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Chinese electric vehicle (EV) maker Xpeng has ramped up development of its own artificial intelligence (AI) chip to power its semi-autonomous cars, with a first mass production model to be fitted with the Turing chip from as early as this quarter.

The chip, which is claimed to be more powerful than Nvidia’s Drive Orin X, would be used in all its production models as the EV maker promoted its cutting-edge technologies, CEO He Xiaopeng said in an interview. The chip could also power flying cars and robots being developed by its affiliated companies, he added.

Level of intelligence has become the new battleground for carmakers to overcome cutthroat competition in China. Xpeng’s Turing chip, designed for level 4 (L4) autonomous driving capabilities, was three times more powerful in computing power than Nvidia’s Drive Orin X installed in its existing smart vehicles, the CEO said in August.

At present, Xpeng’s cars such as the P7 sedan and G6 SUV can navigate their way automatically on mainland China’s highways and streets, but drivers are required to be fully alert with their hands on the wheel. They are deemed as semi-autonomous and categorised as L2+ vehicles.

L3 is considered a “hands-off” system, but still requires drivers to be responsible for safety and ready to take over, while L4 would allow drivers to take their eyes off the road in designated areas, according to standards set by US-based SAE International.

Tesla is the front runner in mainland China’s premium EV market segment. Xpeng, Shanghai-based Nio and Beijing-headquartered Li Auto are viewed as China’s best responses to the market leader.

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China and Vietnam signed dozens of cooperation agreements during a state visit by Chinese President Xi Jinping, as he aimed to strengthen ties in Southeast Asia on his first overseas trip of the year.

Vietnam is seeking to further strengthen cooperation with China in security, transport and securing preferential loans as well as technology transfers from China, VTV said. Hanoi also expects more balanced trade with its neighbor, it said.

Xi landed in Vietnam days after Donald Trump raised tariffs on China but gave everyone else — including Vietnam, which is negotiating over its 46% rate — a 90-day pause.

His regional tour, which will also see him visit Malaysia and Cambodia, highlights the tricky position Southeast Asian nations face. They’ve become key routes for Chinese exports to reach the US since Trump’s tariff hikes on Beijing in his first term.

Vietnam’s economy is heavily reliant on Chinese parts and raw materials, and the two sides are working to develop infrastructure to connect them more closely. China is Vietnam’s largest bilateral trade partner, with commerce totaling over $205 billion last year, and is a major market for Vietnam’s agricultural products from fruit to seafood, cashew nuts and coffee.

Vietnam’s government has vowed to speed up the progress of three railway projects connecting the two countries. This includes the $8.4 billion cross-border railway that will link the northern border city of Lao Cai to Hanoi and Haiphong port city.

Vietnamese Prime Minister Pham Minh Chinh said that aviation cooperation between Comac and Vietnamese partners has produced “increasingly positive outcomes,” after meeting the company’s chairman on Monday, according to a post on the government website.

Xi said at the meeting that China welcomes more trade with Vietnam and seeks increased cooperation in manufacturing and supply chains, as well technology including AI and semiconductor sectors, VTV said.

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China’s government said the US decision to exempt certain consumer electronics from its so-called reciprocal tariffs is a small step toward rectifying its wrongdoings and urged Washington to do more to revoke the levies.

President Donald Trump’s administration excluded smartphones, computers and other electronics from the increased import duties on Friday, narrowing the scope of his tariffs of 125% on goods from China and a baseline 10% on imports from most other countries.

“This is a small step by the US toward correcting its wrongful action of unilateral ‘reciprocal tariffs’”, the Ministry of Commerce said in a statement posted on its official WeChat account on Sunday. The ministry went on to urge the US to “take a big stride in completely abolishing the wrongful action, and return to the correct path of resolving differences through equal dialog based on mutual respect.”

Trump’s latest exemptions cover almost $390 billion in US imports based on official US 2024 trade statistics, including more than $101 billion from China, according to data compiled by Gerard DiPippo, associate director of the Rand China Research Center.

Trump on Saturday declined to elaborate on the exemptions beyond the published memoranda but hinted at further developments on Monday.

The move appeared to exclude the products from the 10% global baseline tariff on other countries, including Samsung Electronics Co.’s home of South Korea.

The tariff reprieve does not extend to a separate Trump levy on China — a 20% duty applied to pressure Beijing to crack down on fentanyl, including the shipment of precursor materials. Other previously existing levies, including those that predate Trump’s current term, also appear unaffected.

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Smartphones, computers, flash drives, semiconductors and solar cells will be exempt from the Trump administration’s wide-ranging tariffs on China and other nations, according to guidance from U.S Customs and Border Protection released late Friday night.

The policy is a boon to U.S. tech companies such as Apple, which produces most of iPhones in China.

Tech companies, and the net worth of their billionaire CEOs, were among those hardest hit when markets tanked on the tariff announcement. But, now Trump appears to be offering a helping hand by exempting some products from the 125 percent tariff he left on China.

A handful of tech stocks such as Apple, Microsoft, Nvidia, Netflix, Amazon, Meta and Google parent Alphabet make up over a quarter of the value of the S&P 500 at any given time — and all of these companies would face major financial challenges if global electronics supplies were hit with sustained tariffs.

The Friday announcement is the latest sudden adjustment in a tariff policy that’s changed every few days, after Trump announced on Wednesday a 90-day pause on a series of “reciprocal” tariffs on U.S. trading partners that rattled financial markets, while increasing tariffs on China to an effective rate of 145 percent and maintaining a baseline 10 percent tariffs on all countries that hadn’t retaliated against the U.S.

Despite attempting to soften the financial blow of the tariff agenda, some fear the policies have set the U.S. on a course for a recession.

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India is accelerating efforts to finalise free-trade agreements with Britain and the European Union by the end of the year, as it seeks to safeguard its economy against the ripple effects of US President Donald Trump’s latest tariff moves.

Analysts say New Delhi’s move to diversify its trade partnerships reflects a strategic shift to reduce reliance on the US market.

India was expected to adopt a measured approach in its negotiations with the United States, aiming to secure a trade agreement by September, said T.S. Vishwanath, principal adviser at international trade consultancy ASL-Legal.

At the same time, Delhi is working to expand its trade partnerships to cushion against any potential fallout from American policy shifts.

British businesses were informed during a call with negotiators this week that 90 per cent of the UK-India free-trade agreement had already been finalised, The Guardian reported. Remaining issues include tariffs on whisky, cars and pharmaceuticals.

In February, Indian Prime Minister Narendra Modi and European Commission President Ursula von der Leyen met in Delhi, where they expressed a shared determination to finalise the trade agreement. Von der Leyen was accompanied by a delegation of EU leaders, and discussions extended beyond trade to include defence and security partnerships.

“Partially, Trump’s tariffs have created urgency around diversification, encouraging quicker deal-making between global powers,” said Chris Blackburn, an independent UK-based political commentator.

One major sticking point in the India-EU talks is the EU’s planned implementation of a carbon border adjustment mechanism starting next year. This policy would impose charges on carbon-intensive goods, posing challenges for India, which still relies heavily on coal and fossil fuels to meet its energy needs despite making great strides in renewable energy capacity.

Climate experts are hopeful for a compromise, however, noting both sides’ commitments to net-zero goals. They suggest that collaboration could extend into renewable energy and the development of environmentally friendly technologies.

If Washington’s trade policies persist, other key sectors – including aerospace, industrial machinery, pharmaceuticals, luxury goods, and agricultural products such as cheese, wine and olive oil – could face greater exposure to trade uncertainties.

“This pressure is pushing them to diversify,” Blackburn said. “Countries have hedged between East and West for decades. The East could win. It’s a high-stakes gamble by Trump.”

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China retaliated against Donald Trump’s latest tariffs by hiking duties on all US goods, while calling the administration’s actions a “joke” and saying it no longer considers them worth matching.

Beijing will raise tariffs on all US goods from 84% to 125% starting April 12, the Ministry of Finance said on Friday, after the White House clarified that levies on Chinese goods rose to 145% this year.

“Given that American goods are no longer marketable in China under the current tariff rates, if the US further raises tariffs on Chinese exports, China will disregard such measures,” according to the statement.

However, China warned that it will “resolutely counterattack and fight to the end” if the US continues to infringe on its rights and interests. It also said America should take full responsibility for the damage caused by the tariffs.

Tensions between Beijing and Washington have spiraled beyond tit-for-tat tariff exchanges in recent days to impact services and people-to-people ties. Chinese authorities on Thursday moved to cut the number of American films allowed in theaters. Officials also warned citizens against traveling to the US and cautioned students about security risks in “certain states.”

The US and China now trade about $700 billion worth of goods each year. Without a deal to ease tensions, the higher tariffs will mean consumers and businesses on both sides are likely to face rising costs, as they scramble to adjust supply chains and reduce their tariff exposure.

So far, China has refused to cave to Trump’s pressure even as soaring duties are expected to weigh on the economy, with Goldman Sachs Group Inc. economists cutting their 2025 growth forecast to 4% from 4.5%.

President Xi Jinping on Friday made his first public remarks on the escalating trade war, saying China remains confident and unafraid of any “unjustified suppression.”

“One that goes against the world risks being isolated themselves,” Xi told visiting Spanish Prime Minister Pedro Sanchez.

Reaffirming China’s stance that there are no winners in a tariff war, Xi added that the country’s development has never relied on the goodwill of others. “No matter how the external environment changes, China will stay confident, remain calm, and focus on managing its own affairs,” he said.

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On Thursday morning in Shanghai, as shoppers filled the luxury malls and delivery drivers whizzed around the winding streets at breakneck speed, financiers breathed a cautious sigh of relief. Overnight, US President Donald Trump had reversed course, announcing a 90-day pause on his so-called “reciprocal tariffs” of up to 50% for dozens of countries. Although China got no such reprieve – instead, the levy on Chinese goods was increased to 145% – the temporary return of normal trade channels showed Chinese businesspeople that all was not lost.

Since 2017, thanks to tariffs on Chinese goods, the share of China’s exports bound for the US has dropped from about 20% to less than 15%. But much of that trade has simply been re-routed through third countries, as Chinese firms set up shop in places with cheaper labour costs and easier access to the US market.

Hobbling those countries’ ability to export to the US would inflict more true economic pain on Chinese companies than bilateral tariffs ever could. So in Shanghai, China’s commercial capital, a return to a narrowly US-China trade war, while still unwelcome, is some comfort.

But on the ideological front, the mood in China is hardening over Trump’s imposition of 145% tariffs. State media and the foreign ministry have been sharing a clip of the former US president Ronald Reagan decrying tariffs in 1987. On X, foreign ministry spokesperson Mao Ning has been trolling the US, posting a meme of a Make America Great Again baseball cap increasing in price from $50 to $77.

The most telling propaganda has been the resurfacing of a video clip of former Chinese leader Mao Zedong from 1953. “As to how long this war will last, we are not the ones who can decide,” Mao says. “No matter how long this war is going to last, we will never yield,” he says to applause.

Ren Yi, an influential commentator who writes under the name Chairman Rabbit, wrote on Thursday: “The trade war is a war of public opinion, public sentiment, and information … China should adopt a ‘wartime’ state of tension in terms of public opinion, and all sectors should move in one direction and one goal. This issue is by no means a joke.”

There is an ominous sense that the US-China relationship could still get worse. On Thursday, in a largely symbolic move, China said it would restrict the import of Hollywood movies. China’s tariffs of 84% on US goods have come into effect. Six US companies have been added to Beijing’s list of “unreliable entities”, restricting their ability to do business in China.

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European Union leaders are planning to travel to Beijing for a summit with Chinese President Xi Jinping in late July, according to five people familiar with the arrangement.

No date has been confirmed with the Chinese side, but EU leaders’ willingness to make the trip indicates a serious effort to re-engage with Beijing at a time when the bloc’s relationship with the United States has effectively collapsed.

Von der Leyen spoke with Chinese Premier Li Qiang on Tuesday, at the request of China’s No 2 official, while trade chief Maros Sefcovic spoke to Chinese Commerce Minister Wang Wentao on Wednesday.

On a video call, Wang and Sefcovic agreed to “immediately start negotiations on electric vehicle price commitments, as well as discuss China-EU automotive industry investment cooperation”, according to a commerce ministry read-out.

With both sides under severe economic pressure from the US, Brussels has put the brakes on a spiralling relationship with China, which sank to new lows in recent years over Beijing’s ties with Moscow and a list of economic grievances.

This year, von der Leyen – seen as among Europe’s most prominent hawks – has adopted a softer tone when speaking of China.

Spanish Prime Minister Pedro Sanchez arrived on Thursday for his third trip in two years, while French President Emmanuel Macron plans to visit in the second half of this year, according to several official sources.

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US President Donald Trump's steep tariff hike targeting Chinese goods, which took effect Thursday, brings Washington's additional rate on many products to 145 percent, the White House confirms.

Trump's 90-day halt in fresh duties for dozens of countries has come into place, a White House order showed.

But he has also doubled down by raising new tariffs on Chinese imports to 125 percent, a figure that stacks atop a 20 percent additional duty from earlier in the year over China's alleged role in the fentanyl supply chain.

This takes the total tariffs Trump has imposed on Chinese products this year to 145 percent, stacking on existing levies from past administrations.

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Hours after Donald Trump imposed record 125% tariffs on Chinese products entering the US, China has announced it will further curb the number of US films allowed to screen in the country.

The move mirrors the potential countermeasure suggested by two influential Chinese bloggers earlier in the week, warning that “China has plenty of tools for retaliation”.

Both Liu Hong, a senior editor at Xinhuanet, the website of the state-run Xinhua news agency, as well as Ren Yi, the grandson of former Guangdong party chief Ren Zhongyi, posted an identical proposal involving a heavy reduction on the import of US movies and further investigation of the intellectual property benefits of American companies operating in China.

China is the world’s second largest film market after the US, although in recent years domestic offerings have outshone Hollywood imports. However, Thursday’s measure comes as a significant blow to western studios, with Bloomberg reporting shares of Walt Disney Co, Paramount Global, and Warner Bros Discovery Inc all suffering an immediate decline.

Last week, the newly released A Minecraft Movie from Warner Bros topped the Chinese box office with ticket sales of $14.5m – around 10% of the global total. In 2024, the highest-grossing US film released in China was Godzilla x Kong: The New Empire, which took $132m in that territory, towards a global total of $572m.

The first US film was approved for Chinese release 31 years ago, with the number peaking at more than 60 in 2018. Since then it has declined, according to data from the Chinese ticketing service Maoyan Entertainment, thanks to escalating tensions and the increased popularity of homegrown movies.

Animated fantasy film Ne Zha 2, about a child battling monsters from Chinese mythology, was released in late January and has now taken $1.8bn in China, and $20m in the US.

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Amid an escalating trade war with the United States, China is holding frequent conversations with the European Union (EU) and the Association of Southeast Asian Nations (Asean) – its two largest trading partners by bloc – with plans to address bilateral issues and forge stronger ties.

Commerce Minister Wang Wentao held a video call with EU Trade Commissioner Maros Sefcovic on Tuesday, during which both sides agreed to immediately begin negotiations on electric vehicle (EV) pricing and discuss investment ties in the auto sector, according to a statement released by China’s Ministry of Commerce on Thursday.

As of Thursday, additional US tariffs imposed this year on imports from China stood at 125 per cent – on top of previous tariffs estimated to average more than 10 per cent.

Before the latest 21 per cent increase in US tariffs, China had already decided to increase its retaliatory tariffs on US goods to 84 per cent from noon on Thursday.

The 27-nation EU also retaliated against the US, imposing tariffs as high as 25 per cent on American products.

China, the world’s second-largest economy, is also enhancing communication with its Southeast Asian trade partners to foster deeper cooperation.

On Wednesday, Wang had a video meeting with Malaysian Trade Minister Tengku Zafrul Abdul Aziz. Malaysia is the current chair of Asean.

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Trump in a Truth Social post says he is “immediately” raising U.S. tariffs on Chinese imports to 125% “based on the lack of respect that China has shown to the World’s Markets.”

But Trump in the same post says he has “authorized a 90 day PAUSE” for other countries, pointing to what he says are more than 75 nations who have reached out to negotiate.

That pause, and “a substantially lowered Reciprocal Tariff during this period, of 10%,” are both “effective immediately,” Trump writes.

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