00:01 Ramzan Karmali
Hello and welcome to Morning Brief Market Sunrise. I’m Ramzan Karmali, live from Yahoo Finance’s Studios in London. It’s Friday, 19th September. Coming up on the show, President Trump gears up for a high stakes call with Chinese President Xi.
00:20 Ramzan Karmali
Trump’s attack on the media intensifies and Intel stock is still seeing big swings. So, grab your coffee and let’s own the morning.
00:39 Ramzan Karmali
Our markets are bracing themselves for what could be a critical call between President Trump and Xi later this morning. Trump has claimed that a deal over the future of TikTok in the US is all but done and that he wants to make more progress on tariffs.
00:54 Ramzan Karmali
This week has been a rough one for Nvidia in China. First, it was accused the chipmaker of violating anti-monopoly laws, and then it told its big tech firms not to buy from Nvidia. On the flip side, an antitrust probe in Google was dropped. But for the first time since at least the 1990s, China hasn’t bought any US soy beans at the start of the export season. A sign that Beijing is once again using agriculture as leverage in its trade fight with Washington.
01:23 Ramzan Karmali
Now, remember, current duties between the two nations are 30% on Chinese imports and 10% on US goods. The current 90-day pause is set to expire in November. If no deal is done, then there could be a return to triple digit digit to triple digit tariffs. Well, Alicia Garcia Herrero is the chief economist for Asia Pacific at Netexas and joins me now from Hong Kong.
01:50 Ramzan Karmali
Alicia, let’s start with the the this anticipation over this call between President Xi and President Trump. What’s the most that we can really expect out of it, do you think?
02:05 Alicia Garcia-Herrero
The most would be actually Trump’s visit uh to Beijing. Uh it is still unlikely. I think the most probably it will only be alone on the on the sidelines of the APEC meeting. But I think a personal encounter will be announced after this call and that’s kind of the big takeaway. For the rest is just making everybody know this is Trump’s view of the world that things are are going well.
02:37 Alicia Garcia-Herrero
And TikTok is of course a big part of the story with Oracle becoming, you know, the kind of the leader in this in this consortium. I think still bytedance will play a role there. I don’t think uh China will accept full um control by the US. But but it is something that uh Trump can certainly uh bank on and and that’s good news for the market.
03:00 Ramzan Karmali
And Alicia, what have you made of China’s tactics, especially the focus on Nvidia and the fact that the China is very keen to develop their own chips as well.
03:13 Alicia Garcia-Herrero
Yeah, this is interesting because, you know, uh dropping Google’s probe, which by the way, is very relevant because Google isn’t really very present in China. Um and putting pressure on Nvidia, uh should be read actually as pressuring Nvidia to sell better GPUs, not so much H20s, but you know, better than that, which they they of course, the Trump administration is very reluctant to allow.
03:47 Alicia Garcia-Herrero
So I think it’s it’s really more that than really stopping Nvidia. Also because we know quite well, for example, 10 cent in in, you know, when when they um, um in in their recent results, which were actually excellent, they they made it very clear that where they had to switch away from Nvidia H20, it would be much more expensive for 10 cent because they have to stack so many chips.
04:15 Alicia Garcia-Herrero
So it’s not a good news actually for Chinese um uh tech companies to switch. And therefore, I think this is really leverage but in a way uh a poker game if you want if if you see what I mean, on Nvidia, more than anything else.
04:31 Ramzan Karmali
But could this backfire on China? Nvidia’s made this deal with Intel. Does that mean that maybe less chips are made in Taiwan, for example?
04:41 Alicia Garcia-Herrero
Exactly, exactly. And actually we’ve been uh hearing not only, of course, uh a new factory in in Beito, North of Taipei from Nvidia already announced, but also we’ve heard that that even Apple is thinking of building these uh two-side phones um in Taiwan. So, you know, there’s this this game going on that, okay, you push me, I push you. And that’s why I think it it is really very important to see what’s going on with with this with this threat from China because this one might actually not end up being successful.
05:13 Ramzan Karmali
So, you sound very pessimistic there. What’s the best that investors can expect at the end point once all these trade negotiations negotiations are actually over.
05:25 Alicia Garcia-Herrero
Uh again, I think the call for right after the call is positive because, you know, the worst has already been announced on Nvidia. I mean, China is not going to say anything worse than what it has already said. And we may we might get a personal visit. So, you know, investors should cheer after this call. I think that would be my, my, my takeaway for today, at least for today.
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