Chapter 1: What approval did President Trump give regarding Nvidia's chips to China?
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A win for NVIDIA as President Trump okays the sale of its high-performance chips to China, plus the bellwether stakes of Miami's mayoral race.
Even though the candidates have sought to focus on local issues like housing issues, taxes and transportation. All these national political forces have helped turn the race into a referendum on the parties and on Trump himself.
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Chapter 2: How will Nvidia benefit from selling H200 chips to China?
And Ford turns to France's Renault to upshift its embattled European business. It's Tuesday, December 9th. I'm Luke Vargas for The Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today.
Shares of NVIDIA have jumped off hours after President Trump said he'd let the company export its H200 chips to China in an apparent easing of stringent export controls. Journal Asia business editor Peter Lander says the move is a boon for NVIDIA, which has fought for months to maintain access to the world's second-largest economy.
This is going to be another source of demand for NVIDIA. Probably billions of dollars of chip sales can be made to China if this is ultimately approved. At its peak, China was about 20 percent of NVIDIA's sales. It's been a lot less than that in recent years because of US export controls. So they're still a huge company, extremely profitable without China.
Chapter 3: What impact does China's manufacturing sector have on Europe?
But certainly the China market, as CEO Jensen Huang has said, is an important addition to whatever they're selling elsewhere. These chips are believed to be quite a bit ahead of anything that the Chinese chip makers can produce. And so NVIDIA's products would be welcome in China, even though they're not as advanced as China. the Nvidia chips that some U.S. customers can get their hands on.
Curiously, Trump said the U.S. would receive a 25% cut of Nvidia's chip sales in China without offering any details on how. And as Peter explains, taxing exports in that way might not be entirely legal.
The Constitution actually says that the U.S. cannot impose a tax on exports, but probably there's no one out there who could legally challenge it.
Chapter 4: What measures are Germany and France considering against Chinese imports?
Nvidia is apparently willing to pay this 25% charge. Their profit margin is much greater than that, but it is an extremely unusual arrangement for the U.S. government to take a cut of sales of a U.S. product that go overseas.
Meanwhile, Chinese competition has been a growing headache for European carmakers, but now two major players are teaming up to try and push back. Ford is engaging France's Renault to make a pair of small EVs and maybe a van down the line to bolster its European lineup. Ford's accounted for just over 3% of new passenger cars sold on the continent this year, down from over 7% a decade ago.
Well, let's keep the focus on China as the country has hit a major trade milestone, achieving a $1 trillion trade surplus in goods. That is in spite of U.S. tariffs meant to dent Chinese exports and which have instead seen products redirected elsewhere, including to Europe, where a pair of leaders are now sounding the alarm and hinting at new restrictive measures of their own.
Chapter 5: What are the stakes in Miami's mayoral race?
Joining us from Beijing is our China bureau chief, Jonathan Cheng. And from Berlin, we've got global economics correspondent Tom Fairless with us as well. John, let me start with you. Talk to us about this trillion dollar goods surplus figure. What does it represent?
Obviously, what it means is that they're selling goods. far more to the world than they are buying from the world to the tune of a trillion dollars this year. This is obviously not something that is necessarily looked upon as a good thing in other countries, particularly in the White House, where President Trump has long had a problem with deficits, especially with China.
But, you know, this is not just the U.S.-China thing. This is a Europe thing.
Chapter 6: How is the Miami mayoral election influenced by national politics?
This is a whole world thing. This is China just making a lot more and selling a lot more to the world than they're buying. Yeah.
And it would seem putting a target on its back in the process. And we should note that this trillion dollar figure is actually probably going to be higher when 2025 is all said and done, because it just covers the first 11 months of the year. Tom, let's look at Europe, the EU, among the places where Chinese shipments have been increasing quite dramatically this year. They're up 15 percent.
That has evidently attracted the attention of leaders in France and Germany who've been making some big comments in recent days.
Yes, that's right. The French President Emmanuel Macron recently said that the trade balance with China is unsustainable.
Chapter 7: What is the significance of China's $1 trillion trade surplus?
And he raised the prospect of tariffs, of European tariffs against Chinese products. The Germans have been more cautious. And I think there is a kind of groundswell of concern that's coming, especially from businesses, from German businesses that are being hit. directly. The core of German industry is being threatened now by China because China has moved up the value chain.
Germany escaped the first China shock that sort of rattled the US economy because it produced higher end goods and it produced the machinery that China needed. But now China doesn't need Germany so much anymore because it produces all the stuff itself. The German China shock could be even more severe than the US China shock because for the US, it wasn't the core of the US economy.
It was furniture and toys. But machinery and cars is really the heart of the German economy.
Chapter 8: What challenges do European countries face from Chinese competition?
So German industry is really rattled and lobbyists are speaking out more and more for tariffs in Brussels.
What is the chance we might see Beijing and, for instance, these European countries reach some sort of mutually agreeable solution here? John, I noticed Emmanuel Macron saying the goal is to get China to take measures to curb its advantage. Is there a reason China might be amenable to that?
Certainly, I think the view in Beijing is to say, listen, we're playing by your rules. The whole idea is that those who can make certain products more competitively than others should make them and sell them to other countries. That's what we're doing. Now you're going to penalize us because you don't like the results.
But I do think that when you look at the geopolitical chessboard around the world, China really regards the U.S. as the main rival, adversary, however you want to put it. And in that scenario, Europe is actually someone that China wants to bring onto its side. So you could see a scenario where China looks at Europe and sees perhaps a tactical reason for wanting to extend a lifeline or
go a little easier on Europe when it comes to trade.
And Tom, for Europe, what's the chance that, I don't know, getting a bit more defensive in their dealings with China would help their domestic champions? They've tried to boost them up for a while to no avail. Is there a reason this could be successful here where it hasn't been in the past?
I think some kind of deal, either on the currency or that maybe if China agreed to allow the yuan to appreciate, or on some kind of tariffs against certain products, could buy time for European industries. From the European perspective, there seems to be a growing sense that they're going to lose this battle, that for large parts of the world,
expensive German products will not be competitive anymore and that they have to climb the value chain. They have to focus on really the highest end manufacturing goods and also probably refocus on the European market. Probably markets like India and Brazil are maybe lost in future because China is just too dominant. So some kind of agreement with China could buy time.
I think one thing that the Europeans would like is if the Chinese were to build more factories in Europe and to share some of the technologies, it would be a sort of reverse of what European and US companies were doing in China where they were sharing tech. It would be China coming to Europe and sharing tech. The question is whether China would accept. And there's some question about that.
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