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Stacked containers in American and Chinese national colors symbolize a trade war between the US and China.
Beijing and Brussels react to Trump tariffs
Of greater interest are nontariff measures, including anti-monopoly investigations launched into Google and the placing of Calvin Klein’s parent company, PVH, on China’s “unreliable entities” list, limiting the brand’s operations there. Beijing also imposed export controls on 25 rare metals, including tungsten, critical for electronics and military equipment.
In the US, consumers might not like Trump’s cancellation of the “de minimis exemption,” which allowed the purchase of goods under $800 without duties. The move is expected to hurt low-income Americans who rely on direct shipping from online vendors while having a minimal impact on Chinese firms. While Trump has said he’s in “no hurry” to talk to President Xi Jinping, we’re watching whether public backlash in the US changes his tune.
Next, the European Union? Trump has put Brussels on his hit list but has not given any dates or specifics. EU trade chief Maros Sefcovic said on Tuesday, "We are ready to engage immediately“ and hoping “to avoid the measures which would bring a lot of disturbance to the most important trade and investment relationship on this planet.”
Putin trolls Europe about "the master" Trump
Ian Bremmer shares his insights on global politics this week on World In :60.
What does Putin mean when he says Europe "will stand at the feet of the master"?
It means that he loves to troll his adversaries. Don't you remember when he said that he actually thought Biden would be a better president from Russia's perspective than Trump? He trolls. It's all misinformation. It's propaganda. It's all served to undermine and show that he's powerful, and he can say whatever he wants. And of course, he would love to see a fight between the Americans and their allies, whether it's the Nordics on Greenland or it's Canada on 51st state, or it's Panama on the canal, or it's Europe on tariffs. And he wants to undermine the countries that gets a divide and conquer kind of response from Putin. And that is what he is doing when he trolls the Europeans.
What's next for Panama after deciding to exit China's Belt and Road Initiative?
Well, certainly, of all the countries that are facing a deeply asymmetric relationship on the back of threats from President Trump, Panama is high on that list. And they really are trying to find a way to avoid tariffs and avoid the Americans squeezing them on the canal. And an easy way to do that, because they've heard this now directly from Trump and from Secretary of State, Marco Rubio, is that the Chinese have too much influence over transit. And that is particularly true through these port facilities that a Hong Kong-based company, read, China, is in charge of. And so, they are opening investigations into the contract and into how they engage there. And they're also saying they'll pull out of Belt and Road. All of that is clearly going to upset and antagonize the Chinese. And I think that the Panamanians are very, very comfortable showing that they are going to orient much more towards the United States, given how much more they rely on the Americans.
How would a potential Turkey defense pact with Syria reshape power dynamics in the Middle East?
Given who's on the ground in Syria and the fact that the Americans are likely to pull out the over 2,000 troops they have there, and that Trump has said it's really up to Turkey to maintain that relationship, they were the ones that were closest to the rebels that ended up defeating, overthrowing Assad's regime. Not surprised at all that that is where the diplomacy is heading. But that doesn't mean that it's going to be stable, and it certainly doesn't mean that the Kurds on the ground are going to be handled well. And that will be what we need to watch carefully. But Turkey, a NATO ally that has a lot of influence across the region and particularly now on the ground with Syria, I think that'll be relatively stable given the support from the United States. That's it for me, and I'll talk to you all real soon.
This illustration photo shows the DeepSeek AI application logo on a black background displayed on a cell phone with a kaleidoscope-effect China flag in the background.
What DeepSeek means for the US-China AI war
A Chinese startup might have achieved what many thought was impossible: matching America’s best artificial intelligence systems at a fraction of the cost.
DeepSeek's latest AI model, DeepSeek-R1, was released earlier this month. The open-source model performs as well as top models from OpenAI and Google while using just a fraction of the computing power and cost to develop; it’s also a fraction of the cost to use.
DeepSeek claims that it only needed $6 million in computing power to develop the model, which the New York Times notes is 10 times less than what Meta spent on its model. The R1 model received the fourth-highest score on Chatbot Arena, which crowd-sources evaluations to rank large language models by capability, only behind two of Google’s Gemini models and ChatGPT-4o and ahead of Anthropic’s Claude 3.5 Sonnet.
If you take DeepSeek at its word, then China has managed to put a major player in AI on the map without access to top chips from US companies like Nvidia and AMD — at least those released in the past two years. Joe Biden’s administration placed strict export controls on these chips, so if the company has had access it may not be forthright about that.
For now, the US markets are indeed taking DeepSeek at its word. Nvidia stock fell nearly 17% on Monday, erasing a record sum from its market capitalization — $589 billion in a single day. The Nasdaq stock exchange ended the day down 3%, as a result.
The revelation about DeepSeek has come as Donald Trump tries to spur AI infrastructure in the United States, heralding the $500 billion Stargate project. But China’s new open-source model might have just changed the landscape when many thought the United States was running away with the race.
In a speech Monday evening, Trump called news of the DeepSeek model a “positive” due to its cheap cost but said American industry needs to compete. “The release of DeepSeek, AI from a Chinese company should be a wakeup call for our industries that we need to be laser-focused on competing to win.”Marco Rubio speaks after he is sworn in as Secretary of State by U.S. Vice President JD Vance at the Eisenhower Executive Office Building in Washington, on Jan. 21, 2025.
Tough talk on Taiwan
US Secretary of State Marco Rubio clashed with Chinese Foreign Minister Wang Yi in their first phone call on Friday over the independence of Taiwan, according to State Department spokesperson Tammy Bruce. During the conversation, Wang reaffirmed China’s position that the island nation is part of China and reportedly told Rubio “I hope you will act accordingly,” a Chinese phrase usually employed by a superior warning a student or employee to behave and act responsibly. Rubio has previously called Beijing the top US threat and was twice sanctioned by China in 2020.
And Rubio may have more wars of words with Wang in the future. China is reportedly ramping up efforts to encourage the independence movement on the Japanese island of Okinawa, which hosts 70% of US bases in the region – and is a mere 466 miles from Taiwan.
Chinese state media frequently highlights US military crimes in Okinawa, and Chinese social media propaganda claims most Okinawans favor independence. A poll published in May 2022 showed that only 3% of residents favored full independence, although 48% supported greater autonomy through a federal arrangement with Tokyo.
Reports suggest Beijing also tried but failed to establish an underground police station in Okinawa and plans to establish a Ryukyu Research Centre to remind locals of the island’s status as a former independent empire until it was annexed by Japan in 1609. Beijing has also been conducting a “charm offensive,” stressing Okinawa’s cultural ties to China – and strengthening its claim to the island.President Donald Trump attends a bilateral meeting with Chinese President Xi Jinping during a G20 leaders summit in Osaka, Japan, in 2019.
Trump creates a power vacuum in the world.
During his first week in office, Donald Trump took steps to withdraw the US from two major international commitments: the Paris Climate Agreement and the World Health Organization.
Trump’s reasoning on both was, broadly speaking, the same: Like many American conservatives, he sees international obligations as needless constraints on US power and sovereignty. But that may create opportunities for other global powers, not least China.
Dragon in the room? With one of the world’s two largest economies (and polluters) out of Paris, the other, China, has an opportunity to shape global norms in its favor. China emits more greenhouse gasses than anyone but is also a world leader in clean energy technology and financing.
Could China look to boost its influence at the WHO as well? Beijing supplies less than 1% of the organization’s annual budget right now, compared to more than 15% (about $1 billion) from the US. China’s relationship with the WHO has been complicated – Beijing, for example, went to great lengths to stymie the organization’s probe into the origin of COVID-19.
The bigger picture: “America First” will entail scaling back from a range of international commitments. But while Trump may abhorobligations, power abhors a vacuum. As the US withdraws, who will fill the gap? In a GZERO world, can anyone?
Container ships in front of the port of Bremerhaven.
How scared should the world be of Trump’s economic threats?
On Wednesday, President Donald Trump used his social media platform to threatenVladimir Putin with “high levels of Taxes, Tariffs, and Sanctions on anything being sold by Russia to the United States” unless he struck a bargain over Ukraine.
There’s just one problem: Russia has very little trade with the US. Americans imported just $2.8 billion in goods from Russia from Jan. to Nov. 2024, less than a tenth of the pre-war figure and less than 1% of all US imports over the same time period. The extensive sanctions already in place have hardly brought Moscow to its knees, and arguably benefited US rivals like China, Iran, and North Korea. It’s tough talk, but it’s not likely to push Putin to the table.
China is a different story. Trade with the US added up to an average of $54 billion per month in 2024, and the 60% tariffs Trump threatened to put on China on the campaign trail would cause severe damage to both economies. That may be why Trump is backing off the high sticker number and said Tuesday he is considering imposing at 10% tariffs on Chinese goods as soon as Feb. 1.
Now, 10% is a number that Beijing feels is much more manageable. China is experiencing price deflation — a really damaging phenomenon with one silver lining in that it could mean US consumers wind up paying about the same prices even if Trump hikes tariffs. The central government is also promising funds to stabilize the stock market in the face of potential tariffs and prevent investors from seeking safer shelter for their cash.
The fears are more real in Europe, where Trump threatened to impose tariffs without specifying a rate on Tuesday. Growth in the region’s most important economies is already stagnating, and even small barriers to trade with their most important partner will have serious consequences. Further economic troubles could empower far-right movements across the continent, which may suit Trump just fine. We have our eye on Germany, which will hold elections in precisely one month.
And don’t forget Canada and Mexico, which are staring down the barrel of 25% tariffs that Trump threatened on Tuesday as well. It’s creating a decidedly tense atmosphere in North America, with Canadian Prime Minister (for now) Justin Trudeau promising retaliation, which Mexican President Claudia Sheinbaum has hinted at as well.
The bottom line? You’re probably in for rising prices in the near future … unless everyone can come up with a reason for Trump to let them slide. We’re watching what Trump says when he speaks at the World Economic Forum in Davos on Thursday.
Firefighters work to extinguish a fire at a hotel in the ski resort of Kartalkaya in Bolu province, Turkey, January 21, 2025.
Hard Numbers: Ski resort fire in Turkey, Bolton loses Secret Service protections, Putin and Xi hold joint meeting, Historic snow in the South
76: A devastating fire at Turkey’s Grand Kartal Hotel ski resort killed 76 people and injured scores of others on Tuesday. The blaze began at 3:30 a.m. on the restaurant floor of the 12-story building, quickly engulfing it and forcing desperate guests to jump from windows or attempt escapes using bed sheets.
17: President Donald Trump revoked John Bolton’s Secret Service protection hours after taking office on Monday, despite ongoing threats against Bolton from Iran. Bolton, who served as Trump’s national security advisor for 17 months and had previously lost protection after leaving the administration but had it restored by Biden, expressed disappointment but not surprise. The move comes amid documented Iranian assassination plots against Bolton and follows Trump’s revocation of Bolton’s security clearance.
95: Russian President Vladimir Putin and Chinese President Xi JinpingcelebratedDonald Trump’s first official day in office by reaffirming their “no-limits” partnership on Tuesday in a joint televised meeting that lasted 95 minutes. Though Trump was not directly named, the timing suggests that the two world leaders may be pursuing a coordinated response to the new president, which has threatened to levy tariffs on China and end Russia’s war with Ukraine.
8: A historic polar vortex-related snowstorm is hitting the Gulf Coast, bringing record-breaking snow to Texas and Louisiana. The National Weather Service issued its first-ever blizzard warning for Lake Charles, Louisiana, while Lafayette, Louisiana, already has 8 inches. With the region ill-equipped for winter weather, travel disruptions and service outages are expected to last for days. Remarkably, New Orleans received more January snow than Anchorage, Alaska.
U.S. President-elect Donald Trump's nominee to be U.S. Secretary of the Interior Doug Burgum attends the vice president?s dinner ahead of the inauguration of Trump, in Washington, U.S., January 18, 2025.
Doug Burgum’s coal-filled energy plan for AI
The AI race depends on fossil fuels. That was the message from Doug Burgum in his Senate confirmation hearing last Thursday.
Burgum is currently auditioning for two jobs. If confirmed by the US Senate, the former North Dakota governor will not only serve as secretary of the interior but also as the head of a new committee called the National Energy Council.
Burgum said that the US will lose its “AI arms race” with China unless it takes full advantage of fossil fuels. To run artificial intelligence models on advanced processors, data centers require copious amounts of electricity. He criticized wind and solar energy and said the country needs more “baseload” electricity from coal. “The sun doesn’t always shine, and the wind doesn’t always blow,” Burgum told senators, signaling plans for a deregulatory environment in the energy sector.
Companies are rethinking their climate ambitions in the age of AI. In July, Google’s Chief Sustainability Officer Kate Brandtadmitted that the company’s goal to become carbon “net zero” by 2030 is now “extremely ambitious.” The Biden administration has encouraged the development of nuclear energy infrastructure as a way to get more “clean energy” to pursue AI at scale without further delaying progress on climate goals. Google and Microsoft have struck deals for nuclear energy, while Meta is seeking a deal of its own.
Burgum’s confirmation hearing showed that while Trump’s administration may be just as enthused about dominating global AI, it’ll be less stringent on using renewable or clean energy to do so.