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China Launches Discrimination and Dumping Probes into US Chips ahead of Trade Talks

Flags of US and China are seen in this illustration picture taken August 2, 2022. REUTERS/Florence Lo/Illustration/File Photo
Flags of US and China are seen in this illustration picture taken August 2, 2022. REUTERS/Florence Lo/Illustration/File Photo
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China Launches Discrimination and Dumping Probes into US Chips ahead of Trade Talks

Flags of US and China are seen in this illustration picture taken August 2, 2022. REUTERS/Florence Lo/Illustration/File Photo
Flags of US and China are seen in this illustration picture taken August 2, 2022. REUTERS/Florence Lo/Illustration/File Photo

China's Ministry of Commerce initiated an anti-discrimination investigation into US trade policy over chips on Saturday, as well as a separate investigation into dumping, a day ahead of a new round of US-China trade talks in Spain.

The first investigation would examine whether Washington had discriminated against Chinese companies in its policies on trade in chips. The second would look into suspected dumping of imports of some US analog chips used in devices such as hearing aids, Wi-Fi routers and temperature sensors, according to Reuters.

The ministry said in a statement that the United States had imposed a series of restrictions on China over chips in recent years, including trade discrimination investigations and export controls.

Such "protectionist" practices are suspected of discriminating against China and are intended to curb and suppress China's development of high-tech industries such as advanced computing chips and artificial intelligence, it added.

TALKS TO START IN MADRID

A delegation to be led by Chinese Vice Premier He Lifeng is due to kick off a new round of dialogue with the United States from September 14-17 in Madrid.

The commerce ministry has said the two sides will discuss economic and trade issues such as US tariffs, the "abuse" of export controls and TikTok. In a separate statement on the talks on Saturday it questioned Washington's policies.

"What is the US's intention in imposing sanctions on Chinese companies at this time?" the ministry said.

"China urges the US to immediately correct its erroneous practices and cease its unwarranted suppression of Chinese companies. China will take necessary measures to resolutely safeguard the legitimate rights and interests of Chinese companies."

On Friday, the United States added 32 entities, 23 of them in China, to a commerce department restricted trade list. They included two Chinese firms accused of acquiring US chipmaking equipment for China's top chipmaker SMIC.

The upcoming US-China talks in Spain will be the fourth major in-person meeting this year as the two countries seek to maintain a trade truce that reduced retaliatory tariffs on both sides and restored the flow of Chinese rare earth minerals to the United States.

After meetings in Geneva and London, the two sides largely agreed in late July in Stockholm to extend a tariff pause for another 90 days. President Donald Trump approved the extension on August 12 until November 10.

ByteDance's short video app TikTok, which faces a potential ban in the US unless it moves to US ownership, will be on the agenda in the talks in Spain.

Trump has extended a deadline for TikTok to divest its US assets until September 17. US lawmakers have said TikTok's US user data could fall into the hands of China's government.

"The Chinese government attaches great importance to data privacy and security and has never and will never require companies or individuals to collect or provide data located in foreign countries for the Chinese government in violation of local laws," China's official People's Daily said in an article on Saturday.

If the United States insists on undermining the legitimate interests of Chinese companies, China will take necessary measures to safeguard national interests and the rights of Chinese companies, the Chinese newspaper wrote.

 

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Trump Threatens 100% Tax on European Imports if Countries Impose Tax on Digital Services

US President Donald Trump speaks at a rally to kick off the 16-day Great American State Fair as part of Washington, DC's celebration of the nation's 250th birthday, on the National Mall in Washington, DC, USA, 24 June 2026. (EPA)
US President Donald Trump speaks at a rally to kick off the 16-day Great American State Fair as part of Washington, DC's celebration of the nation's 250th birthday, on the National Mall in Washington, DC, USA, 24 June 2026. (EPA)
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Trump Threatens 100% Tax on European Imports if Countries Impose Tax on Digital Services

US President Donald Trump speaks at a rally to kick off the 16-day Great American State Fair as part of Washington, DC's celebration of the nation's 250th birthday, on the National Mall in Washington, DC, USA, 24 June 2026. (EPA)
US President Donald Trump speaks at a rally to kick off the 16-day Great American State Fair as part of Washington, DC's celebration of the nation's 250th birthday, on the National Mall in Washington, DC, USA, 24 June 2026. (EPA)

President Donald Trump on Friday threatened a 100% tax on imports from any country that imposes a tax on digital services from United States companies.

In a post on social media, Trump took aim at European countries that he said are discussing “imminent” implementation of taxes on American companies.

“Please let this statement serve to represent that any Country that imposes such a Tax will immediately be met with a 100% TARIFF on any and all Goods sent to the United States of America,” Trump wrote.

He added that the new tax would supersede any previously negotiated trade deals. Trump said the penalty would apply to any country that moves forward with such a tax, but he singled out European nations in his post.

Trump has repeatedly pushed against foreign efforts to tax or regulate American tech giants. Last year he threatened new tariffs on any country that moved to do so. A post from last August said that digital taxes and regulation “are all designed to harm, or discriminate against, American Technology.”

Business

US Goods Trade Deficit Hits 14-month High in May as Imports Surge

APM Terminals' facility at the Port of Los Angeles in California. (Reuters)
APM Terminals' facility at the Port of Los Angeles in California. (Reuters)
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US Goods Trade Deficit Hits 14-month High in May as Imports Surge

APM Terminals' facility at the Port of Los Angeles in California. (Reuters)
APM Terminals' facility at the Port of Los Angeles in California. (Reuters)

The US trade deficit in goods swelled to a 14-month high in May as businesses boosted imports, likely to avoid shortages and higher prices related to the Middle East conflict, suggesting trade remained a drag on economic growth in the second quarter.

The sharp deterioration in the goods trade deficit reported by the Commerce Department on Friday also reflected a decline in exports.

Recent business surveys have shown front-loading of orders by firms. Sponsors of the surveys attributed the behavior to the US-led war against Iran, which raised commodity prices, including for oil and fertilizers, and disrupted shipping in the Strait of Hormuz.

But after the United States and Iran last week signed a preliminary peace deal, shipments through the strait have picked up, driving oil prices sharply lower. Even if supply chains returned to normal, economists warned that the trade deficit would likely remain elevated because of an artificial intelligence investment boom that is largely reliant on imports.

"The widening trade deficit is bad news for national income growth, and it suggests that net exports might drag down real GDP growth too," said Carl Weinberg, chief economist at High Frequency Economics. "The AI boom had better generate a corresponding increase in services exports to offset the influx of equipment. If it doesn't, then this AI bubble is a losing proposition for the economy."

The goods trade gap increased 27.4% to $105.8 billion last month, the highest level since March 2025, the Commerce Department's Census Bureau said. Economists polled by Reuters had forecast the deficit at $85.0 billion.

Imports of goods increased $10.9 billion, or 3.6% to $313.4 billion, also a 14-month high. They were driven by a 6.3% surge in imports of automotive vehicles. Imports of consumer goods soared 5.7%. Despite high inflation, mostly stemming from the Iran war, consumer spending has remained strong, thanks to large tax refunds this year and a stock market rally.

BROAD INCREASE IN IMPORTS

Imports of industrial supplies, which include petroleum, increased 4.8%. Capital goods imports rose 0.4%. They surged 41.9% on a year-on-year basis, reflecting the AI spending spree.

Imports of foods, feeds and beverages increased 4.3%, while those of other goods advanced 11.5%. Overall imports have remained high despite tariffs imposed by the Trump administration.

Goods exports dropped $11.8 billion, or 5.4%, to $207.7 billion in May. They were weighed down by a 9.2% plunge in exports of consumer goods. Industrial supplies exports tumbled 7.0%, while those of capital goods dropped 5.0%. Exports of other goods decreased 6.8%. But food, feed and beverage exports increased 3.9%. Automotive vehicle exports rose 0.5%.

"Imports are moving sharply higher and this will subtract from GDP growth this quarter," said Christopher Rupkey, chief economist at FWDBONDS. "The import drag on domestic economic growth is back because factories here cannot make it here no matter how Washington economic officials try to spin it."

Trade had been a drag on gross domestic product for two straight quarters. Growth estimates for the second quarter were converging around a 2.5% annualized rate before the trade data.

The economy grew at a 2.1% annualized rate last quarter after expanding at a 0.5% pace in the October-December quarter.

Business

Gold Gains as Dollar Weakens; Still on Track for Fourth Straight Weekly Loss

British gold bars and sovereign coins on display in a London shop. (Reuters)
British gold bars and sovereign coins on display in a London shop. (Reuters)
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Gold Gains as Dollar Weakens; Still on Track for Fourth Straight Weekly Loss

British gold bars and sovereign coins on display in a London shop. (Reuters)
British gold bars and sovereign coins on display in a London shop. (Reuters)

Gold edged higher on Friday as the dollar weakened and expectations of US interest rate hikes eased slightly following inflation data, though prices were still on track for a fourth consecutive weekly decline. Spot gold was up 0.51% to $4,046.70 per ounce by 9:39 a.m. EDT (1339 GMT).

US gold futures for August delivery rose 0.35% to $4,061.40 per ounce.

The US dollar eased from recent highs after the release of the Fed's preferred inflation gauge on Thursday. The US Personal Consumption Expenditures Price Index surged 4.1% in the 12 months through May, matching economists' forecasts in a Reuters poll. Traders are pricing in about a 60% chance of a US rate hike in September, lower than an earlier expectation of 64%, according to CME Group's FedWatch Tool.

Gold is seeing a modest rebound after coming under selling pressure earlier this week, said Jim Wyckoff, a market analyst at American Gold Exchange. Higher interest rates and tighter monetary policy reduce the appeal of non-yielding bullion, as they tend to boost bond yields and increase returns on interest-bearing assets. Spot gold hit more than a seven-month low earlier this week and prices were down 2.6% for the week.

TD Securities said in a note that, given gold's inverse relationship with both higher oil prices and a stronger US dollar, sustained strength in energy markets could put further downward pressure on the precious metal in the months ahead. Gold started trading at a premium in India this week for the first time in a month and a half, as a price correction lifted buying, while demand stayed subdued in China, the top consumer. Among other precious metals, spot silver rose 0.42% to $58.1109 per ounce.

Platinum gained 0.21% to $1,604.45 and palladium jumped 1.25% to $1,199.25.