy Treasury Secretary Wally Adeyemo publicly warned Russian intelligence services that the US is monitoring their efforts and is cracking down.

    “We know Russia is actively seeking ways to circumvent these sanctions… In fact, one of the ways we know our sanctions are working is that Russia has tasked its intelligence services – the FSB and GRU – to find ways to get around them,” Adeyemo said in his February speech.

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  • UK reaches its biggest trade deal since Brexit, joining trans-Pacific partnership | CNN Business

    UK reaches its biggest trade deal since Brexit, joining trans-Pacific partnership | CNN Business


    Atlanta/Hong Kong
    CNN
     — 

    Britain has reached an agreement to join a major trans-Pacific partnership, calling it its biggest trade deal since Brexit.

    The country will become the first new member, and the first in Europe, to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) since it came into force in 2018.

    British Prime Minister Rishi Sunak announced the move early Friday, hailing it as a historic move that could help lift economic growth in the country by £1.8 billion ($2.2 billion) in the long run.

    “The bloc is home to more 500 million people and will be worth 15% of global GDP once the UK joins,” Sunak’s office said.

    The CPTPP is a free trade agreement with 11 members: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam. It succeeded the Trans-Pacific Partnership after the United States withdrew under former President Donald Trump in 2017.

    The UK agreement comes almost two years after it began talks to join the pact.

    As a member, more than 99% of UK exports to those 11 countries will now be eligible for tariff-free trade. That includes major exports, such as cheese, cars, chocolate, machinery, gin and whisky.

    In the year through September 2022, the United Kingdom exported £60.5 billion ($75 billion) worth of goods to CPTPP countries, Sunak’s office said in a statement.

    Dairy farmers, for example, sent £23.9 million ($29.6 million) worth of products such as cheese and butter to Canada, Chile, Japan and Mexico last year, and were set to “benefit from lower tariffs,” it added.

    The deal also aims to lift red tape for British businesses, which will no longer be required to set up local offices or be residents of the pact’s member countries to provide services there.

    Services made up a huge chunk — 43% — of overall UK trade with CPTPP members last year, according to Sunak’s office.

    “We are at our heart an open and free-trading nation,” the prime minister said in the statement, seeking to cast the deal as an example of the “economic benefits of our post-Brexit freedoms.”

    “As part of CPTPP, the UK is now in a prime position in the global economy to seize opportunities for new jobs, growth and innovation,” Sunak added.

    Several businesses expressed their support for the deal in the government statement, including global bank Standard Chartered

    (SCBFF)
    and spirits maker Pernod Ricard

    (PDRDF)
    .

    Joining the pact “is a big opportunity for our Scotch whisky business,” said Anishka Jelicich, Pernod Ricard’s UK director of public affairs.

    “Five of our top 20 export markets are CPTPP members. We expect tariff cuts and smoother access to some of the world’s fastest growing economies to increase exports and secure jobs and investment in the UK, with sales doubling in some markets.”

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  • China may prefer TikTok to be banned than fall into US hands | CNN Business

    China may prefer TikTok to be banned than fall into US hands | CNN Business


    Hong Kong
    CNN
     — 

    Nearly three years after the Trump administration threatened to ban TikTok if its Chinese owner didn’t sell the company to American investors, the video app is once again facing an existential threat.

    TikTok CEO Shou Zi Chew will appear later Thursday before US lawmakers, many of whom want the app banned in the United States because of the risk they say it presents to national security. The clamor for a sale is growing louder again.

    But an outright divestment isn’t in the cards, according to analysts and legal experts, not least because the Chinese government views TikTok’s technology as sensitive and has taken steps since 2020 to ensure it can veto any sale by its Beijing-based owner, ByteDance.

    At issue is who owns the keys to TikTok’s algorithms and the vast troves of data collected from the 150 million people in the United States who use the app each month.

    The Chinese government considers some advanced technology, including content recommendation algorithms, to be critical to its national interest. In December, Chinese officials proposed tightening the rules that govern the sale of that technology to foreign buyers.

    “Beijing will have no say in the US decision to mandate the sale of TikTok, but it will retain the ultimate approval authority over such a sale,” said Brock Silvers, chief investment officer for Kaiyuan Capital.

    “It also seems extremely unlikely that Beijing will accept any deal that removes TikTok’s algorithm[s] from its direct control and regulatory authority,” he said.

    TikTok’s algorithms, which keep users glued to the app, are believed to be key to its success. The algorithms give recommendations based on users’ behavior, thus pushing videos they actually like and want to watch.

    Chinese regulators first added algorithms to the restricted list of technologies in August 2020, when the Trump administration threatened to ban TikTok unless it was sold.

    Back then, Chinese state media published a commentary by a professor of trade at the University of International Business and Economics who said the updated rules meant ByteDance would need a license from Beijing to sell its technology.

    “Some cutting-edge technologies might impact national security and public welfare, and need to be included in [export control] management,” Cui Fan told Xinhua.

    The intended sale of TikTok in 2020 to Oracle and Walmart hit a snag after Beijing added algorithms to its export control list. The Biden administration eventually rescinded the Trump-era executive order targeting TikTok, but replaced it with a broader directive focused on investigating technology linked to foreign adversaries, including China.

    Now, the company is once again caught up in a geopolitical struggle between Washington and Beijing.

    “The TikTok hearings in the United States mark the beginnings of a regulatory meat-grinder facing all [Chinese] tech companies,” said Alex Capri, a research fellow at the Hinrich Foundation.

    A senior official from the Chinese regulator of digital and traditional media visited Bytedance’s offices last week. He urged the company to improve the use of “recommendation algorithms” to spread “positive energy” and strengthen the review of online content, according to a statement from the regulator posted on its website.

    The visit highlights Beijing’s resolve to keep its most powerful internet companies on a tight leash. It also has more direct levers to pull.

    In April 2021, a Chinese government entity acquired a “golden share” of 1% in a Beijing subsidiary of ByteDance, according to business data platform Qichacha. The subsidiary controls operating licenses for Douyin, TikTok’s sister app in China, and Toutiao, a news aggregation app.

    “TikTok’s algorithms make it truly unique in terms of data harvesting and strategic analytics, therefore, I don’t see Beijing allowing it to fall into the hands of US interests,” said Capri.

    “Unless they can somehow still access TikTok’s data through other means and methods, including ongoing cyber intrusion and other forms of back-door access.”

    Chinese regulators have been gradually tightening their control over algorithm technology more generally.

    Starting in March 2022, an unprecedented regulation came into effect requiring internet companies to register recommendation algorithms with the Cyberspace Administration, the powerful internet regulator that reports to President Xi Jinping.

    At the beginning of 2023, rules governing “deep synthesis algorithms” also took effect. They will restrict the use of AI-powered image, audio and text-generation software. Such technologies underpin popular apps such as ChatGPT.

    These regulatory developments suggest that TikTok’s recommendation algorithms will be subject to China’s export controls, said Winston Ma, an adjunct professor at New York University School of Law.

    TikTok has been erecting technical and organizational barriers that it says will keep user data safe from unauthorized access.

    Under the plans, known as Project Texas, the US government and third-party companies such as Oracle would also have some degree of oversight of TikTok’s data practices. TikTok is working on a similar plan for the European Union known as Project Clover.

    But that hasn’t reassured US officials, likely because no matter what TikTok does internally, China would still theoretically have leverage over TikTok’s Chinese owners. (Similar measures taken by Huawei didn’t prevent it from being kicked out of Western 5G markets.)

    And the concerns would remain even if TikTok is sold to an American buyer, Capri said.

    “A change of TikTok’s ownership solves nothing,” he said. “The real issue is general data security and who ultimately has access to that data, by whatever means, regardless of legal ownership.”

    The true test, he said, is whether user data can be effectively ring-fenced and privacy and security can be achieved through data segregation, encryption and other means.

    As for a solution, Silvers expects both sides to try to “finesse a compromise” where US concerns are addressed, but Beijing still retains control over TikTok.

    But, he believes Beijing would ultimately prefer for TikTok leave the US market rather than surrender its algorithm.

    “If any Chinese company is to have any chance of surviving increased scrutiny from Western governments, they will have to entrust their data to third party security firms and endure rigorous third party audits and government intrusion, in addition to transferring ownership,” Capri said.

    “This is really an existential crisis for Chinese firms operating in the West.”

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  • Dutch to restrict semiconductor tech exports to China, joining US effort | CNN Business

    Dutch to restrict semiconductor tech exports to China, joining US effort | CNN Business


    Amsterdam/Washington
    Reuters
     — 

    The Netherlands’ government on Wednesday said it plans new restrictions on exports of semiconductor technology to protect national security, joining the US effort to curb chip exports to China.

    The announcement marked the first concrete move by the Dutch, who oversee essential chipmaking technology, toward adopting rules urged by Washington to hobble China’s chipmaking industry and slow its military advances.

    The US in October imposed sweeping export restrictions on shipments of American chipmaking tools to China, but for the restrictions to be effective it needs other key suppliers in the Netherlands and Japan, who produce key chipmaking technology, to agree. The allied countries have been in talks on the matter for months.

    Dutch Trade Minister Liesje Schreinemacher announced the decision in a letter to parliament, saying the restrictions will be introduced before the summer.

    Her letter did not name China, a key Dutch trading partner, nor did it name ASML Holding

    (ASML)
    , Europe’s largest tech firm and a major supplier to semiconductor manufacturers, but both will be affected. It specified one technology that will be impacted is “DUV” lithography systems, the second-most advanced machines that ASML sells to computer chip manufacturers.

    “Because the Netherlands considers it necessary on national security grounds to get this technology into oversight with the greatest of speed, the Cabinet will introduce a national control list,” the letter said.

    A White House representative did not immediately respond to a request for comment.

    ASML said in a response it expects to have to apply for licenses to export the most advanced segment among its DUV machines, but that would not impact its 2023 financial guidance.

    ASML dominates the market for lithography systems, multimillion dollar machines that use powerful lasers to create the minute circuitry of computer chips.

    The company expects sales in China to remain about flat at 2.2 billion euros in 2023, implying relative shrinkage as the company expects overall sales to grow by 25%. Major ASML customers such as TSMC and Intel

    (INTC)
    are engaged in capacity expansions.

    ASML has never sold its most advanced “EUV” machines to customers in China, and the bulk of its “DUV” sales in China go to relatively less advanced chipmakers. Its biggest South Korean customers, Samsung

    (SSNLF)
    and SK Hynix both have significant manufacturing capacity in China.

    The Dutch announcement leaves major questions unanswered, including whether ASML will be able to service the more than 8 billion euros worth of DUV machines it has sold to customers in China since 2014.

    Schreinemacher said the Dutch government had decided on measures “as carefully and precisely as possible … to avoid unnecessary disruption of value chains.”

    “It is for companies of importance to know what they are facing and to have time to adjust to new rules,” she wrote.

    Japan is expected to issue an update on its chip equipment export policies as soon as this week.

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  • Fact check: Trump delivers wildly dishonest speech at CPAC | CNN Politics

    Fact check: Trump delivers wildly dishonest speech at CPAC | CNN Politics


    Washington
    CNN
     — 

    As president, Donald Trump made some of his most thoroughly dishonest speeches at the annual Conservative Political Action Conference.

    As he embarks on another campaign for the presidency, Trump delivered another CPAC doozy Saturday night.

    Trump’s lengthy address to the right-wing gathering in Maryland was filled with wildly inaccurate claims about his own presidency, Joe Biden’s presidency, foreign affairs, crime, elections and other subjects.

    Here is a fact check of 23 of the false claims Trump made. (And that’s far from the total.)

    Crime in Manhattan

    While Trump criticized Manhattan District Attorney Alvin Bragg, who has been investigating Trump’s company, he claimed that “killings are taking place at a number like nobody’s ever seen, right in Manhattan.”

    Facts First: It isn’t even close to true that Manhattan is experiencing a number of killings that nobody has ever seen. The region classified by the New York Police Department as Manhattan North had 43 reported murders in 2022; that region had 379 reported murders in 1990 and 306 murders in 1993. The Manhattan South region had 35 reported murders in 2022 versus 124 reported murders in 1990 and 86 murders in 1993. New York City as a whole is also nowhere near record homicide levels; the city had 438 reported murders in 2022 versus 2,262 in 1990 and 1,927 in 1993.

    Manhattan North had just eight reported murders this year through February 19, while Manhattan South had one. The city as a whole had 49 reported murders.

    The National Guard and Minnesota

    Talking about rioting amid racial justice protests after the police murder of George Floyd in Minneapolis in 2020, Trump claimed he had been ready to send in the National Guard in Seattle, then added, “We saved Minneapolis. The thing is, we’re not supposed to do that. Because it’s up to the governor, the Democrat governor. They never want any help. They don’t mind – it’s almost like they don’t mind to have their cities and states destroyed. There’s something wrong with these people.”

    Facts First: This is a reversal of reality. Minnesota’s Democratic governor, Tim Walz, not Trump, was the one who deployed the Minnesota National Guard during the 2020 unrest; Walz first activated the Guard more than seven hours before Trump publicly threatened to deploy the Guard himself. Walz’s office told CNN in 2020 that the governor activated the Guard in response to requests from officials in Minneapolis and St. Paul – cities also run by Democrats.

    Trump has repeatedly made the false claim that he was the one who sent the Guard to Minneapolis. You can read a longer fact check, from 2020, here.

    Trump’s executive order on monuments

    Trump boasted that he had taken effective action as president to stop the destruction of statues and memorials. He claimed: “I passed and signed an executive order. Anybody that does that gets 10 years in jail, with no negotiation – it’s not ’10’ but it turns into three months.” He added: “But we passed it. It was a very old law, and we found it – one of my very good legal people along with [adviser] Stephen Miller, they found it. They said, ‘Sir, I don’t know if you want to try and bring this back.’ I said. ‘I do.’”

    Facts First: Trump’s claim is false. He did not create a mandatory 10-year sentence for people who damage monuments. In fact, his 2020 executive order did not mandate any increase in sentences.

    Rather, the executive order simply directed the attorney general to “prioritize” investigations and prosecutions of monument-destruction cases and declared that it is federal policy to prosecute such cases to the fullest extent permitted under existing law, including an existing law that allowed a sentence of up to 10 years in prison for willfully damaging federal property. The executive order did nothing to force judges to impose a 10-year sentence.

    Vandalism in Portland

    Trump claimed, “How’s Portland doing? They don’t even have storefronts anymore. Everything’s two-by-four’s because they get burned down every week.”

    Facts First: This is a major exaggeration. Portland obviously still has hundreds of active storefronts, though it has struggled with downtown commercial vacancies for various reasons, and some businesses are sometimes vandalized by protesters. Trump has for years exaggerated the extent of property damage from protest vandalism in Portland.

    Russian expansionism

    Boasting of his foreign policy record, Trump claimed, “I was also the only president where Russia didn’t take over a country during my term.”

    Facts First: While it’s true that Russia didn’t take over a country during Trump’s term, it’s not true that he was the only US president under whom Russia didn’t take over a country. “Totally false,” Michael Khodarkovsky, a Loyola University Chicago history professor who is an expert on Russian imperialism, said in an email. “If by Russia he means the current Russian Federation that existed since 1991, then the best example is Clinton, 1992-98. During this time Russia fought a war in Chechnya, but Chechnya was not a country but one of Russia’s regions.”

    Khodarkovsky added, “If by Russia he means the USSR, as people often do, then from 1945, when the USSR occupied much of Eastern Europe until 1979, when USSR invaded Afghanistan, Moscow did not take over any new country. It only sent forces into countries it had taken over in 1945 (Hungary 1956, Czechoslovakia 1968).”

    NATO funding

    Trump said while talking about NATO funding: “And I told delinquent foreign nations – they were delinquent, they weren’t paying their bills – that if they wanted our protection, they had to pay up, and they had to pay up now.”

    Facts First: It’s not true that NATO countries weren’t paying “bills” until Trump came along or that they were “delinquent” in the sense of failing to pay bills – as numerous fact-checkers pointed out when Trump repeatedly used such language during his presidency. NATO members haven’t been failing to pay their share of the organization’s common budget to run the organization. And while it’s true that most NATO countries were not (and still are not) meeting NATO’s target of each country spending a minimum of 2% of gross domestic product on defense, that 2% figure is what NATO calls a “guideline”; it is not some sort of binding contract, and it does not create liabilities. An official NATO recommitment to the 2% guideline in 2014 merely said that members not currently at that level would “aim to move towards the 2% guideline within a decade.”

    NATO Secretary General Jens Stoltenberg did credit Trump for securing increases in European NATO members’ defense spending, but it’s worth noting that those countries’ spending had also increased in the last two years of the Obama administration following Russia’s 2014 annexation of Ukraine’s Crimea and the recommitment that year to the 2% guideline. NATO notes on its website that 2022 was “the eighth consecutive year of rising defence spending across European Allies and Canada.”

    NATO’s existence

    Boasting of how he had secured additional funding for NATO from countries, Trump claimed, “Actually, NATO wouldn’t even exist if I didn’t get them to pay up.”

    Facts First: This is nonsense.

    There was never any indication that NATO, created in 1949, would have ceased to exist in the early 2020s without additional funding from some members. The alliance was stable even with many members not meeting the alliance’s guideline of having members spend 2% of their gross domestic product on defense.

    We don’t often fact-check claims about what might have happened in an alternative scenario, but this Trump claim has no basis in reality. “The quote doesn’t make sense, obviously,” said Erwan Lagadec, research professor at George Washington University’s Elliott School of International Affairs and an expert on NATO.

    Lagadec noted that NATO has had no trouble getting allies to cover the roughly $3 billion in annual “direct” funding for the organization, which is “peanuts” to this group of countries. And he said that the only NATO member that had given “any sign” in recent years that it was thinking about leaving the alliance “was … the US, under Trump.” Lagadec added that the US leaving the alliance is one scenario that could realistically kill it, but that clearly wasn’t what Trump was talking about in his remarks on spending levels.

    James Goldgeier, an American University professor of international relations and Brookings Institution visiting fellow, said in an email: “NATO was founded in 1949, so it seems very clear that Donald Trump had nothing to do with its existence. In fact, the worry was that he would pull the US out of NATO, as his national security adviser warned he would do if he had been reelected.”

    The cost of NATO’s headquarters

    Trump mocked NATO’s headquarters, saying, “They spent – an office building that cost $3 billion. It’s like a skyscraper in Manhattan laid on its side. It’s one of the longest buildings I’ve ever seen. And I said, ‘You should have – instead of spending $3 billion, you should have spent $500 million building the greatest bunker you’ve ever seen. Because Russia didn’t – wouldn’t even need an airplane attack. One tank one shot through that beautiful glass building and it’s gone.’”

    Facts First: NATO did spend a lot of money on its headquarters in Belgium, but Trump’s “$3 billion” figure is a major exaggeration. When Trump used the same inaccurate figure in early 2020, NATO told CNN that the headquarters was actually constructed for a sum under the approved budget of about $1.18 billion euro, which is about $1.3 billion at exchange rates as of Sunday morning.

    The Pulitzer Prize

    Trump made his usual argument that The Washington Post and The New York Times should not have won a prestigious journalism award, a 2018 Pulitzer Prize, for their reporting on Russian interference in the 2016 election and its connections to Trump’s team. He then said, “And they were exactly wrong. And now they’ve even admitted that it was a hoax. It was a total hoax, and they got the prize.”

    Facts First: The Times and Post have not made any sort of “hoax” admission. “The claim is completely false,” Times spokesperson Charlie Stadtlander said in an email on Sunday.

    Stadtlander continued: “When our Pulitzer Prize shared with The Washington Post was challenged by the former President, the award was upheld by the Pulitzer Prize Board after an independent review. The board stated that ‘no passages or headlines, contentions or assertions in any of the winning submissions were discredited by facts that emerged subsequent to the conferral of the prizes.’ The Times’s reporting was also substantiated by the Mueller investigation and Republican-led Senate Intelligence Committee investigation into the matter.”

    The Post referred CNN to that same July statement from the Pulitzer Prize Board.

    Awareness of the Nord Stream 2 pipeline

    Trump claimed of his opposition to Russia’s Nord Stream 2 gas pipeline to Germany: “Nord Stream 2 – Nobody ever heard of it … right? Nobody ever heard of Nord Stream 2 until I came along. I started talking about Nord Stream 2. I had to go call it ‘the pipeline’ because nobody knew what I was talking about.”

    Facts First: This is standard Trump hyperbole; it’s just not true that “nobody” had heard of Nord Stream 2 before he began discussing it. Nord Stream 2 was a regular subject of media, government and diplomatic discussion before Trump took office. In fact, Biden publicly criticized it as vice president in 2016. Trump may well have generated increased US awareness to the controversial project, but “nobody ever heard of Nord Stream 2 until I came along” isn’t true.

    Trump and Nord Stream 2

    Trump claimed, “I got along very well with Putin even though I’m the one that ended his pipeline. Remember they said, ‘Trump is giving a lot to Russia.’ Really? Putin actually said to me, ‘If you’re my friend, I’d hate like hell to see you as my enemy.’ Because I ended the pipeline, right? Do you remember? Nord Stream 2.” He continued, “I ended it. It was dead.”

    Facts First: Trump did not kill Nord Stream 2. While he did approve sanctions on companies working on the project, that move came nearly three years into his presidency, when the pipeline was already around an estimated 90% complete – and the state-owned Russian gas company behind the project said shortly after the sanctions that it would complete the pipeline itself. The company announced in December 2020 that construction was resuming. And with days left in Trump’s term in January 2021, Germany announced that it had renewed permission for construction in its waters.

    The pipeline never began operations; Germany ended up halting the project as Russia was about to invade Ukraine early last year. The pipeline was damaged later in the year in what has been described as an act of sabotage.

    The Obama administration and Ukraine

    Trump claimed that while he provided lethal assistance to Ukraine, the Obama administration “didn’t want to get involved” and merely “supplied the bedsheets.” He said, “Do you remember? They supplied the bedsheets. And maybe even some pillows from [pillow businessman] Mike [Lindell], who’s sitting right over here. … But they supplied the bedsheets.”

    Facts First: This is inaccurate. While it’s true that the Obama administration declined to provide weapons to Ukraine, it provided more than $600 million in security assistance to Ukraine between 2014 and 2016 that involved far more than bedsheets. The aid included counter-artillery and counter-mortar radars, armored Humvees, tactical drones, night vision devices and medical supplies.

    Biden and a Ukrainian prosecutor

    Trump claimed that Biden, as vice president, held back a billion dollars from Ukraine until the country fired a prosecutor who was “after Hunter” and a company that was paying him. Trump was referring to Hunter Biden, Joe Biden’s son, who sat on the board of Ukrainian energy company Burisma Holdings.

    Facts First: This is baseless. There has never been any evidence that Hunter Biden was under investigation by the prosecutor, Viktor Shokin, who had been widely faulted by Ukrainian anti-corruption activists and European countries for failing to investigate corruption. A former Ukrainian deputy prosecutor and a top anti-corruption activist have both said the Burisma-related investigation was dormant at the time Joe Biden pressured Ukraine to fire Shokin.

    Daria Kaleniuk, executive director of Ukraine’s Anti-Corruption Action Center, told The Washington Post in 2019: “Shokin was not investigating. He didn’t want to investigate Burisma. And Shokin was fired not because he wanted to do that investigation, but quite to the contrary, because he failed that investigation.” In addition, Shokin’s successor as prosecutor general, Yuriy Lutsenko, told Bloomberg in 2019: “Hunter Biden did not violate any Ukrainian laws – at least as of now, we do not see any wrongdoing.”

    Biden, as vice president, was carrying out the policy of the US and its allies, not pursuing his own agenda, in threatening to withhold a billion-dollar US loan guarantee if the Ukrainian government did not sack Shokin. CNN fact-checked Trump’s claims on this subject at length in 2019.

    Trump and job creation

    Promising to save Americans’ jobs if he is elected again, Trump claimed, “We had the greatest job history of any president ever.”

    Facts First: This is false. The US lost about 2.7 million jobs during Trump’s presidency, the worst overall jobs record for any president. The net loss was largely because of the Covid-19 pandemic, but even Trump’s pre-pandemic jobs record – about 6.7 million jobs added – was far from the greatest of any president ever. The economy added more than 11.5 million jobs in the first term of Democratic President Bill Clinton in the 1990s.

    Tariffs on China

    Trump repeated a trade claim he made frequently during his presidency. Speaking of China, he said he “charged them” with tariffs that had the effect of “bringing in hundreds of billions of dollars pouring into our Treasury from China. Thank you very much, China.” He claimed that he did this even though “no other president had gotten even 10 cents – not one president got anything from them.”

    Facts First: As we have written repeatedly, it’s not true that no president before Trump had generated any revenue through tariffs on goods from China. In reality, the US has had tariffs on China for more than two centuries, and FactCheck.org reported in 2019 that the US generated an “average of $12.3 billion in custom duties a year from 2007 to 2016, according to the U.S. International Trade Commission DataWeb.” Also, American importers, not Chinese exporters, make the actual tariff payments – and study after study during Trump’s presidency found that Americans were bearing most of the cost of the tariffs.

    The trade deficit with China

    Trump went on to repeat a false claim he made more than 100 times as president – that the US used to have a trade deficit with China of more than $500 billion. He claimed it was “five-, six-, seven-hundred billion dollars a year.”

    Facts First: The US has never had a $500 billion, $600 billion or $700 billion trade deficit with China even if you only count trade in goods and ignore the services trade in which the US runs a surplus with China. The pre-Trump record for a goods deficit with China was about $367 billion in 2015. The goods deficit hit a new record of about $418 billion under Trump in 2018 before falling back under $400 billion in subsequent years.

    Trump and the 2020 election

    Trump said people claim they want to run against him even though, he claimed, he won the 2020 election. He said, “I won the second election, OK, won it by a lot. You know, when they say, when they say Biden won, the smart people know that didn’t [happen].”

    Facts First: This is Trump’s regular lie. He lost the 2020 election to Biden fair and square, 306 to 232 in the Electoral College. Biden earned more than 7 million more votes than Trump did.

    Democrats and elections

    Trump said Democrats are only good at “disinformation” and “cheating on elections.”

    Facts First: This is nonsense. There is just no basis for a broad claim that Democrats are election cheaters. Election fraud and voter fraud are exceedingly rare in US elections, though such crimes are occasionally committed by officials and supporters of both parties. (We’ll ignore Trump’s subjective claim about “disinformation.”)

    The liberation of the ISIS caliphate

    Trump repeated his familiar story about how he had supposedly liberated the “caliphate” of terror group ISIS in “three weeks.” This time, he said, “In fact, with the ISIS caliphate, a certain general said it could only be done in three years, ‘and probably it can’t be done at all, sir.’ And I did it in three weeks. I went over to Iraq, met a great general. ‘Sir, I can do it in three weeks.’ You’ve heard that story. ‘I can do it in three weeks, sir.’ ‘How are you going to do that?’ They explained it. I did it in three weeks. I was told it couldn’t be done at all, that it would take at least three years. Did it in three weeks. Knocked out 100% of the ISIS caliphate.”

    Facts First: Trump’s claim of eliminating the ISIS caliphate in “three weeks” isn’t true; the ISIS “caliphate” was declared fully liberated more than two years into Trump’s presidency, in 2019. Even if Trump was starting the clock at the time of his visit to Iraq, in late December 2018, the liberation was proclaimed more than two and a half months later. In addition, Trump gave himself far too much credit for the defeat of the caliphate, as he has in the past, when he said “I did it”: Kurdish forces did much of the ground fighting, and there was major progress against the caliphate under President Barack Obama in 2015 and 2016.

    IHS Markit, an information company that studied the changing size of the caliphate, reported two days before Trump’s 2017 inauguration that the caliphate shrunk by 23% in 2016 after shrinking by 14% in 2015. “The Islamic State suffered unprecedented territorial losses in 2016, including key areas vital for the group’s governance project,” an analyst there said in a statement at the time.

    Military equipment left in Afghanistan

    Trump claimed, as he has before, that the US left behind $85 billion worth of military equipment when it withdrew from Afghanistan in 2021. He said of the leader of the Taliban: “Now he’s got $85 billion worth of our equipment that I bought – $85 billion.” He added later: “The thing that nobody ever talks about, we lost 13 [soldiers], we lost $85 billion worth of the greatest military equipment in the world.”

    Facts First: Trump’s $85 billion figure is false. While a significant quantity of military equipment that had been provided by the US to Afghan government forces was indeed abandoned to the Taliban upon the US withdrawal, the Defense Department has estimated that this equipment had been worth about $7.1 billion – a chunk of about $18.6 billion worth of equipment provided to Afghan forces between 2005 and 2021. And some of the equipment left behind was rendered inoperable before US forces withdrew.

    As other fact-checkers have previously explained, the “$85 billion” is a rounded-up figure (it’s closer to $83 billion) for the total amount of money Congress has appropriated during the war to a fund supporting the Afghan security forces. A minority of this funding was for equipment.

    The Afghanistan withdrawal and the F-16

    Trump claimed that the Taliban acquired F-16 fighter planes because of the US withdrawal, saying: “They feared the F-16s. And now they own them. Think of it.”

    Facts First: This is false. F-16s were not among the equipment abandoned upon the US withdrawal and the collapse of the Afghan armed forces, since the Afghan armed forces did not fly F-16s.

    The border wall

    Trump claimed that he had kept his promise to complete a wall on the border with Mexico: “As you know, I built hundreds of miles of wall and completed that task as promised. And then I began to add even more in areas that seemed to be allowing a lot of people to come in.”

    Facts First: It’s not true that Trump “completed” the border wall. According to an official “Border Wall Status” report written by US Customs and Border Protection two days after Trump left office, about 458 miles of wall had been completed under Trump – but about 280 more miles that had been identified for wall construction had not been completed.

    The report, provided to CNN’s Priscilla Alvarez, said that, of those 280 miles left to go, about 74 miles were “in the pre-construction phase and have not yet been awarded, in locations where no barriers currently exist,” and that 206 miles were “currently under contract, in place of dilapidated and outdated designs and in locations where no barriers previously existed.”

    Latin America and deportations

    Trump told his familiar story about how, until he was president, the US was unable to deport MS-13 gang members to other countries, “especially” Guatemala, El Salvador and Honduras because those countries “didn’t want them.”

    Facts First: It’s not true that, as a rule, Guatemala and Honduras wouldn’t take back migrants being deported from the US during Obama’s administration, though there were some individual exceptions.

    In 2016, just prior to Trump’s presidency, neither Guatemala nor Honduras was on the list of countries that Immigration and Customs Enforcement (ICE) considered “recalcitrant,” or uncooperative, in accepting the return of their nationals.

    For the 2016 fiscal year, Obama’s last full fiscal year in office, ICE reported that Guatemala and Honduras ranked second and third, behind only Mexico, in terms of the country of citizenship of people being removed from the US. You can read a longer fact check, from 2019, here.

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  • Trump proposes building 10 ‘freedom cities’ and flying cars | CNN Politics

    Trump proposes building 10 ‘freedom cities’ and flying cars | CNN Politics



    CNN
     — 

    Former President Donald Trump on Friday proposed building up to 10 futuristic “freedom cities” on federal land, part of a plan that the 2024 presidential contender said would “create a new American future” in a country that has “lost its boldness.”

    Commuters, meanwhile, could get around in flying cars, Trump said – an echo of “The Jetsons,” the classic cartoon about a family in a high-tech future society. Work to develop vertical takeoff and landing vehicles is already underway by major airlines, auto manufacturers and other companies, though widely seen as years away from reaching the market.

    “I want to ensure that America, not China, leads this revolution in air mobility,” Trump, who announced his third bid for the presidency in November, said in a four-minute video detailing his plan.

    He said he would launch a contest to charter up to 10 “freedom cities” roughly the size of Washington, DC, on undeveloped federal land.

    “We’ll actually build new cities in our country again,” Trump said in the video. “These freedom cities will reopen the frontier, reignite American imagination, and give hundreds of thousands of young people and other people, all hardworking families, a new shot at home ownership and in fact, the American dream.”

    Trump’s pitch comes the day before he is set to address the Conservative Political Action Conference in the Washington, DC, area, and as the 2024 Republican presidential field begins to take shape.

    The proposal is the latest in a series of early policy offerings from Trump, who in recent weeks has also said he would seek to ramp up domestic energy production, adopt a more isolationist foreign policy stance and purge the government and military of “warmongers and globalists,” and undo a Biden executive order that would require government agencies to submit annual public plans aimed at promoting equity.

    In December, the former president unveiled plans as part of his “free speech platform” that included vows to ban federal money from being used to label speech as misinformation or disinformation and to punish universities engaging in “censorship activities” with cuts to federal funding.

    Trump did not elaborate Friday on how he would pay for his latest proposal – leaving unanswered what could be the biggest question as Republicans in Washington seek to curb federal spending. He also did not explain how some elements of his proposal differ from similar Democratic plans.

    His plan, which was light on details, includes three additional planks: increasing tariffs on goods imported into the United States; providing families with “baby bonuses” that he said would “help launch a new baby boom”; and launching a beautification effort aimed at removing “ugly” buildings and revitalizing parks and public spaces.

    Trump did not explain what “baby bonuses” would amount to or who would qualify. It’s not clear how his proposal differs from the enhanced child tax credit, which wasn’t extended beyond 2021. A group of Democratic lawmakers and progressive advocates tried – but failed – to have it included in the $1.7 trillion spending measure in December. That proposal was blocked by Republicans.

    Trump on Friday also called for universal tariffs and imposing higher taxes on imported goods. He said he would escalate a trade battle with China, which he began during his four years in the White House. Doing so, he said, would jump-start American manufacturing.

    President Joe Biden has left tariffs in place on $350 billion of Chinese goods – nearly two-thirds of what the US imports from China – which were imposed by Trump.

    However, the costs of those tariffs are being passed on to American consumers, and contributing to inflation, experts say.

    Treasury Secretary Janet Yellen said last year that those tariffs on Chinese goods have “imposed more harm on consumers and businesses” than on China.

    Chris Rupkey, chief economist at markets research firm FwdBonds, said Trump’s proposed economic plan is reflective of the onetime real estate developer’s efforts before taking office.

    “Builders build and make dreams a reality, but this plan looks like a stretch because the country cannot afford to undertake massive new projects when the national debt is over $31 trillion,” Rupkey said in an email. “There are some interesting ideas here, but this is not the right time for bold plans that dream big. There’s no money left in Uncle Sam’s till to pay for big dreams and daring projects.”

    The nation is in the midst of a “cost-of-living crisis” that makes this too expensive of a proposition, Rupkey added.

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  • US is reviewing Huawei export license policy amid rising congressional scrutiny of China | CNN Business

    US is reviewing Huawei export license policy amid rising congressional scrutiny of China | CNN Business


    Washington
    CNN
     — 

    The US government is reviewing a policy that permits certain US exports to continue to Huawei, despite an overall push by the Trump and Biden administrations to block the Chinese telecommunications giant from receiving American technology.

    Alan Estevez, a Commerce Department official, told lawmakers Tuesday that the policy is “under assessment” as the agency conducts a “top-to-bottom review of our export control policies related to the [People’s Republic of China].”

    Estevez testified before the House Foreign Affairs Committee, which was holding a hearing to scrutinize China’s impact on US national security.

    In 2019, Huawei was one of a number of Chinese companies placed on the Commerce Department’s Entity List, which prohibits US companies from trading specified items with entities named on the list unless they obtain a license to do so.

    US officials have expressed concerns that Huawei’s 5G wireless networking gear could allow the Chinese government to spy on American communications. Huawei has denied that it poses a security risk, and its founder has said the company would resist any Chinese government effort to obtain its data.

    According to Foreign Affairs Committee chairman Michael McCaul, between January and March of 2022 the Commerce Department approved more than $23 billion in license applications to trade with Chinese-affiliated companies on the Entity List. Confronting Estevez at Tuesday’s hearing, McCaul asked the Commerce Department to square the license approvals with the US government’s wider effort to sideline Huawei and similar companies.

    “A licensing rule of the previous administration that still stands for Huawei allows things below 5G, below cloud-level to go,” Estevez said, “and I will say that all those things are under assessment.”

    Entity List restrictions do not provide for a “blanket embargo” on exports generally, Estevez added, but rather reflect specific rules about particular exports.

    Separately, in 2020 the Commerce Department moved to prevent Huawei’s suppliers from selling the company semiconductor chips made by US-built software and equipment, unless those suppliers also obtained a license.

    Other parts of the US government have also moved against Huawei. The Federal Communications Commission has prohibited US wireless carriers from using federal funding to purchase Huawei networking gear, and last year also banned future approvals of Huawei equipment for sale in the United States, in the first use of the FCC’s equipment authorization authority for a national security purpose.

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  • ASML says ‘rules are being finalized’ on chip export controls to China | CNN Business

    ASML says ‘rules are being finalized’ on chip export controls to China | CNN Business


    Hong Kong
    CNN
     — 

    ASML, a Dutch maker of semiconductor equipment, says “rules are being finalized” on export controls, amid reports that the Netherlands and Japan have joined the United States in restricting sales of some computer chip machinery to China.

    “It is our understanding that steps have been made towards an agreement between governments which, to our understanding, will be focused on advanced chip manufacturing technology, including but not limited to advanced lithography tools,” the company told CNN late Friday in response to questions about export controls to China.

    “Before it will come into effect it has to be detailed out and implemented into legislation which will take time.”

    ASML is known for its prowess in making lithography machines, which uses light to print patterns on silicon. The firm says that step is crucial in the mass production of microchips.

    The company’s response came as Bloomberg, the Wall Street Journal and the Financial Times reported over the weekend that the United States had persuaded the Netherlands and Japan to agree to curb exports of certain chipmaking equipment to China, citing anonymous sources.

    A deal was reached at the White House on Friday, though it was not officially announced, partly due to “concerns by Japan and Netherlands about potential retaliation by China,” according to the Journal, which cited a person familiar with the matter.

    Bloomberg reported that the deal “would extend some export controls the US adopted in October” to Dutch and Japanese companies, including ASML

    (ASML)
    , Nikon

    (NINOY)
    and Tokyo Electron.

    The Biden administration had banned Chinese companies from buying advanced chips and chipmaking equipment without a license. It also restricted the ability of American citizens to provide support for the development or production of chips at certain manufacturing facilities in China.

    The White House did not immediately respond to a request for comment outside US business hours. Nikon and Tokyo Electron declined to comment.

    On Saturday, Japan’s Economy and Trade Minister Yasutoshi Nishimura told reporters that he would “refrain from commenting on diplomatic negotiations.”

    Asked about the three-way talks in Washington, Nishimura said “we would like to respond appropriately while taking into consideration the regulatory trends in each country.”

    Because of its dominance in the market, ASML has been cited by experts as a bellwether of the growing rift between China and the West over access to advanced technology.

    In recent months, the Dutch government has faced pressure from the United States to limit chip-related exports to China, particularly from ASML, according to Xiaomeng Lu, director of geo-technology at the Eurasia Group.

    In its Friday statement, the company said that based on what has been said by government officials and current market conditions, it did not expect any material impact on its financial projections for 2023.

    But ASML said its knowledge of the new rules was still limited, making it difficult to map out “the medium and long-term financial, organizational and global industry-wide impact of new export control rules.”

    “While these rules are being finalized, ASML will continue to engage with the authorities to inform them about the potential impact of any proposed rule in order to assess the impact on the global semiconductor supply chain,” it said.

    It noted that it mainly sold “mature” products to China, and its most advanced lithography technology had already been restricted since 2019.

    Those machines had been prohibited from being sent to China because the Dutch government had “refused to grant it a license under US pressure,” Lu previously told CNN.

    — CNN’s Emiko Jozuka contributed to this report.

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  • As egg prices rise, so do attempts to smuggle them from Mexico, say US Customs officials | CNN

    As egg prices rise, so do attempts to smuggle them from Mexico, say US Customs officials | CNN



    CNN
     — 

    High prices are driving an increase in attempts to bring eggs into the US from Mexico, according to border officials.

    Officers at the San Diego Customs and Border Protection Office have seen an increase in the number of attempts to move eggs across the US-Mexico border, according to a tweet from director of field operations Jennifer De La O.

    “The San Diego Field Office has recently noticed an increase in the number of eggs intercepted at our ports of entry,” wrote De La O in the Tuesday tweet. “As a reminder, uncooked eggs are prohibited entry from Mexico into the U.S. Failure to declare agriculture items can result in penalties of up to $10,000.”

    Bringing uncooked eggs from Mexico into the US is illegal because of the risk of bird flu and Newcastle disease, a contagious virus that affects birds, according to Customs and Border Protection.

    In a statement emailed to CNN, Customs and Border Protection public affairs specialist Gerrelaine Alcordo attributed the rise in attempted egg smuggling to the spiking cost of eggs in the US. A massive outbreak of deadly avian flu among American chicken flocks has caused egg prices to skyrocket, climbing 11.1% from November to December and 59.9% annually, according to the Bureau of Labor Statistics.

    The increase has been reported at the Tijuana-San Diego crossing as well as “other southwest border locations,” Alcordo said.

    For the most part, travelers bringing eggs have declared the eggs while crossing the border. “When that happens the person can abandon the product without consequence,” said Alcordo. “CBP agriculture specialists will collect and then then destroy the eggs (and other prohibited food/ag products) as is the routine course of action.”

    In a few incidents, travelers did not declare their eggs and the products were discovered during inspection. In those cases, the eggs were seized and the travelers received a $300 penalties, Alcordo explained.

    “Penalties can be higher for repeat offenders or commercial size imports,” he added.

    Alcordo emphasized the importance of declaring all food and agricultural products when traveling.

    “While many items may be permissible, it’s best to declare them to avoid possible fines and penalties if they are deemed prohibited,” he said. “If they are declared and deemed prohibited, they can be abandoned without consequence. If they are undeclared and then discovered during an exam the traveler will be subject to penalties.”

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