Peter Fatelnig

No surprise here. According to the FT, Beijing apparently is asking for the relaxation of export controls on HBM chips used to make advanced AI chips as part of the bilateral trade talks underway. Having opened the door by putting export controls on the negotiating table in recent months, the US will be hard pressed to convince the Chinese that such requests are off limits. Furthermore, sensing that the President would like to visit China and meet with Xi, the Chinese may feel additional leverage beyond their newfound bargaining edge — minerals and magnets

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Some thoughts on U.S.-Taiwan tariff talks. The biggest tariff threat Taiwan faces is not to established industries like semiconductors and other ICT products, or even metal and machinery exporters, but to emerging sectors like drones. If all or most finished drones and UAS components from Taiwan face for instance a 25% tariff, they could struggle to build economies of scale. Many of these companies are counting on the U.S. market both due to its size and the potential for broader defense supply chain cooperation between the two countries. It would be hard for Taiwan's nascent drone sector to scale up if it had to rely mostly on small Eastern European countries like Lithuania, Estonia and Latvia. Currently, Taiwan’s drone exports to the U.S. market remain limited, with government procurement largely confined to state-level contracts. No Taiwanese drone makers have secured federal contracts or appear on the U.S. Department of Defense’s Blue UAS or the industry-led Green UAS certification lists, "constituting a major barrier to broader market penetration," Taiwan's Research Institute for Democracy, Society and Emerging Technology (DSET) noted in their June report about the island's drone sector. There are just a few Taiwanese UAS companies (such as Thunder Tiger) that can afford to set up U.S. production facilities, and even then, they are unlikely to produce every component there. That said, Taiwan might be able to secure a relatively favorable tariff rate from the Trump administration if it were willing to make certain concessions, like easing tariffs on imported vehicles. To protect its domestic auto industry, Taiwan imposes duties of up to 52.5% on auto imports. This includes a 17.5% tariff, a 25-30% commodity tax and a 5% business tax. There are also import quotas on foreign vehicles. At present, Taiwan allows only 75 units of each American car model to be imported, "a restriction that significantly limits market access," The Taipei Times notes. The duties on cars are a significant source of tax revenue for Taiwan. Tariffs to raise tax revenue...sound familiar? 😄 In 2024, Taiwan's Ministry of Finance collected more than NT$130 billion from vehicle-related tariffs and commodity taxes. #aerospace #defense #trade #economy #technology #military #nationalsecurity #drone #supplychain #semiconductor Further reading: DSET drone report: https://lnkd.in/emUeA3JZ Taipei Times article: https://lnkd.in/ecrnAfYQ

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China's South China Sea ambitions stalled: ASEAN Fights Back Amid U.S. Distractions – check out the latest CYFIRMA report on Beijing's ambitions hitting a wall in the South China Sea, and the fallout in cyber space.   #Geopolitics #CYFIRMAresearch #ThreatIntelligence #cybersecurity #ETLM #currentaffairs #MilitaryAffairs #GreyZoneCoertion #UNCLOS #MischiefReef #Spratlys #ExternalThreatLandscapeManagement

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