tariffs

Turbulent global economy could drive up prices for Netflix and rivals

netflix, streaming, tariffs, Tech, united kingdom / Beth Washington / April 12, 2025

“… our members are going to be punished.”

A scene from BBC’s Doctor Who. Credit: BBC/Disney+

Debate around how much taxes US-based streaming services should pay internationally, among other factors, could result in people paying more for subscriptions to services like Netflix and Disney+.

On April 10, the United Kingdom’s Culture, Media and Sport (CMS) Committee reignited calls for a streaming tax on subscription revenue acquired through UK residents. The recommendation came alongside the committee’s 120-page report [PDF] that makes numerous recommendations for how to support and grow Britain’s film and high-end television (HETV) industry.

For the US, the recommendation garnering the most attention is one calling for a 5 percent levy on UK subscriber revenue from streaming video on demand services, such as Netflix. That’s because if streaming services face higher taxes in the UK, costs could be passed onto consumers, resulting in more streaming price hikes. The CMS committee wants money from the levy to support HETV production in the UK and wrote in its report:

The industry should establish this fund on a voluntary basis; however, if it does not do so within 12 months, or if there is not full compliance, the Government should introduce a statutory levy.

Calls for a streaming tax in the UK come after 2024’s 25 percent decrease in spending for UK-produced high-end TV productions and 27 percent decline in productions overall, per the report. Companies like the BBC have said that they lack funds to keep making premium dramas.

In a statement, the CMS committee called for streamers, “such as Netflix, Amazon, Apple TV+, and Disney+, which benefit from the creativity of British producers, to put their money where their mouth is by committing to pay 5 percent of their UK subscriber revenue into a cultural fund to help finance drama with a specific interest to British audiences.” The committee’s report argues that public service broadcasters and independent movie producers are “at risk,” due to how the industry currently works. More investment into such programming would also benefit streaming companies by providing “a healthier supply of [public service broadcaster]-made shows that they can license for their platforms,” the report says.

The Department for Digital, Culture, Media and Sport has said that it will respond to the CMS Committee’s report.

Streaming companies warn of higher prices

In response to the report, a Netflix spokesperson said in a statement shared by the BBC yesterday that the “UK is Netflix’s biggest production hub outside of North America—and we want it to stay that way.” Netflix reportedly claims to have spent billions of pounds in the UK via work with over 200 producers and 30,000 cast and crew members since 2020, per The Hollywood Reporter. In May 2024, Benjamin King, Netflix’s senior director of UK and Ireland public policy, told the CMS committee that the streaming service spends “about $1.5 billion” annually on UK-made content.

Netflix’s statement this week, responding to the CMS Committee’s levy, added:

… in an increasingly competitive global market, it’s key to create a business environment that incentivises rather than penalises investment, risk taking, and success. Levies diminish competitiveness and penalise audiences who ultimately bear the increased costs.

Adam Minns, executive director for the UK’s Association for Commercial Broadcasters and On-Demand Services (COBA), highlighted how a UK streaming tax could impact streaming providers’ content budgets.

“Especially in this economic climate, a levy risks impacting existing content budgets for UK shows, jobs, and growth, along with raising costs for businesses,” he said, per the BBC.

An anonymous source that The Hollywood Reporter described as “close to the matter” said that “Netflix members have already paid the BBC license fee. A levy would be a double tax on them and us. It’s unfair. This is a tariff on success. And our members are going to be punished.”

The anonymous source added: “Ministers have already rejected the idea of a streaming levy. The creation of a Cultural Fund raises more questions than it answers. It also begs the question: Why should audiences who choose to pay for a service be then compelled to subsidize another service for which they have already paid through the license fee. Furthermore, what determines the criteria for ‘Britishness,’ which organizations would qualify for funding … ?”

In May, Mitchel Simmons, Paramount’s VP of EMEA public policy and government affairs, also questioned the benefits of a UK streaming tax when speaking to the CMS committee.

“Where we have seen levies in other jurisdictions on services, we then see inflation in the market. Local broadcasters, particularly in places such as Italy, have found that the prices have gone up because there has been a forced increase in spend and others have suffered as a consequence,” he said at the time.

Tax threat looms largely on streaming companies

Interest in the UK putting a levy on streaming services follows other countries recently pushing similar fees onto streaming providers.

Music streaming providers, like Spotify, for example, pay a 1.2 percent tax on streaming revenue made in France. Spotify blamed the tax for a 1.2 percent price hike in the country issued in May. France’s streaming taxes are supposed to go toward the Centre National de la Musique.

Last year, Canada issued a 5 percent tax on Canadian streaming revenue that’s been halted as companies including Netflix, Amazon, Apple, Disney, and Spotify battle it in court.

Lawrence Zhang, head of policy of the Centre for Canadian Innovation and Competitiveness at the Information Technology and Innovation Foundation think tank, has estimated that a 5 percent streaming tax would result in the average Canadian family paying an extra CA$40 annually.

A streaming provider group called the Digital Media Association has argued that the Canadian tax “could lead to higher prices for Canadians and fewer content choices.”

“As a result, you may end up paying more for your favourite streaming services and have less control over what you can watch or listen to,” the Digital Media Association’s website says.

Streaming companies hold their breath

Uncertainty around US tariffs and their implications on the global economy have also resulted in streaming companies moving slower than expected regarding new entrants, technologies, mergers and acquisitions, and even business failures, Alan Wolk, co-founder and lead analyst at TVRev, pointed out today. “The rapid-fire nature of the executive orders coming from the White House” has a massive impact on the media industry, he said.

“Uncertainty means that deals don’t get considered, let alone completed,” Wolk mused, noting that the growing stability of the streaming industry overall also contributes to slowing market activity.

For consumers, higher prices for other goods and/or services could result in smaller budgets for spending on streaming subscriptions. Establishing and growing advertising businesses is already a priority for many US streaming providers. However, the realities of stingier customers who are less willing to buy multiple streaming subscriptions or opt for premium tiers or buy on-demand titles are poised to put more pressure on streaming firms’ advertising plans. Simultaneously, advertisers are facing pressures from tariffs, which could result in less money being allocated to streaming ads.

“With streaming platform operators increasingly turning to ad-supported tiers to bolster profitability—rather than just rolling out price increases—this strategy could be put at risk,” Matthew Bailey, senior principal analyst of advertising at Omdia, recently told Wired. He added:

Against this backdrop, I wouldn’t be surprised if we do see some price increases for some streaming services over the coming months.

Streaming service providers are likely to tighten their purse strings, too. As we’ve seen, this can result in price hikes and smaller or less daring content selection.

Streaming customers may soon be forced to reduce their subscriptions. The good news is that most streaming viewers are already accustomed to growing prices and have figured out which streaming services align with their needs around affordability, ease of use, content, and reliability. Customers may set higher standards, though, as streaming companies grapple with the industry and global changes.

Scharon is a Senior Technology Reporter at Ars Technica writing news, reviews, and analysis on consumer gadgets and services. She’s been reporting on technology for over 10 years, with bylines at Tom’s Hardware, Channelnomics, and CRN UK.

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Apple silent as Trump promises “impossible” US-made iPhones

Apple, china, china tariffs, Donald Trump, Foxconn, IPhone, Policy, tariffs, tim cook, us, us-china trade war / Kelly Newman / April 12, 2025

How does Apple solve a problem like Trump’s trade war?

Despite a recent pause on some tariffs, Apple remains in a particularly thorny spot as Donald Trump’s trade war spikes costs in the tech company’s iPhone manufacturing hub, China.

Analysts predict that Apple has no clear short-term options to shake up its supply chain to avoid tariffs entirely, and even if Trump grants Apple an exemption, iPhone prices may increase not just in the US but globally.

The US Trade Representative, which has previously granted Apple an exemption on a particular product, did not respond to Ars’ request to comment on whether any requests for exemptions have been submitted in 2025.

Currently, the US imposes a 145 percent tariff on Chinese imports, while China has raised tariffs on US imports to 125 percent.

Neither side seems ready to back down, and Trump’s TikTok deal—which must be approved by the Chinese government—risks further delays the longer negotiations and retaliations drag on. Trump has faced criticism for delaying the TikTok deal, with Senate Intelligence Committee Vice Chair Mark Warner (D-Va.) telling The Verge last week that the delay was “against the law” and threatened US national security. Meanwhile, China seems to expect more business to flow into China rather than into the US as a result of Trump’s tough stance on global trade.

With the economy and national security at risk, Trump is claiming that tariffs will drive manufacturing into the US, create jobs, and benefit the economy. Getting the world’s most valuable company, Apple, to manufacture its most popular product, the iPhone, in the US, is clearly part of Trump’s vision. White House Press Secretary Karoline Leavitt told reporters this week that Apple’s commitment to invest $500 billion in the US over the next four years was supposedly a clear indicator that Apple believed it was feasible to build iPhones here, Bloomberg reported.

“If Apple didn’t think the United States could do it, they probably wouldn’t have put up that big chunk of change,” Leavitt said.

Apple did not respond to Ars’ request to comment, and so far, it has been silent on how tariffs are impacting its business.

iPhone price increases expected globally

For Apple, even if it can build products for the US market in India, where tariffs remain lower, Trump’s negotiations with China “remain the most important variable for Apple” to retain its global dominance.

Dan Ives, global head of technology research at Wedbush Securities, told CNBC that “Apple could be set back many years by these tariffs.” Although Apple reportedly stockpiled phones to sell in the US market, that supply will likely dwindle fast as customers move to purchase phones before prices spike. In the medium-term, consultancy firm Omdia forecasted, Apple will likely “focus on increasing iPhone production and exports from India” rather than pushing its business into the US, as Trump desires.

But Apple will still incur additional costs from tariffs on India until that country tries to negotiate a more favorable trade deal. And any exemption that Apple may secure due to its investment promise in the US or moderation of China tariffs that could spare Apple some pain “may not be enough for Apple to avoid adverse business effects,” co-founder and senior analyst at equity research publisher MoffettNathanson, Craig Moffett, suggested to CNBC.

And if Apple is forced to increase prices, it likely won’t be limited to just the US, Bank of America Securities analyst Wamsi Mohan suggested, as reported by The Guardian. To ensure that Apple’s largest market isn’t the hardest hit, Apple may increase prices “across the board geographically,” he forecasted.

“While Apple has not commented on this, we expect prices will be changed globally to prevent arbitrage,” Mohan said.

Apple may even choose to increase prices everywhere but the US, vice president at Forrester Research, Dipanjan Chatterjee, explained in The Guardian’s report.

“If there is a cost impact in the US for certain products,” Chatterjee said, Apple may not increase US prices because “the market is far more competitive there.” Instead, “the company may choose to keep prices flat in the US while recovering the lost margin elsewhere in its global portfolio,” Chatterjee said.

Trump’s US-made iPhone may be an impossible dream

Analysts have said that Trump’s dream that a “made-in-the-USA” iPhone could be coming soon is divorced from reality. Not only do analysts estimate that more than 80 percent of Apple products are currently made in China, but so are many individual parts. So even if Apple built an iPhone factory in the US, it would still have to pay tariffs on individual parts, unless Trump agreed to a seemingly wide range of exemptions. Mohan estimated it would “likely take many years” to move the “entire iPhone supply chain,” if that’s “even possible.”

Further, Apple’s $500 billion commitment covered “building servers for its artificial intelligence products, Apple TV productions and 20,000 new jobs in research and development—not a promise to make the iPhone stateside,” The Guardian noted.

For Apple, it would likely take years to build a US factory and attract talent, all without knowing how tariffs might change. A former Apple manufacturing engineer, Matthew Moore, told Bloomberg that “there are millions of people employed by the Apple supply chain in China,” and Apple has long insisted that the US talent pool is too small to easily replace them.

“What city in America is going to put everything down and build only iPhones?” Moore said. “Boston is over 500,000 people. The whole city would need to stop everything and start assembling iPhones.”

In a CBS interview, Commerce Secretary Howard Lutnick suggested that the “army of millions and millions of human beings” could be automated, Bloomberg reported. But China has never been able to make low-cost automation work, so it’s unclear how the US could achieve that goal without serious investment.

“That’s not yet realistic,” people who have worked on Apple’s product manufacturing told Bloomberg, especially since each new iPhone model requires retooling of assembly, which typically requires manual labor. Other analysts agreed, CNBC reported, concluding that “the idea of an American-made iPhone is impossible at worst and highly expensive at best.”

For consumers, CNBC noted, a US-made iPhone would cost anywhere from 25 percent more than the $1,199 price point today, increasing to about $1,500 at least, to potentially $3,500 at most, Wall Street analysts have forecasted.

It took Apple a decade to build its factory in India, which Apple reportedly intends to use to avoid tariffs where possible. That factory “only began producing Apple’s top-of-the-line Pro and Pro Max iPhone models for the first time last year,” CNBC reported.

Analysts told CNBC that it would take years to launch a similar manufacturing process in the US, while “there’s no guarantee that US trade policy might not change yet again in a way to make the factory less useful.”

Apple CEO’s potential game plan to navigate tariffs

It appears that there’s not much Apple can do to avoid maximum pain through US-China negotiations. But Apple’s CEO Tim Cook—who is considered “a supply chain whisperer”—may be “uniquely suited” to navigate Trump’s trade war, Fortune reported.

After Cook arrived at Apple in 1998, he “redesigned Apple’s sprawling supply chain” and perhaps is game to do that again, Fortune reported. Jeremy Friedman, associate professor of business and geopolitics at Harvard Business School, told Fortune that rather than being stuck in the middle, Cook may turn out to be a key intermediary, helping the US and China iron out a deal.

During Trump’s last term, Cook raised a successful “charm offensive” that secured tariff exemptions without caving to Trump’s demand to build iPhones in the US, CNBC reported, and he’s likely betting that Apple’s recent $500 billion commitment will lead to similar outcomes, even if Apple never delivers a US-made iPhone.

Back in 2017, Trump announced that Apple partner Foxconn would be building three “big beautiful plants” in the US and claimed that they would be Apple plants, CNBC reported. But the pandemic disrupted construction, and most of those plans were abandoned, with one facility only briefly serving to make face masks, not Apple products. In 2019, Apple committed to building a Texas factory that Trump toured. While Trump insisted that a US-made iPhone was on the horizon due to Apple moving some business into the US, that factory only committed to assembling the MacBook Pro, CNBC noted.

Morgan Stanley analyst Erik Woodring suggested that Apple may “commit to some small-volume production in the US (HomePod? AirTags?)” to secure an exemption in 2025, rather than committing to building iPhones, CNBC reported.

Although this perhaps sounds like a tried-and-true game plan, for Cook, Apple’s logistics have likely never been so complicated. However, analysts told Fortune that experienced logistics masterminds understand that flexibility is the priority, and Cook has already shown that he can anticipate Trump’s moves by stockpiling iPhones and redirecting US-bound iPhones through its factory in India.

While Trump negotiates with China, Apple hopes that an estimated 35 million iPhones it makes annually in India can “cover a large portion of its needs in the US,” Bloomberg reported. These moves, analysts said, prove that Cook may be the man for the job when it comes to steering Apple through the trade war chaos.

But to keep up with global demand—selling more than 220 million iPhones annually—Apple will struggle to quickly distance itself from China, where there’s abundant talent to scale production that Apple says just doesn’t exist in the US. For example, CNBC noted that Foxconn hired 50,000 additional workers last fall at its largest China plant just to build enough iPhones to meet demand during the latest September launches.

As Apple remains dependent on China, Cook will likely need to remain at the table, seeking friendlier terms on both sides to ensure its business isn’t upended for years.

“One can imagine, if there is some sort of grand bargain between US and China coming in the next year or two,” Friedman said, “Tim Cook might as soon as anybody play an intermediary role.”

Ashley is a senior policy reporter for Ars Technica, dedicated to tracking social impacts of emerging policies and new technologies. She is a Chicago-based journalist with 20 years of experience.

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Trump boosts China tariffs to 125%, pauses tariff hikes on other countries

china tariffs, consumer technology, Donald Trump, Policy, tariffs, us-china trade war / 9u50fv / April 10, 2025

On Wednesday, Donald Trump, once again, took to Truth Social to abruptly shift US trade policy, announcing a 90-day pause “substantially” lowering reciprocal tariffs against all countries except China to 10 percent.

Because China retaliated—raising tariffs on US imports to 84 percent on Wednesday—Trump increased tariffs on China imports to 125 percent “effective immediately.” That likely will not be received well by China, which advised the Trump administration to cancel all China tariffs Wednesday, NPR reported.

“The US’s practice of escalating tariffs on China is a mistake on top of a mistake,” the Chinese finance ministry said, calling for Trump to “properly resolve differences with China through equal dialogue on the basis of mutual respect.”

For tech companies, trying to keep up with Trump’s social media posts regarding tariffs has been a struggle, as markets react within minutes. It’s not always clear what Trump’s posts mean or how the math will add up, but after Treasury Secretary Scott Bessent clarified Trump’s recent post, the stock market surged, CNBC reported, after slumping for days.

But even though the stock market may be, for now, recovering, tech companies remain stuck swimming in uncertainty. Ed Brzytwa, vice president of international trade for the Consumer Technology Association (CTA)—which represents the $505 billion US consumer technology industry—told Ars that for many CTA members, including small businesses and startups, “the damage has been done.”

“Our small business and startup members were uniquely exposed to these reciprocal tariffs and the whipsaw effect,” Brzytwa told Ars. “There’s collateral damage to that.”

In a statement, CTA CEO Gary Shapiro suggested that the pause was “a victory for American consumers,” but ultimately the CTA wants Trump to “fully revoke” the tariffs.

“While this is great news, we are hearing directly from our members that the ongoing additional 10 percent universal baseline tariffs and this continued uncertainty, are already hurting American small businesses,” Shapiro said. “CTA urges President Trump to focus his efforts on what he does best, dealmaking. Now is the time to reposition the United States with our allies as a reliable trading partner while growing the American and global economy.”

Trump boosts China tariffs to 125%, pauses tariff hikes on other countries Read More »

Framework “temporarily pausing” some laptop sales because of new tariffs

AMD, framework, framework laptop 13, intel, tariffs, Tech, trump tariffs / Kelly Newman / April 8, 2025

Framework, the designers and sellers of the modular and repairable Framework Laptop 13 and other products, announced today that it would be “temporarily pausing US sales” on some of its laptop configurations as a result of new tariffs put on Taiwanese imports by the Trump administration. The affected models will be removed from Framework’s online store for now, and there’s no word on when buyers can expect them to come back.

“We priced our laptops when tariffs on imports from Taiwan were 0 percent,” the company responded to a post asking why it was pausing sales. “At a 10 percent tariff, we would have to sell the lowest-end SKUs at a loss.”

“Other consumer goods makers have performed the same calculations and taken the same actions, though most have not been open about it,” Framework said. Nintendo also paused US preorders for its upcoming Switch 2 console last week after the tariffs were announced.

For right now, Framework’s sales pause affects at least two specific laptop configurations: the Intel Core Ultra 5 125H and AMD Ryzen 5 7640U versions of the Framework Laptop 13. As of April 1, Framework was selling pre-built versions of those laptops for $999 and $899, respectively. Without those options, the cheapest versions of those laptops start at $1,399 and $1,499.

Framework “temporarily pausing” some laptop sales because of new tariffs Read More »

Trump tariffs terrify board game designers

Board games, china, culture, tariffs / Shannon Garcia / April 6, 2025

Placko called the new policy “not just a policy change” but “a seismic shift.”

Rob Daviau, who helps run Restoration Games and designed hit games like Pandemic Legacy, has been writing on social media for months about the fact that every meeting he’s in “has been an existential crisis about our industry.”

Expanding on his remarks in an interview with BoardGameWire late last year, Daviau added that he was a natural pessimist who foresaw a “great collapse in the hobby gaming market in the US” if tariffs were implemented.

Gamers aren’t likely to stop playing, but they might stick with their back catalog (gamers are notorious for having “shelves of shame” featuring hot new games they purchased without playing them… because other hot new games had already appeared). Or they might, in search of a better deal, shop only online, which could be tough on already struggling local game stores. Or games might decline in quality to keep costs lower. None of which is likely to lead to a robust, high-quality board gaming ecosystem.

Stegmaier’s forecast is nearly as dark as Daviau’s. “Within a few months US companies will lose a lot of money and/or go out of business,” he wrote, “and US citizens will suffer from extreme inflation.”

The new tariffs can be avoided by shipping directly from the factories to firms in other countries, such as a European distributor, but the US remains a crucial market for US game makers; Stegmaier notes that “65 percent of our sales are in the US, so this will take a heavy toll.”

For games still in the production pipeline, at least budgetary adjustments can be made, but some games have already been planned, produced, and shipped. If the boat arrives after the tariffs go into effect—too bad. The US importer still has to pay the extra fees. Chris Solis, who runs Solis Game Studio in California, issued an angry statement yesterday covering exactly this situation, saying, “I have 8,000 games leaving a factory in China this week and now need to scramble to cover the import bill.”

GAMA, the trade group for board game publishers, has been lobbying against the new tariffs, but with little apparent success thus far.

Trump tariffs terrify board game designers Read More »

The same day Trump bought a Tesla, automaker moved to disrupt trade war

Donald Trump, Electric vehicles, elon musk, EVs, Policy, tariffs, Tesla / Kelly Newman / March 16, 2025

Tesla hopes to slow down Trump’s tit-for-tat tariffs amid financial woes.

Donald Trump and White House Senior Advisor, Tesla and SpaceX CEO Elon Musk deliver remarks next to a Tesla Model S on the South Lawn of the White House on March 11, 2025 in Washington, DC. Credit: Andrew Harnik / Staff | Getty Images News

Elon Musk’s Tesla is waving a red flag, warning that Donald Trump’s trade war risks dooming US electric vehicle makers, triggering job losses, and hurting the economy.

In an unsigned letter to the US Trade Representative (USTR), Tesla cautioned that Trump’s tariffs could increase costs of manufacturing EVs in the US and forecast that any retaliatory tariffs from other nations could spike costs of exports.

“Tesla supports a robust and thorough process” to “address unfair trade practices,” but only those “which, in the process, do not inadvertently harm US companies,” the letter said.

The carmaker recommended that the USTR—in its ongoing review of unfair trade practices and investigation into harms of non-reciprocal trade agreements—”consider the downstream impacts of certain proposed actions taken to address unfair trade practices.”

According to Tesla, the current process to address unfair trade threatens to harm its more than 70,000 employees, and more broadly could trigger job losses and revenue dips in the US auto industry. It could also disrupt supply chains, as Tesla claims that even its best efforts prove it would be “impossible” to source all parts from the US currently.

“Even with aggressive localization of the supply chain, certain parts and components are difficult or impossible to source within the United States,” the letter said, asking the USTR to “evaluate domestic supply chain limitations.”

If left unchanged, the process could make the US less competitive in global auto markets, Tesla warned, recommending that the “USTR should investigate ways to avoid these pitfalls in future actions.”

Moving forward, Tesla recommends that the USTR “take into account” how the trade war could hurt US exporters, as “US exporters are inherently exposed to disproportionate impacts when other countries respond to US trade actions.”

In the letter, Tesla appears to suggest that Trump’s tariffs were rushed, suggesting that “US companies will benefit from a phased approach that enables them to prepare accordingly and ensure appropriate supply chain and compliance measures are taken.”

Tesla was not alone in submitting comments to the USTR. So far, hundreds of companies have chimed in, many hoping to push back on Trump’s aggressive tariffs regime.

Among them was a trade group representing major foreign automakers like BMW, Honda, and Toyota—Autos Drive America—which agreed with Tesla that the USTR should slow Trump down and require considerations about long-term impacts of sudden actions to address unfair trade. They similarly warned that imposing “broad-based tariffs will disrupt production at US assembly plants,” Reuters reported.

“Automakers cannot shift their supply chains overnight, and cost increases will inevitably lead to some combination of higher consumer prices, fewer models offered to consumers and shut-down US production lines, leading to potential job losses across the supply chain,” the group said.

Disrupting Trump trade war may be tough

Last week, Trump’s 25 percent tariffs on Canada and Mexico took effect, likely frustrating Tesla, which relies on a small parts manufacturer in Canada, Laval Tool, to source parts for the already costly molds for its Cybertrucks. Those tariffs threatened to spike costs beyond the current rate of nearly $500,000 per mold at a time when the Cybertruck hasn’t been selling well, InsideEVs reported. And for Tesla, Trump’s China tariffs may hit even harder, as China is Tesla’s second biggest market.

On the day that those tariffs kicked in, the head of the Alliance for Automotive Innovation—which represents all the major US automakers, except Tesla—John Bozzella warned that “all automakers will be impacted by these tariffs on Canada and Mexico,” Reuters reported. He joined others predicting price hikes on cars coming soon, perhaps as high as 25 percent.

Tesla’s letter to the USTR is notably unsigned, despite CEO Musk’s close allyship with Trump as a senior advisor in his administration—suggesting Musk may be hesitant to directly criticize Trump’s trade war or his opposition to EVs.

Many have questioned how long Musk’s friendship with Trump can possibly last, given their strong personalities and seeming unwillingness to bend to critics. At the beginning of this administration, Musk seemed unafraid to question Trump despite teaming up with him. Perhaps most notably, Trump’s team was supposedly “furious” after Musk trashed Trump’s $500 billion “Stargate” project with OpenAI, Politico reported, which Trump had hyped as “tremendous” and “monumental.”

“It’s clear he has abused the proximity to the president,” a Trump ally granted anonymity told Politico. “The problem is the president doesn’t have any leverage over him and Elon gives zero fucks.”

Officially, Trump downplayed Musk’s public criticism of his major announcement, seeming to understand that Musk views OpenAI CEO Sam Altman—whom Musk is suing for making a “fool” out of him—as an enemy.

“He hates one of the people in the deal,” Trump told a reporter who asked if Musk’s comments had bothered him, confirming, “it doesn’t.”

Despite a long history of harsh comments about EVs, Trump has recently hyped Tesla cars, which Tesla noted in its letter to the USTR, further its mission “to accelerate the world’s transition to sustainable energy.” The BBC noted Tesla’s letter was sent the same day that Trump hosted a White House event where the president vowed to purchase a Tesla in defiance of Tesla boycotts and protests that some believe are driving a steep Tesla stock fall and even degrading the price of used Teslas. In a Truth Social post, Trump claimed that he was buying a Tesla to support “one of the World’s great automakers” and “Elon’s ‘baby,'” alleging that protests and boycotts were somehow illegal.

The Hill suggested that their friendship isn’t likely to end soon, even though Trump has supposedly complained in private about taunts suggesting that Musk is really the president or somehow pulling the strings, The Independent reported.

Musk may be settling into a good dynamic with Trump after spending ample time at the president’s side, reportedly even joining meetings and sensitive calls. Or perhaps Musk is giving Trump space to call the shots, after Musk’s Department of Government Efficiency’s aggressive cuts at federal agencies sparked backlash that finally pushed Trump to rein in Musk’s power a little.

Musk’s proximity to Trump was predicted to be a boon to his businesses, but Tesla has been stuck in a slump that seemingly some Trump allies think Trump might fear makes him look weak, The New Republic reported. But Trump has made tariffs the core of his trade policy, hoping aggressive taxes will force more industry into the US, and it’s hard to see how Musk could easily influence him to shift gears.

In Tesla’s letter, the automaker told the USTR that it was “essential to support US manufacturing jobs” by ensuring that cost-prohibitive tariffs or other import restrictions don’t disrupt critical auto industry supply chains. For Tesla, the stakes couldn’t be higher, as the company reminded the USTR that “Tesla was ranked as the world leader in the transition to vehicle electrification,” manufacturing “the best-selling car in the world (EV or otherwise).”

“Tesla’s US facilities support over 70,000 employees and are responsible for billions of dollars of US investment and economic activity each year,” Tesla’s letter said.

Ashley is a senior policy reporter for Ars Technica, dedicated to tracking social impacts of emerging policies and new technologies. She is a Chicago-based journalist with 20 years of experience.

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TSMC to invest $100B as Trump demands more US-made chips, report says

AI chips, Chips Act, chips fabs, Donald Trump, Policy, semiconductors, Taiwan Semiconductor Manufacturing Company, tariffs, TSMC / Shannon Garcia / March 4, 2025

Currently, TSMC only builds its most advanced chips in Taiwan. But when the most advanced US fabs are operational, they’ll be prepared to manufacture “tens of millions of leading-edge chips” to “power products like 5G/6G smartphones, autonomous vehicles, and AI datacenter servers,” the Commerce Department said in 2024.

TSMC has not confirmed the WSJ’s report but provided a statement: “We’re pleased to have an opportunity to meet with the President and look forward to discussing our shared vision for innovation and growth in the semiconductor industry, as well as exploring ways to bolster the technology sector along with our customers.”

Trump threat of semiconductor tariffs still looms

Advanced chips are regarded as critical for AI innovation, which Trump has prioritized, as well as for national security.

Without a steady supply, the US risks substantial technological and economic losses as well as potential weakening of its military.

To avert that, Trump campaigned on imposing tariffs that he claimed would drive more semiconductor manufacturing into the US, while criticizing the CHIPS Act for costing the US billions. Following through on that promise, in February, he threatened a “25 percent or more tariff” on all semiconductor imports, the WSJ reported. According to CNBC, Trump suggested those tariffs could be in effect by April 2.

“We have to have chips made in this country,” Trump said last month. “Right now, everything is made in Taiwan, practically, almost all of it, a little bit in South Korea, but everything—almost all of it is made in Taiwan. And we want it to be made—we want those companies to come to our country, in all due respect.”

While it’s unclear if Trump plans to overtly kill the CHIPS Act, his government funding cuts could trigger a future where the CHIPS Act dies with no workers left to certify that companies meet requirements for ongoing award disbursements, a semiconductor industry consultant group, Semiconductor Advisors, warned in a statement last month.

“If I were running a chip company, I would not count on CHIPS Act funding, even if I had a signed contract,” SA’s statement said.

TSMC to invest $100B as Trump demands more US-made chips, report says Read More »

Tariffs will “blow a hole” in the US auto industry, says Ford CEO

Cars, Ford, tariffs / Shannon Garcia / February 12, 2025

The US has had to pause some of these new tariffs almost immediately, and the proposed 25 percent tariffs against any Canadian or Mexican imports have been delayed for a month. But yesterday, the president imposed 25 percent tariffs on any imported steel or aluminum. When last in office, Trump also imposed tariffs on steel (25 percent) and aluminum (10 percent), igniting a trade war and cutting US steel imports by far more than domestic steel production was able to rise to meet it.

“Let’s be real honest: long-term, 25 percent tariffs across the Mexican and Canadian border would blow a hole in the US industry that we have never seen,” Farley said, pointing out that the tariffs would “give free rein” to OEMs that import their vehicles from Japan, South Korea, or Europe.

As the CEO of Polestar told Ars last week, the main thing automakers want is clarity. The last they want is chaos, where the rules have changed from one day to the next based on whim. At the conference, Farley had a similar message. “They need to understand there’s a lot of policy uncertainty here, but in the meantime, we’re scrambling to manage the company as professionals,” he said.

Tariffs will “blow a hole” in the US auto industry, says Ford CEO Read More »

Tariffs may soon spike costs of cars, household goods, consumer tech

auto industry, Canada, china, Donald Trump, mexico, Policy, tariffs, us-china trade war / Mike M. / February 4, 2025

“A little pain”: Trump finally admits tariffs heap costs on Americans.

Canadian and American flags are seen at the US/Canada border March 1, 2017, in Pittsburg, New Hampshire. Credit: DON EMMERT / Staff | AFP

Over the weekend, President Trump issued executive orders heaping significant additional tariffs on America’s biggest trading partners, Canada, China, and Mexico.

To justify the tariffs—”a 25 percent additional tariff on imports from Canada and Mexico and a 10 percent additional tariff on imports from China”—Trump claimed that all partners were allowing drugs and immigrants to illegally enter the US. Declaring a national emergency under the International Emergency Economic Powers Act, Trump’s orders seemed bent on “downplaying” the potential economic impact on Americans, AP News reported.

But very quickly, the trade policy sparked inflation fears, with industry associations representing major US firms from many sectors warning of potentially derailed supply chains and spiked consumer costs of cars, groceries, consumer technology, and more. Perhaps the biggest pain will be felt by car buyers already frustrated by high prices if car prices go up by $3,000, as Bloomberg reported. And as Trump eyes expanding tariffs to the European Union next, January research from the Consumer Technology Association showed that imposing similar tariffs on all countries would increase the cost of laptops by as much as 68 percent, game consoles by up to 58 percent, and smartphones perhaps by 37 percent.

With tariffs scheduled to take effect on Tuesday, Mexico moved fast to negotiate a one-month pause on Monday, ABC News reported. In exchange, Mexico promised to “reinforce” the US-Mexico border with 10,000 National Guard troops.

The pause buys Mexico a little time to convince the Trump administration—including Secretary of State Marco Rubio, Treasury Secretary Scott Bessent, and potentially Commerce Secretary nominee Howard Lutnick—to strike a “permanent” trade deal, ABC News reported. If those talks fall through, though, Mexico has indicated it will retaliate with both tariff and non-tariff measures, ABC News reported.

Even in the best-case scenario where no countries retaliate, the average household income in 2025 could drop by about $1,170 if this week’s new tariffs remain in place, an analysis from the Budget Lab at Yale forecast. With retaliation, average income could decrease by $1,245.

Canada has already threatened to retaliate by imposing 35 percent tariffs on US goods, although that could change, depending on the outcome of a meeting this afternoon between Trump and outgoing Prime Minister Justin Trudeau.

Currently, there’s seemingly tension between the Trump administration and Trudeau, however.

On Saturday, Trudeau called Trump’s rationale for imposing tariffs on Canada—which Trudeau noted is responsible for less than 1 percent of drugs flowing into the US—”the flimsiest pretext possible,” NBC News reported.

This morning, the director of the White House’s National Economic Council, Kevin Hassett, reportedly criticized Canada’s response on CNBC. While Mexico is viewed as being “very, very serious” about Trump’s tariffs threat, “Canadians appear to have misunderstood the plain language of the executive order and they’re interpreting it as a trade war,” Hassett said.

On the campaign trail, Trump promised to lower prices of groceries, cars, gas, housing, and other goods, AP News noted. But on Sunday, Trump clearly warned reporters while boarding Air Force One that tariffs could have the opposite effect, ABC News reported, and could significantly worsen inflation the longer the trade policy stands.

“We may have short term, some, a little pain, and people understand that, but, long term, the United States has been ripped off by virtually every country in the world,” Trump said.

Online shoppers, car buyers brace for tariffs

In addition to imposing new tariffs on these countries, Trump’s executive orders also took aim at their access to the “de minimus” exemption that allows businesses, including online retailers, to send shipments below $800 into the US without being taxed. That move could likely spike costs for Americans using popular Chinese retail platforms like Temu or Shein.

Before leaving office, Joe Biden had threatened in September to alter the “de minimus” rule, accusing platforms like Temu or Shein of flooding the US with “huge volumes of low-value products such as textiles and apparel” and making “it increasingly difficult to target and block illegal or unsafe shipments.” Following the same logic, it seems that Trump wants to exclude Canada, China, and potentially Mexico from the duty-free exemption to make it easier to identify illegal drug shipments.

Temu and Shein did not respond to Ars’ request to comment. But both platforms in September told Ars that losing the duty-free exemption wouldn’t slow their growth. And both platforms have shifted business to keep more inventory in the US, CNBC reported.

Canada is retaliating, auto industry will suffer

While China has yet to retaliate to defend such retailers, for Canada, the tariffs are considered so intolerable that the country immediately ordered tariffs on beverages, cosmetics, and paper products flowing from the US, AP News reported. Next up will be “passenger vehicles, trucks, steel and aluminum products, certain fruits and vegetables, beef, pork, dairy products, aerospace products, and more.”

If the trade wars further complicate auto industry trade in particular, it could hurt US consumers. Carmakers globally saw stocks fall on expectations that Trump’s tariffs will have a “profound impact” on the entire auto industry, CNBC reported. And if tariffs expand into the EU, an Oxford Economics analysis suggested, the cost of European cars in the US market would likely increase while availability decreases, perhaps crippling a core EU market and limiting Americans’ choice in vehicles.

EU car companies are already bracing for potential disruptions. A spokesperson for Germany-based BMW told CNBC that tariffs “hinder free trade, slow down innovation, and set a negative spiral in motion. In the end, they are detrimental to customers, making products more expensive and less innovative.” A Volkswagen spokesperson confirmed the company was “counting on constructive talks between the trading partners to ensure planning security and economic stability and to avoid a trade conflict.”

Right now, Canada’s auto industry appears most spooked by the impending trade war, with the president of Canada’s Automotive Parts Manufacturers’ Association, Flavio Volpe, warning that Canada’s auto sector could “shut down within a week,” Bloomberg reported.

“At 25 percent, absolutely nobody in our business is profitable by a long shot,” Volpe said.

According to Bloomberg, nearly one-quarter of the 16 million cars sold in the US each year will be hit with duties, adding about $60 billion in industry costs. Seemingly the primary wallet drain will be car components that cross the US-Canada and US-Mexico borders “as many as eight times during production” and, should negotiations fail, could be getting hit with tariffs both ways. Tesla, for example, relies on a small parts manufacturer in Canada, Laval Tool, to create the molds for its Cybertruck. It already costs up to $500,000 per mold, Bloomberg noted, and since many of the mold components are sourced from Canada currently, that cost could go up at a time when Cybertruck sales already aren’t great, InsideEVs reported.

Tariffs “necessary”

William Reinsch, senior adviser at the Center for Strategic and International Studies and a former US trade official, told AP News that Trump’s new tariffs on raw materials disrupting the auto industry and others don’t seem to “make much economic sense.”

“Historically, most of our tariffs on raw materials have been low because we want to get cheaper materials so our manufacturers will be competitive … Now, what’s he talking about? He’s talking about tariffs on raw materials,” Reinsch said. “I don’t get the economics of it.”

But Trump has maintained that tariffs are necessary to push business into the US while protecting national security. Industry experts have warned that hoping Trump’s tariffs will pressure carmakers to source all car components within the US is a “tough ask,” as shifting production could take years. Trump seems unlikely to back down any time soon, instead asking already cash-strapped Americans to be patient with any rising costs potentially harming businesses and consumers.

“We can play the game all they want,” Trump said.

But to countries threatening the US with tariffs in response to Trump’s orders, it likely doesn’t feel like a game. According to AP News, the Ministry of Commerce in China plans to file a lawsuit with the World Trade Organization for the “wrongful practices of the US.”

Ashley is a senior policy reporter for Ars Technica, dedicated to tracking social impacts of emerging policies and new technologies. She is a Chicago-based journalist with 20 years of experience.

Tariffs may soon spike costs of cars, household goods, consumer tech Read More »

Trump targets Mexico and Canada with tariffs, plus an extra 10% for China

Canada, china, Donald Trump, mexico, Policy, syndication, tariffs / 9u50fv / November 26, 2024

Trump had in particular targeted Mexico on the campaign trail, threatening to impose “whatever tariffs are required—100 percent, 200 percent, 1,000 percent” to stop Chinese cars from crossing the southern border.

He has also warned Mexico’s president, Claudia Sheinbaum, he would impose tariffs of 25 percent if she did not crack down on the “onslaught of criminals and drugs” crossing the border.

The levies could be imposed using executive powers that would override the USMCA, the free trade agreement Trump signed with Canada and Mexico during his first term as president.

“There’s a lot of integration of North American manufacturing in a lot of sectors, particularly autos, so this would be pretty disruptive for a lot of US companies and industries,” said Warren Maruyama, former general counsel at the Office of the US Trade Representative. “Tariffs are inflationary and will drive up prices,” he added.

Ricardo Monreal, leader of Mexico’s ruling party in the lower house of congress, said tariffs would “not solve the underlying issue” at the border. “Escalating trade retaliation would only hurt people’s pockets,” he wrote on X.

Diego Marroquín Bitar at the Wilson Center think tank warned that unilateral tariffs “would shatter confidence in USMCA and harm all three economies.”

In a joint statement, Canada’s deputy prime minister, Chrystia Freeland, and public safety minister Dominic LeBlanc hailed the bilateral relationship with the US as “one of the strongest and closest… particularly when it comes to trade and border security.”

They also noted that Canada “buys more from the United States than China, Japan, France, and the UK combined,” and last year supplied “60 percent of US crude oil imports.”

“Even if this is a negotiating strategy, I don’t see what Canada has to offer that Trump is not already getting,” said Carlo Dade at the Canada West Foundation.

While Trump put tariffs at the center of his economic pitch to voters, President Joe Biden has also increased levies on Chinese imports. In May, Biden’s administration sharply increased tariffs on a range of imported clean-energy technologies, including boosting tariffs on electric vehicles from China to 100 percent.

Biden’s administration has also pushed Beijing for several years to crack down on the production of ingredients for fentanyl, which it estimated claimed the lives of almost 75,000 Americans in 2023. Beijing this year agreed to impose controls on chemicals crucial to manufacturing fentanyl following meetings with senior US officials.

Additional reporting by William Sandlund and Haohsiang Ko in Hong Kong, Christine Murray in Mexico City, Ilya Gridneff in Toronto, Joe Leahy in Beijing, and Alex Rogers in Washington.

Trump targets Mexico and Canada with tariffs, plus an extra 10% for China Read More »

China tells WTO that US EV subsidies are unfair trade barriers

Cars, Chinese EVs, tariffs, world trade organization / Mike M. / July 15, 2024

trade war continues —

China says it’s unfair that only EVs made in North America qualify for tax credits.

Jonathan M. Gitlin – Jul 15, 2024 3: 32 pm UTC

China money RMB and USA USD — Getty Images

The ongoing dispute between the United States and China over electric vehicles shows no sign of abating. Today, Reuters reports that China has asked the World Trade Organization to set up a special panel to determine if US EV subsidies are an unfair trade barrier.

The Inflation Reduction Act of 2022 has been the most significant climate legislation in US history, with hundreds of billions of dollars of funding for the clean energy transition. Among its many details, it revamped the federal tax credit for buying a new electric vehicle.

In the past, a credit of up to $7,500 was tied to a plug-in vehicle’s battery capacity. But it’s now tied to where the car and its batteries were assembled, as well as where the battery minerals come from. Final assembly of the vehicle must be in North America, for example, and ever-increasing amounts of the battery pack’s content and value must come from North America or a country with which the US has a free trade agreement.

Even more troubling for Chinese automakers is a rule from the US Treasury Department that prohibits tax subsidies for vehicles manufactured by companies linked to “foreign entities of concern,” a category that includes Russia, North Korea, Iran, and China.

The measures were included in tax credit rules after extensive lobbying from automakers and unions in the US and politicians from both sides of the aisle. Pressure from the automotive industry also succeeded in getting the Mexican government to promise not to subsidize new Chinese EV factories south of the US border.

In May, US President Joe Biden levied a new 100 percent tariff targeted at specific Chinese imports, including EVs. In Europe, similar fears over the impact of heavily subsidized Chinese EVs on domestic car production saw the EU raise new tariffs of up to 37.6 percent on Chinese-made EVs, despite objections from the German auto industry.

China’s action at the WTO actually predates the new US EV tariffs—it first went to the trade organization in March, arguing that the US tax credits hinder fair competition and break existing WTO agreements.

China’s commerce ministry told Reuters that protectionist EV subsidies from the US “undermine international cooperation on climate change.”

China tells WTO that US EV subsidies are unfair trade barriers Read More »

Biden’s new import rules will hit e-bike batteries too

ebike, ebikes, Policy, syndication, tariffs / DJ Henderson / May 24, 2024

tariff tussle —

The tariffs’ effects on the bike industry are still up in the air.

Aarian Marshall, WIRED.com – May 24, 2024 5: 40 pm UTC

Last week, the Biden administration announced it would levy dramatic new tariffs on electric vehicles, electric vehicle batteries, and battery components imported into the United States from China. The move kicked off another round of global debate on how best to push the transportation industry toward an emissions-free future, and how global automotive manufacturers outside of China should compete with the Asian country’s well-engineered and low-cost car options.

But what is an electric vehicle exactly? China has dominated bicycle manufacturing, too; it was responsible for some 80 percent of US bicycle imports in 2021, according to one report. In cycling circles, the US’s new trade policies have raised questions about how much bicycle companies will have to pay to get Chinese-made bicycles and components into the US, and whether any new costs will get passed on to US customers.

On Wednesday, the Office of the United States Trade Representative—the US agency that creates trade policy—clarified that ebike batteries would be affected by the new policy, too.

In a written statement, Angela Perez, a spokesperson for the USTR, said that e-bike batteries imported from China on their own will be subject to new tariffs of 25 percent in 2026, up from 7.5 percent.

But it’s unclear whether imported complete e-bikes, as well as other cycling products including children’s bicycles and bicycle trailers, might be affected by new US trade policies. These products have technically been subject to 25 percent tariffs since the Trump administration. But US trade officials have consistently used exclusions to waive tariffs for many of those cycling products. The latest round of exclusions are set to expire at the end of this month.

Perez, the USTR spokesperson, said the future of tariff exclusions related to bicycles would be “addressed in the coming days.”

If the administration does not extend tariff exclusions for some Chinese-made bicycle products, “it will not help adoption” of e-bikes, says Matt Moore, the head of policy at the bicycle advocacy group PeopleForBikes. Following the announcement of additional tariffs on Chinese products earlier this month, PeopleForBikes urged its members to contact local representatives and advocate for an extension of the tariff exclusions. The group estimates tariff exclusions have saved the bike industry more than $130 million since 2018. It’s hard to pinpoint how much this has saved bicycle buyers, but in general, Moore says, companies that pay higher “landed costs”—that is, the cost of the product to get from the factory floor to an owner’s home—raise prices to cover their margins.

The tariff tussle comes as the US is in the midst of an extended electric bicycle boom. US sales of e-bikes peaked in 2022 at $903 million, up from $240 million in 2019, according to Circana’s Retail Tracking Service. Sales spiked as Americans looked for ways to get active and take advantage of the pandemic era’s empty streets. E-bike sales fell last year, but have ticked up by 4 percent since the start of 2024, according to Circana.

In the US, climate-conscious state and local governments have started to think more seriously about subsidizing electric bicycles in the way they have electric autos. States including Colorado and Hawaii give rebates to income-qualified residents. E-bike rebate programs in Denver and Connecticut were so popular among cyclists that they ran out of funding in days.

A paper published last year by researchers with the University of California, Davis, suggests these sorts of programs might work. It found that people who used local and state rebate programs to buy e-bikes reported bicycling more after their purchases. Almost 40 percent of respondents said they replaced at least one weekly car trip with their e-bike in the long-term—the kind of shift that could put a noticeable dent in carbon emissions.

This story originally appeared on wired.com

Biden’s new import rules will hit e-bike batteries too Read More »