Key insights
- The article suggests a potential resurgence of tariffs on China by the US, irrespective of the recent US-China talks. China's reluctance to purchase Nvidia's H200 chips, despite US approval, signals a complex dynamic influenced by self-sufficiency goals and potential negotiation tactics. The US's dependence on China for rare earths limits its leverage, but efforts to diversify could lead to a more aggressive trade stance. Renewed tariffs could negatively impact US equities, particularly tech and consumer discretionary sectors.
China Beige Book international managing director Shehzad Qazi joins Yahoo Finance to explain what needs to happen for China to budge on Nvidia's (NVDA) H200 chips, and where the future of tariffs stands.
We did not get more news out of China on the Nvidia front from President Trump's meeting with President Xi of China. There was some speculation perhaps that there would be some movement on an agreement to sell those chips into China. It looks like the US has opened the door, but China has not.
Joining us for more is Shazad Kazi, a China Beige Book International managing director who watches China very closely. We might as well talk more about Nvidia.
Jensen Wong was a last minute addition to um the the group that was going to China, but him being there doesn't seem to have at least yet elicited any change.
You know, the US has approved H200 sales for for months and months now anyway. The real issue is that are the Chinese interested in buying? I think they have lots of serious concerns, apart from the fact that they have a self-sufficiency drive and clearly don't seem to think that they need the H200s. They could be just waiting it out so that they can make a bigger ask for the Blackwells.
So, how do we assess now the relationship coming out of this?
Till the time we can get more independence on the rare earths uh uh and critical mineral side, uh we really don't have much of an option but to just ensure that there is a truce in place and this detaunt carries on. The moment we can change the equation on the critical mineral minerals and rare earth side, we can start to perhaps take a little bit more of a aggressive posture um again vis-a-vis China.
What then is the status of tariffs? And what do you think are the are the Trump administration's intentions on tariffs on China?
Critical. Tariffs are going to come back. The the tariffs that got struck down by AIPA or even the 122 ones, these are being reconstructed as we speak. The investigations are ongoing. And the trade representative's view is that we can go back and put tariffs on China under new trade these other trade authorities, but these are not new tariffs. These are pre-existing tariffs just being levied under as a part of new investigations, and so China will be absolutely fine with them. So the tariff wall is being rebuilt and is being reconstructed.