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Microsoft’s stock surged after a strong earnings report revealed a record $30 billion capital spending forecast for the fiscal first quarter. The software giant’s market cap surpassed $4 trillion in after-hours trading on July 30, marking a key milestone as it joins Nvidia in the exclusive $4 trillion club. Shares of Microsoft jumped 8 per cent following its earnings announcement, lifting the company’s market cap to about $4.1 trillion. This move puts Microsoft in the rarefied ranks alongside Nvidia, which crossed the $4 trillion threshold earlier this month. With the stock up 22 per cent year-to-date, Microsoft is on track to potentially outpace its competitors in capital spending over the next year.<h2>Azure cloud sales and AI investments fuel growth</h2>A major driver behind the company’s surge was its cloud computing business, Azure. Microsoft revealed for the first time that Azure sales had surpassed $75 billion on an annual basis, beating Wall Street’s expectations of $74.62 billion. Azure’s revenue growth was a standout, with a 39 per cent year-over-year increase in the June quarter, outpacing the analyst estimate of 34.75 per cent.For the upcoming fiscal quarter, Microsoft projects Azure revenue growth of 37 per cent, again exceeding analyst expectations of 33.5 per cent. This growth is driven in large part by the company’s heavy investment in artificial intelligence (AI), which has allowed it to develop new products such as the Copilot AI tools. Microsoft reported that Copilot AI tools had surpassed 100 million monthly active users, further showcasing the growing adoption of its AI-powered services.The company’s capital expenditure forecast of $30 billion, which represents the largest for any single quarter, is a clear signal that Microsoft is doubling down on its investments in AI and data centres to meet soaring demand.<h2>Market outlook and competitive edge in AI</h2>Microsoft’s investment strategy and its successful pivot to AI-powered cloud services have positioned the company as a leader in the ongoing AI boom. Although Amazon Web Services (AWS) remains the market leader in cloud services, Microsoft's aggressive spending in AI and data infrastructure has paid off handsomely.The company’s ties to OpenAI, which have allowed it to integrate cutting-edge AI models into products like Microsoft 365, have also helped boost its competitive edge. But investor confidence remains strong, despite concerns over the ongoing renegotiation of Microsoft’s deal with OpenAI, which could affect its stake and access to future technologies.For now, Microsoft appears to be managing this risk effectively by developing in-house AI solutions and expanding its AI model lineup with new partnerships, such as with xAI, Meta, and Mistral.As of July 30, Microsoft’s stock closed at $513.24, continuing its strong performance for 2025. With capital spending poised to reach new heights and Azure leading the way in cloud services, Microsoft’s growth shows no signs of slowing down. As the company focuses on expanding its AI and cloud infrastructure, it remains a key player in the tech world, likely to continue outperforming its competitors in the coming quarters.&nbsp;(With inputs from agencies)

Shares of Microsoft jumped 8 per cent following its earnings announcement, lifting the company’s market cap to about $4.1 trillion. This move puts Microsoft in the rarefied ranks alongside Nvidia, which crossed the $4 trillion threshold earlier this month.

Microsoft’s stock surged after a strong earnings report revealed a record $30 billion capital spending forecast for the fiscal first quarter. The software giant’s market cap surpassed $4 trillion in after-hours trading on July 30, marking a key milestone as it joins Nvidia in the exclusive $4 trillion club. Shares of Microsoft jumped 8 per cent following its earnings announcement, lifting the company’s market cap to about $4.1 trillion. This move puts Microsoft in the rarefied ranks alongside Nvidia, which crossed the $4 trillion threshold earlier this month. With the stock up 22 per cent year-to-date, Microsoft is on track to potentially outpace its competitors in capital spending over the next year. Azure cloud sales and AI investments fuel growth A major driver behind the company’s surge was its cloud computing business, Azure. Microsoft revealed for the first time that Azure sales had surpassed $75 billion on an annual basis, beating Wall Street’s expectations of $74.62 billion. Azure’s revenue growth was a standout, with a 39 per cent year-over-year increase in the June quarter, outpacing the analyst estimate of 34.75 per cent. For the upcoming fiscal quarter, Microsoft projects Azure revenue growth of 37 per cent, again exceeding analyst expectations of 33.5 per cent. This growth is driven in large part by the company’s heavy investment in artificial intelligence (AI), which has allowed it to develop new products such as the Copilot AI tools. Microsoft reported that Copilot AI tools had surpassed 100 million monthly active users, further showcasing the growing adoption of its AI-powered services. The company’s capital expenditure forecast of $30 billion, which represents the largest for any single quarter, is a clear signal that Microsoft is doubling down on its investments in AI and data centres to meet soaring demand. Market outlook and competitive edge in AI Microsoft’s investment strategy and its successful pivot to AI-powered cloud services have positioned the company as a leader in the ongoing AI boom. Although Amazon Web Services (AWS) remains the market leader in cloud services, Microsoft's aggressive spending in AI and data infrastructure has paid off handsomely. The company’s ties to OpenAI, which have allowed it to integrate cutting-edge AI models into products like Microsoft 365, have also helped boost its competitive edge. But investor confidence remains strong, despite concerns over the ongoing renegotiation of Microsoft’s deal with OpenAI, which could affect its stake and access to future technologies. For now, Microsoft appears to be managing this risk effectively by developing in-house AI solutions and expanding its AI model lineup with new partnerships, such as with xAI, Meta, and Mistral. As of July 30, Microsoft’s stock closed at $513.24, continuing its strong performance for 2025. With capital spending poised to reach new heights and Azure leading the way in cloud services, Microsoft’s growth shows no signs of slowing down. As the company focuses on expanding its AI and cloud infrastructure, it remains a key player in the tech world, likely to continue outperforming its competitors in the coming quarters. (With inputs from agencies)

Shares of Microsoft jumped 8 per cent following its earnings announcement, lifting the company’s market cap to about $4.1 trillion. This move puts Microsoft in the rarefied ranks alongside Nvidia, which crossed the $4 trillion threshold earlier this month.

Microsoft’s record capital spending and Azure growth push stock to $4 trillion market cap

China’s manufacturing activity continued its downward trend in July, showing signs of economic deceleration despite the easing of US tariffs. According to data released by China’s National Bureau of Statistics (NBS), the country’s official Purchasing Managers' Index (PMI) fell to 49.3, down from 49.7 in June. A reading below 50 indicates contraction in manufacturing activity, and July's figure marked the lowest level since April. This data came in below market expectations, which had forecasted the PMI would hold steady at 49.7. The contraction in manufacturing comes amid persistent domestic and external challenges. Notably, a series of adverse weather events, including heavy rains, high temperatures, and flooding in several regions, have strained production. Additionally, the seasonal off-peak period for manufacturing has contributed to lower output.&nbsp;Experts also highlighted that while US-China trade relations have cooled following a truce, uncertainties regarding tariffs and weaker domestic consumption continue to weigh on China’s economy. The data suggests that the boost from the trade truce is fading. While the US and China agreed in May to extend a 90-day tariff suspension, the looming expiration of the truce in mid-August, coupled with shifting production to lower-tariff countries like Vietnam, poses challenges. US tariffs on Chinese goods, which had been temporarily paused, could escalate once again, dampening export momentum for the second half of the year.<h2>Export orders and domestic demand continue to weaken</h2>New export orders were a key concern in the July data. The sub-index for new export orders remained in contraction for the 15th consecutive month, dipping to 47.1 from 47.7 in June. This decline points to the fading strength of China’s export sector, which had surged in the first half of the year in anticipation of tariff hikes. As the front-loaded shipments slow, a longer-term decline in export demand appears inevitable.On the domestic front, manufacturing demand was equally tepid. The new order index, which measures domestic demand for manufactured goods, also contracted, falling to 49.4 from 50.2 in June. This suggests that despite a modest recovery in the second quarter, the Chinese economy continues to struggle with sluggish household consumption, low private sector investment, and a real estate market weighed down by excess inventory and overcapacity in key industries.<h2>Mixed signals from services and economic support measures</h2>Adding to the concerns, the official non-manufacturing PMI, which includes services and construction, also saw a decline in July. The services PMI fell to 50.1, down from 50.5 in June, signalling that growth in the sector is slowing down. Despite the summer travel season boosting certain sectors like air transport and postal services, the overall services sector, including real estate and residential services, has seen weakening demand.Even though the PMI data paints a picture of a sluggish economy, China is not without policy support. In a move aimed at rebalancing the economy, Beijing has announced childcare subsidies to boost consumption and address the country’s demographic challenges. The scheme will offer 3,600 yuan ($501) annually until a child reaches the age of three, hoping to ease the burden on young families and encourage higher birth rates. This could eventually lead to a rebalancing of China’s economy, shifting from an export-driven model to one that relies more on domestic consumption.<h2>Economic slowdown is a real concern</h2>Despite the efforts made by the Chinese government, concerns about the future trajectory of China’s economy persist. Goldman Sachs analysts highlighted that weak manufacturing, along with an ongoing property market slowdown, suggests that economic stimulus might be needed to prevent further deceleration. While China’s GDP grew 5.2 per cent in the second quarter, well above expectations, analysts now forecast a significant slowdown in the second half of the year, especially if the tariffs are re-imposed.While some industries, such as high-tech manufacturing and high-end equipment production, showed signs of resilience, the broader outlook remains uncertain. Analysts suggest that the ongoing trade tensions and lacklustre domestic demand may stifle recovery efforts. As for the equities market, Hong Kong and mainland Chinese stocks took a hit, reflecting concerns about the country’s economic prospects.The PMI data is a strong indicator of an economic slowdown. With key indicators—such as manufacturing activity, new export orders, and domestic demand—contracting, China faces mounting challenges in sustaining its recovery. The fading impact of the trade truce, compounded by weak domestic consumption and industrial deflation, suggests that the economy is at a critical juncture.&nbsp;(With inputs fron agencies)

The contraction in manufacturing comes amid persistent domestic and external challenges. Notably, a series of adverse weather events, including heavy rains, high temperatures, and flooding in several regions, have strained production.

China’s manufacturing activity continued its downward trend in July, showing signs of economic deceleration despite the easing of US tariffs. According to data released by China’s National Bureau of Statistics (NBS), the country’s official Purchasing Managers' Index (PMI) fell to 49.3, down from 49.7 in June. A reading below 50 indicates contraction in manufacturing activity, and July's figure marked the lowest level since April. This data came in below market expectations, which had forecasted the PMI would hold steady at 49.7. The contraction in manufacturing comes amid persistent domestic and external challenges. Notably, a series of adverse weather events, including heavy rains, high temperatures, and flooding in several regions, have strained production. Additionally, the seasonal off-peak period for manufacturing has contributed to lower output. Experts also highlighted that while US-China trade relations have cooled following a truce, uncertainties regarding tariffs and weaker domestic consumption continue to weigh on China’s economy. The data suggests that the boost from the trade truce is fading. While the US and China agreed in May to extend a 90-day tariff suspension, the looming expiration of the truce in mid-August, coupled with shifting production to lower-tariff countries like Vietnam, poses challenges. US tariffs on Chinese goods, which had been temporarily paused, could escalate once again, dampening export momentum for the second half of the year. Export orders and domestic demand continue to weaken New export orders were a key concern in the July data. The sub-index for new export orders remained in contraction for the 15th consecutive month, dipping to 47.1 from 47.7 in June. This decline points to the fading strength of China’s export sector, which had surged in the first half of the year in anticipation of tariff hikes. As the front-loaded shipments slow, a longer-term decline in export demand appears inevitable. On the domestic front, manufacturing demand was equally tepid. The new order index, which measures domestic demand for manufactured goods, also contracted, falling to 49.4 from 50.2 in June. This suggests that despite a modest recovery in the second quarter, the Chinese economy continues to struggle with sluggish household consumption, low private sector investment, and a real estate market weighed down by excess inventory and overcapacity in key industries. Mixed signals from services and economic support measures Adding to the concerns, the official non-manufacturing PMI, which includes services and construction, also saw a decline in July. The services PMI fell to 50.1, down from 50.5 in June, signalling that growth in the sector is slowing down. Despite the summer travel season boosting certain sectors like air transport and postal services, the overall services sector, including real estate and residential services, has seen weakening demand. Even though the PMI data paints a picture of a sluggish economy, China is not without policy support. In a move aimed at rebalancing the economy, Beijing has announced childcare subsidies to boost consumption and address the country’s demographic challenges. The scheme will offer 3,600 yuan ($501) annually until a child reaches the age of three, hoping to ease the burden on young families and encourage higher birth rates. This could eventually lead to a rebalancing of China’s economy, shifting from an export-driven model to one that relies more on domestic consumption. Economic slowdown is a real concern Despite the efforts made by the Chinese government, concerns about the future trajectory of China’s economy persist. Goldman Sachs analysts highlighted that weak manufacturing, along with an ongoing property market slowdown, suggests that economic stimulus might be needed to prevent further deceleration. While China’s GDP grew 5.2 per cent in the second quarter, well above expectations, analysts now forecast a significant slowdown in the second half of the year, especially if the tariffs are re-imposed. While some industries, such as high-tech manufacturing and high-end equipment production, showed signs of resilience, the broader outlook remains uncertain. Analysts suggest that the ongoing trade tensions and lacklustre domestic demand may stifle recovery efforts. As for the equities market, Hong Kong and mainland Chinese stocks took a hit, reflecting concerns about the country’s economic prospects. The PMI data is a strong indicator of an economic slowdown. With key indicators—such as manufacturing activity, new export orders, and domestic demand—contracting, China faces mounting challenges in sustaining its recovery. The fading impact of the trade truce, compounded by weak domestic consumption and industrial deflation, suggests that the economy is at a critical juncture. (With inputs fron agencies)

The contraction in manufacturing comes amid persistent domestic and external challenges. Notably, a series of adverse weather events, including heavy rains, high temperatures, and flooding in several regions, have strained production.

China’s manufacturing drops to lowest since April amid sluggish demand and exports

The United States, under President Donald Trump’s administration, has imposed a hefty 25 per cent tariff, plus an unspecified penalty for buying Russian oil and weapons, on goods imported from India, a move that has sent shockwaves through the trade relations between the two countries. This decision follows months of negotiations, which ultimately failed to reach a satisfactory deal. The new tariff set to be imposed from August 1 is expected to impact a range of sectors critical to India’s economy, from electronics and pharmaceuticals to textiles and gems.<h2>Why couldn't India and the US reach a deal?</h2>Trade talks between India and the US have been ongoing for months, but several points of contention remain unresolved. Here are the primary reasons why the two countries couldn't finalise a deal:1. High Indian tariffs: The US has long criticised India’s high tariffs on several goods, particularly in agriculture, which remain among the highest in the world. For example, India imposes nearly 39 per cent on agricultural products and up to 50 per cent on certain items like apples and corn. While India has been open to reducing these tariffs, it has resisted offering full access to its agricultural markets, fearing the impact on its domestic farmers.2. Market access: The US has been pushing India to open up its agricultural and dairy markets to American exports, a demand India has been unwilling to fully meet. There is a major concern in India that allowing in large-scale imports of items like genetically modified soybeans, wheat, and corn could harm local farmers and disrupt the agricultural balance.3. Geopolitical tensions: There’s also an underlying geopolitical element at play. India’s continued military ties with Russia, especially as it remains one of Russia’s largest buyers of energy and military equipment, have been a thorn in the side of US-India relations. President Trump has cited this as a major issue, criticising India for buying Russian oil despite global sanctions on Russia over its actions in Ukraine. But India, which imports 80 per cent of its energy needs, stated that maintaining diverse sources of energy is critical for its national economy.4. Non-tariff barriers: The US has also raised concerns about India’s rising quality and safety barriers on imports. While these regulations are meant to protect local industries, they have been criticised for being restrictive and unfair to foreign exporters. This has been another significant roadblock in the negotiations.<h2>Impact of the tariff on Indian sectors</h2>The imposition of the 25 per cent tariff will have far-reaching consequences for key Indian industries that depend heavily on exports to the US. Here’s how various sectors are expected to be affected:1. Smartphones and electronicsIndia’s electronics industry, especially its smartphone sector, is among the hardest hit. India recently overtook China to become the top supplier of smartphones to the US, with a 44 per cent market share in the June quarter of 2025. The new tariffs are expected to significantly raise prices for US consumers, making Indian smartphones less competitive. In 2025, Indian electronics exports to the US exceeded $3 billion, and this will likely decline as a result of the tariff.2. Pharmaceuticals and genericsPharmaceuticals, another critical export sector for India, are also at risk. India is a leading exporter of generic drugs and active pharmaceutical ingredients (APIs) to the US, contributing over $7.5 billion annually. The higher tariffs could drive up the cost of these drugs in the US, potentially affecting access to affordable healthcare and weakening India’s position as the “world’s pharmacy.” Smaller players in the sector might suffer the most from these changes, especially if alternative suppliers from countries with lower tariffs, like Vietnam, begin to capture market share.3. Textiles and garmentsIndia’s textile industry, including garments, cotton fabric, and handloom products, is another area poised to feel the brunt of this tariff. The $2.5 billion worth of textiles exported to the US could face stiff price hikes, making Indian products less attractive to American buyers compared to competitors from other countries with lower tariffs, such as Vietnam and Indonesia. Smaller Indian exporters may find themselves squeezed out of the US market.4. Gems and jewelleryDiamonds, gold jewellery, and other gems are a major export category, with the US importing $8.5 billion worth from India in 2025. The tariffs could make Indian gems less competitive in the global market, especially as other suppliers, including China and Thailand, can offer similar products with lower costs due to their favourable trade terms with the US.5. Petroleum productsIndia exports about $20 billion worth of petroleum products to the US, including diesel, jet fuel, and LPG. This tariff is expected to add significant pressure on these products, especially as the US pushes for more stringent restrictions on imports, particularly from countries like India that are major buyers of Russian energy.<h2>Broader impact on the Indian economy</h2>The imposition of these tariffs comes at a sensitive time, as global supply chain disruptions and economic recovery post-pandemic have already put a strain on the economy. The US is India’s largest trading partner, and the $131 billion trade relationship is now under serious threat, as India will struggle to maintain its position as a major exporter to the US without making significant adjustments. The Indian rupee has already seen a dip in value, reflecting investor uncertainty about the long-term effects of the tariff.India's government is now under pressure to mitigate the damage by exploring alternative markets like the European Union, the United Kingdom, and West Asia—regions where India has already signed new trade deals. However, given that the US remains India’s largest export partner, it’s unrealistic to expect these alternative markets to fully compensate for the losses in the US, at least in the near future.India is already exploring ways to counteract the negative impact of this tariff by seeking to negotiate new trade agreements or make concessions in other sectors like defence and LNG exports. Prime Minister Narendra Modi and President Trump may hold further discussions to resolve this issue, but it remains uncertain whether a quick resolution is possible. The looming uncertainty in trade negotiations between the two countries is likely to continue impacting Indian exporters in the coming months.While the US tariffs on India may seem like a short-term setback, their long-term implications could reshape the nature of US-India trade and India’s export-driven economy. The next few months will be crucial in determining whether India can regain its footing in the US market or if new trading alliances can fill the gap.

The US is India’s largest trading partner, and the $131 billion trade relationship is now under serious threat, as India will struggle to maintain its position as a major exporter to the US without making significant adjustments.

The United States, under President Donald Trump’s administration, has imposed a hefty 25 per cent tariff, plus an unspecified penalty for buying Russian oil and weapons, on goods imported from India, a move that has sent shockwaves through the trade relations between the two countries. This decision follows months of negotiations, which ultimately failed to reach a satisfactory deal. The new tariff set to be imposed from August 1 is expected to impact a range of sectors critical to India’s economy, from electronics and pharmaceuticals to textiles and gems. Why couldn't India and the US reach a deal? Trade talks between India and the US have been ongoing for months, but several points of contention remain unresolved. Here are the primary reasons why the two countries couldn't finalise a deal: 1. High Indian tariffs: The US has long criticised India’s high tariffs on several goods, particularly in agriculture, which remain among the highest in the world. For example, India imposes nearly 39 per cent on agricultural products and up to 50 per cent on certain items like apples and corn. While India has been open to reducing these tariffs, it has resisted offering full access to its agricultural markets, fearing the impact on its domestic farmers. 2. Market access: The US has been pushing India to open up its agricultural and dairy markets to American exports, a demand India has been unwilling to fully meet. There is a major concern in India that allowing in large-scale imports of items like genetically modified soybeans, wheat, and corn could harm local farmers and disrupt the agricultural balance. 3. Geopolitical tensions: There’s also an underlying geopolitical element at play. India’s continued military ties with Russia, especially as it remains one of Russia’s largest buyers of energy and military equipment, have been a thorn in the side of US-India relations. President Trump has cited this as a major issue, criticising India for buying Russian oil despite global sanctions on Russia over its actions in Ukraine. But India, which imports 80 per cent of its energy needs, stated that maintaining diverse sources of energy is critical for its national economy. 4. Non-tariff barriers: The US has also raised concerns about India’s rising quality and safety barriers on imports. While these regulations are meant to protect local industries, they have been criticised for being restrictive and unfair to foreign exporters. This has been another significant roadblock in the negotiations. Impact of the tariff on Indian sectors The imposition of the 25 per cent tariff will have far-reaching consequences for key Indian industries that depend heavily on exports to the US. Here’s how various sectors are expected to be affected: 1. Smartphones and electronics India’s electronics industry, especially its smartphone sector, is among the hardest hit. India recently overtook China to become the top supplier of smartphones to the US, with a 44 per cent market share in the June quarter of 2025. The new tariffs are expected to significantly raise prices for US consumers, making Indian smartphones less competitive. In 2025, Indian electronics exports to the US exceeded $3 billion, and this will likely decline as a result of the tariff. 2. Pharmaceuticals and generics Pharmaceuticals, another critical export sector for India, are also at risk. India is a leading exporter of generic drugs and active pharmaceutical ingredients (APIs) to the US, contributing over $7.5 billion annually. The higher tariffs could drive up the cost of these drugs in the US, potentially affecting access to affordable healthcare and weakening India’s position as the “world’s pharmacy.” Smaller players in the sector might suffer the most from these changes, especially if alternative suppliers from countries with lower tariffs, like Vietnam, begin to capture market share. 3. Textiles and garments India’s textile industry, including garments, cotton fabric, and handloom products, is another area poised to feel the brunt of this tariff. The $2.5 billion worth of textiles exported to the US could face stiff price hikes, making Indian products less attractive to American buyers compared to competitors from other countries with lower tariffs, such as Vietnam and Indonesia. Smaller Indian exporters may find themselves squeezed out of the US market. 4. Gems and jewellery Diamonds, gold jewellery, and other gems are a major export category, with the US importing $8.5 billion worth from India in 2025. The tariffs could make Indian gems less competitive in the global market, especially as other suppliers, including China and Thailand, can offer similar products with lower costs due to their favourable trade terms with the US. 5. Petroleum products India exports about $20 billion worth of petroleum products to the US, including diesel, jet fuel, and LPG. This tariff is expected to add significant pressure on these products, especially as the US pushes for more stringent restrictions on imports, particularly from countries like India that are major buyers of Russian energy. Broader impact on the Indian economy The imposition of these tariffs comes at a sensitive time, as global supply chain disruptions and economic recovery post-pandemic have already put a strain on the economy. The US is India’s largest trading partner, and the $131 billion trade relationship is now under serious threat, as India will struggle to maintain its position as a major exporter to the US without making significant adjustments. The Indian rupee has already seen a dip in value, reflecting investor uncertainty about the long-term effects of the tariff. India's government is now under pressure to mitigate the damage by exploring alternative markets like the European Union, the United Kingdom, and West Asia—regions where India has already signed new trade deals. However, given that the US remains India’s largest export partner, it’s unrealistic to expect these alternative markets to fully compensate for the losses in the US, at least in the near future. India is already exploring ways to counteract the negative impact of this tariff by seeking to negotiate new trade agreements or make concessions in other sectors like defence and LNG exports. Prime Minister Narendra Modi and President Trump may hold further discussions to resolve this issue, but it remains uncertain whether a quick resolution is possible. The looming uncertainty in trade negotiations between the two countries is likely to continue impacting Indian exporters in the coming months. While the US tariffs on India may seem like a short-term setback, their long-term implications could reshape the nature of US-India trade and India’s export-driven economy. The next few months will be crucial in determining whether India can regain its footing in the US market or if new trading alliances can fill the gap.

The US is India’s largest trading partner, and the $131 billion trade relationship is now under serious threat, as India will struggle to maintain its position as a major exporter to the US without making significant adjustments.

The US tariff hit on India: What’s happening and what’s at stake?

India’s most popular digital payment system, the Unified Payments Interface (UPI), is undergoing a significant backend overhaul from August 1, 2025, as the National Payments Corporation of India (NPCI) introduces a fresh set of rules aimed at making the platform faster, more secure, and less prone to overload during peak hours. The changes, although largely invisible to casual users, are expected to streamline how frequently used services such as balance checks, account fetch requests, and auto-debit transactions operate in the background.<h2>Daily usage limits for key UPI functions</h2>One of the most significant changes is the introduction of daily limits on UPI-related requests. Starting August 1, users will be able to:<ul><li>Check their account balance only 50 times per day on each UPI app (like PhonePe, Paytm, or Google Pay).</li><li>Fetch linked account information (like listing bank accounts tied to the mobile number) a maximum of 25 times per day.</li><li>Check the status of a pending transaction only 3 times, with a mandatory 90-second gap between each attempt.</li></ul>NPCI believes these limits will help ease the pressure on backend servers, particularly during high-traffic periods, while maintaining smooth functionality for most users. However, to reduce the need for manual balance checks, banks will now be required to display updated balances automatically after each successful transaction.<h2>Scheduled processing for autopay and reversals</h2>Another major change is to UPI autopay, the feature used for subscriptions, SIPs (systematic investment plans), and recurring bill payments. These transactions will now be processed only in three fixed time slots:<ul><li>Before 10 AM</li><li>Between 1 PM and 5 PM</li><li>After 9:30 PM</li></ul>This scheduling is aimed at reducing congestion during peak payment hours (10 AM–1 PM and 5 PM–9:30 PM), when the platform is under maximum load. In addition, payment reversal requests will be capped at 10 per month, with a maximum of 5 allowed per sender.<h2>Stronger oversight, greater transparency</h2>The NPCI will also be closely monitoring how UPI apps and partner banks use critical APIs (application programming interfaces), focusing on their transaction-per-second (TPS) loads and request frequency. Non-compliance could lead to penalties or restricted access.In a welcome move for fraud prevention, users will now see the recipient’s bank name before confirming a transaction, adding another layer of transparency. The reforms come as UPI continues to surge, processing billions of transactions each month. The International Monetary Fund recently praised India’s payment infrastructure as the fastest globally, with UPI playing a central role since its launch in 2016.

The changes made in the Unified Payments Interface, although largely invisible to casual users, are expected to streamline how frequently used services such as balance checks, account fetch requests, and auto-debit transactions operate in the background.

India’s most popular digital payment system, the Unified Payments Interface (UPI), is undergoing a significant backend overhaul from August 1, 2025, as the National Payments Corporation of India (NPCI) introduces a fresh set of rules aimed at making the platform faster, more secure, and less prone to overload during peak hours. The changes, although largely invisible to casual users, are expected to streamline how frequently used services such as balance checks, account fetch requests, and auto-debit transactions operate in the background. Daily usage limits for key UPI functions One of the most significant changes is the introduction of daily limits on UPI-related requests. Starting August 1, users will be able to: Check their account balance only 50 times per day on each UPI app (like PhonePe, Paytm, or Google Pay). Fetch linked account information (like listing bank accounts tied to the mobile number) a maximum of 25 times per day. Check the status of a pending transaction only 3 times, with a mandatory 90-second gap between each attempt. NPCI believes these limits will help ease the pressure on backend servers, particularly during high-traffic periods, while maintaining smooth functionality for most users. However, to reduce the need for manual balance checks, banks will now be required to display updated balances automatically after each successful transaction. Scheduled processing for autopay and reversals Another major change is to UPI autopay, the feature used for subscriptions, SIPs (systematic investment plans), and recurring bill payments. These transactions will now be processed only in three fixed time slots: Before 10 AM Between 1 PM and 5 PM After 9:30 PM This scheduling is aimed at reducing congestion during peak payment hours (10 AM–1 PM and 5 PM–9:30 PM), when the platform is under maximum load. In addition, payment reversal requests will be capped at 10 per month, with a maximum of 5 allowed per sender. Stronger oversight, greater transparency The NPCI will also be closely monitoring how UPI apps and partner banks use critical APIs (application programming interfaces), focusing on their transaction-per-second (TPS) loads and request frequency. Non-compliance could lead to penalties or restricted access. In a welcome move for fraud prevention, users will now see the recipient’s bank name before confirming a transaction, adding another layer of transparency. The reforms come as UPI continues to surge, processing billions of transactions each month. The International Monetary Fund recently praised India’s payment infrastructure as the fastest globally, with UPI playing a central role since its launch in 2016.

The changes made in the Unified Payments Interface, although largely invisible to casual users, are expected to streamline how frequently used services such as balance checks, account fetch requests, and auto-debit transactions operate in the background.

UPI set for major revamp from August 1. Here’s what will change

Australia’s consumer price growth slowed to its weakest pace in more than four years in the June quarter, boosting expectations that the Reserve Bank of Australia (RBA) will resume interest rate cuts as early as August. Headline inflation rose just 2.1 per cent year-on-year, down from 2.4 per cent in the March quarter and below the 2.2 per cent median forecast from economists polled by Reuters. On a quarterly basis, the consumer price index (CPI) climbed 0.8 per cent, while core inflation, measured by the trimmed mean, rose 0.6 per cent, also softer than expectations.The annual pace of core inflation fell to 2.7 per cent, the lowest since mid-2021 and near the midpoint of the RBA’s 2-3 per cent target range. The figures, released on July 30 by the Australian Bureau of Statistics (ABS), reinforce the view that inflation has largely been tamed, especially with temporary government cost-of-living subsidies still exerting downward pressure on prices. Market reaction was swift, with traders pricing in a near-100 per cent chance of a 25-basis-point rate cut at the RBA’s next meeting on August 12. The Australian dollar held steady around $0.6512, and bond yields dipped as investors digested the softer inflation print.<h2>Services, housing prices ease; supply issues still bite</h2>Much of the disinflation stemmed from a broad-based easing in price pressures, particularly in housing, healthcare, and services. Notably, annual services inflation slowed to 3.3 per cent, the lowest in three years, helped by falling rents and insurance costs. The cost of new dwellings, which surged during the 2022-23 construction boom, rose just 0.7 per cent year-on-year, down sharply from a 1.6 per cent increase in Q1 and a peak of nearly 21 per cent two years ago. Builders have reportedly responded to soft demand with discounts and promotions.Still, some categories continued to face upward pressure. Egg prices spiked 19.1 per cent over the year due to avian flu-related supply disruptions, and non-alcoholic beverages became more expensive amid higher global prices for coffee, tea, and cocoa. Non-tradables, typically influenced by domestic conditions like rents and utility costs, rose 0.7 per cent in the quarter, while tradables, subject to global forces and currency movements, climbed 1 per cent.<h2>RBA expected to resume cuts amid weak growth outlook</h2>The inflation data comes as Australia’s broader economic momentum remains sluggish. GDP grew just 1.3 per cent year-on-year in Q1, missing forecasts, and unemployment rose to a 3.5-year high of 4.3 per cent in June.RBA Governor Michele Bullock had warned earlier this month that headline inflation might temporarily pick up later in the year as rebates expire. However, she also signalled a shift in focus toward supporting growth, noting that Australia didn’t hike rates as aggressively as other major economies during the pandemic-era inflation surge.Analysts at the Commonwealth Bank and Bank of America now expect a rate cut in August, with more to follow. AMP forecasts four additional cuts, bringing the cash rate down to 2.85 per cent by mid-2026.&nbsp;(With inputs from agencies)

The figures on Australia’s inflation, released on July 30 by the Australian Bureau of Statistics (ABS), reinforce the view that inflation has largely been tamed, especially with temporary government cost-of-living subsidies still exerting downward pressure on prices.

Australia’s consumer price growth slowed to its weakest pace in more than four years in the June quarter, boosting expectations that the Reserve Bank of Australia (RBA) will resume interest rate cuts as early as August. Headline inflation rose just 2.1 per cent year-on-year, down from 2.4 per cent in the March quarter and below the 2.2 per cent median forecast from economists polled by Reuters. On a quarterly basis, the consumer price index (CPI) climbed 0.8 per cent, while core inflation, measured by the trimmed mean, rose 0.6 per cent, also softer than expectations. The annual pace of core inflation fell to 2.7 per cent, the lowest since mid-2021 and near the midpoint of the RBA’s 2-3 per cent target range. The figures, released on July 30 by the Australian Bureau of Statistics (ABS), reinforce the view that inflation has largely been tamed, especially with temporary government cost-of-living subsidies still exerting downward pressure on prices. Market reaction was swift, with traders pricing in a near-100 per cent chance of a 25-basis-point rate cut at the RBA’s next meeting on August 12. The Australian dollar held steady around $0.6512, and bond yields dipped as investors digested the softer inflation print. Services, housing prices ease; supply issues still bite Much of the disinflation stemmed from a broad-based easing in price pressures, particularly in housing, healthcare, and services. Notably, annual services inflation slowed to 3.3 per cent, the lowest in three years, helped by falling rents and insurance costs. The cost of new dwellings, which surged during the 2022-23 construction boom, rose just 0.7 per cent year-on-year, down sharply from a 1.6 per cent increase in Q1 and a peak of nearly 21 per cent two years ago. Builders have reportedly responded to soft demand with discounts and promotions. Still, some categories continued to face upward pressure. Egg prices spiked 19.1 per cent over the year due to avian flu-related supply disruptions, and non-alcoholic beverages became more expensive amid higher global prices for coffee, tea, and cocoa. Non-tradables, typically influenced by domestic conditions like rents and utility costs, rose 0.7 per cent in the quarter, while tradables, subject to global forces and currency movements, climbed 1 per cent. RBA expected to resume cuts amid weak growth outlook The inflation data comes as Australia’s broader economic momentum remains sluggish. GDP grew just 1.3 per cent year-on-year in Q1, missing forecasts, and unemployment rose to a 3.5-year high of 4.3 per cent in June. RBA Governor Michele Bullock had warned earlier this month that headline inflation might temporarily pick up later in the year as rebates expire. However, she also signalled a shift in focus toward supporting growth, noting that Australia didn’t hike rates as aggressively as other major economies during the pandemic-era inflation surge. Analysts at the Commonwealth Bank and Bank of America now expect a rate cut in August, with more to follow. AMP forecasts four additional cuts, bringing the cash rate down to 2.85 per cent by mid-2026. (With inputs from agencies)

The figures on Australia’s inflation, released on July 30 by the Australian Bureau of Statistics (ABS), reinforce the view that inflation has largely been tamed, especially with temporary government cost-of-living subsidies still exerting downward pressure on prices.

Australia’s inflation cools sharply, paving way for August rate cut

France’s economy unexpectedly accelerated in the second quarter of 2025, expanding 0.3 per cent from the previous quarter, according to official data released by statistics agency Insee on July 30. The figure outperformed economists’ expectations of 0.1 per cent growth and marks an improvement over the 0.1 per cent expansion seen in Q1. The positive headline number was largely driven by increased inventory buildup, which masked deeper signs of domestic weakness. Household consumption edged up by 0.1 per cent, a modest improvement following a 0.3 per cent decline in the first quarter, while business investment fell by 0.4 per cent.&nbsp;Trade continued to weigh on the economy, subtracting from overall output as exports underperformed. Despite the surprising growth figure, France’s economic outlook remains fragile, constrained by ongoing political instability, subdued consumer confidence, and uncertainties tied to transatlantic trade policy.<h2>Political fragility, trade tensions cast long shadow</h2>The better-than-expected growth offers a brief reprieve for Prime Minister Francois Bayrou’s administration, which has been struggling to restore fiscal discipline and political cohesion after the government collapsed in late 2024. Though a new financial bill was passed in February, the ruling coalition still lacks a parliamentary majority and risks collapse if further austerity measures are rejected later this year. The government is targeting a reduction in the budget deficit from 5.4 per cent of GDP in 2025 to 4.6 per cent in 2026, with an eye on the European Union’s 3 per cent threshold by 2029.&nbsp;Finance Minister Eric Lombard welcomed the growth data as a sign that the French economy is “resisting relatively well, given the situation,” including trade uncertainty following the weekend announcement of a preliminary EU-US tariff deal. While the trade agreement may offer some stability going forward, it includes provisions for increased European spending on US military equipment, which analysts say could limit France’s ability to reduce domestic spending and rein in its deficit.<h2>Underlying indicators still point to economic weakness</h2>Beneath the headline GDP number, many economic indicators remain soft. Business sentiment in France has hovered below long-term averages for over a year, while household confidence is even weaker. Insee’s monthly measure of household savings propensity reached a record high, suggesting consumers are becoming increasingly cautious. Consumer spending in June provided a bright spot, rising 0.6 per cent month-over-month, beating expectations for a contraction, but analysts warn this may not indicate a sustained rebound.While Q2’s surprise acceleration offers some breathing space, France’s growth path remains dependent on a complex mix of domestic policy decisions, European fiscal rules, and the evolving contours of global trade.

The positive headline number was driven by increased inventory buildup, which masked deeper signs of domestic weakness. Household consumption edged up by 0.1 per cent, a modest improvement following a 0.3 per cent decline in the first quarter, while business investment fell by 0.4 per cent.

France’s economy unexpectedly accelerated in the second quarter of 2025, expanding 0.3 per cent from the previous quarter, according to official data released by statistics agency Insee on July 30. The figure outperformed economists’ expectations of 0.1 per cent growth and marks an improvement over the 0.1 per cent expansion seen in Q1. The positive headline number was largely driven by increased inventory buildup, which masked deeper signs of domestic weakness. Household consumption edged up by 0.1 per cent, a modest improvement following a 0.3 per cent decline in the first quarter, while business investment fell by 0.4 per cent. Trade continued to weigh on the economy, subtracting from overall output as exports underperformed. Despite the surprising growth figure, France’s economic outlook remains fragile, constrained by ongoing political instability, subdued consumer confidence, and uncertainties tied to transatlantic trade policy. Political fragility, trade tensions cast long shadow The better-than-expected growth offers a brief reprieve for Prime Minister Francois Bayrou’s administration, which has been struggling to restore fiscal discipline and political cohesion after the government collapsed in late 2024. Though a new financial bill was passed in February, the ruling coalition still lacks a parliamentary majority and risks collapse if further austerity measures are rejected later this year. The government is targeting a reduction in the budget deficit from 5.4 per cent of GDP in 2025 to 4.6 per cent in 2026, with an eye on the European Union’s 3 per cent threshold by 2029. Finance Minister Eric Lombard welcomed the growth data as a sign that the French economy is “resisting relatively well, given the situation,” including trade uncertainty following the weekend announcement of a preliminary EU-US tariff deal. While the trade agreement may offer some stability going forward, it includes provisions for increased European spending on US military equipment, which analysts say could limit France’s ability to reduce domestic spending and rein in its deficit. Underlying indicators still point to economic weakness Beneath the headline GDP number, many economic indicators remain soft. Business sentiment in France has hovered below long-term averages for over a year, while household confidence is even weaker. Insee’s monthly measure of household savings propensity reached a record high, suggesting consumers are becoming increasingly cautious. Consumer spending in June provided a bright spot, rising 0.6 per cent month-over-month, beating expectations for a contraction, but analysts warn this may not indicate a sustained rebound. While Q2’s surprise acceleration offers some breathing space, France’s growth path remains dependent on a complex mix of domestic policy decisions, European fiscal rules, and the evolving contours of global trade.

The positive headline number was driven by increased inventory buildup, which masked deeper signs of domestic weakness. Household consumption edged up by 0.1 per cent, a modest improvement following a 0.3 per cent decline in the first quarter, while business investment fell by 0.4 per cent.

France's economic growth beats forecasts despite trade, political headwinds

Singapore Airlines (SIA) has reported a steep 58.8 per cent year-on-year decline in net profit for the first quarter of the financial year 2025-26, weighed down heavily by its investment in Air India and broader industry headwinds. Net income dropped to S$186 million (US$145 million) in the April-June quarter, down from S$266 million (US$206.7 million) in the same period last year, marking its weakest financial performance in nearly a year. The poor results triggered a sharp reaction from investors, with SIA shares plunging as much as 8.7 per cent in early trading in Singapore, the largest intraday drop since August 2024.The earnings slump is largely attributed to the airline’s 25.1 per cent stake in Air India, which it began consolidating into its financial statements following the completion of the Vistara-Air India merger in November 2024. This is the first full quarter that Air India’s financials have been accounted for within SIA’s consolidated results.<h2>Air India losses weigh heavily on SIA</h2>Air India has emerged as a major operational and financial drag on Singapore Airlines. The Tata-owned carrier reported a net loss of ₹10,859 crore (US$1.25 billion) in FY25, despite revenue of ₹78,636 crore (US$9 billion). This made it the largest loss-making entity within the Tata Group during the fiscal year. Singapore Airlines absorbed S$122 million (US$94 million) in losses from its associated companies during the quarter, most of which came from its share in Air India. This marked a significant reversal from the previous year, when such investments contributed positively to the bottom line.Operationally, Air India continues to face turbulence following the June crash of Flight 171 shortly after takeoff from Ahmedabad, killing over 240 passengers and crew. The disaster, considered the worst in Indian aviation in over three decades, has triggered regulatory scrutiny and forced short-term capacity reductions. Investigations are ongoing, and the fallout is expected to affect performance in the coming quarters.<h2>Broader industry pressures and strategic shifts</h2>Beyond the impact from Air India, Singapore Airlines is also contending with multiple macroeconomic and industry-specific headwinds. Passenger yields declined 2.9 per cent year-on-year, cargo revenue was down 1.9 per cent, and interest income dropped 15 per cent. Competitive fare pressures, weaker returns on cash reserves, and muted demand in certain segments have further squeezed margins.Despite these challenges, Singapore Airlines has outlined a cautious growth strategy. The carrier is adding new regional routes in Malaysia and the Philippines and has expanded its codeshare agreement with Air India. It maintains a positive long-term outlook, citing resilient travel demand across major markets, though it remains alert to geopolitical instability and economic volatility. The carrier's quarterly revenue increased marginally by 1.5 per cent to S$4.8 billion (US$3.73 billion), suggesting that core demand for air travel remains intact even amid broader global uncertainty.<h2>Mixed market reactions</h2>Analysts responded with a range of views. JPMorgan downgraded the stock to ‘neutral’ with a price target of S$7.00 (US$5.44), noting the results as a significant miss. Citigroup pointed to weaker core profitability, while Morgan Stanley projected some stabilisation in passenger yields in the coming quarters, which could ease pressure on earnings.The airline industry globally is sending mixed signals. American Airlines recently lowered its earnings outlook due to aggressive fare discounts, while competitors like Delta and United Airlines have reported more stable demand trends. Against this backdrop, SIA’s results offer a glimpse into the growing complexity facing Asia-Pacific carriers in a volatile market.Despite the ongoing headwinds, Singapore Airlines has reiterated its commitment to the Indian market. The group plans to continue supporting Air India’s transformation in collaboration with Tata Sons, even as the Indian carrier struggles with integration costs, operational inefficiencies, and stiff competition from domestic rival IndiGo, which now commands nearly two-thirds of India’s market share.

The earnings slump is largely attributed to Singapore Airlines’ 25.1 per cent stake in Air India, which it began consolidating into its financial statements following the completion of the Vistara-Air India merger in November 2024. 

Singapore Airlines (SIA) has reported a steep 58.8 per cent year-on-year decline in net profit for the first quarter of the financial year 2025-26, weighed down heavily by its investment in Air India and broader industry headwinds. Net income dropped to S$186 million (US$145 million) in the April-June quarter, down from S$266 million (US$206.7 million) in the same period last year, marking its weakest financial performance in nearly a year. The poor results triggered a sharp reaction from investors, with SIA shares plunging as much as 8.7 per cent in early trading in Singapore, the largest intraday drop since August 2024. The earnings slump is largely attributed to the airline’s 25.1 per cent stake in Air India, which it began consolidating into its financial statements following the completion of the Vistara-Air India merger in November 2024. This is the first full quarter that Air India’s financials have been accounted for within SIA’s consolidated results. Air India losses weigh heavily on SIA Air India has emerged as a major operational and financial drag on Singapore Airlines. The Tata-owned carrier reported a net loss of ₹10,859 crore (US$1.25 billion) in FY25, despite revenue of ₹78,636 crore (US$9 billion). This made it the largest loss-making entity within the Tata Group during the fiscal year. Singapore Airlines absorbed S$122 million (US$94 million) in losses from its associated companies during the quarter, most of which came from its share in Air India. This marked a significant reversal from the previous year, when such investments contributed positively to the bottom line. Operationally, Air India continues to face turbulence following the June crash of Flight 171 shortly after takeoff from Ahmedabad, killing over 240 passengers and crew. The disaster, considered the worst in Indian aviation in over three decades, has triggered regulatory scrutiny and forced short-term capacity reductions. Investigations are ongoing, and the fallout is expected to affect performance in the coming quarters. Broader industry pressures and strategic shifts Beyond the impact from Air India, Singapore Airlines is also contending with multiple macroeconomic and industry-specific headwinds. Passenger yields declined 2.9 per cent year-on-year, cargo revenue was down 1.9 per cent, and interest income dropped 15 per cent. Competitive fare pressures, weaker returns on cash reserves, and muted demand in certain segments have further squeezed margins. Despite these challenges, Singapore Airlines has outlined a cautious growth strategy. The carrier is adding new regional routes in Malaysia and the Philippines and has expanded its codeshare agreement with Air India. It maintains a positive long-term outlook, citing resilient travel demand across major markets, though it remains alert to geopolitical instability and economic volatility. The carrier's quarterly revenue increased marginally by 1.5 per cent to S$4.8 billion (US$3.73 billion), suggesting that core demand for air travel remains intact even amid broader global uncertainty. Mixed market reactions Analysts responded with a range of views. JPMorgan downgraded the stock to ‘neutral’ with a price target of S$7.00 (US$5.44), noting the results as a significant miss. Citigroup pointed to weaker core profitability, while Morgan Stanley projected some stabilisation in passenger yields in the coming quarters, which could ease pressure on earnings. The airline industry globally is sending mixed signals. American Airlines recently lowered its earnings outlook due to aggressive fare discounts, while competitors like Delta and United Airlines have reported more stable demand trends. Against this backdrop, SIA’s results offer a glimpse into the growing complexity facing Asia-Pacific carriers in a volatile market. Despite the ongoing headwinds, Singapore Airlines has reiterated its commitment to the Indian market. The group plans to continue supporting Air India’s transformation in collaboration with Tata Sons, even as the Indian carrier struggles with integration costs, operational inefficiencies, and stiff competition from domestic rival IndiGo, which now commands nearly two-thirds of India’s market share.

The earnings slump is largely attributed to Singapore Airlines’ 25.1 per cent stake in Air India, which it began consolidating into its financial statements following the completion of the Vistara-Air India merger in November 2024.&nbsp;

Singapore Airlines hit by sharp decline in profit amid Air India turbulence

Tesla Inc. has signed a $4.3 billion agreement with South Korea’s LG Energy Solution (LGES) to supply lithium iron phosphate (LFP) batteries for its energy storage systems, marking a strategic move by the EV giant to localise its supply chain and reduce dependence on Chinese imports amid growing tariff headwinds. According to media reports, the deal will see LGES provide LFP batteries from its US-based facility in Michigan over a three-year period beginning in August 2027, with provisions for a potential seven-year extension and increased volumes depending on future demand. While neither Tesla nor LGES publicly named the customer, sources and market analysts widely point to Tesla as the buyer.The deal underscores Tesla’s accelerating pivot toward localised battery sourcing, particularly for its energy storage segment, which includes products like the Powerwall and Megapack. It is also the second major South Korea-linked agreement for the company this month, following a $16.5 billion chip supply partnership with Samsung Electronics to support Tesla’s next-generation AI chips.<h2>Shift toward LFP and local supply chains</h2>LFP batteries, while lower in energy density compared to nickel-based alternatives, offer significant advantages in cost, safety, and durability, making them increasingly attractive for stationary energy storage solutions. Unlike traditional lithium-ion batteries that rely on costly materials like cobalt and nickel, LFP batteries use more abundant and cheaper elements such as iron and phosphate.Tesla currently imports LFP batteries primarily from China, particularly from top supplier CATL. However, with tariffs on Chinese-made EV components rising, the economics of relying on Chinese imports have become less viable. Tesla Chief Financial Officer Vaibhav Taneja acknowledged in April that the company was actively seeking non-Chinese battery suppliers, though he noted it would take time to fully transition.LGES began LFP production at its Michigan factory in May and is one of the few manufacturers outside of China with significant US-based LFP capacity. Its existing $1.4 billion investment in the facility positions it well to capitalise on federal incentives under the Inflation Reduction Act (IRA), which encourages localised clean energy manufacturing through tax credits and other policy tools.<h2>Strategic implications for the battery industry</h2>For LGES, the deal is a significant step forward in its broader strategy to expand its footprint in the US energy storage market. The South Korean firm, which counts General Motors and Tesla among its top clients, has been exploring converting some EV battery production lines for energy storage systems in response to slowing global EV demand and growing demand for grid-scale storage.Industry analysts view the agreement as part of a broader reshaping of global battery supply chains, with companies and governments alike aiming to diversify away from Chinese dominance. The implications extend beyond the battery sector. Tesla’s twin deals with LGES and Samsung this month highlight the growing importance of South Korea in the company’s supply chain strategy, spanning both energy storage and artificial intelligence. With the global energy transition accelerating and trade policies becoming more fragmented, battery suppliers like LGES that can offer localised, scalable solutions are poised to gain substantial competitive advantage.<h2>A new era for energy storage</h2>As governments push for decarbonisation and grid modernisation, the need for reliable and affordable energy storage systems is surging. Tesla’s deal with LGES is a strategic response to this trend, ensuring supply chain resilience while aligning with US industrial policy. For LGES, it cements its place as a key player in North America’s energy transition.The deal also signals a shift in how automakers view batteries, not just as components for vehicles but as foundational technology for broader clean energy infrastructure. As such, the companies that adapt fastest to changing technologies and geopolitical realities will shape the future of the energy economy.

The deal will see LGES provide Tesla with LFP batteries from its US-based facility in Michigan over a three-year period beginning in August 2027, with provisions for a potential seven-year extension and increased volumes depending on future demand. 

Tesla Inc. has signed a $4.3 billion agreement with South Korea’s LG Energy Solution (LGES) to supply lithium iron phosphate (LFP) batteries for its energy storage systems, marking a strategic move by the EV giant to localise its supply chain and reduce dependence on Chinese imports amid growing tariff headwinds. According to media reports, the deal will see LGES provide LFP batteries from its US-based facility in Michigan over a three-year period beginning in August 2027, with provisions for a potential seven-year extension and increased volumes depending on future demand. While neither Tesla nor LGES publicly named the customer, sources and market analysts widely point to Tesla as the buyer. The deal underscores Tesla’s accelerating pivot toward localised battery sourcing, particularly for its energy storage segment, which includes products like the Powerwall and Megapack. It is also the second major South Korea-linked agreement for the company this month, following a $16.5 billion chip supply partnership with Samsung Electronics to support Tesla’s next-generation AI chips. Shift toward LFP and local supply chains LFP batteries, while lower in energy density compared to nickel-based alternatives, offer significant advantages in cost, safety, and durability, making them increasingly attractive for stationary energy storage solutions. Unlike traditional lithium-ion batteries that rely on costly materials like cobalt and nickel, LFP batteries use more abundant and cheaper elements such as iron and phosphate. Tesla currently imports LFP batteries primarily from China, particularly from top supplier CATL. However, with tariffs on Chinese-made EV components rising, the economics of relying on Chinese imports have become less viable. Tesla Chief Financial Officer Vaibhav Taneja acknowledged in April that the company was actively seeking non-Chinese battery suppliers, though he noted it would take time to fully transition. LGES began LFP production at its Michigan factory in May and is one of the few manufacturers outside of China with significant US-based LFP capacity. Its existing $1.4 billion investment in the facility positions it well to capitalise on federal incentives under the Inflation Reduction Act (IRA), which encourages localised clean energy manufacturing through tax credits and other policy tools. Strategic implications for the battery industry For LGES, the deal is a significant step forward in its broader strategy to expand its footprint in the US energy storage market. The South Korean firm, which counts General Motors and Tesla among its top clients, has been exploring converting some EV battery production lines for energy storage systems in response to slowing global EV demand and growing demand for grid-scale storage. Industry analysts view the agreement as part of a broader reshaping of global battery supply chains, with companies and governments alike aiming to diversify away from Chinese dominance. The implications extend beyond the battery sector. Tesla’s twin deals with LGES and Samsung this month highlight the growing importance of South Korea in the company’s supply chain strategy, spanning both energy storage and artificial intelligence. With the global energy transition accelerating and trade policies becoming more fragmented, battery suppliers like LGES that can offer localised, scalable solutions are poised to gain substantial competitive advantage. A new era for energy storage As governments push for decarbonisation and grid modernisation, the need for reliable and affordable energy storage systems is surging. Tesla’s deal with LGES is a strategic response to this trend, ensuring supply chain resilience while aligning with US industrial policy. For LGES, it cements its place as a key player in North America’s energy transition. The deal also signals a shift in how automakers view batteries, not just as components for vehicles but as foundational technology for broader clean energy infrastructure. As such, the companies that adapt fastest to changing technologies and geopolitical realities will shape the future of the energy economy.

The deal will see LGES provide Tesla with LFP batteries from its US-based facility in Michigan over a three-year period beginning in August 2027, with provisions for a potential seven-year extension and increased volumes depending on future demand.&nbsp;

Tesla strikes $4.3 billion battery deal with LG Energy Solution to cut reliance on China

The US goods trade deficit narrowed significantly in June to $86 billion, the lowest level in nearly two years, as imports fell sharply, reflecting subdued domestic demand and the lingering effects of trade policy uncertainty. The unexpected contraction, reported by the Commerce Department on July 29, is expected to provide a meaningful boost to second-quarter gross domestic product (GDP) figures, due for release on July 30. Economists had forecast the goods trade gap would widen to $98.2 billion, but instead it shrank by 10.8 per cent from May’s revised $96.4 billion level. Imports dropped $11.5 billion, or 4.2 per cent, to $264.2 billion, led by a steep 12.4 per cent plunge in consumer goods. Industrial supplies, including crude oil and non-monetary gold, also fell by 5.5 per cent.<h2>Trade gap shrinks, but details signal caution</h2>While the narrowing trade deficit is expected to add significantly to GDP after dragging growth down in Q1, the underlying data revealed some red flags. Imports of food, motor vehicles, and other categories all declined, with only capital goods registering a modest 0.6 per cent increase. Goods exports also dipped by 0.6 per cent to $178.2 billion, weighed down by an 8.1 per cent decline in industrial supplies exports, though offset slightly by gains in capital goods and consumer goods.Economists at Goldman Sachs and JPMorgan have revised their Q2 GDP forecasts upward, with the Atlanta Fed now expecting a 2.9 per cent growth rate, up from its previous 2.4 per cent estimate. Wholesale and retail inventories, which also factor into GDP calculations, rose by 0.2 per cent and 0.3 per cent, respectively, in June. However, excluding motor vehicles, retail inventories were flat, a potential drag on the final output figure.<h2>Labour market softens as job openings and hiring decline</h2>Trade-related uncertainty has also seeped into the labour market. The Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey (JOLTS) showed job openings fell by 275,000 in June to 7.437 million, with hiring dropping by 261,000 to 5.204 million. Accommodation and food services, a sector hard-hit by both tariffs and immigration policy shifts, saw job openings decline by 308,000 and hiring drop by 106,000.The separation rate in that sector rose as concerns mount over immigration crackdowns affecting legal work status. “Some increased churn in leisure hospitality in the last few months may already reflect factors like premature exits ahead of changes,” Citigroup economist Veronica Clark told Reuters. Despite the slowdown in hiring, layoffs remained stable at 1.604 million, suggesting employers are still hesitant to let workers go after years of tight labour supply.The Conference Board also reported that consumer perceptions of job availability worsened significantly in July, with the share of respondents viewing jobs as hard to get rising to the highest level in over four years. Consumer plans to purchase big-ticket items like vehicles and homes also declined.<h2>Fed expected to hold rates as growth picture remains mixed</h2>Despite a likely strong Q2 GDP headline, the broader economic outlook remains uncertain. The Federal Reserve is expected to hold interest rates steady at 4.25–4.50 per cent following its policy meeting on July 30, resisting political pressure to cut borrowing costs further. While smaller trade deficits are poised to boost GDP temporarily, ongoing volatility from tariffs, inventory challenges, and a weakening labour market suggests the recovery may not yet be on solid footing.

Economists had forecast the goods trade deficit would widen to $98.2 billion, but instead it shrank by 10.8 per cent from May’s revised $96.4 billion level. Imports dropped $11.5 billion, or 4.2 per cent, to $264.2 billion, led by a steep 12.4 per cent plunge in consumer goods. 

The US goods trade deficit narrowed significantly in June to $86 billion, the lowest level in nearly two years, as imports fell sharply, reflecting subdued domestic demand and the lingering effects of trade policy uncertainty. The unexpected contraction, reported by the Commerce Department on July 29, is expected to provide a meaningful boost to second-quarter gross domestic product (GDP) figures, due for release on July 30. Economists had forecast the goods trade gap would widen to $98.2 billion, but instead it shrank by 10.8 per cent from May’s revised $96.4 billion level. Imports dropped $11.5 billion, or 4.2 per cent, to $264.2 billion, led by a steep 12.4 per cent plunge in consumer goods. Industrial supplies, including crude oil and non-monetary gold, also fell by 5.5 per cent. Trade gap shrinks, but details signal caution While the narrowing trade deficit is expected to add significantly to GDP after dragging growth down in Q1, the underlying data revealed some red flags. Imports of food, motor vehicles, and other categories all declined, with only capital goods registering a modest 0.6 per cent increase. Goods exports also dipped by 0.6 per cent to $178.2 billion, weighed down by an 8.1 per cent decline in industrial supplies exports, though offset slightly by gains in capital goods and consumer goods. Economists at Goldman Sachs and JPMorgan have revised their Q2 GDP forecasts upward, with the Atlanta Fed now expecting a 2.9 per cent growth rate, up from its previous 2.4 per cent estimate. Wholesale and retail inventories, which also factor into GDP calculations, rose by 0.2 per cent and 0.3 per cent, respectively, in June. However, excluding motor vehicles, retail inventories were flat, a potential drag on the final output figure. Labour market softens as job openings and hiring decline Trade-related uncertainty has also seeped into the labour market. The Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey (JOLTS) showed job openings fell by 275,000 in June to 7.437 million, with hiring dropping by 261,000 to 5.204 million. Accommodation and food services, a sector hard-hit by both tariffs and immigration policy shifts, saw job openings decline by 308,000 and hiring drop by 106,000. The separation rate in that sector rose as concerns mount over immigration crackdowns affecting legal work status. “Some increased churn in leisure hospitality in the last few months may already reflect factors like premature exits ahead of changes,” Citigroup economist Veronica Clark told Reuters. Despite the slowdown in hiring, layoffs remained stable at 1.604 million, suggesting employers are still hesitant to let workers go after years of tight labour supply. The Conference Board also reported that consumer perceptions of job availability worsened significantly in July, with the share of respondents viewing jobs as hard to get rising to the highest level in over four years. Consumer plans to purchase big-ticket items like vehicles and homes also declined. Fed expected to hold rates as growth picture remains mixed Despite a likely strong Q2 GDP headline, the broader economic outlook remains uncertain. The Federal Reserve is expected to hold interest rates steady at 4.25–4.50 per cent following its policy meeting on July 30, resisting political pressure to cut borrowing costs further. While smaller trade deficits are poised to boost GDP temporarily, ongoing volatility from tariffs, inventory challenges, and a weakening labour market suggests the recovery may not yet be on solid footing.

Economists had forecast the goods trade deficit would widen to $98.2 billion, but instead it shrank by 10.8 per cent from May’s revised $96.4 billion level. Imports dropped $11.5 billion, or 4.2 per cent, to $264.2 billion, led by a steep 12.4 per cent plunge in consumer goods.&nbsp;

US merchandise trade deficit narrows in June, fuelling Q2 GDP optimism

The US labour market showed further signs of cooling in June as job openings and hiring activity declined, particularly in sectors that had previously driven growth. According to the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) released on July 27, job openings fell by 275,000 to 7.44 million, in line with economists’ expectations. The drop comes after two months of gains and suggests demand for workers is moderating amid broader economic uncertainty. Hiring also edged down, slipping by 261,000 to 5.2 million. The decline was especially steep in the accommodation and food services sector, where job openings fell by 308,000 and hiring decreased by 106,000. This industry, once a post-pandemic employment engine, has cooled as businesses hesitate to expand amid concerns about trade policy and consumer demand.<h2>Quits stable, layoffs still low</h2>Despite the dip in openings and hires, the labour market hasn’t seen a corresponding rise in layoffs. Layoffs and discharges were virtually unchanged at 1.6 million, indicating that employers are reluctant to part with workers after years of labour shortages. Quits, often a signal of worker confidence, also held steady at 3.1 million.&nbsp;Job openings also declined in health care and social assistance (-244,000) and finance and insurance (-142,000), while increasing in retail trade (+190,000), information (+67,000), and state and local government education (+61,000). Separations in total, including quits, layoffs, and retirements, were little changed at 5.1 million. The quits rate, often viewed as a measure of employee confidence in the job market, remained at 2.0 per cent.<h2>Fed eyes labour trends amid tariff uncertainty</h2>The JOLTS report precedes the closely watched July employment report to be released on August 1, which is expected to show continued moderation in job growth. Economists predict that nonfarm payrolls will rise by 102,000, down from June’s 147,000, with the unemployment rate ticking up to 4.2 per cent.The Federal Reserve, concluding its two-day policy meeting on July 30, is widely expected to hold interest rates steady at 4.25-04.50 per cent, despite pressure from US President Donald Trump to lower borrowing costs. Chair Jerome Powell has described the labour market as “solid,” but policymakers are closely monitoring signs of weakening, particularly as tariff uncertainty weighs on hiring decisions.

According to the JOLTS released on July 27, job openings fell by 275,000 to 7.44 million, in line with economists’ expectations. The drop comes after two months of gains and suggests demand for workers is moderating amid broader economic uncertainty.

The US labour market showed further signs of cooling in June as job openings and hiring activity declined, particularly in sectors that had previously driven growth. According to the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) released on July 27, job openings fell by 275,000 to 7.44 million, in line with economists’ expectations. The drop comes after two months of gains and suggests demand for workers is moderating amid broader economic uncertainty. Hiring also edged down, slipping by 261,000 to 5.2 million. The decline was especially steep in the accommodation and food services sector, where job openings fell by 308,000 and hiring decreased by 106,000. This industry, once a post-pandemic employment engine, has cooled as businesses hesitate to expand amid concerns about trade policy and consumer demand. Quits stable, layoffs still low Despite the dip in openings and hires, the labour market hasn’t seen a corresponding rise in layoffs. Layoffs and discharges were virtually unchanged at 1.6 million, indicating that employers are reluctant to part with workers after years of labour shortages. Quits, often a signal of worker confidence, also held steady at 3.1 million. Job openings also declined in health care and social assistance (-244,000) and finance and insurance (-142,000), while increasing in retail trade (+190,000), information (+67,000), and state and local government education (+61,000). Separations in total, including quits, layoffs, and retirements, were little changed at 5.1 million. The quits rate, often viewed as a measure of employee confidence in the job market, remained at 2.0 per cent. Fed eyes labour trends amid tariff uncertainty The JOLTS report precedes the closely watched July employment report to be released on August 1, which is expected to show continued moderation in job growth. Economists predict that nonfarm payrolls will rise by 102,000, down from June’s 147,000, with the unemployment rate ticking up to 4.2 per cent. The Federal Reserve, concluding its two-day policy meeting on July 30, is widely expected to hold interest rates steady at 4.25-04.50 per cent, despite pressure from US President Donald Trump to lower borrowing costs. Chair Jerome Powell has described the labour market as “solid,” but policymakers are closely monitoring signs of weakening, particularly as tariff uncertainty weighs on hiring decisions.

According to the JOLTS released on July 27, job openings fell by 275,000 to 7.44 million, in line with economists’ expectations. The drop comes after two months of gains and suggests demand for workers is moderating amid broader economic uncertainty.

US job openings dip in June as labour market shows signs of gradual cooling

Top US and Chinese trade officials concluded two days of high-level talks on July 29 with a mutual agreement to push for an extension of the current 90-day tariff truce, amid growing concerns that the world’s two largest economies could reignite a trade war if no deal is reached by the August 12 deadline. While no formal breakthroughs were announced, officials on both sides described the meetings as “constructive,” reflecting a cautiously optimistic tone that contrasted with the tense atmosphere earlier this year when tariff rates escalated into triple digits.<h2>Truce extension on the table as August deadline looms</h2>The meetings, held in Stockholm, included US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer, along with China’s top trade negotiator Li Chenggang and Vice Premier He Lifeng. They reviewed prior agreements reached in Geneva and London and explored mechanisms to continue pausing mutual tariffs, including the 24 per cent levies currently suspended. “Nothing is agreed until we speak with President Trump,” Bessent told reporters, adding that the final decision rests with the president. “But the meetings were very constructive. We just haven’t given the sign-off.”Bessent is expected to brief Trump in Washington on July 30 following the president’s return from Scotland, where he signed a separate trade pact with the European Union. Trump, speaking aboard Air Force One, said Bessent felt “very good” about the China meetings and hinted at the possibility of extending the truce another 90 days. Chinese officials, meanwhile, echoed similar sentiments, emphasising cooperation and the broader stakes involved. “The two sides should further deepen dialogue and strive for more win-win outcomes,” Vice Premier He Lifeng said. “Confrontation harms both sides.”<h2>Rare earths, trade balance, and geopolitical friction in focus</h2>The talks tackled a wide range of economic and strategic issues beyond tariffs. A key point of contention remains China’s control over rare earth minerals, critical to technologies such as electric vehicles and military hardware. Recent months have seen Beijing slow the export of these minerals in response to US curbs on semiconductor and AI chip sales to China.While both parties avoided publicly discussing security-sensitive topics like TikTok or China’s ties with Russia and Iran, US negotiators did raise concerns over China’s export-driven industrial model. They pressed for reforms that would increase Chinese consumer demand, which in turn could create more opportunities for US exports. “We’re not looking to decouple,” Bessent said. “We just need to de-risk in certain strategic industries—rare earths, semiconductors, and medicines.”Bessent and Greer said they expect another round of talks in roughly 90 days, regardless of whether the current pause is extended. They also noted growing “personal interaction and mutual respect” between the negotiating teams.<h2>Momentum builds, but risks remain</h2>The International Monetary Fund on July 29 flagged the potential expiration of the US-China truce as a major global economic risk, despite raising its growth forecast. Any failure to extend the truce could see tariffs “boomerang” back to triple-digit levels, threatening global supply chains and financial markets.Trump, who has long decried the US trade deficit with China, claimed recent deals with Japan, Indonesia, and the EU demonstrate growing momentum. US officials also said they were on track to reduce the trade imbalance with China by $50 billion this year. A future meeting between Trump and Chinese President Xi Jinping remains on the horizon, with both sides suggesting it could happen by the end of the year—though no formal plans have been announced.&nbsp;(With inputs from agencies)

The officials from US and China reviewed prior agreements reached in Geneva and London and explored mechanisms to continue pausing mutual tariffs, including the 24 per cent levies currently suspended. 

Top US and Chinese trade officials concluded two days of high-level talks on July 29 with a mutual agreement to push for an extension of the current 90-day tariff truce, amid growing concerns that the world’s two largest economies could reignite a trade war if no deal is reached by the August 12 deadline. While no formal breakthroughs were announced, officials on both sides described the meetings as “constructive,” reflecting a cautiously optimistic tone that contrasted with the tense atmosphere earlier this year when tariff rates escalated into triple digits. Truce extension on the table as August deadline looms The meetings, held in Stockholm, included US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer, along with China’s top trade negotiator Li Chenggang and Vice Premier He Lifeng. They reviewed prior agreements reached in Geneva and London and explored mechanisms to continue pausing mutual tariffs, including the 24 per cent levies currently suspended. “Nothing is agreed until we speak with President Trump,” Bessent told reporters, adding that the final decision rests with the president. “But the meetings were very constructive. We just haven’t given the sign-off.” Bessent is expected to brief Trump in Washington on July 30 following the president’s return from Scotland, where he signed a separate trade pact with the European Union. Trump, speaking aboard Air Force One, said Bessent felt “very good” about the China meetings and hinted at the possibility of extending the truce another 90 days. Chinese officials, meanwhile, echoed similar sentiments, emphasising cooperation and the broader stakes involved. “The two sides should further deepen dialogue and strive for more win-win outcomes,” Vice Premier He Lifeng said. “Confrontation harms both sides.” Rare earths, trade balance, and geopolitical friction in focus The talks tackled a wide range of economic and strategic issues beyond tariffs. A key point of contention remains China’s control over rare earth minerals, critical to technologies such as electric vehicles and military hardware. Recent months have seen Beijing slow the export of these minerals in response to US curbs on semiconductor and AI chip sales to China. While both parties avoided publicly discussing security-sensitive topics like TikTok or China’s ties with Russia and Iran, US negotiators did raise concerns over China’s export-driven industrial model. They pressed for reforms that would increase Chinese consumer demand, which in turn could create more opportunities for US exports. “We’re not looking to decouple,” Bessent said. “We just need to de-risk in certain strategic industries—rare earths, semiconductors, and medicines.” Bessent and Greer said they expect another round of talks in roughly 90 days, regardless of whether the current pause is extended. They also noted growing “personal interaction and mutual respect” between the negotiating teams. Momentum builds, but risks remain The International Monetary Fund on July 29 flagged the potential expiration of the US-China truce as a major global economic risk, despite raising its growth forecast. Any failure to extend the truce could see tariffs “boomerang” back to triple-digit levels, threatening global supply chains and financial markets. Trump, who has long decried the US trade deficit with China, claimed recent deals with Japan, Indonesia, and the EU demonstrate growing momentum. US officials also said they were on track to reduce the trade imbalance with China by $50 billion this year. A future meeting between Trump and Chinese President Xi Jinping remains on the horizon, with both sides suggesting it could happen by the end of the year—though no formal plans have been announced. (With inputs from agencies)

The officials from US and China reviewed prior agreements reached in Geneva and London and explored mechanisms to continue pausing mutual tariffs, including the 24 per cent levies currently suspended.&nbsp;

US and China signal intent to extend tariff truce after constructive talks in Stockholm

At the World Artificial Intelligence Conference (WAIC) 2025, China presented a bold vision for its role in shaping the global AI landscape, offering an alternative to the US’ “America First” approach. The three-day event, which concluded on July 28, attracted more than 800 companies, including tech giants like Tencent, Alibaba, and Huawei, as well as international leaders from Google, including former CEO Eric Schmidt. The showcase, featuring robots, flying taxis, and AI-driven technologies, underscored China’s efforts to position itself as a champion of multilateralism and international collaboration in the AI race.During his keynote speech, Premier Li Qiang outlined China's approach to AI governance, which contrasts with the US's recent AI action plan focused on national dominance. Li emphasised the importance of global cooperation, suggesting that AI governance should not be monopolised by a few countries or tech giants. “If we engage in technological monopoly, AI will become an exclusive game for a small number of countries and enterprises,” he warned. His comments came just days after the Trump administration unveiled its own strategy for AI supremacy, which included removing bureaucratic barriers and reinforcing US leadership in the field.<h2>China’s AI alliances and technological showcases</h2>One of the key announcements at WAIC was the formation of two new industry alliances aimed at bolstering China’s domestic AI ecosystem in the wake of US export restrictions on advanced semiconductors. The “Model-Chip Ecosystem Innovation Alliance” is a collaboration between Chinese large language model (LLM) developers and chip manufacturers, including Huawei and other firms impacted by US sanctions. The alliance aims to create a self-sustaining ecosystem, reducing China’s dependence on foreign technology, especially in the critical AI chip sector.Another alliance, the Shanghai General Chamber of Commerce AI Committee, seeks to integrate AI technologies into industrial applications, marking a shift from purely consumer-driven AI solutions to those targeting broader economic sectors. Companies such as SenseTime, a leader in AI-driven facial recognition technologies, are pivoting to LLMs, underscoring the speed of China's AI sector evolution.On the exhibition floor, China’s AI prowess was evident in the numerous product debuts. Huawei introduced the CloudMatrix 384, an AI computing system said to rival Nvidia’s offerings. The system uses 384 Huawei 910C chips, demonstrating the company’s ability to produce competitive alternatives to US-made AI chips despite facing export restrictions. Other Chinese firms, including Metax and Iluvatar CoreX, showcased their own advancements in AI chip technology, further signalling China’s increasing self-reliance in this critical domain.Among the most talked-about innovations were consumer-orientated products like Alibaba’s Qwen AI Glasses, which will enable users to navigate and make payments through voice commands. These smart glasses, slated for release in 2025, exemplify China’s drive to integrate AI seamlessly into everyday life.<h2>International collaboration and ethical concerns</h2>The global impact of AI was a recurring theme at the conference, with several prominent figures urging international cooperation on AI safety and regulation. Eric Schmidt, former CEO of Google, called for the US and China to collaborate on AI safety, highlighting the existential risks that come with the rapid proliferation of AI technologies. He noted that both countries, as the world’s largest economic players, have a shared responsibility to ensure that AI remains a force for good.AI ethics and safety were hotly debated, with some experts expressing concerns over China’s open-source approach to AI models. While the open-source model allows for greater collaboration and innovation, it also opens the door for misuse by bad actors. Despite this, China remains committed to advancing its AI technologies, having invested heavily in research and development. Between 2013 and 2023, China’s state venture capital firms pumped an estimated $209 billion into AI businesses. The nation’s AI industry is valued at approximately $84 billion, with expectations to top $400 billion in public spending this year alone.Experts are also taking note of China’s rapid progress in AI. The launch of DeepSeek’s breakthrough AI model, which outpaced models developed by Meta and Anthropic, sent shockwaves through the global AI community. The model, developed with just $5.6 million, was far more cost-effective than similar offerings from US companies, signalling China’s ability to deliver high-quality AI products at a fraction of the cost.The WAIC 2025 expo demonstrated China’s growing confidence in its AI sector, with the country positioning itself as a leader in shaping the future of artificial intelligence. As Premier Li Qiang emphasised, AI governance should be a collaborative effort, with countries working together to create a global framework that ensures AI serves humanity's best interests.&nbsp;(With inputs from agencies)

Chinese Premier Li Qiang outlined China's approach to AI governance, which contrasts with the US's recent AI action plan focused on national dominance, emphasising the importance of global cooperation, and suggesting that AI governance should not be monopolised by a few nations or tech firms.

At the World Artificial Intelligence Conference (WAIC) 2025, China presented a bold vision for its role in shaping the global AI landscape, offering an alternative to the US’ “America First” approach. The three-day event, which concluded on July 28, attracted more than 800 companies, including tech giants like Tencent, Alibaba, and Huawei, as well as international leaders from Google, including former CEO Eric Schmidt. The showcase, featuring robots, flying taxis, and AI-driven technologies, underscored China’s efforts to position itself as a champion of multilateralism and international collaboration in the AI race. During his keynote speech, Premier Li Qiang outlined China's approach to AI governance, which contrasts with the US's recent AI action plan focused on national dominance. Li emphasised the importance of global cooperation, suggesting that AI governance should not be monopolised by a few countries or tech giants. “If we engage in technological monopoly, AI will become an exclusive game for a small number of countries and enterprises,” he warned. His comments came just days after the Trump administration unveiled its own strategy for AI supremacy, which included removing bureaucratic barriers and reinforcing US leadership in the field. China’s AI alliances and technological showcases One of the key announcements at WAIC was the formation of two new industry alliances aimed at bolstering China’s domestic AI ecosystem in the wake of US export restrictions on advanced semiconductors. The “Model-Chip Ecosystem Innovation Alliance” is a collaboration between Chinese large language model (LLM) developers and chip manufacturers, including Huawei and other firms impacted by US sanctions. The alliance aims to create a self-sustaining ecosystem, reducing China’s dependence on foreign technology, especially in the critical AI chip sector. Another alliance, the Shanghai General Chamber of Commerce AI Committee, seeks to integrate AI technologies into industrial applications, marking a shift from purely consumer-driven AI solutions to those targeting broader economic sectors. Companies such as SenseTime, a leader in AI-driven facial recognition technologies, are pivoting to LLMs, underscoring the speed of China's AI sector evolution. On the exhibition floor, China’s AI prowess was evident in the numerous product debuts. Huawei introduced the CloudMatrix 384, an AI computing system said to rival Nvidia’s offerings. The system uses 384 Huawei 910C chips, demonstrating the company’s ability to produce competitive alternatives to US-made AI chips despite facing export restrictions. Other Chinese firms, including Metax and Iluvatar CoreX, showcased their own advancements in AI chip technology, further signalling China’s increasing self-reliance in this critical domain. Among the most talked-about innovations were consumer-orientated products like Alibaba’s Qwen AI Glasses, which will enable users to navigate and make payments through voice commands. These smart glasses, slated for release in 2025, exemplify China’s drive to integrate AI seamlessly into everyday life. International collaboration and ethical concerns The global impact of AI was a recurring theme at the conference, with several prominent figures urging international cooperation on AI safety and regulation. Eric Schmidt, former CEO of Google, called for the US and China to collaborate on AI safety, highlighting the existential risks that come with the rapid proliferation of AI technologies. He noted that both countries, as the world’s largest economic players, have a shared responsibility to ensure that AI remains a force for good. AI ethics and safety were hotly debated, with some experts expressing concerns over China’s open-source approach to AI models. While the open-source model allows for greater collaboration and innovation, it also opens the door for misuse by bad actors. Despite this, China remains committed to advancing its AI technologies, having invested heavily in research and development. Between 2013 and 2023, China’s state venture capital firms pumped an estimated $209 billion into AI businesses. The nation’s AI industry is valued at approximately $84 billion, with expectations to top $400 billion in public spending this year alone. Experts are also taking note of China’s rapid progress in AI. The launch of DeepSeek’s breakthrough AI model, which outpaced models developed by Meta and Anthropic, sent shockwaves through the global AI community. The model, developed with just $5.6 million, was far more cost-effective than similar offerings from US companies, signalling China’s ability to deliver high-quality AI products at a fraction of the cost. The WAIC 2025 expo demonstrated China’s growing confidence in its AI sector, with the country positioning itself as a leader in shaping the future of artificial intelligence. As Premier Li Qiang emphasised, AI governance should be a collaborative effort, with countries working together to create a global framework that ensures AI serves humanity's best interests. (With inputs from agencies)

Chinese Premier Li Qiang outlined China's approach to AI governance, which contrasts with the US's recent AI action plan focused on national dominance, emphasising the importance of global cooperation, and suggesting that AI governance should not be monopolised by a few nations or tech firms.

China lays out ambitious AI vision, countering US’ America First plan

In response to ongoing trade tensions with the United States and the challenges posed by US President Donald Trump’s tariffs, China has made a notable shift in its fiscal policy. The country has dramatically increased social welfare spending, marking the highest level of expenditure on social programs in nearly two decades. This pivot toward supporting domestic consumption and boosting household well-being comes as China faces a record budget deficit and an economic slowdown exacerbated by the trade war.According to data released on July 28, government spending on social welfare-related outlays reached nearly 5.7 trillion yuan ($795 billion) in the first half of 2025, representing a 6.4 per cent year-on-year increase. This marks the highest level of social welfare expenditure since 2007. The increase in social spending is almost double the rise in total government expenditure under the general public budget. In comparison, infrastructure-related spending saw a 4.5 per cent decrease from the previous year, signalling that the government is prioritising welfare over traditional investments in large-scale infrastructure projects.The uptick in social spending is part of a broader strategy to support domestic demand and counter the economic impact of US tariffs. Analysts suggest that the shift in fiscal policy is critical as China seeks to mitigate job losses and bolster its social safety net, which has been under pressure due to the trade conflict.<h2>New initiatives to boost birth rates and employment support</h2>In a direct effort to support families and improve employment prospects, the Chinese government has unveiled a nationwide cash handout program for couples. Starting later this year, families with children under the age of three will receive annual subsidies of 3,600 yuan ($501.5) per child. The initiative aims to address China’s declining birth rates, which have been exacerbated by rising living costs and limited childcare options.The decision to ramp up social welfare comes as government officials look to bolster domestic demand in the face of a declining export market. China’s shipments to the United States have slumped due to the ongoing trade war, with tariffs as high as 51 per cent on Chinese goods. Citigroup estimates that the cost of the child welfare program could reach up to 117 billion yuan ($16.30 billion) in the second half of 2025, while Morgan Stanley predicts it could cost around 100 billion yuan ($13.93 billion) annually.In addition to childcare subsidies, the government has also increased spending on social security and employment, with outlays rising by almost 8 per cent in the first half of 2025. A record low employment sentiment index, as revealed by the People's Bank of China’s recent survey, underscores the need for additional government support in this area.<h2>Strained government revenues and shifting priorities</h2>Despite the increased spending on social programs, government revenues have been under strain. Tax revenue for the first half of the year fell by 1.2 per cent year-on-year, amounting to 9.29 trillion yuan ($1.29 trillion). The most significant drop came from the vehicle purchase tax, which plunged 19.1 per cent, reflecting the impact of a government decision to extend the suspension of the levy on new energy vehicles through 2027. This shift to electric cars has also weighed heavily on consumption taxes, particularly those levied on gasoline and diesel.Meanwhile, local governments have been cautious in issuing new bonds, with 56 per cent of the annual quota for special local bonds already used up. This is lower than the 61 per cent average in previous years, as provinces are now prioritising social welfare programs over infrastructure projects. Despite this, China remains committed to major infrastructure projects, including the construction of a 1.2 trillion yuan ($167.18 billion) mega-dam in Tibet, though analysts suggest the scope for new infrastructure expansion may be shrinking.The government’s strategy of prioritising social spending over traditional growth drivers, such as infrastructure, reflects the pressing need to shore up domestic demand and maintain stability in an increasingly uncertain global environment.&nbsp;(With inputs from agencies)

The uptick in China's social spending is part of a broader strategy to support domestic demand and counter the economic impact of US tariffs. Analysts suggest that the shift in fiscal policy is critical as China seeks to mitigate job losses and bolster its social safety net.

In response to ongoing trade tensions with the United States and the challenges posed by US President Donald Trump’s tariffs, China has made a notable shift in its fiscal policy. The country has dramatically increased social welfare spending, marking the highest level of expenditure on social programs in nearly two decades. This pivot toward supporting domestic consumption and boosting household well-being comes as China faces a record budget deficit and an economic slowdown exacerbated by the trade war. According to data released on July 28, government spending on social welfare-related outlays reached nearly 5.7 trillion yuan ($795 billion) in the first half of 2025, representing a 6.4 per cent year-on-year increase. This marks the highest level of social welfare expenditure since 2007. The increase in social spending is almost double the rise in total government expenditure under the general public budget. In comparison, infrastructure-related spending saw a 4.5 per cent decrease from the previous year, signalling that the government is prioritising welfare over traditional investments in large-scale infrastructure projects. The uptick in social spending is part of a broader strategy to support domestic demand and counter the economic impact of US tariffs. Analysts suggest that the shift in fiscal policy is critical as China seeks to mitigate job losses and bolster its social safety net, which has been under pressure due to the trade conflict. New initiatives to boost birth rates and employment support In a direct effort to support families and improve employment prospects, the Chinese government has unveiled a nationwide cash handout program for couples. Starting later this year, families with children under the age of three will receive annual subsidies of 3,600 yuan ($501.5) per child. The initiative aims to address China’s declining birth rates, which have been exacerbated by rising living costs and limited childcare options. The decision to ramp up social welfare comes as government officials look to bolster domestic demand in the face of a declining export market. China’s shipments to the United States have slumped due to the ongoing trade war, with tariffs as high as 51 per cent on Chinese goods. Citigroup estimates that the cost of the child welfare program could reach up to 117 billion yuan ($16.30 billion) in the second half of 2025, while Morgan Stanley predicts it could cost around 100 billion yuan ($13.93 billion) annually. In addition to childcare subsidies, the government has also increased spending on social security and employment, with outlays rising by almost 8 per cent in the first half of 2025. A record low employment sentiment index, as revealed by the People's Bank of China’s recent survey, underscores the need for additional government support in this area. Strained government revenues and shifting priorities Despite the increased spending on social programs, government revenues have been under strain. Tax revenue for the first half of the year fell by 1.2 per cent year-on-year, amounting to 9.29 trillion yuan ($1.29 trillion). The most significant drop came from the vehicle purchase tax, which plunged 19.1 per cent, reflecting the impact of a government decision to extend the suspension of the levy on new energy vehicles through 2027. This shift to electric cars has also weighed heavily on consumption taxes, particularly those levied on gasoline and diesel. Meanwhile, local governments have been cautious in issuing new bonds, with 56 per cent of the annual quota for special local bonds already used up. This is lower than the 61 per cent average in previous years, as provinces are now prioritising social welfare programs over infrastructure projects. Despite this, China remains committed to major infrastructure projects, including the construction of a 1.2 trillion yuan ($167.18 billion) mega-dam in Tibet, though analysts suggest the scope for new infrastructure expansion may be shrinking. The government’s strategy of prioritising social spending over traditional growth drivers, such as infrastructure, reflects the pressing need to shore up domestic demand and maintain stability in an increasingly uncertain global environment. (With inputs from agencies)

The uptick in China's social spending is part of a broader strategy to support domestic demand and counter the economic impact of US tariffs. Analysts suggest that the shift in fiscal policy is critical as China seeks to mitigate job losses and bolster its social safety net.

China shifts focus to social welfare spending amid trade tensions with US

China’s trade has hit its first significant speed bump since May, with the latest data revealing a drop in cargo throughput at the nation’s ports. Last week, the number of containers processed fell to 6.2 million, marking a 7 per cent decline from the previous week and the lowest figure since the second week of May. This slowdown signals that the historic trade volumes seen in May and June, when over 30 million containers were processed per month, may be starting to lose momentum.While May and June marked a high point for China’s trade, driven by a push to get ahead of US tariffs under US President Donald Trump’s trade war, analysts suggest that this burst of activity may now be winding down. Tariff concerns, particularly the ongoing threat of 50 per cent duties on Chinese goods, continue to weigh on trade as the US negotiates deals with other global partners, such as the European Union and Japan.<h2>Impact of US-China tariffs on exports and imports</h2>China’s trade with the US has been significantly impacted by the tariff uncertainty, especially in the first half of 2025. The US imposed various tariffs, including rates of up to 145 per cent at one point, reducing the volume of Chinese goods entering the US. In response, countries like those in ASEAN and the EU have become increasingly important trading partners, mitigating the losses in the US-bound shipments.Despite the decline in exports to the US, domestic trade has remained resilient. According to the Ministry of Transport, China’s ports handled a total cargo throughput of 8.9 billion tonnes in the first half of 2025, a 4 per cent year-on-year increase. Domestic logistics rose by 5 per cent, while foreign trade grew by 1.8 per cent. The growth in container throughput, which reached 170 million TEU (twenty-foot equivalent units), up 6.9 per cent from the previous year, suggests that China’s domestic economy is largely sustaining itself amid global uncertainties.<h2>Geopolitical tensions and the broader impact on logistics</h2>Alongside the tariff-induced slowdown, China’s broader logistics sector continues to show resilience. The total value of social logistics in the first half of 2025 grew by 5.6 per cent to reach 171.3 trillion yuan ($23.86 trillion), highlighting the strength of domestic demand. Industrial logistics, in particular, rose by 5.8 per cent, driven by strong demand in sectors like high-tech manufacturing and equipment production. The rebound in bulk commodity imports, such as crude oil and semiconductor chips, further indicates a diversified and robust logistics ecosystem.However, the ripple effects of tariff uncertainties remain, especially in light of the US potentially imposing new tariffs. The slowdown in cargo throughput and shifting global trade patterns suggest that China's trade landscape is evolving, with the longer-term impact of tariff policies still unfolding.

While May and June marked a high point for China’s trade, driven by a push to get ahead of US tariffs under US President Donald Trump’s trade war, analysts suggest that this burst of activity may now be winding down.

China’s trade has hit its first significant speed bump since May, with the latest data revealing a drop in cargo throughput at the nation’s ports. Last week, the number of containers processed fell to 6.2 million, marking a 7 per cent decline from the previous week and the lowest figure since the second week of May. This slowdown signals that the historic trade volumes seen in May and June, when over 30 million containers were processed per month, may be starting to lose momentum. While May and June marked a high point for China’s trade, driven by a push to get ahead of US tariffs under US President Donald Trump’s trade war, analysts suggest that this burst of activity may now be winding down. Tariff concerns, particularly the ongoing threat of 50 per cent duties on Chinese goods, continue to weigh on trade as the US negotiates deals with other global partners, such as the European Union and Japan. Impact of US-China tariffs on exports and imports China’s trade with the US has been significantly impacted by the tariff uncertainty, especially in the first half of 2025. The US imposed various tariffs, including rates of up to 145 per cent at one point, reducing the volume of Chinese goods entering the US. In response, countries like those in ASEAN and the EU have become increasingly important trading partners, mitigating the losses in the US-bound shipments. Despite the decline in exports to the US, domestic trade has remained resilient. According to the Ministry of Transport, China’s ports handled a total cargo throughput of 8.9 billion tonnes in the first half of 2025, a 4 per cent year-on-year increase. Domestic logistics rose by 5 per cent, while foreign trade grew by 1.8 per cent. The growth in container throughput, which reached 170 million TEU (twenty-foot equivalent units), up 6.9 per cent from the previous year, suggests that China’s domestic economy is largely sustaining itself amid global uncertainties. Geopolitical tensions and the broader impact on logistics Alongside the tariff-induced slowdown, China’s broader logistics sector continues to show resilience. The total value of social logistics in the first half of 2025 grew by 5.6 per cent to reach 171.3 trillion yuan ($23.86 trillion), highlighting the strength of domestic demand. Industrial logistics, in particular, rose by 5.8 per cent, driven by strong demand in sectors like high-tech manufacturing and equipment production. The rebound in bulk commodity imports, such as crude oil and semiconductor chips, further indicates a diversified and robust logistics ecosystem. However, the ripple effects of tariff uncertainties remain, especially in light of the US potentially imposing new tariffs. The slowdown in cargo throughput and shifting global trade patterns suggest that China's trade landscape is evolving, with the longer-term impact of tariff policies still unfolding.

While May and June marked a high point for China’s trade, driven by a push to get ahead of US tariffs under US President Donald Trump’s trade war, analysts suggest that this burst of activity may now be winding down.

China’s trade faces first setback since record-breaking highs

India has overtaken China for the first time to become the largest source of smartphones sold in the US, according to new data from Canalys. In the second quarter of 2025, smartphones assembled in India accounted for 44 per cent of US imports, a dramatic increase from just 13 per cent in the same period the previous year. This milestone highlights the significant shift in global manufacturing supply chains, primarily driven by Apple’s accelerated production ramp-up in India, as the company seeks to mitigate the risks of escalating trade tensions and tariffs between the US and China.This marks a stark decline for China, which saw its share of US smartphone exports plummet to just 25 per cent in Q2 2025, down from more than 60 per cent a year ago. And a 240 per cent year-on-year increase in Indian shipments signals a significant change in the global tech landscape as smartphone makers move their production outside of China in response to heightened geopolitical risks and trade uncertainty.<h2>Apple leads the shift with increased production in India</h2>Apple has played a pivotal role in this shift, increasingly relying on India for iPhone production. The company’s move to ramp up manufacturing in India is part of its broader “China Plus One” strategy, which seeks to reduce dependence on China amid growing tariffs and geopolitical tensions. According to Canalys, Apple has been accelerating its plans to produce a substantial portion of its iPhones in India, especially for the US market. In Q2 2025, Apple’s increased output from India included base iPhone models, which now account for a significant share of US shipments.“India became the leading manufacturing hub for smartphones sold in the US for the very first time in Q2 2025, largely driven by Apple’s accelerated supply chain shift to India amid an uncertain trade landscape between the US and China,” said Sanyam Chaurasia, Principal Analyst at Canalys.Apple’s decision to move more production to India has been fuelled by the ongoing tariff concerns and the uncertainty surrounding US-China relations. Despite assembling some models, like the iPhone 16 Pro, in India, the company still relies on its Chinese facilities to meet large-scale demand for high-end models in the US. However, Apple’s rapid increase in exports from India—accounting for nearly 70 per cent of India’s smartphone exports in Q1 FY26 (April–June 2025), according to a&nbsp;Moneycontrol&nbsp;report—is setting the stage for India to become a major global manufacturing hub for premium smartphones in the future.<h2>Samsung and Motorola follow suit</h2>While Apple has taken the lead in shifting its production to India, other global smartphone vendors, including Samsung and Motorola, are also beginning to move some of their US-bound production to the country. Samsung’s smartphone exports to the US from India saw a 38 per cent increase during the April to June period in 2025, largely driven by its Galaxy A-series devices. Motorola, like Apple, has a core manufacturing base in China but has started shifting some of its production to India as well. However, compared to Apple, their shifts remain modest in scale.Despite these shifts, overall smartphone shipments to the US grew by only 1 per cent year-on-year in Q2 2025, suggesting that the market is not growing as quickly as manufacturers had hoped. Canalys analyst Runar Bjorhovde explained, “Vendors continue to frontload devices and maintain high inventory levels to best cope with the risk of tariffs coming into play later in the year. Yet, the market only grew 1 per cent, indicating tepid demand in an increasingly pressured economic environment.”<h2>India solidifies its position as a key smartphone export hub</h2>India’s rise as a critical hub for smartphone manufacturing has been solidified by its increasing role in the global supply chain. In Q2 2025, India’s total smartphone exports reached $7 billion, a 40 per cent increase from the previous year, with Apple contributing significantly to the surge. With major players like Foxconn and Tata Electronics ramping up their production capacity in India, the country is poised to become an even more dominant player in the smartphone manufacturing space in the coming years.As the US market faces potential tariff hurdles and a slowing economy, the shift to India highlights the broader changes taking place in the global tech manufacturing ecosystem. While the future of tariffs remains uncertain, India’s rise as a key supplier to the US underscores its growing importance in the global smartphone supply chain, with the potential for continued expansion and investment from both local and international players.&nbsp;(With inputs from agencies)

China saw its share of US smartphone exports plummet to just 25 per cent in Q2 2025, down from more than 60 per cent a year ago, while Indian shipments witnessed a 240 per cent year-on-year increase, driven by Apple's production in India.

India has overtaken China for the first time to become the largest source of smartphones sold in the US, according to new data from Canalys. In the second quarter of 2025, smartphones assembled in India accounted for 44 per cent of US imports, a dramatic increase from just 13 per cent in the same period the previous year. This milestone highlights the significant shift in global manufacturing supply chains, primarily driven by Apple’s accelerated production ramp-up in India, as the company seeks to mitigate the risks of escalating trade tensions and tariffs between the US and China. This marks a stark decline for China, which saw its share of US smartphone exports plummet to just 25 per cent in Q2 2025, down from more than 60 per cent a year ago. And a 240 per cent year-on-year increase in Indian shipments signals a significant change in the global tech landscape as smartphone makers move their production outside of China in response to heightened geopolitical risks and trade uncertainty. Apple leads the shift with increased production in India Apple has played a pivotal role in this shift, increasingly relying on India for iPhone production. The company’s move to ramp up manufacturing in India is part of its broader “China Plus One” strategy, which seeks to reduce dependence on China amid growing tariffs and geopolitical tensions. According to Canalys, Apple has been accelerating its plans to produce a substantial portion of its iPhones in India, especially for the US market. In Q2 2025, Apple’s increased output from India included base iPhone models, which now account for a significant share of US shipments. “India became the leading manufacturing hub for smartphones sold in the US for the very first time in Q2 2025, largely driven by Apple’s accelerated supply chain shift to India amid an uncertain trade landscape between the US and China,” said Sanyam Chaurasia, Principal Analyst at Canalys. Apple’s decision to move more production to India has been fuelled by the ongoing tariff concerns and the uncertainty surrounding US-China relations. Despite assembling some models, like the iPhone 16 Pro, in India, the company still relies on its Chinese facilities to meet large-scale demand for high-end models in the US. However, Apple’s rapid increase in exports from India—accounting for nearly 70 per cent of India’s smartphone exports in Q1 FY26 (April–June 2025), according to a Moneycontrol report—is setting the stage for India to become a major global manufacturing hub for premium smartphones in the future. Samsung and Motorola follow suit While Apple has taken the lead in shifting its production to India, other global smartphone vendors, including Samsung and Motorola, are also beginning to move some of their US-bound production to the country. Samsung’s smartphone exports to the US from India saw a 38 per cent increase during the April to June period in 2025, largely driven by its Galaxy A-series devices. Motorola, like Apple, has a core manufacturing base in China but has started shifting some of its production to India as well. However, compared to Apple, their shifts remain modest in scale. Despite these shifts, overall smartphone shipments to the US grew by only 1 per cent year-on-year in Q2 2025, suggesting that the market is not growing as quickly as manufacturers had hoped. Canalys analyst Runar Bjorhovde explained, “Vendors continue to frontload devices and maintain high inventory levels to best cope with the risk of tariffs coming into play later in the year. Yet, the market only grew 1 per cent, indicating tepid demand in an increasingly pressured economic environment.” India solidifies its position as a key smartphone export hub India’s rise as a critical hub for smartphone manufacturing has been solidified by its increasing role in the global supply chain. In Q2 2025, India’s total smartphone exports reached $7 billion, a 40 per cent increase from the previous year, with Apple contributing significantly to the surge. With major players like Foxconn and Tata Electronics ramping up their production capacity in India, the country is poised to become an even more dominant player in the smartphone manufacturing space in the coming years. As the US market faces potential tariff hurdles and a slowing economy, the shift to India highlights the broader changes taking place in the global tech manufacturing ecosystem. While the future of tariffs remains uncertain, India’s rise as a key supplier to the US underscores its growing importance in the global smartphone supply chain, with the potential for continued expansion and investment from both local and international players. (With inputs from agencies)

China saw its share of US smartphone exports plummet to just 25 per cent in Q2 2025, down from more than 60 per cent a year ago, while Indian shipments witnessed a 240 per cent year-on-year increase, driven by Apple's production in India.

India overtakes China as top supplier of smartphones to the US amid shifting global supply chain

Big Tech companies like Microsoft and Indian software giants like TCS are slashing jobs and laying off their workforce. This should be a moment of reality check for Indian parents and students, who collectively spend trillions of rupees every year for software engineering courses in India or abroad, and allied entrance coachings, every year. There's clearly a disconnect between education investment and job realities in India in the IT field, which for nearly three decades was considered a sureshot ticket to job security with campus placements.<h2>Are you spending millions on your child's software degree? AI will disrupt your dreams</h2>Even as Indian parents continue to spend millions of rupees on IT education at home and abroad, the country's $283 billion software industry is undergoing a painful transformation of job cuts, often attributed to automation by Artificial Intelligence (AI), and 'skill gaps'. This month, India’s largest IT firm Tata Consultancy Services (TCS) announced a cut of 12,000 jobs, which is 2 per cent of its workforce, at middle and senior levels, to become 'future ready' by investing heavily in AI."A number of reskilling and redeployment initiatives have been underway, said TCS, warning that it would be 'releasing associates from the organisation whose deployment may not be feasible'.The shift is a result of AI automation of tens of thousands of repetitive IT tasks, for which global firms traditionally depended on the relatively cheap skilled labour from India. Now, clients of these IT firms who used to outsource such skills to India, are seeking innovation and not cost-cutting, because AI will take care of mundane and repetitive tasks.<h2>AI-related roles are not growing fast enough</h2>The Indian parents and aspiring IT students might still try to rationalise by thinking that an education in AI would offset the job losses in traditional IT. But the truth is, at least for some years now, roles in AI, cloud and cyberseucirty are not growing fast enough.Then there is the problem of how fast IT institutions are changing their curriculum to match the fast-changing adoption of AI. There are just not enough AI-trained instructors in the colleges and institutes. According to industry monitor Nasscom, India faces a deep skills mismatch: It will need 1 million AI professionals by next year, but less than 20 per cent of the current IT workforce is trained in these areas, it said.<h2>The impact is already visible: From north to south India, IT Jobs are being slashed</h2>A compilation of recent data shows that at least 50,000 IT jobs were lost in 2023 across Bengaluru, Hyderabad, and Pune, with the slide continuing into 2025. There is a 72 per cent drop in net new hires at top IT firms in India.

<a href="https://www.wionews.com/videos/indias-tcs-outlook-bleaker-for-current-quarter-blames-us-banking-crisis-world-business-watch-581966/embed">https://www.wionews.com/videos/indias-tcs-outlook-bleaker-for-current-quarter-blames-us-banking-crisis-world-business-watch-581966/embed</a><h2>Campus placements are drying up amid India's IT job slowdown</h2>Once a sector known for campus placements, where companies lap up good talent for high salaries straight after college, software engineering is not a green pasture anymore when it comes to hiring. On average, annual fresh graduate hiring has fallen from 600,000 to just 150,000, according to recent estimates.“20-25 per cent of fresh graduates will have no jobs,” a BBC report on the slump quoted Neeti Sharma, the CEO of HR firm TeamLease Digital, as saying.For many parents who took education loans to send their wards to good IT courses at home or abroad, this could have a massive impact. The steady paychecks from IT jobs are now on shaky ground.<h2>What Indian parents are spending on IT education</h2>While clear data is not available, a gleaning of available information reveals that technical degrees like BTech in Computer Science at private colleges cost a minimum of ₹100,000 per year, or up to ₹400,000 over four years. Remember this is a low-side estimate, as costs vary in different institutes, and this amount is only the tuition fee. Some 1.5 million engineering students are enrolled annually, many in software engineering. Domestically, the estimated spending in IT education by Indian parents likely ranges from ₹60,000 crore to 90,000 crore annually. Then there is entrance coaching fees for exams like JEE or GATE, which could go up to 200,000 rupees per year per student.<h2>Spending on IT education went through roof, crossing one trillion rupees</h2>Indian students continue to go abroad for higher education, many of them in IT or allied courses. A specific number on how many go for IT education alone is difficult to gather, but it would be safe to assume that the majority of them do. Overall, 770,000 Indian students studied abroad in 2019, and the number was projected to hit 1.8 million in 2024. By that year, Indian families likely spent $75–85 billion annually on international education, with IT and computer science among the most popular fields. Putting this data together, it would be safe to estimate that Indian parents cumulatively spend around ₹60,000–1,00,000 crore (yes, one trillion rupees) on overseas IT education.The biggest contributors to this outflow are families from higher-income states like Punjab, Maharashtra, and Andhra Pradesh.Total annual estimate of IT education - combiing domestic, overseas, coaching and upskilling - is between ₹1.3 trillion to 2.1 trillion rupees.<h2>Indian IT firings: A wake-up call for parents and students</h2>The outcomes no longer match the investment on education, especially in the IT sector.Many private colleges charge high fees, but their graduates face job uncertainty due to limited AI skills, a decline in legacy IT roles, and a shift towards leaner, AI-first IT teams both in India and abroad.The quality of IT education in many institutions is also not aligned with current industry needs. This leads many IT graduates to spend even more money on certifications post-graduation, and many years into their jobs.<h2>Reassess your return on investment before opting for IT education</h2>Parents considering heavy investments in IT education, whether for domestic degrees, foreign universities, or coaching, must factor in the shifting job landscape, where&nbsp; AI is redefining demand. Jobs that were once seen as 'stable' are fast drying up now. India's spending boom, facilitated by IT jobs since the 1990s, may be on its way out, unless both the government and the education system adapt fast to the technologies of the future, mainly driven by AI. An overhaul of the curriculum, upskilling of teachers, and a change in course offerings to match present-day industry needs are the order of the day. Till that happens, considering software engineering education as a 'safe bet' might prove to be risky. &nbsp;

There's clearly a disconnect between education investment and job realities in India in the IT field, which for nearly three decades was considered a sureshot ticket to job security with campus placements. READ this analysis so that you can make informed decisions

Big Tech companies like Microsoft and Indian software giants like TCS are slashing jobs and laying off their workforce. This should be a moment of reality check for Indian parents and students, who collectively spend trillions of rupees every year for software engineering courses in India or abroad, and allied entrance coachings, every year. There's clearly a disconnect between education investment and job realities in India in the IT field, which for nearly three decades was considered a sureshot ticket to job security with campus placements. Are you spending millions on your child's software degree? AI will disrupt your dreams Even as Indian parents continue to spend millions of rupees on IT education at home and abroad, the country's $283 billion software industry is undergoing a painful transformation of job cuts, often attributed to automation by Artificial Intelligence (AI), and 'skill gaps'. This month, India’s largest IT firm Tata Consultancy Services (TCS) announced a cut of 12,000 jobs, which is 2 per cent of its workforce, at middle and senior levels, to become 'future ready' by investing heavily in AI. "A number of reskilling and redeployment initiatives have been underway, said TCS, warning that it would be 'releasing associates from the organisation whose deployment may not be feasible'. The shift is a result of AI automation of tens of thousands of repetitive IT tasks, for which global firms traditionally depended on the relatively cheap skilled labour from India. Now, clients of these IT firms who used to outsource such skills to India, are seeking innovation and not cost-cutting, because AI will take care of mundane and repetitive tasks. AI-related roles are not growing fast enough The Indian parents and aspiring IT students might still try to rationalise by thinking that an education in AI would offset the job losses in traditional IT. But the truth is, at least for some years now, roles in AI, cloud and cyberseucirty are not growing fast enough. Then there is the problem of how fast IT institutions are changing their curriculum to match the fast-changing adoption of AI. There are just not enough AI-trained instructors in the colleges and institutes. According to industry monitor Nasscom, India faces a deep skills mismatch: It will need 1 million AI professionals by next year, but less than 20 per cent of the current IT workforce is trained in these areas, it said. The impact is already visible: From north to south India, IT Jobs are being slashed A compilation of recent data shows that at least 50,000 IT jobs were lost in 2023 across Bengaluru, Hyderabad, and Pune, with the slide continuing into 2025. There is a 72 per cent drop in net new hires at top IT firms in India.

There's clearly a disconnect between education investment and job realities in India in the IT field, which for nearly three decades was considered a sureshot ticket to job security with campus placements. READ this analysis so that you can make informed decisions

Indian parents, READ THIS NOW if you spend millions of rupees on your child's software engineering degree

A newly announced trade deal between the European Union (EU) and the United States could add substantial costs to the pharmaceutical sector, with estimates suggesting an additional $13 billion to $19 billion in expenses for drugmakers. The deal, which includes a 15 per cent tariff on most EU goods, does not yet provide clarity on how it will affect pharmaceuticals. Although medicines were excluded from the deal on July 27, they remain subject to the outcome of a US national security investigation, which could potentially impose tariffs of up to 15 per cent.<h2>Tariff uncertainty clouds the future for pharmaceuticals</h2>Pharmaceuticals are the EU’s largest export to the US by value, accounting for about 60 per cent of all EU pharmaceutical imports. Historically, these products have been exempt from tariffs, but the new trade agreement could change that. The investigation into the pharmaceutical sector, initiated by the Trump administration, has created uncertainty for the industry. US President Donald Trump recently hinted that tariffs could rise as high as 200 per cent on pharmaceuticals. However, some analysts do not expect additional tariffs beyond the 15 per cent already proposed, while others caution that the situation is still fluid.Despite the official announcement of the new EU-US deal on July 27, the pharmaceutical sector was not included in the blanket tariff, as the US could not commit to any decisions regarding tariffs until the national security review is completed. While the EU has expressed confidence that any new tariffs will be capped at 15 per cent, the lack of clarity has left pharmaceutical companies facing potential financial strain.<h2>Impact on EU drugmakers and US consumers</h2>Industry analysts have warned that the added costs from tariffs could eventually trickle down to US consumers, raising prices on imported drugs unless companies take mitigation steps. UBS analysts noted that the EU could push for protective measures for pharmaceutical exports as part of ongoing negotiations. Major pharmaceutical firms like Sanofi and Roche are already taking preemptive actions to minimise disruptions, with Roche increasing US inventories and Sanofi selling a manufacturing facility in New Jersey to avoid supply chain bottlenecks.In the short term, however, no tariffs are expected to be imposed on pharmaceuticals immediately. US officials clarified that there will be no changes to the zero per cent tariff rate on pharmaceutical products for now, maintaining consistency with existing trade frameworks and WTO commitments. As the situation evolves, the pharmaceutical industry remains on edge, with questions surrounding tariffs still lingering in the wake of the EU-US trade deal.

The US-EU deal, which includes a 15 per cent tariff on most EU goods, does not yet provide clarity on how it will affect pharmaceuticals. Although medicines were excluded from the deal, they remain subject to the outcome of a US national security investigation.

A newly announced trade deal between the European Union (EU) and the United States could add substantial costs to the pharmaceutical sector, with estimates suggesting an additional $13 billion to $19 billion in expenses for drugmakers. The deal, which includes a 15 per cent tariff on most EU goods, does not yet provide clarity on how it will affect pharmaceuticals. Although medicines were excluded from the deal on July 27, they remain subject to the outcome of a US national security investigation, which could potentially impose tariffs of up to 15 per cent. Tariff uncertainty clouds the future for pharmaceuticals Pharmaceuticals are the EU’s largest export to the US by value, accounting for about 60 per cent of all EU pharmaceutical imports. Historically, these products have been exempt from tariffs, but the new trade agreement could change that. The investigation into the pharmaceutical sector, initiated by the Trump administration, has created uncertainty for the industry. US President Donald Trump recently hinted that tariffs could rise as high as 200 per cent on pharmaceuticals. However, some analysts do not expect additional tariffs beyond the 15 per cent already proposed, while others caution that the situation is still fluid. Despite the official announcement of the new EU-US deal on July 27, the pharmaceutical sector was not included in the blanket tariff, as the US could not commit to any decisions regarding tariffs until the national security review is completed. While the EU has expressed confidence that any new tariffs will be capped at 15 per cent, the lack of clarity has left pharmaceutical companies facing potential financial strain. Impact on EU drugmakers and US consumers Industry analysts have warned that the added costs from tariffs could eventually trickle down to US consumers, raising prices on imported drugs unless companies take mitigation steps. UBS analysts noted that the EU could push for protective measures for pharmaceutical exports as part of ongoing negotiations. Major pharmaceutical firms like Sanofi and Roche are already taking preemptive actions to minimise disruptions, with Roche increasing US inventories and Sanofi selling a manufacturing facility in New Jersey to avoid supply chain bottlenecks. In the short term, however, no tariffs are expected to be imposed on pharmaceuticals immediately. US officials clarified that there will be no changes to the zero per cent tariff rate on pharmaceutical products for now, maintaining consistency with existing trade frameworks and WTO commitments. As the situation evolves, the pharmaceutical industry remains on edge, with questions surrounding tariffs still lingering in the wake of the EU-US trade deal.

The US-EU deal, which includes a 15 per cent tariff on most EU goods, does not yet provide clarity on how it will affect pharmaceuticals. Although medicines were excluded from the deal, they remain subject to the outcome of a US national security investigation.

EU-US trade deal sparks uncertainty over pharmaceutical tariffs

US stock markets ended mixed on July 28, with the S&amp;P 500 edging higher to hit its sixth consecutive record close, while the Dow Jones Industrial Average slipped slightly. The Nasdaq Composite also closed at a record, despite choppy trading, as investors focused on multiple market catalysts, including a US-EU trade agreement, upcoming Federal Reserve policy decisions, and a busy earnings season. The S&amp;P 500 rose 1.13 points, or 0.02 per cent, to close at 6,389.77. The Nasdaq gained 70.27 points, or 0.33 per cent, settling at 21,178.58. However, the Dow Jones fell 64.36 points, or 0.14 per cent, finishing at 44,837.56. The market’s performance reflected mixed reactions to the weekend’s US-European Union trade deal and cautious optimism for the upcoming economic data.<h2>Muted market reaction to US-EU trade pact</h2>On July 27, US President Donald Trump and European Commission President Ursula von der Leyen unveiled a trade framework that slashes EU import tariffs to 15-20 per cent, significantly lower than the previously threatened 30 per cent rate. While this deal averted the worst-case scenario for US-EU relations, the market’s response was tepid, with investors seeing the deal as less impactful than anticipated.Although the deal may provide some relief by easing tariff uncertainty, there is scepticism about its long-term implications. French officials have criticised the agreement as a “submission,” pointing out that it doesn’t go far enough in addressing trade imbalances. Scott Welch, chief investment officer at Certuity, noted that while the trade deal was better than the alternative, it’s still too early to assess its full effects on the global economy.&nbsp;<h2>Earnings season and Fed decision in focus</h2>With the market digesting the trade agreement, investors are now turning their attention to the Federal Reserve’s policy meeting and earnings reports from major companies. The Fed is widely expected to keep interest rates unchanged during its two-day meeting, which concludes July 30. Traders will be looking for any hints about potential rate cuts in September.Corporate earnings are also front and centre this week, with over 150 S&amp;P 500 companies set to report quarterly results. Tech giants Meta Platforms, Microsoft, Amazon, and Apple are all scheduled to release earnings, and their performance could influence market sentiment. A strong showing from these companies could provide much-needed momentum, especially after a mixed reaction to the US-EU trade deal.In addition to the Fed’s decision and earnings, key economic data this week includes the Personal Consumption Expenditure (PCE) inflation report and the jobs report. Economists expect the economy to have added 102,000 jobs in July, down from 147,000 in June. This will give investors further insight into the state of the labour market and the potential impact of tariffs on consumer prices. With tariff uncertainty easing somewhat and corporate earnings potentially outperforming expectations, the market is set for another week of volatility as traders weigh the long-term effects of trade deals and economic policy decisions.&nbsp;(With inputs from agencies)

The US market’s performance reflected mixed reactions to the weekend’s US-EU trade deal and cautious optimism for the upcoming economic data. S&P 500 edging higher to hit its sixth consecutive record close, Nasdaq also closed at a record, while the Dow Jones slipped slightly.

US stock markets ended mixed on July 28, with the S&P 500 edging higher to hit its sixth consecutive record close, while the Dow Jones Industrial Average slipped slightly. The Nasdaq Composite also closed at a record, despite choppy trading, as investors focused on multiple market catalysts, including a US-EU trade agreement, upcoming Federal Reserve policy decisions, and a busy earnings season. The S&P 500 rose 1.13 points, or 0.02 per cent, to close at 6,389.77. The Nasdaq gained 70.27 points, or 0.33 per cent, settling at 21,178.58. However, the Dow Jones fell 64.36 points, or 0.14 per cent, finishing at 44,837.56. The market’s performance reflected mixed reactions to the weekend’s US-European Union trade deal and cautious optimism for the upcoming economic data. Muted market reaction to US-EU trade pact On July 27, US President Donald Trump and European Commission President Ursula von der Leyen unveiled a trade framework that slashes EU import tariffs to 15-20 per cent, significantly lower than the previously threatened 30 per cent rate. While this deal averted the worst-case scenario for US-EU relations, the market’s response was tepid, with investors seeing the deal as less impactful than anticipated. Although the deal may provide some relief by easing tariff uncertainty, there is scepticism about its long-term implications. French officials have criticised the agreement as a “submission,” pointing out that it doesn’t go far enough in addressing trade imbalances. Scott Welch, chief investment officer at Certuity, noted that while the trade deal was better than the alternative, it’s still too early to assess its full effects on the global economy. Earnings season and Fed decision in focus With the market digesting the trade agreement, investors are now turning their attention to the Federal Reserve’s policy meeting and earnings reports from major companies. The Fed is widely expected to keep interest rates unchanged during its two-day meeting, which concludes July 30. Traders will be looking for any hints about potential rate cuts in September. Corporate earnings are also front and centre this week, with over 150 S&P 500 companies set to report quarterly results. Tech giants Meta Platforms, Microsoft, Amazon, and Apple are all scheduled to release earnings, and their performance could influence market sentiment. A strong showing from these companies could provide much-needed momentum, especially after a mixed reaction to the US-EU trade deal. In addition to the Fed’s decision and earnings, key economic data this week includes the Personal Consumption Expenditure (PCE) inflation report and the jobs report. Economists expect the economy to have added 102,000 jobs in July, down from 147,000 in June. This will give investors further insight into the state of the labour market and the potential impact of tariffs on consumer prices. With tariff uncertainty easing somewhat and corporate earnings potentially outperforming expectations, the market is set for another week of volatility as traders weigh the long-term effects of trade deals and economic policy decisions. (With inputs from agencies)

The US market’s performance reflected mixed reactions to the weekend’s US-EU trade deal and cautious optimism for the upcoming economic data. S&amp;P 500 edging higher to hit its sixth consecutive record close, Nasdaq also closed at a record, while the Dow Jones slipped slightly.

US markets edge higher amid EU trade deal, Fed meeting and earnings season

Top economic officials from the United States and China convened in Stockholm on July 28 for a fresh round of trade talks, aimed at extending a 90-day truce between the world’s two largest economies. With an August 12 deadline fast approaching, both countries are negotiating to avoid a return to the high tariffs that have characterised the ongoing trade war. Treasury Secretary Scott Bessent led the US delegation, while Chinese Vice Premier He Lifeng represented Beijing in what was a more than five-hour round of discussions at Sweden’s prime minister's office.The meetings come after several months of escalating trade tensions, with both sides having raised tariffs on each other's goods to over 100 per cent earlier this year. The current temporary tariff pause, agreed to in May, was meant to allow time for further negotiations. Both sides hope to avoid a scenario in which tariffs snap back to even higher levels, potentially triggering significant disruptions to global supply chains.<h2>Truce expected to be extended amid complex negotiations</h2>Reports suggest that both the US and China are leaning toward a 90-day extension of the existing truce, which would push the deadline for a final agreement into mid-November. This extension would buy more time for detailed negotiations, including addressing key issues such as China’s restrictions on rare earth mineral exports, technology exports, and broader trade imbalances.“Right now, what we’re aiming for is continued monitoring and ensuring that the terms we’ve agreed to thus far are being followed,” US Trade Representative Jamieson Greer told CNBC. He stressed that the discussions would focus on implementing agreements made earlier this year, such as ensuring the continued flow of critical minerals between the two nations. Negotiators from both sides were seen exiting the Stockholm talks without offering any immediate comments, with a second round of discussions set to continue on July 29.China’s economic leverage has been increasing in recent months, with its economy showing growth of 5.3 per cent in the first half of 2025. Additionally, Beijing’s control over the global supply of rare earth minerals, which are essential for everything from military equipment to consumer electronics, gives it significant bargaining power. In April, China imposed new export restrictions on these crucial materials, heightening tensions and prompting Washington to soften its stance on other trade matters.<h2>US-China talks threatened by geopolitical concerns and pressure</h2>While economic negotiations are ongoing, the trade talks come amid growing geopolitical tensions. US senators from both major political parties are preparing to introduce bills this week that target China over its treatment of minority groups, human rights abuses, and its stance on Taiwan. These bills could complicate the negotiations, as the Trump administration moves to take a hard stance on China’s behaviour in areas outside of trade.Taiwan’s potential role in the talks is another source of friction. Reports indicated that Taiwan President Lai Ching-te would delay a visit to the US that could have further infuriated Beijing, which considers Taiwan a breakaway province. Any support for Taiwan from the US would likely be viewed as a significant diplomatic challenge for Beijing and could further complicate the trade discussions.Despite these external pressures, US officials, including Treasury Secretary Bessent, have expressed optimism about the future of the trade talks. “Trade is at a good place with China,” Bessent said, adding that negotiations were “constructive” and focused on achieving balanced trade and economic stability. Analysts, however, note that progress on a deal will likely require more time, with both countries continuing to address a range of complex issues, including trade imbalances, intellectual property concerns, and the role of state-owned enterprises in China’s economy.&nbsp;(With inputs from agencies)

The Stockholm talks come after months of escalating trade tensions, with the US and China raising tariffs on each other's goods to over 100 per cent earlier this year. Now, both sides hope to avoid a scenario in which tariffs snap back to even higher levels, disrupting global supply chains.

Top economic officials from the United States and China convened in Stockholm on July 28 for a fresh round of trade talks, aimed at extending a 90-day truce between the world’s two largest economies. With an August 12 deadline fast approaching, both countries are negotiating to avoid a return to the high tariffs that have characterised the ongoing trade war. Treasury Secretary Scott Bessent led the US delegation, while Chinese Vice Premier He Lifeng represented Beijing in what was a more than five-hour round of discussions at Sweden’s prime minister's office. The meetings come after several months of escalating trade tensions, with both sides having raised tariffs on each other's goods to over 100 per cent earlier this year. The current temporary tariff pause, agreed to in May, was meant to allow time for further negotiations. Both sides hope to avoid a scenario in which tariffs snap back to even higher levels, potentially triggering significant disruptions to global supply chains. Truce expected to be extended amid complex negotiations Reports suggest that both the US and China are leaning toward a 90-day extension of the existing truce, which would push the deadline for a final agreement into mid-November. This extension would buy more time for detailed negotiations, including addressing key issues such as China’s restrictions on rare earth mineral exports, technology exports, and broader trade imbalances. “Right now, what we’re aiming for is continued monitoring and ensuring that the terms we’ve agreed to thus far are being followed,” US Trade Representative Jamieson Greer told CNBC. He stressed that the discussions would focus on implementing agreements made earlier this year, such as ensuring the continued flow of critical minerals between the two nations. Negotiators from both sides were seen exiting the Stockholm talks without offering any immediate comments, with a second round of discussions set to continue on July 29. China’s economic leverage has been increasing in recent months, with its economy showing growth of 5.3 per cent in the first half of 2025. Additionally, Beijing’s control over the global supply of rare earth minerals, which are essential for everything from military equipment to consumer electronics, gives it significant bargaining power. In April, China imposed new export restrictions on these crucial materials, heightening tensions and prompting Washington to soften its stance on other trade matters. US-China talks threatened by geopolitical concerns and pressure While economic negotiations are ongoing, the trade talks come amid growing geopolitical tensions. US senators from both major political parties are preparing to introduce bills this week that target China over its treatment of minority groups, human rights abuses, and its stance on Taiwan. These bills could complicate the negotiations, as the Trump administration moves to take a hard stance on China’s behaviour in areas outside of trade. Taiwan’s potential role in the talks is another source of friction. Reports indicated that Taiwan President Lai Ching-te would delay a visit to the US that could have further infuriated Beijing, which considers Taiwan a breakaway province. Any support for Taiwan from the US would likely be viewed as a significant diplomatic challenge for Beijing and could further complicate the trade discussions. Despite these external pressures, US officials, including Treasury Secretary Bessent, have expressed optimism about the future of the trade talks. “Trade is at a good place with China,” Bessent said, adding that negotiations were “constructive” and focused on achieving balanced trade and economic stability. Analysts, however, note that progress on a deal will likely require more time, with both countries continuing to address a range of complex issues, including trade imbalances, intellectual property concerns, and the role of state-owned enterprises in China’s economy. (With inputs from agencies)

The Stockholm talks come after months of escalating trade tensions, with the US and China raising tariffs on each other's goods to over 100 per cent earlier this year. Now, both sides hope to avoid a scenario in which tariffs snap back to even higher levels, disrupting global supply chains.

US and China trade talks resume in Stockholm as deadline approaches

The Bank of England (BoE) is expected to slow the pace of its bond sales as part of quantitative tightening (QT), amid rising UK government bond yields and increased scrutiny over market stability and financial losses. A formal review is anticipated in its upcoming policy decision on August 7, as reported by Reuters.&nbsp;The central bank has already reduced its gilt holdings by £100 billion ($130 billion) over the past year, £87 billion via maturing bonds and £13 billion through active sales. But continuing this pace would require selling an unprecedented £51 billion in gilts in the coming year, a target many economists now believe is unrealistic given current market conditions.<h2>Shift in guidance expected</h2>As per Reuters, the BoE is widely expected to cut interest rates by 25 basis points, bringing the benchmark rate to 4 per cent, and offer updated guidance on QT alongside. Analysts say the surge in long-dated gilt yields and curve steepening could prompt the central bank to slow or pause outright sales.&nbsp;“They are not operating in a vacuum,” said Peter Schaffrik, global macro strategist at RBC, as quoted by Reuters. “Market conditions have clearly changed.”<h2>Active QT under pressure</h2>The BoE is unique among major central banks for actively selling long-dated government bonds in addition to letting them mature. But that approach was tested in April when it was forced to postpone a scheduled auction after volatility triggered by US President Donald Trump’s tariff announcement, according to Reuters.&nbsp;A May investor survey by the BoE, cited by Reuters, showed market participants expect the pace of QT to be trimmed to £75 billion per year from September, further declining to £50 billion by 2026-27. That would eventually see active sales stop altogether by 2028.“QT has never been done in this environment,” said Dani Stoilova, economist at BNP Paribas, adding the BoE might halt all bond sales from October due to “interaction effects” between falling rates and QT, as per Reuters.<h2>Political scrutiny grows</h2>QT has also drawn political attention amid rising losses. Selling gilts in a higher-rate environment means the BoE is often booking losses, which the UK Treasury must cover. The scale of these losses has raised concerns across Westminster.&nbsp;BoE Governor Andrew Bailey, addressing the matter, denied QT was the sole cause of the yield surge but admitted to Reuters that “how QT interacts with monetary policy and market liquidity” needs to be assessed.&nbsp;Meanwhile, Michael Saunders, a former BoE rate-setter, told Reuters the central bank could stop selling long-term gilts (20-year+) altogether or refocus on shorter maturities. However, Adam Dent, strategist at Santander, said using QT to control the yield curve’s slope may be ineffective: &gt; “Trying to use QT to control the slope should have little lasting effect.”<h2>Reserve targets in question</h2>The long-term destination of QT remains uncertain. One stated aim is to reduce bank reserves, which still sit around £680 billion, far above the BoE’s preferred range of £385–540 billion. But as Reuters noted, some analysts believe reserves are already approaching their effective lower limit, evidenced by rising participation in the BoE’s repo operations.&nbsp;“They could slow things down and feel their way to that level,” said RBC’s Schaffrik, quoted by Reuters.&nbsp;As expectations of a rate cut mount, the central bank faces pressure to adjust its tightening strategy. With markets volatile and political scrutiny intensifying, the BoE’s August 7 decision could mark a turning point in how aggressively it pursues QT going forward.&nbsp;(With inputs from the agencies)&nbsp;

After reducing gilt holdings by £100 billion over the past year, the target for selling £51 billion in the coming year is now seen as unrealistic. Analysts anticipate a 25 basis points cut in interest rates, potentially halting bond sales due to adverse market conditions. 

The Bank of England (BoE) is expected to slow the pace of its bond sales as part of quantitative tightening (QT), amid rising UK government bond yields and increased scrutiny over market stability and financial losses. A formal review is anticipated in its upcoming policy decision on August 7, as reported by Reuters. The central bank has already reduced its gilt holdings by £100 billion ($130 billion) over the past year, £87 billion via maturing bonds and £13 billion through active sales. But continuing this pace would require selling an unprecedented £51 billion in gilts in the coming year, a target many economists now believe is unrealistic given current market conditions. Shift in guidance expected As per Reuters, the BoE is widely expected to cut interest rates by 25 basis points, bringing the benchmark rate to 4 per cent, and offer updated guidance on QT alongside. Analysts say the surge in long-dated gilt yields and curve steepening could prompt the central bank to slow or pause outright sales. “They are not operating in a vacuum,” said Peter Schaffrik, global macro strategist at RBC, as quoted by Reuters. “Market conditions have clearly changed.” Active QT under pressure The BoE is unique among major central banks for actively selling long-dated government bonds in addition to letting them mature. But that approach was tested in April when it was forced to postpone a scheduled auction after volatility triggered by US President Donald Trump’s tariff announcement, according to Reuters. A May investor survey by the BoE, cited by Reuters, showed market participants expect the pace of QT to be trimmed to £75 billion per year from September, further declining to £50 billion by 2026-27. That would eventually see active sales stop altogether by 2028. “QT has never been done in this environment,” said Dani Stoilova, economist at BNP Paribas, adding the BoE might halt all bond sales from October due to “interaction effects” between falling rates and QT, as per Reuters. Political scrutiny grows QT has also drawn political attention amid rising losses. Selling gilts in a higher-rate environment means the BoE is often booking losses, which the UK Treasury must cover. The scale of these losses has raised concerns across Westminster. BoE Governor Andrew Bailey, addressing the matter, denied QT was the sole cause of the yield surge but admitted to Reuters that “how QT interacts with monetary policy and market liquidity” needs to be assessed. Meanwhile, Michael Saunders, a former BoE rate-setter, told Reuters the central bank could stop selling long-term gilts (20-year+) altogether or refocus on shorter maturities. However, Adam Dent, strategist at Santander, said using QT to control the yield curve’s slope may be ineffective: > “Trying to use QT to control the slope should have little lasting effect.” Reserve targets in question The long-term destination of QT remains uncertain. One stated aim is to reduce bank reserves, which still sit around £680 billion, far above the BoE’s preferred range of £385–540 billion. But as Reuters noted, some analysts believe reserves are already approaching their effective lower limit, evidenced by rising participation in the BoE’s repo operations. “They could slow things down and feel their way to that level,” said RBC’s Schaffrik, quoted by Reuters. As expectations of a rate cut mount, the central bank faces pressure to adjust its tightening strategy. With markets volatile and political scrutiny intensifying, the BoE’s August 7 decision could mark a turning point in how aggressively it pursues QT going forward. (With inputs from the agencies)

The Bank of England (BoE) is expected to slow bond sales amid rising government bond yields and concerns over market stability, with a review scheduled for August 7.

BoE to reassess bond sales amid rising yields

There is discontent brewing in Europe over the new trade deal with the US agreed upon between European Commission president Ursula von der Leyen and US President Donald Trump at a meeting in Scotland on Sunday, and European leaders have started expressing their concerns over it. France’s prime minister and business leaders across Germany have criticised the deal. Analysts say the deal just averts a damaging trade war by imposing a 15% import tariff, half of the rate threatened by Trump, on most EU goods, but over three times of the average 4.8% effective now.&nbsp;France’s Prime Minister François Bayrou said Europe had submitted to the US on a “dark day” for the European Union. “It is a dark day when an alliance of free peoples, gathered to affirm their values and defend their interests, resolves to submission,” Bayrou said in a post on X.&nbsp;

<blockquote class="twitter-tweet">Accord Van der Leyen-Trump : c&#39;est un jour sombre que celui où une alliance de peuples libres, rassemblés pour affirmer leurs valeurs et défendre leurs intérêts, se résout à la soumission.&mdash; François Bayrou (@bayrou) <a href="https://twitter.com/bayrou/status/1949749114436194782?ref_src=twsrc%5Etfw">July 28, 2025</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

The agreement, which imposes 15% tariffs on most European exports to the US, including cars, ends the threat of a punitive 30% import duty, but it is far from the EU-offered zero-zero import and export tariff.The deal means that European exporters will now face three times the present average 4.8% tariff.&nbsp;<h2>‘Trump ate von der Leyen for breakfast’: Orban</h2>&nbsp;Hungarian Prime Minister Viktor Orban said, “This is not an agreement…Donald Trump ate von der Leyen for breakfast, this is what happened and we suspected this would happen as the US president is a heavyweight when it comes to negotiations while Madame President is featherweight.”&nbsp;German chancellor Friedrich Merz hailed the deal, saying it avoided “needless escalation in transatlantic trade relations” and averted a damaging trade war, but German exporters were less enthusiastic.&nbsp;&nbsp;It is also clear that the US tariff of 15% on automotive products will place a burden on German automotive companies in the midst of their transformation, hitting sales and profits.&nbsp;Simon Harris, deputy prime minister of Ireland, one of the EU’s top exporters to the US, said it welcomed the deal for bringing “a measure of much-needed certainty”, but that it “regrets” the baseline tariff.&nbsp;<h2>‘Deal would provide temporary stability, but is unbalanced’</h2>&nbsp;France’s minister for Europe, Benjamin Haddad, said the deal would provide “temporary stability … but is unbalanced”.“Fifteen per cent is not to be underestimated, but it is the best we could get,” the European Commision president, Ursula von der Leyen, acknowledged.&nbsp;French Europe minister Benjamin Haddad said that while the deal would “bring temporary stability,” it was generally “unbalanced,” calling the situation “not satisfactory and … not sustainable.”&nbsp;The 15% tariff agreed in the EU-US deal will apply to 70% of all exports to the US worth €380 billion, while rates on pharma and steel are still being negotiated, officials said.

The 15% tariff agreed in the EU-US deal will apply to 70% of all exports to the US worth €380 billion, while rates on pharma and steel are still being negotiated, officials said.

France’s minister for Europe, Benjamin Haddad, said the deal is unbalanced but would provide temporary stability, while European Commission President Ursula von der Leyen also acknowledged that 15 per cent is not to be underestimated, but it is the best the EU could get.

There is discontent brewing in Europe over the new trade deal with the US agreed upon between European Commission president Ursula von der Leyen and US President Donald Trump at a meeting in Scotland on Sunday, and European leaders have started expressing their concerns over it. France’s prime minister and business leaders across Germany have criticised the deal. Analysts say the deal just averts a damaging trade war by imposing a 15% import tariff, half of the rate threatened by Trump, on most EU goods, but over three times of the average 4.8% effective now. France’s Prime Minister François Bayrou said Europe had submitted to the US on a “dark day” for the European Union. “It is a dark day when an alliance of free peoples, gathered to affirm their values and defend their interests, resolves to submission,” Bayrou said in a post on X.

France’s minister for Europe, Benjamin Haddad, said the deal is unbalanced but would provide temporary stability, while European Commission President Ursula von der Leyen also acknowledged that 15 per cent is not to be underestimated, but it is the best the EU could get.

Discontent brews in Europe over US-EU trade deal; French PM calls it a ‘dark day’

Chinese artificial intelligence firms are forming new alliances to accelerate domestic innovation and reduce reliance on foreign technologies, as US export controls continue to block access to Nvidia’s most advanced chips. The announcements came during the three-day World Artificial Intelligence Conference in Shanghai, which concludes Monday. According to Reuters, two major industry alliances were launched at the event to strengthen collaboration between China’s leading AI chipmakers and developers of large language models (LLMs).&nbsp;The first, called the Model-Chip Ecosystem Innovation Alliance, brings together domestic LLM developers and GPU manufacturers including Huawei, Biren, Moore Threads, and Enflame—all of whom have faced US sanctions restricting their access to cutting-edge semiconductors. Zhao Lidong, CEO of Enflame, described the alliance as “an innovative ecosystem that connects the complete technology chain from chips to models to infrastructure.” Another consortium, the Shanghai General Chamber of Commerce AI Committee, aims to integrate AI technologies more deeply into industrial applications. Members include sanctioned facial-recognition firm SenseTime, LLM developers StepFun and MiniMax, and chipmakers Metax and Iluvatar CoreX.<h2>Huawei unveils Nvidia rival as China clusters chip power</h2>Huawei took centre stage at the conference with the launch of its CloudMatrix 384 system, built using 384 of its self-developed 910C AI chips. According to US-based research firm SemiAnalysis, the system outperforms Nvidia’s flagship GB200 NVL72 on some metrics, thanks to Huawei’s system-level innovations and large-scale clustering approach.&nbsp;The CloudMatrix platform is designed to compensate for lower chip-level performance through high-volume integration and liquid-cooled infrastructure. At least six other Chinese firms, including Metax, showcased similar cluster-based architectures at the event, signalling a nationwide push toward scaling up domestic data-processing capacity. Metax’s AI supernode demonstration featured 128 of its C550 chips, tailored for large-scale cloud and data centre deployments.<h2>Tech giants pivot to AI wearables, digital avatars</h2>The conference also spotlighted AI consumer tech, with major firms launching interactive wearables and virtual services. Alibaba unveiled its Quark AI Glasses, expected to hit the Chinese market by end-2025. Powered by the company’s Qwen model, the smart glasses will enable users to scan QR codes using voice commands and access maps on the go.&nbsp;Tencent introduced its Hunyuan3D World Model 1.0, an open-source tool for generating interactive 3D environments from text or image prompts. Meanwhile, Baidu showcased a new “digital human” technology that can generate virtual livestream hosts. Its AI cloning tool can replicate a person’s voice, tone, and body language using just 10 minutes of sample footage.<h2>Strategic shift amid US tech sanctions</h2>Beijing’s AI industry push comes in response to ongoing US export restrictions that have barred China’s access to Nvidia’s H100 and other high-end AI chips. The shift toward domestic clustering, innovation alliances, and national LLM development signals a long-term strategy to counter Washington’s technological containment.&nbsp;As per Reuters, the AI alliances unveiled in Shanghai may serve as a launchpad for a broader, state-backed campaign to strengthen China’s self-reliance in semiconductors and artificial intelligence.&nbsp;(With inputs from the agencies)

Beijing’s AI industry push comes in response to ongoing US export restrictions that have barred China’s access to Nvidia’s H100 and other high-end AI chips. 

Chinese artificial intelligence firms are forming new alliances to accelerate domestic innovation and reduce reliance on foreign technologies, as US export controls continue to block access to Nvidia’s most advanced chips. The announcements came during the three-day World Artificial Intelligence Conference in Shanghai, which concludes Monday. According to Reuters, two major industry alliances were launched at the event to strengthen collaboration between China’s leading AI chipmakers and developers of large language models (LLMs). The first, called the Model-Chip Ecosystem Innovation Alliance, brings together domestic LLM developers and GPU manufacturers including Huawei, Biren, Moore Threads, and Enflame—all of whom have faced US sanctions restricting their access to cutting-edge semiconductors. Zhao Lidong, CEO of Enflame, described the alliance as “an innovative ecosystem that connects the complete technology chain from chips to models to infrastructure.” Another consortium, the Shanghai General Chamber of Commerce AI Committee, aims to integrate AI technologies more deeply into industrial applications. Members include sanctioned facial-recognition firm SenseTime, LLM developers StepFun and MiniMax, and chipmakers Metax and Iluvatar CoreX. Huawei unveils Nvidia rival as China clusters chip power Huawei took centre stage at the conference with the launch of its CloudMatrix 384 system, built using 384 of its self-developed 910C AI chips. According to US-based research firm SemiAnalysis, the system outperforms Nvidia’s flagship GB200 NVL72 on some metrics, thanks to Huawei’s system-level innovations and large-scale clustering approach. The CloudMatrix platform is designed to compensate for lower chip-level performance through high-volume integration and liquid-cooled infrastructure. At least six other Chinese firms, including Metax, showcased similar cluster-based architectures at the event, signalling a nationwide push toward scaling up domestic data-processing capacity. Metax’s AI supernode demonstration featured 128 of its C550 chips, tailored for large-scale cloud and data centre deployments. Tech giants pivot to AI wearables, digital avatars The conference also spotlighted AI consumer tech, with major firms launching interactive wearables and virtual services. Alibaba unveiled its Quark AI Glasses, expected to hit the Chinese market by end-2025. Powered by the company’s Qwen model, the smart glasses will enable users to scan QR codes using voice commands and access maps on the go. Tencent introduced its Hunyuan3D World Model 1.0, an open-source tool for generating interactive 3D environments from text or image prompts. Meanwhile, Baidu showcased a new “digital human” technology that can generate virtual livestream hosts. Its AI cloning tool can replicate a person’s voice, tone, and body language using just 10 minutes of sample footage. Strategic shift amid US tech sanctions Beijing’s AI industry push comes in response to ongoing US export restrictions that have barred China’s access to Nvidia’s H100 and other high-end AI chips. The shift toward domestic clustering, innovation alliances, and national LLM development signals a long-term strategy to counter Washington’s technological containment. As per Reuters, the AI alliances unveiled in Shanghai may serve as a launchpad for a broader, state-backed campaign to strengthen China’s self-reliance in semiconductors and artificial intelligence. (With inputs from the agencies)

Chinese AI firms are forming new alliances to boost domestic innovation and lessen dependence on foreign technology due to US export controls.

Chinese AI firms join forces to build homegrown ecosystem as US curbs bite

The United States is set to announce the outcome of its national security investigation into semiconductor imports within the next two weeks, Commerce Secretary Howard Lutnick confirmed on Sunday. The probe, launched under Section 232 of the Trade Expansion Act, could pave the way for sweeping new tariffs on chip imports. The development came shortly after US President Donald Trump met European Commission President Ursula von der Leyen in Scotland, where the two leaders agreed to a new framework trade deal. The agreement includes a blanket 15 per cent tariff on all European Union imports entering the US and even higher duties for certain key sectors.&nbsp;“Von der Leyen avoided the pending chip tariffs in a much better way,” Trump said, suggesting the new agreement may shield EU firms from the harshest semiconductor penalties.<h2>Trade policy tool returns to centre stage</h2>The chip probe is part of a broader Trump administration strategy that revives a controversial policy instrument — Section 232 — used extensively during his first term. The same provision had previously formed the basis for tariffs on steel, aluminium, and autos, citing national security risks. Now, semiconductors and pharmaceuticals are under scrutiny, with decisions likely to influence global tech supply chains.&nbsp;According to Lutnick, the semiconductor investigation was a “key reason” the EU sought to accelerate broader trade negotiations with the US. The urgency stems from growing concerns in Europe over Washington’s protectionist stance, which has already unsettled auto and energy sectors.<h2>Taiwan in the crosshairs</h2>President Trump has long criticised America’s dependence on Taiwanese chips. While the Biden administration tried to fix this imbalance by offering billions in subsidies through the CHIPS and Science Act, Trump’s new approach appears tariff-driven.He hinted that many companies, including some from Taiwan, are now planning investments in US chip manufacturing, potentially to sidestep incoming duties.&nbsp;That could be a veiled reference to firms like TSMC, which recently expanded its Arizona facility, and Samsung, which secured a $16.5 billion contract to supply chips for Tesla via its Texas fab.<h2>Section 232 probes expand</h2>Besides chips and pharma, the Trump administration has launched Section 232 investigations into imports of copper and lumber. If past precedents are any guide, these could also result in tariff actions.&nbsp;The latest probe comes just days before a fresh round of US tariff hikes takes effect on August 1. As per Trump’s April announcement, many large trading partners will soon face import duties well beyond the current 10 per cent baseline.With chip supply chains already strained and global tech firms scrambling for foundry capacity, Washington’s next move could reshape the semiconductor trade map, again.&nbsp;(With inputs from the agencies)

This comes after President Trump and EU von der Leyen agreed on a trade framework with a 15% tariff on EU imports. Trump has criticized reliance on Taiwanese chips, suggesting firms might invest in U.S. manufacturing to avoid duties.

The United States is set to announce the outcome of its national security investigation into semiconductor imports within the next two weeks, Commerce Secretary Howard Lutnick confirmed on Sunday. The probe, launched under Section 232 of the Trade Expansion Act, could pave the way for sweeping new tariffs on chip imports. The development came shortly after US President Donald Trump met European Commission President Ursula von der Leyen in Scotland, where the two leaders agreed to a new framework trade deal. The agreement includes a blanket 15 per cent tariff on all European Union imports entering the US and even higher duties for certain key sectors. “Von der Leyen avoided the pending chip tariffs in a much better way,” Trump said, suggesting the new agreement may shield EU firms from the harshest semiconductor penalties. Trade policy tool returns to centre stage The chip probe is part of a broader Trump administration strategy that revives a controversial policy instrument — Section 232 — used extensively during his first term. The same provision had previously formed the basis for tariffs on steel, aluminium, and autos, citing national security risks. Now, semiconductors and pharmaceuticals are under scrutiny, with decisions likely to influence global tech supply chains. According to Lutnick, the semiconductor investigation was a “key reason” the EU sought to accelerate broader trade negotiations with the US. The urgency stems from growing concerns in Europe over Washington’s protectionist stance, which has already unsettled auto and energy sectors. Taiwan in the crosshairs President Trump has long criticised America’s dependence on Taiwanese chips. While the Biden administration tried to fix this imbalance by offering billions in subsidies through the CHIPS and Science Act, Trump’s new approach appears tariff-driven. He hinted that many companies, including some from Taiwan, are now planning investments in US chip manufacturing, potentially to sidestep incoming duties. That could be a veiled reference to firms like TSMC, which recently expanded its Arizona facility, and Samsung, which secured a $16.5 billion contract to supply chips for Tesla via its Texas fab. Section 232 probes expand Besides chips and pharma, the Trump administration has launched Section 232 investigations into imports of copper and lumber. If past precedents are any guide, these could also result in tariff actions. The latest probe comes just days before a fresh round of US tariff hikes takes effect on August 1. As per Trump’s April announcement, many large trading partners will soon face import duties well beyond the current 10 per cent baseline. With chip supply chains already strained and global tech firms scrambling for foundry capacity, Washington’s next move could reshape the semiconductor trade map, again. (With inputs from the agencies)

The US will announce findings from its semiconductor import security probe within two weeks, with potential new tariffs looming.

US set to act on chip imports, Trump hints at tariffs

Samsung Electronics has signed a landmark $16.5 billion semiconductor supply deal with Tesla, according to CEO Elon Musk — a move that could reshape the chipmaking landscape and revive the South Korean giant’s struggling foundry business. Musk confirmed on Monday that the multi-year contract would see Samsung manufacture Tesla’s next-generation AI6 chips, dedicated to autonomous and AI computing. He added that Samsung’s upcoming fab in Taylor, Texas, would be at the heart of the deal, calling its strategic value “hard to overstate”.&nbsp;The agreement comes at a critical moment for Samsung, which has been losing market share in advanced chipmaking to Taiwan’s TSMC and facing mounting losses in its contract manufacturing division. According to Reuters, the foundry business recorded losses of over 5 trillion won ($3.63 billion) in just the first half of 2025. Samsung had initially announced the 22.8 trillion won ($16.5 billion) deal without naming the client, citing confidentiality clauses. However, multiple sources told Reuters that Tesla is the customer, and Musk later confirmed this publicly on X.<h2>Boost for Samsung’s Texas ambitions</h2>The deal is expected to run until the end of 2033 and signals a possible revival of Samsung’s delayed Texas project. The Taylor fab has faced construction delays and a lack of major clients. Musk said Tesla would help “maximise manufacturing efficiency” and that he would “walk the line personally” to accelerate production.&nbsp;The plant’s location also holds personal significance. “It’s conveniently located not far from my house,” Musk wrote.<h2>Race for AI chip dominance</h2>Samsung, the world’s largest memory chip maker, has been under pressure in the race to develop AI-focused semiconductors. While it is investing in 2-nanometre technology, analysts believe the Tesla order is unlikely to use the cutting-edge node just yet. Still, the contract is seen as a vote of confidence in Samsung’s roadmap.&nbsp;As per Bloomberg Intelligence, the deal could boost Samsung’s foundry sales by 10 per cent annually over the contract period. This may help Samsung claw back some ground in the global foundry market, where its share has slipped to just 7.7 per cent, compared to TSMC’s dominant 67.6 per cent, according to TrendForce.&nbsp;TSMC currently serves industry heavyweights such as Apple, Nvidia and Qualcomm, making it the default choice for high-end chip fabrication. Samsung has been struggling to attract similarly lucrative clients, and the Tesla contract marks a rare strategic breakthrough.<h2>Geopolitical implications</h2>The timing is significant. South Korea is currently in trade negotiations with the United States, seeking to avoid or reduce potential 25 per cent US tariffs on exports such as ships and electronics. A high-profile chip partnership with an American automaker like Tesla could play to Seoul’s advantage in upcoming discussions.&nbsp;Meanwhile, the US continues to encourage onshore semiconductor production as part of its broader tech decoupling strategy. The Tesla-Samsung deal, centred around a US-based fab, aligns with Washington’s goal of reshoring advanced chip&nbsp;manufacturing.&nbsp;(With inputs from the agencies)&nbsp;&nbsp;

This deal, confirmed by Elon Musk, aims to bolster Samsung struggling foundry business amidst losses and competition from TSMC. The deal enhances Samsung presence in AI chipmaking and may increase foundry sales by 10% annually. 

Samsung Electronics has signed a landmark $16.5 billion semiconductor supply deal with Tesla, according to CEO Elon Musk — a move that could reshape the chipmaking landscape and revive the South Korean giant’s struggling foundry business. Musk confirmed on Monday that the multi-year contract would see Samsung manufacture Tesla’s next-generation AI6 chips, dedicated to autonomous and AI computing. He added that Samsung’s upcoming fab in Taylor, Texas, would be at the heart of the deal, calling its strategic value “hard to overstate”. The agreement comes at a critical moment for Samsung, which has been losing market share in advanced chipmaking to Taiwan’s TSMC and facing mounting losses in its contract manufacturing division. According to Reuters, the foundry business recorded losses of over 5 trillion won ($3.63 billion) in just the first half of 2025. Samsung had initially announced the 22.8 trillion won ($16.5 billion) deal without naming the client, citing confidentiality clauses. However, multiple sources told Reuters that Tesla is the customer, and Musk later confirmed this publicly on X. Boost for Samsung’s Texas ambitions The deal is expected to run until the end of 2033 and signals a possible revival of Samsung’s delayed Texas project. The Taylor fab has faced construction delays and a lack of major clients. Musk said Tesla would help “maximise manufacturing efficiency” and that he would “walk the line personally” to accelerate production. The plant’s location also holds personal significance. “It’s conveniently located not far from my house,” Musk wrote. Race for AI chip dominance Samsung, the world’s largest memory chip maker, has been under pressure in the race to develop AI-focused semiconductors. While it is investing in 2-nanometre technology, analysts believe the Tesla order is unlikely to use the cutting-edge node just yet. Still, the contract is seen as a vote of confidence in Samsung’s roadmap. As per Bloomberg Intelligence, the deal could boost Samsung’s foundry sales by 10 per cent annually over the contract period. This may help Samsung claw back some ground in the global foundry market, where its share has slipped to just 7.7 per cent, compared to TSMC’s dominant 67.6 per cent, according to TrendForce. TSMC currently serves industry heavyweights such as Apple, Nvidia and Qualcomm, making it the default choice for high-end chip fabrication. Samsung has been struggling to attract similarly lucrative clients, and the Tesla contract marks a rare strategic breakthrough. Geopolitical implications The timing is significant. South Korea is currently in trade negotiations with the United States, seeking to avoid or reduce potential 25 per cent US tariffs on exports such as ships and electronics. A high-profile chip partnership with an American automaker like Tesla could play to Seoul’s advantage in upcoming discussions. Meanwhile, the US continues to encourage onshore semiconductor production as part of its broader tech decoupling strategy. The Tesla-Samsung deal, centred around a US-based fab, aligns with Washington’s goal of reshoring advanced chip manufacturing. (With inputs from the agencies)

Samsung Electronics has secured a $16.5 billion semiconductor supply deal with Tesla, enabling the production of Tesla's next-generation AI6 chips at Samsung’s new Texas fab.

Samsung to supply Tesla chips in $16.5 billion deal through 2033

After the trade deal with the US, Tokyo has made a big clarification on $550 billion fund. As per Bloomberg, Japan has revealed that just 1–2 per cent of the recently announced $550 billion US–Japan investment framework will be in the form of actual investment, with the overwhelming majority structured as loans and loan guarantees. That’s according to Ryosei Akazawa, Japan’s chief negotiator, who addressed the details on NHK over the weekend in an attempt to defuse public criticism of the deal.&nbsp;The fund, a key pillar of Japan’s trade agreement with the Trump administration, was initially seen as a massive financial commitment to the US. However, Akazawa clarified, “It’s not that $550 billion in cash will be sent to the US.” Instead, most of it will be financing through Japanese-backed institutions, which would earn interest and guarantee fees.&nbsp;According to Akazawa, actual investments in the US will total just $5.5 billion to $11 billion, with Tokyo and Washington agreeing to a 90-10 profit split, heavily favouring the US. Japan had reportedly proposed a 50-50 ratio, but compromised in order to secure broader trade concessions. “For that part, Japan’s just making money,” Akazawa said about the loan guarantees, noting that unless a default occurs, Japan simply collects fees, as per Bloomberg.<h2>Tariff relief saves Japan ¥10 trillion</h2>Despite the lopsided investment structure, Japan expects to save ¥10 trillion ($68 billion) through lower US tariff rates, especially on automobiles and industrial exports. According to Bloomberg, under the new trade terms, the US will impose 15 per cent universal tariffs on most Japanese goods, including cars, replacing higher and often unpredictable levies. Akazawa said he expects the tariff reduction to take effect as early as August 1, even though a joint implementation document between the two countries has not been signed. Instead, Tokyo is urging the US to issue an executive order to enact the tariff cuts quickly. “If you say something like, ‘Let’s create a joint document,’ they will say, ‘We’ll lower tariffs after the document is created,’” Akazawa noted. “We will demand that they issue an executive order to lower tariffs as soon as possible," as quoted by Bloomberg.&nbsp;According to Bloomberg, the fund isn’t limited to Japan–US cooperation. Akazawa highlighted that non-Japanese firms operating in the US, such as a Taiwanese semiconductor company, could also benefit from the financing. The broader aim, he said, is to support manufacturing and tech capacity building in the US, while still securing gains for Japanese lenders. The US–Japan agreement came just days before Washington announced a similar trade pact with the European Union, which includes a $750 billion LNG purchase plan and $600 billion in European investment into the US. The Trump administration is positioning both deals as templates for global trade reset under its “America First” policy.<h2>Public backlash and Akazawa’s defence</h2>Akazawa’s public remarks appeared to be a pre-emptive response to growing domestic criticism, with opposition figures accusing the government of “selling out” Japan. But the chief negotiator insisted that the actual risk to Japanese taxpayers is limited, given the conservative structure of loans and guarantees.&nbsp;“People are saying various things, such as ‘You sold out Japan,’ but they’re wrong,” he said, as quoted by Reuters.&nbsp;<h2>What’s next?</h2>Key questions remain unanswered, including when the investment mechanism will launch, how the funds will be allocated, and what sectors will be prioritised. With just months left in President Donald Trump’s second term, Japan hopes to finalise the framework within this political window.&nbsp;Until then, officials from across Asia and Europe are watching closely, trying to assess whether Washington’s new tariff-plus-investment model is a fair deal or a strategic trap.&nbsp;(With inputs from the agencies)

Ryosei Akazawa, Japan chief negotiator, mentioned that this fund aims for $5.5 billion to $11 billion in real investments, with a 90-10 profit split favoring the US. Japan anticipates saving ¥10 trillion through reduced tariffs, particularly on automobiles. 

After the trade deal with the US, Tokyo has made a big clarification on $550 billion fund. As per Bloomberg, Japan has revealed that just 1–2 per cent of the recently announced $550 billion US–Japan investment framework will be in the form of actual investment, with the overwhelming majority structured as loans and loan guarantees. That’s according to Ryosei Akazawa, Japan’s chief negotiator, who addressed the details on NHK over the weekend in an attempt to defuse public criticism of the deal. The fund, a key pillar of Japan’s trade agreement with the Trump administration, was initially seen as a massive financial commitment to the US. However, Akazawa clarified, “It’s not that $550 billion in cash will be sent to the US.” Instead, most of it will be financing through Japanese-backed institutions, which would earn interest and guarantee fees. According to Akazawa, actual investments in the US will total just $5.5 billion to $11 billion, with Tokyo and Washington agreeing to a 90-10 profit split, heavily favouring the US. Japan had reportedly proposed a 50-50 ratio, but compromised in order to secure broader trade concessions. “For that part, Japan’s just making money,” Akazawa said about the loan guarantees, noting that unless a default occurs, Japan simply collects fees, as per Bloomberg. Tariff relief saves Japan ¥10 trillion Despite the lopsided investment structure, Japan expects to save ¥10 trillion ($68 billion) through lower US tariff rates, especially on automobiles and industrial exports. According to Bloomberg, under the new trade terms, the US will impose 15 per cent universal tariffs on most Japanese goods, including cars, replacing higher and often unpredictable levies. Akazawa said he expects the tariff reduction to take effect as early as August 1, even though a joint implementation document between the two countries has not been signed. Instead, Tokyo is urging the US to issue an executive order to enact the tariff cuts quickly. “If you say something like, ‘Let’s create a joint document,’ they will say, ‘We’ll lower tariffs after the document is created,’” Akazawa noted. “We will demand that they issue an executive order to lower tariffs as soon as possible," as quoted by Bloomberg. According to Bloomberg, the fund isn’t limited to Japan–US cooperation. Akazawa highlighted that non-Japanese firms operating in the US, such as a Taiwanese semiconductor company, could also benefit from the financing. The broader aim, he said, is to support manufacturing and tech capacity building in the US, while still securing gains for Japanese lenders. The US–Japan agreement came just days before Washington announced a similar trade pact with the European Union, which includes a $750 billion LNG purchase plan and $600 billion in European investment into the US. The Trump administration is positioning both deals as templates for global trade reset under its “America First” policy. Public backlash and Akazawa’s defence Akazawa’s public remarks appeared to be a pre-emptive response to growing domestic criticism, with opposition figures accusing the government of “selling out” Japan. But the chief negotiator insisted that the actual risk to Japanese taxpayers is limited, given the conservative structure of loans and guarantees. “People are saying various things, such as ‘You sold out Japan,’ but they’re wrong,” he said, as quoted by Reuters. What’s next? Key questions remain unanswered, including when the investment mechanism will launch, how the funds will be allocated, and what sectors will be prioritised. With just months left in President Donald Trump’s second term, Japan hopes to finalise the framework within this political window. Until then, officials from across Asia and Europe are watching closely, trying to assess whether Washington’s new tariff-plus-investment model is a fair deal or a strategic trap. (With inputs from the agencies)

Tokyo clarified that only 1-2% of the $550 billion US-Japan investment framework will consist of actual investments, with most being loans and guarantees.

Japan says only 1–2% of $550 billion US fund is actual investment

On Monday, the United States and China returned to the negotiating table, aiming to extend their fragile trade truce by another 90 days and stave off a new wave of tariffs that could destabilise global supply chains. Senior economic officials from both countries are meeting in Stockholm to hash out differences ahead of an August 12 deadline. Without a deal, existing US duties on Chinese goods could snap back to triple-digit levels, effectively triggering a new phase of the trade war.&nbsp;As per Reuters, the talks follow a series of preliminary deals in May and June that temporarily paused tariffs and export controls on sensitive goods like rare earths and AI chips. The new round is expected to focus on locking in the tariff ceasefire and setting the stage for a potential Trump–Xi summit later this year. Unlike the major US–EU trade agreement signed on Sunday, which introduced a 15 per cent tariff framework and $750 billion in energy purchases, the US–China talks are reportedly expected to produce only a temporary extension, not a full-blown deal.&nbsp;Trade analysts told Reuters that another 90-day pause is likely, which would allow both sides to avoid an escalation and maintain space for diplomacy. Such a truce would also help facilitate a meeting between President Donald Trump and Chinese President Xi Jinping, potentially in October or November.<h2>Deep-rooted issues remain untouched</h2>The discussions so far have been narrowly focused on halting retaliation. Talks in Geneva and London earlier this year dealt with tariff reductions and the resumption of rare earth and chip exports, but avoided the core ideological clash between the two economies. “The talks are not yet addressing the fundamental disagreements,” said Scott Kennedy, a China economics expert at the Center for Strategic and International Studies, as quoted by Reuters. “I’d be surprised if there is an early harvest… but an extension of the ceasefire for another 90 days seems the most likely outcome.”&nbsp;Among Washington’s long-standing concerns are China’s state-led, export-driven industrial model and its impact on global prices. Meanwhile, Beijing has pushed back against US national security export controls, which it says are designed to limit Chinese tech growth.<h2>High-stakes timing for Trump and global markets</h2>The urgency is heightened by the political and economic backdrop. Trump’s administration is preparing to impose new sectoral tariffs in coming weeks, targeting semiconductors, pharmaceuticals, ship-to-shore cranes, and other industrial goods. On the Chinese side, control over rare earth minerals, used in military systems and EV components, remains a key bargaining chip. China has also renewed its push for tariff relief on US-imported fentanyl precursors, in exchange for fulfilling a 2020 pledge to purchase more American farm goods.&nbsp;“There’s a shared interest in avoiding escalation,” said Sun Chenghao, a fellow at Tsinghua University’s Center for International Security and Strategy, as quoted by Reuters. “A Trump-Xi summit would give both sides a political boost and a chance to pave the way toward real progress.”<h2>What’s next?</h2>If the Stockholm talks succeed, Washington and Beijing would likely announce a 90-day freeze on new tariffs, preventing automatic increases and maintaining the status quo through early November. But if the talks falter, both economies and global supply chains, could face renewed disruption.&nbsp;The prospect of a Trump visit to China is also hanging in the balance. A successful summit could unlock deeper reforms, but failure could plunge the two superpowers back into a full-blown economic standoff, just as Trump sharpens his re-election pitch and Xi faces domestic pressure over China’s sluggish recovery.&nbsp;(With inputs from the agencies)

Without an agreement by August 12, existing US tariffs on Chinese imports could escalate significantly. While previous talks led to temporary tariff pauses, core ideological issues remain unresolved. 

On Monday, the United States and China returned to the negotiating table, aiming to extend their fragile trade truce by another 90 days and stave off a new wave of tariffs that could destabilise global supply chains. Senior economic officials from both countries are meeting in Stockholm to hash out differences ahead of an August 12 deadline. Without a deal, existing US duties on Chinese goods could snap back to triple-digit levels, effectively triggering a new phase of the trade war. As per Reuters, the talks follow a series of preliminary deals in May and June that temporarily paused tariffs and export controls on sensitive goods like rare earths and AI chips. The new round is expected to focus on locking in the tariff ceasefire and setting the stage for a potential Trump–Xi summit later this year. Unlike the major US–EU trade agreement signed on Sunday, which introduced a 15 per cent tariff framework and $750 billion in energy purchases, the US–China talks are reportedly expected to produce only a temporary extension, not a full-blown deal. Trade analysts told Reuters that another 90-day pause is likely, which would allow both sides to avoid an escalation and maintain space for diplomacy. Such a truce would also help facilitate a meeting between President Donald Trump and Chinese President Xi Jinping, potentially in October or November. Deep-rooted issues remain untouched The discussions so far have been narrowly focused on halting retaliation. Talks in Geneva and London earlier this year dealt with tariff reductions and the resumption of rare earth and chip exports, but avoided the core ideological clash between the two economies. “The talks are not yet addressing the fundamental disagreements,” said Scott Kennedy, a China economics expert at the Center for Strategic and International Studies, as quoted by Reuters. “I’d be surprised if there is an early harvest… but an extension of the ceasefire for another 90 days seems the most likely outcome.” Among Washington’s long-standing concerns are China’s state-led, export-driven industrial model and its impact on global prices. Meanwhile, Beijing has pushed back against US national security export controls, which it says are designed to limit Chinese tech growth. High-stakes timing for Trump and global markets The urgency is heightened by the political and economic backdrop. Trump’s administration is preparing to impose new sectoral tariffs in coming weeks, targeting semiconductors, pharmaceuticals, ship-to-shore cranes, and other industrial goods. On the Chinese side, control over rare earth minerals, used in military systems and EV components, remains a key bargaining chip. China has also renewed its push for tariff relief on US-imported fentanyl precursors, in exchange for fulfilling a 2020 pledge to purchase more American farm goods. “There’s a shared interest in avoiding escalation,” said Sun Chenghao, a fellow at Tsinghua University’s Center for International Security and Strategy, as quoted by Reuters. “A Trump-Xi summit would give both sides a political boost and a chance to pave the way toward real progress.” What’s next? If the Stockholm talks succeed, Washington and Beijing would likely announce a 90-day freeze on new tariffs, preventing automatic increases and maintaining the status quo through early November. But if the talks falter, both economies and global supply chains, could face renewed disruption. The prospect of a Trump visit to China is also hanging in the balance. A successful summit could unlock deeper reforms, but failure could plunge the two superpowers back into a full-blown economic standoff, just as Trump sharpens his re-election pitch and Xi faces domestic pressure over China’s sluggish recovery. (With inputs from the agencies)

On Monday, US and China resumed trade negotiations in Stockholm, aiming for a 90-day extension of their trade truce to prevent new tariffs disrupting global supply chains.

US, China seek 90-day trade ceasefire in fresh round of talks