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Key Points

• TSMC faces challenges in ensuring export control compliance due to limited visibility in the downstream use of its semiconductors.
• The company has acknowledged the difficulty in preventing unintended end-uses and diverted shipments by intermediaries.
• TSMC has been cooperating with authorities after discovering that its chips might have been diverted to restricted entities like Huawei.

Summary

Taiwan Semiconductor Manufacturing Co. (TSMC) has highlighted significant challenges in maintaining compliance with export controls, particularly after its AI silicon was found in products of US-sanctioned Huawei Technologies Co. via intermediaries. In its latest annual report, TSMC noted that its position in the semiconductor supply chain restricts its ability to monitor the final use or users of its products, complicating efforts to prevent misuse or unauthorized diversions. Despite its efforts to comply with export regulations, TSMC admits there is "no assurance" against compliance issues. The company has been working with authorities following an incident where its chips were potentially diverted to Huawei, which led to a halt in shipments to a client. This situation underscores the broader geopolitical tensions, with the US implementing new regulations to restrict China's access to advanced AI chips, and blacklisting companies involved in such diversions.

Key Points

• China has accused the US of using tariffs as a weapon to pressure other countries into cutting trade with Beijing, labeling it as 'unilateral bullying' disguised as reciprocity.
• President Trump has signaled openness to negotiations with trading partners, including China, Japan, and Mexico, while also escalating tariffs on Chinese imports.
• The US has imposed tariffs on Chinese goods totaling up to 245%, while China has retaliated with duties of 125% on US goods.
• The ongoing trade war is affecting various industries, with baby gear, cosmetics, and gaming industries facing potential price increases and supply chain disruptions.
• China's ambassador to the US has urged for an end to the trade war but warned that Beijing is ready to fight if necessary.

Summary

The escalating trade war between the US and China has led to significant economic repercussions globally. China has criticized the US for using tariffs as a tool to coerce other nations into reducing trade with Beijing, describing it as an act of 'unilateral bullying'. Despite this, President Trump has expressed optimism about negotiating trade deals, hinting at possible tariff adjustments to protect US consumers. The US has imposed tariffs on Chinese imports reaching up to 245%, prompting China to retaliate with a 125% duty on US goods. This tit-for-tat has not only strained bilateral relations but also impacted various sectors. For instance, baby gear manufacturers are facing potential price hikes and supply shortages due to the high dependency on Chinese production. Similarly, the cosmetics industry, particularly companies like e.l.f. Beauty, are at risk as they heavily source from China. The gaming industry also anticipates disruptions with the launch of new consoles and games potentially affected by these tariffs. Amidst these tensions, China's ambassador to the US has called for peaceful coexistence, yet remains prepared for further conflict if necessary.

Key Points

• Gold prices surged to a record high above $3,385 an ounce due to a weakened US dollar, criticism of the Federal Reserve by President Trump, and ongoing trade war concerns.
• President Trump has considered firing Fed Chair Jerome Powell, which could undermine the central bank's independence and boost gold as a safe-haven investment.
• Gold has seen continuous demand with central banks adding to their reserves and investors flocking to bullion-backed ETFs for 12 consecutive weeks.

Summary

Gold prices have soared to unprecedented levels, reaching above $3,385 an ounce, driven by a combination of factors including a weakened US dollar, President Trump's criticism of the Federal Reserve, and persistent trade war tensions. Trump's contemplation of firing Fed Chair Jerome Powell has raised concerns about the independence of the US monetary policy, potentially eroding confidence in the dollar and increasing the appeal of gold as a safe-haven asset. This year, gold has seen a robust demand, with central banks adding to their reserves and investors continuously investing in bullion-backed ETFs for the longest streak since 2022. The trade conflict has unsettled markets, reducing the appetite for risk assets and accelerating the rush towards havens like gold. Additionally, the weakening dollar and positive forecasts from banks like Goldman Sachs, predicting gold could hit $4,000 by mid-next year, further support the bullish trend in gold prices.