Issue #55

USA imposes 25% tariffs, Pharrell speaks on AI, PwC sheds partners, and more.

News from February 6 - February 13, 2025

USA Imposes 25% Tariffs 

The United States will impose a 25% tariff on all steel and aluminum imports starting March 4. The policy removes existing trade agreements with the EU, UK, and Japan, applying tariffs to all countries without exceptions. The measure affects $427.2 billion in annual trade.

The White House aims to protect domestic metal producers from foreign competition. Officials cite concerns over approved import exclusions under the previous administration, which allowed millions of metric tons of untariffed metals into the US market.

Canada has declared the tariffs unjustified, while US manufacturers warn of increased production costs. Metal markets reacted immediately, with aluminum prices rising 10% and US copper futures reaching their highest premium over London rates since 2020.

Source 

Pharrell Speaks on AI

Pharrell Williams, Creative Director of Louis Vuitton and music star, addressed AI concerns at the Paris AI Action Summit, rejecting fears about technology replacing human jobs. Speaking at the Grand Palais, he specifically dismissed AI's impact on creativity, stating, "We wouldn't use AI to help us write a song." He compared current AI anxieties to Y2K fears, noting "we survived that."

The Summit also featured major policy discussions, with UN Secretary-General Guterres calling for global AI regulations and US Vice President JD Vance announcing $450 billion in AI investments. Government and tech leaders focused on sustainable energy solutions for AI development.

South Korean AI company Naver presented plans for personalized commerce platforms, while the International Energy Agency warned about growing power demands from AI infrastructure, emphasizing the need for sustainable data centers.

Source 

China’s Stocks Enter Bull Market

Chinese tech stocks have surged 25% since January 13, entering a bull market following DeepSeek's AI breakthrough. The Hang Seng Tech index outperformed both the Nasdaq 100 and US "Magnificent Seven" stocks, with the latter declining 0.5% over the same period.

DeepSeek's announcement of developing an AI model with minimal computing resources triggered global interest in Chinese tech firms. Alibaba rose 6% after reports of collaboration with Apple on AI features, while other companies like Xiaomi, Baidu, and BYD saw gains between 13% and 43%.

The Stock Connect program shows increased mainland investor activity, with February's daily turnover triple that of 2024. The surge comes despite broader market concerns about US tariffs and China's property sector, with the mainland CSI 300 index gaining only 4% during this period.

Source 

Bulletin Board 

• FCA To Delete Emails After 12 Months. UK's financial regulator will delete staff emails after one year starting April 1, sparking transparency concerns. The Financial Conduct Authority, which oversees UK's financial industry, says only critical emails will be saved in permanent storage. Regular emails will be automatically erased. Watchdog groups warn this could hide potential misconduct, as investigations often rely on old email records. The policy change follows recent controversies about the regulator's handling of information requests and whistleblower identities. The FCA maintains this will improve efficiency while preserving legally required records. Source 
• Apple Partners with Alibaba. Apple has chosen Alibaba to launch its AI platform in China after unsuccessful attempts with Baidu, DeepSeek, and ByteDance. The partnership aims to address falling iPhone sales in China, where an 11% decline was partly attributed to the absence of AI features. The deal comes as local competitors like Huawei gain market share with AI-enabled devices. In the US, Apple uses OpenAI's technology for its AI services. Source 
• PwC Sheds Partners. PwC China has lost 66 partners following its $60 million fine and six-month ban over the Evergrande audit scandal. The exodus represents a 20% reduction in equity partners, the firm's largest decline in five years. The departures include former Asia-Pacific chair Raymund Chao and several key executives. The firm has lost two-thirds of its mainland-listed client revenues, with state-owned and financial sector customers switching to competitors. PwC China has appointed UK partner Hemione Hudson to oversee the restructuring of its operations. Source 
• Apple Exploring Humanoid Robots. Apple is developing home robots, ranging from simple mechanical displays to humanoids, with potential launch by 2028. Following a recent research paper about a Pixar-style lamp robot, analyst Ming-Chi Kuo reveals the project focuses on user interaction rather than specific designs. The initiative reflects a cautious approach after mixed results with Vision Pro and Apple Intelligence. The company aims to integrate robots into smart home systems, though mass-market humanoids remain challenging due to cost barriers. Source
• People Lose Critical Thinking Skills. Users of AI tools show declining critical thinking skills, according to new research from Carnegie Mellon and Microsoft. The study of 319 knowledge workers found that higher trust in AI accuracy correlates with reduced cognitive engagement, particularly in routine tasks. The research reveals that AI dependency leads to less diverse work outcomes and reduced problem-solving abilities. When overseeing AI systems, humans tend to disengage from critical oversight, similar to patterns observed with self-driving vehicles and AI-generated content. These findings echo historical concerns about cognitive decline from technology dependence, though AI's impact appears more extensive than previous tools like calculators or GPS. Source 

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