Sefcovic: strategic US AI chip purchases part of trade deal

Sefcovic: strategic US AI chip purchases part of trade deal

In a significant development, the Trump administration has extended the current tariff truce with China by another three months, as reported by the South China Morning Post [1]. The extension comes as trade talks between Beijing and Washington are set to commence in Stockholm on Monday.

Meanwhile, President Trump and European Commission President Ursula von der Leyen have announced a framework for a trade deal between the US and the EU. The agreement includes a baseline tariff rate of 15% on EU goods imported into the US, with von der Leyen stating that "15% is not to be underestimated, but it is the best we could get" [1]. The details of the framework are still being confirmed, but the deal is being hailed as a significant step forward in US-EU trade relations.

The strategic purchase of AI chips by the US is expected to be a key component of this trade deal. In a recent statement, Trump mentioned that letters dictating tariff rates for over 200 countries would go out soon, with larger trade partners like the EU, India, and Canada being targeted [1]. The Japan trade deal, which includes a $550 billion investment in the US and a 15% tariff on goods imported from Japan, may have set a precedent for the new baseline tariff rate [1].

Japanese trade negotiator Ryosei Akazawa suggested that the money from the Japan deal could be used to finance Taiwanese chipmakers building plants in the US, potentially facilitating the strategic purchase of AI chips [1]. Taiwan's TSMC announced a $100 billion investment in the US earlier this year, further underscoring the strategic importance of AI chip purchases in the trade deal [1].

The US tariff policy has evolved over time, with the April "Liberation Day" tariffs setting a baseline rate of 10% on all US trading partners [1]. The new tariff rates range from 15% to 50%, with tougher partners facing higher rates [1].

References:
[1] https://finance.yahoo.com/news/live/trump-tariffs-live-updates-us-eu-agreement-announced-china-truce-extension-expected-200619379.html