American companies are losing profits in the trade war with China. What the media is writing
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- American companies are losing profits in the trade war with China. What the media is writing
The trade war between the United States and China is leading to the first noticeable consequences. Large American companies such as Tesla and Nvidia are at risk of reducing production in the United States and losing profits due to tariffs from the United States. In China, at the same time, economic growth was recorded above forecasts in the first quarter. What the media write about the trade standoff is in the Izvestia digest.
Bloomberg: China has recorded strong economic growth
China's economy showed strength in early 2025 thanks to consumer subsidies and a sharp increase in exports to overcome tariffs, although the impasse over the trade war with the United States is clouding its prospects and fueling calls for stimulus. China's GDP grew by 5.4% in the first quarter compared to last year, exceeding the forecast of 5.2%. Both production and consumption showed unexpected momentum in March, before the massive U.S. tariffs on Chinese goods took effect.
Bloomberg
The rosy picture is unlikely to comfort policy makers, as economic activity is expected to worsen from April. Last week's shipping data already showed a slowdown in the volume of goods handled by Chinese ports, which portends a decline in trade as global companies suspend orders and reduce production.
Without additional incentives, it may be difficult for China to achieve its official growth target of 5% this year. Exports are expected to decline after rising by a third in 2024, while business and consumer sentiment are likely to be affected by the trade war. Economists at international banks have in recent weeks lowered their forecasts for China's growth in 2025 to about 4% or lower.
CNN: China has a trump card in the trade war with the United States
China's dominance in the rare earth supply chain has become one of its most powerful tools in the renewed trade war with the United States. Minerals used for batteries in all electronics, from iPhones to electric vehicles, are vital components for cutting-edge technologies that will define the future. This is a front where US President Donald Trump has few options for retaliatory actions.
CNN
For decades, the United States and other countries have depended on Beijing's supply of these processed metals. According to the International Energy Agency, China accounts for 61% of global rare earth metal production, but its control over the refining stage accounts for 92% of global production.
The Chinese government has imposed export restrictions on seven types of rare earth minerals in retaliation for Trump's initial 34 percent tariffs on Chinese goods. The new rules require all companies to obtain government approval to export seven minerals, as well as related products such as magnets, which are important components in a range of expensive weapons, from F-35 stealth fighter jets to nuclear attack submarines.
The Guardian: Chinese media urge Trump to "stop whining"
China's official state media said the United States needs to "stop whining" about being a victim of the global economy as the trade war between the two countries continues to gain momentum. The China Daily newspaper published an editorial saying that Donald Trump's frequent statements about the deception of the United States "mislead the American public."
The Guardian
"No one is deceiving the United States," it says. — The problem is that the United States has been living beyond its means for decades. They consume more than they produce. They outsourced production and borrowed money to have a higher standard of living than they should have in terms of productivity. Instead of being "deceived," the United States rode the globalization train for free."
Although the mutual increase in duties seems to have stalled, the conflict between the two largest economies shows no signs of abating. China refuses to capitulate to Trump's demands to sit down at the negotiating table and renegotiate trade terms, while White House spokeswoman Caroline Leavitt once again said that China needs to make a deal with the United States.
Reuters: Trump's tariffs against China undermine Tesla production
Tesla's work on supplying components from China for Cybercab and Semi electric trucks to the United States was suspended after Trump increased duties on Chinese goods. The move could derail a plan to begin mass production of the long-awaited models, which Tesla CEO Elon Musk has touted to investors as important innovations driving the American automaker's growth.
Reuters
Tesla was ready to take on additional costs when Trump imposed a 34% duty on Chinese goods, but was unable to do so when the duty exceeded these limits, which is why supply planning was suspended, the source said.
The company planned to receive components in the coming months in order to begin pilot production of two models in October and mass production in 2026. At the same time, Cybercab will be manufactured in Texas, and Semi — in Nevada. It is not yet clear how long the suspension will last. At the same time, over the past two years, Tesla has been increasing the share of parts supplied from North America for its factories in the United States, due to possible US duties on Chinese products.
Financial Times: Nvidia will lose $5.5 billion due to Trump's tariffs
The Trump administration is limiting Nvidia's ability to sell artificial intelligence chips to China, forcing the Silicon Valley giant to cut profits by $5.5 billion. The chipmaker said it would now require a special license to sell its H20 chip to Chinese customers. Nvidia shares fell 7% in over-the-counter trading on April 16, while futures tracking the Nasdaq 100 technology index declined by more than 2%.
Financial Times
Due to China's shortage of domestic chip suppliers that could compete with Nvidia, Chinese technology companies sought to buy the H20 even in the face of potential tariffs that Beijing could impose on imports in response to Washington's trade war. The United States said the new controls are necessary to eliminate the risk of using H20 chips in a "supercomputer in China."
Washington's ban on H20 chips is the latest example of the US using tariffs and other trade barriers to increase pressure on Beijing. Nvidia introduced its China-focused H20 processors last year after the Joe Biden administration imposed export controls on its chips. They are less powerful than the line of leading GPUs. The H20 accounted for about $12 of Nvidia's $17 billion in revenue in China last year.
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