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By Joe Cash BEIJING (Reuters) -Beijing is stacking up its bargaining chips ahead of expected U.S.-China talks when Presidents Donald Trump and Xi Jinping visit Seoul this month, announcing new export controls to tighten its grip over high-tech manufacturing supply chains. The two superpowers look to be struggling to move beyond their current tariff truce – a 90-day pause from August 11 that ends around November 9 – with officials from both sides continuing to meet to discuss issues predating last month's Madrid summit, widely seen as a breakthrough for its Tiktok deal, which would see the U.S. take a stake in one of China's most successful companies overseas. HOW THE TRADE WAR UNFOLDED On February 4, Trump implemented an additional 10% tariff on imports from China demanding Beijing do more to stop the flow of fentanyl precursors into the U.S. China hit back with levies on some U.S. commodities, farm equipment and automobiles, as well as probes into several American businesses.  In April, Trump singled out China for tariffs exceeding 100% following his sweeping "Liberation Day" duties, while pausing the reciprocal tariffs he placed on some other countries the White House also deemed to be trading unfairly with the U.S. China retaliated, and over the next few weeks, both sides continued raising duties on each other's goods – peaking in May – before agreeing on May 12 to their first 90-day pause, which also saw U.S. tariffs on Chinese goods fall from 145% to 30% and Chinese tariffs on American products drop from 125% to 10%. There have been two more 90-day extensions since then, the latest agreed on August 11. CRITICAL MINERALS  On Thursday, along with the addition of five new elements to its control list, Beijing unexpectedly announced export curbs on certain types of artificial diamonds and artificial graphite anode materials – other areas where China is the top producer – used in the production of semiconductors, quantum devices and advanced electronic systems. Those curbs are set to take effect from November 8, just a day before the current truce expires. Xi and Trump are expected to meet on the sidelines of an Asia-Pacific Economic Cooperation summit prior to that.  China, the world's largest rare earths producer, has been tightening its control over these critical minerals, used in everything from lithium-ion batteries and semiconductors to aircraft engines, LED TVs, camera lenses, and much more. Earlier controls announced in April caused shortages around the world, before a series of deals with Europe and the U.S. eased the supply crunch. SEMICONDUCTORS  One reason China has tightened its control over critical minerals is the U.S. has sought to limit its access to advanced semiconductors, critical for powering artificial intelligence models and applications. U.S. lawmakers say that without these restrictions, China could reverse-engineer or independently develop advanced semiconductor technologies faster than the U.S., enabling China to not only dominate the industry but also gain a military edge. China has repeatedly called on the Trump administration to remove such curbs, accusing Washington of trying to contain its legitimate economic development.  TAIWAN Sensing that the Trump administration might be open to a deal that goes beyond traditional trade talks, there are reports that Beijing has renewed efforts to push Washington to alter the language the United States uses when discussing its position on Taiwanese independence. China for a while now has wanted the U.S. to say "we oppose Taiwan independence," rather than the current version, which is that the U.S. "does not support" the independence of Taiwan, which China claims as part of its territory.  BALANCED TRADE Beijing also demands that the Trump administration remove the additional tariffs and ease restrictions limiting Chinese firms' ability to invest in the world's No.1 economy – a major source of friction that has not been resolved.  Chinese companies' investments in the U.S. face intense scrutiny over concerns about technology transfer, cybersecurity, and dual-use military application, particularly in AI, aerospace, biotech, semiconductors and telecommunications.  On the flip side, U.S. politicians have talked up a deal that would see China commit to buy more Boeing jets and raised the fact that the world's biggest buyer of soybeans has yet to book any U.S. soybean cargoes.     FENTANYL Despite Trump's 20% fentanyl tariffs imposed in early 2025 to pressure China into curbing the flow of chemicals driving America's deadly opioid crisis, Beijing has yet to publicly unveil any dramatic move to meet his demands. But China in June did announce that it had added two precursors to its list of controlled chemicals and arrested or prosecuted some 2,000 people for drug-related money laundering. The Trump administration has not budged. (Reporting by Joe Cash; Editing by Raju Gopalakrishnan)

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By Joe Cash BEIJING (Reuters) -Beijing is stacking up its bargaining chips ahead of expected U.S.-China talks when Presidents Donald Trump and Xi Jinping visit Seoul this month, announcing new export controls to tighten its grip over high-tech manufacturing supply chains. The two superpowers look to be struggling to move beyond their current tariff truce – a 90-day pause from August 11 that ends around November 9 – with officials from both sides continuing to meet to discuss issues predating last month's Madrid summit, widely seen as a breakthrough for its Tiktok deal, which would see the U.S. take a stake in one of China's most successful companies overseas. HOW THE TRADE WAR UNFOLDED On February 4, Trump implemented an additional 10% tariff on imports from China demanding Beijing do more to stop the flow of fentanyl precursors into the U.S. China hit back with levies on some U.S. commodities, farm equipment and automobiles, as well as probes into several American businesses.  In April, Trump singled out China for tariffs exceeding 100% following his sweeping "Liberation Day" duties, while pausing the reciprocal tariffs he placed on some other countries the White House also deemed to be trading unfairly with the U.S. China retaliated, and over the next few weeks, both sides continued raising duties on each other's goods – peaking in May – before agreeing on May 12 to their first 90-day pause, which also saw U.S. tariffs on Chinese goods fall from 145% to 30% and Chinese tariffs on American products drop from 125% to 10%. There have been two more 90-day extensions since then, the latest agreed on August 11. CRITICAL MINERALS  On Thursday, along with the addition of five new elements to its control list, Beijing unexpectedly announced export curbs on certain types of artificial diamonds and artificial graphite anode materials – other areas where China is the top producer – used in the production of semiconductors, quantum devices and advanced electronic systems. Those curbs are set to take effect from November 8, just a day before the current truce expires. Xi and Trump are expected to meet on the sidelines of an Asia-Pacific Economic Cooperation summit prior to that.  China, the world's largest rare earths producer, has been tightening its control over these critical minerals, used in everything from lithium-ion batteries and semiconductors to aircraft engines, LED TVs, camera lenses, and much more. Earlier controls announced in April caused shortages around the world, before a series of deals with Europe and the U.S. eased the supply crunch. SEMICONDUCTORS  One reason China has tightened its control over critical minerals is the U.S. has sought to limit its access to advanced semiconductors, critical for powering artificial intelligence models and applications. U.S. lawmakers say that without these restrictions, China could reverse-engineer or independently develop advanced semiconductor technologies faster than the U.S., enabling China to not only dominate the industry but also gain a military edge. China has repeatedly called on the Trump administration to remove such curbs, accusing Washington of trying to contain its legitimate economic development.  TAIWAN Sensing that the Trump administration might be open to a deal that goes beyond traditional trade talks, there are reports that Beijing has renewed efforts to push Washington to alter the language the United States uses when discussing its position on Taiwanese independence. China for a while now has wanted the U.S. to say "we oppose Taiwan independence," rather than the current version, which is that the U.S. "does not support" the independence of Taiwan, which China claims as part of its territory.  BALANCED TRADE Beijing also demands that the Trump administration remove the additional tariffs and ease restrictions limiting Chinese firms' ability to invest in the world's No.1 economy – a major source of friction that has not been resolved.  Chinese companies' investments in the U.S. face intense scrutiny over concerns about technology transfer, cybersecurity, and dual-use military application, particularly in AI, aerospace, biotech, semiconductors and telecommunications.  On the flip side, U.S. politicians have talked up a deal that would see China commit to buy more Boeing jets and raised the fact that the world's biggest buyer of soybeans has yet to book any U.S. soybean cargoes.     FENTANYL Despite Trump's 20% fentanyl tariffs imposed in early 2025 to pressure China into curbing the flow of chemicals driving America's deadly opioid crisis, Beijing has yet to publicly unveil any dramatic move to meet his demands. But China in June did announce that it had added two precursors to its list of controlled chemicals and arrested or prosecuted some 2,000 people for drug-related money laundering. The Trump administration has not budged. (Reporting by Joe Cash; Editing by Raju Gopalakrishnan)

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By Ankur Banerjee SINGAPORE (Reuters) -The yen steadied on Friday but was set for its steepest weekly drop in a year due to fast-receding chances of a near-term rate hike, while the euro was rooted near two-month lows as traders braced for France's sixth prime minister in less than two years. The yen edged up 0.2% to 152.7 per U.S. dollar but remained close to the weakest level since mid-February it hit on Thursday. The Japanese currency is on pace for a 3.5% drop in the week, its biggest decline since October last year. The yen's drastic drop has been triggered by worries that the Bank of Japan may not hike interest rates again this year after fiscal dove Sanae Takaichi's surprise victory to lead the ruling party, stoking worries of Japanese authorities needing to step in to support the yen. Japanese Finance Minister Katsunobu Kato said on Friday that the government was concerned about excessive volatility in the foreign exchange market. Takaichi said on Thursday she did not want to trigger excessive declines in the yen. "Markets are still of the view that Takaichi's leadership will make it politically difficult for the Bank of Japan to raise interest rates," said Carol Kong, currency strategist at Commonwealth Bank of Australia. Takaichi, on course to become Japan's first female prime minister, said on Thursday that the BOJ is responsible for setting monetary policy but that any decision it makes must align with the government's goal. Traders are currently pricing about 45% chance of a rate hike from the BOJ in the December meeting and are only fully pricing in a 25 basis point hike in March. FRENCH DRAMA DRAGS EURO The euro last fetched $1.15705, anchored near two-month lows hit on Thursday and on pace for a 1.5% drop for the week, its sharpest decline in 11 months as the political turmoil in France weighed on the single currency. President Emmanuel Macron is searching for yet another prime minister, hoping his next pick can steer a budget through a legislature riven by crisis. The political paralysis has made it deeply challenging to pass a belt-tightening budget, demanded by investors increasingly worried by France's yawning deficit. "In France, turmoil following the resignation of Prime Minister Lecornu has undermined EUR sentiment," said Kieran Williams, head of Asia FX at InTouch Capital Markets. "Volatility remains elevated across FX markets as traders readjust positions in response to shifting central bank expectations and political risks." That has left the dollar upbeat, with the dollar index, which measures the U.S. currency against six other units, at 99.33, near a two-month high. The index is on course for a 1.7% gain, its biggest jump in a year. "The recent dollar rally has gone against market positioning and prompted a partial covering of USD shorts," said Chris Weston, head of research at Pepperstone. "There remains a high degree of scepticism that the USD can materially push through 100, a level in the dollar index that was quickly reversed in May," he said in a note. With the U.S. government shutdown continuing and little to no economic data for investors to parse through for clues on the path the Federal Reserve is likely to take, markets are keeping an eye on comments from policymakers. The influential New York Federal Reserve President John Williams signalled on Thursday he would be comfortable with cutting interest rates again, despite some policymakers' qualms about rising inflation that suggest such a decision would not be easily made. Traders are pricing in a 95% chance that the Federal Reserve cuts rates by 25 bps at its October meeting, while the odds of an additional cut in December have dropped to 80%, from 90%, in the past week, according to the CME Group's FedWatch Tool. In other currencies, the Australian dollar was 0.14% firmer at $0.6565, while sterling was at $1.331, near the two-month low it hit on Thursday. The pound is down 1% this week, set for worst week in over two months. The New Zealand dollar was at $0.5755, hovering near its lowest in six months after the central bank slashed its benchmark rate on Wednesday, as policymakers signalled concerns about the frail state of the economy and kept the door open for further easing. (Reporting by Ankur Banerjee in Singapore; Editing by Jacqueline Wong anad Kim Coghill)

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(Reuters) -SoftBank Group Corp is in talks to borrow $5 billion from global banks for a margin loan secured by shares of its chip unit Arm Holdings, Bloomberg News reported on Friday. The capital will fund additional investment in OpenAI this year, the report added, citing people familiar with the matter. Reuters could not immediately verify the report. (Reporting by Rhea Rose Abraham in Bengaluru; Editing by Eileen Soreng)

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(Reuters) -China has stepped up the enforcement of its controls on chip imports, as Beijing seeks to wean the country's technology companies away from U.S. products such as Nvidia's artificial intelligence processors, the Financial Times reported on Friday. (Reporting by Ananya Palyekar in Bengaluru; Editing by Mrigank Dhaniwala)

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(Reuters) -China has ramped up enforcement of its chip import restrictions, aiming to reduce domestic technology companies' dependence on U.S. products such as Nvidia's artificial intelligence processors, the Financial Times reported on Friday. Reuters could not immediately verify the report. Teams of customs officers have been mobilized at major ports across the country in recent few weeks to carry out stringent checks on semiconductor shipments, the newspaper said, citing people with knowledge of the matter. The inspections were initiated with the aim of ensuring local companies halt their purchases of China-specific Nvidia chips following guidance from regulators, according to the FT report. China customs and Nvidia did not immediately respond to Reuters' request for comment. China's regulators, led by the Cyberspace Administration of China (CAC), instructed major tech firms including ByteDance and Alibaba in mid-September to halt orders and testing of Nvidia products, the report said, adding that customs checks have been widened to include all advanced semiconductor products. (Reporting by Ananya Palyekar in Bengaluru; Editing by Mrigank Dhaniwala and Sherry Jacob-Phillips)

(The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)

(Reuters) -China has stepped up the enforcement of its controls on chip imports, as Beijing seeks to wean the country's technology companies away from U.S. products such as Nvidia's artificial intelligence processors, the Financial Times reported on Friday. (Reporting by Ananya Palyekar in Bengaluru; Editing by Mrigank Dhaniwala)

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(Reuters) -Oil prices declined slightly on Friday after settling 1.6% lower in the previous session as the market's risk premium faded after Israel and Hamas agreed to the first phase of a plan to end the war in Gaza. Brent crude futures were down 7 cents at $65.15 a barrel by 0338 GMT. U.S. West Texas Intermediate crude fell 2 cents to $61.49. Israel and the Palestinian militant group Hamas signed a ceasefire agreement on Thursday in the first phase of U.S. President Donald Trump's initiative to end the war in Gaza. Under the deal, which Israel's government ratified on Friday, fighting will cease, Israel will partially withdraw from Gaza, and Hamas will free all remaining hostages it captured in the attack that precipitated the war, in exchange for hundreds of prisoners held by Israel. On a weekly basis, both benchmarks were up around 1% after falling steeply last week. Prices climbed about 1% on Wednesday to a one-week high because of the stalled progress on a Ukraine peace deal, a sign that sanctions against Russia, the world's second-largest oil exporter, could continue. The Gaza ceasefire deal was a major step towards ending the two-year war that has raised the risk of oil supply disruptions, Daniel Hynes, an analyst at ANZ, said in a note on Friday. "This (deal) saw the focus move back to the impending oil surplus, as OPEC proceeds with the unwinding of production cuts," Hynes said. A smaller-than-expected November hike in output agreed by the Organization of the Petroleum Exporting Countries and allies (OPEC+) on Sunday eased some of those oversupply concerns. "Markets’ expectations for a sharp ramp up in crude supply have not manifested themselves in substantially lower prices," BMI analysts said in a note on Friday. "The most recent rise in production is lower than previously feared contributing to a slight rise in prices for the week," they said. Investors are also worried that a prolonged U.S. government shutdown could dampen the American economy and hurt oil demand in the world's largest crude consumer. (Reporting by Sudarshan Varadhan; Editing by Tom Hogue and Christian Schmollinger)

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By Ann Saphir and Michael S. Derby (Reuters) -The influential New York Federal Reserve President John Williams signaled on Thursday he would be comfortable with cutting interest rates again, voicing what appears to be a dominant view at the Fed despite some policymakers' qualms about rising inflation. "The risk of a further slowdown in the labor market is something I'm very focused on," Williams told the New York Times in an interview conducted on Wednesday and published a day later. He also said he felt President Donald Trump's trade tariffs were not putting as much upward pressure on inflation as many observers had expected, and he didn't see signs of any added boost ahead. "I think there are more downside risks to the labor market and employment, and that is something that takes some of the upside risk off of inflation," he said. WORRISOME POINT FOR JOB MARKET San Francisco Fed President Mary Daly, speaking late Thursday in California, largely echoed Williams' view, saying that with inflation having risen less than feared from tariffs, her focus has shifted more to the labor market. "We're to a point now where the softening in the labor market looks like it could be more worrisome if we don't risk-manage it," Daly said. "That interest rate cut we took — and we projected we might take more — those were cuts designed to risk-manage as we move both our inflation goal and our employment goal to a more perfect balance." But at a time when some recent data points to stronger economic growth and consumer spending is buoyed, at least in part, by higher stock market prices, other Fed policymakers say they are worried about cutting rates. In his first speech on monetary policy since June, Fed Governor Michael Barr on Thursday leaned heavily into the risks of inflation, even as he acknowledged the potential vulnerabilities in a "roughly balanced" labor market. "The FOMC should be cautious about adjusting policy so that we can gather further data, update our forecasts, and better assess the balance of risks," Barr said, referring to the central bank's policy-setting Federal Open Market Committee. The  Fed's policy committee voted 11-1 last month to cut its policy rate by a quarter of a percentage point to help stave off potential weakness in the labor market. The only dissent, from new Fed Governor Stephen Miran, was in favor of a bigger rate cut. Minutes of the meeting that were released on Wednesday show that the committee may have been more divided than the vote itself indicated, with "a few" participants at last month's session seeing merit in not cutting rates. Still, the majority of the Fed's 19 policymakers felt at least two more quarter-percentage-point reductions would be needed by the end of this year, forecasts showed. Williams endorsed that rate path in his interview with the New York Times, so long as the economy evolves as he expects – with inflation rising to 3% even as underlying inflation excluding tariffs heads lower, and unemployment, now at 4.3%, ticks up. Financial markets also reflect that expectation, with bets in interest-rate futures now pricing about a 95% chance that the Fed will lower its policy rate by a quarter of a percentage point to the 3.75%-4.00% range at its October 28-29 meeting. "The Fed is taking its cue from weak labor data," wrote Evercore ISI Vice Chairman Krishna Guha, noting that the recent stock market rally, fueled by huge expectations for the impact of artificial intelligence, isn't making Fed leaders like Williams rethink the need for easing policy further. Even so, Fed Chair Jerome Powell may need to corral more skeptics to deliver a rate cut later this month. With both upside inflation risks and downside risks to the labor market, the Fed is in a "challenging position" with no risk-free path forward on monetary policy, Barr said on Thursday, explicitly borrowing the way Powell phrased the central bank's current quandary. WORRIES ABOUT INFLATION REMAIN But Barr did not repeat Powell's view that a "reasonable base case" is that tariffs will only deliver a one-time upward thrust on inflation. Instead, while Barr acknowledged such a case is a possibility, he said trade policy poses "some significant risks" to the central bank's goal of keeping inflation low and stable. Barr said he forecasts underlying inflation by the Fed's key measure, the core Personal Consumption Expenditures Price Index, to rise to above 3% by the end of this year, and noted that central bank officials do not expect headline inflation to fall to their 2% goal until the end of 2027. "After the high inflation Americans have endured, two more years would be a long time to wait for a return to our target, and that possibility weighs on my judgment for appropriate monetary policy," he said. Barr isn't alone in worrying about inflation. Kansas City Fed President Jeffrey Schmid, who is a voting member of the FOMC this year, signaled last week that he would be hesitant about further rate cuts; two other Fed presidents who don't vote this year on policy also have argued that cutting rates risks reigniting inflation. A softer labor market could help mitigate inflation risks, Barr said, adding that it's difficult to tell, particularly without official data during the current federal government shutdown, how much demand for labor has actually softened. "We need to be prepared for the possibility that the softening in the labor market will become something worse, especially if there is a further adverse shock to demand," he said, adding that if it does, the Fed "can, and I believe would, act forcefully to stabilize the economy if necessary." (Reporting by Ann Saphir; Editing by Paul Simao and Shri Navaratnam)

(The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)

By Ann Saphir and Michael S. Derby (Reuters) -The influential New York Federal Reserve President John Williams signaled on Thursday he would be comfortable with cutting interest rates again, voicing what appears to be a dominant view at the Fed despite some policymakers' qualms about rising inflation. "The risk of a further slowdown in the labor market is something I'm very focused on," Williams told the New York Times in an interview conducted on Wednesday and published a day later. He also said he felt President Donald Trump's trade tariffs were not putting as much upward pressure on inflation as many observers had expected, and he didn't see signs of any added boost ahead. "I think there are more downside risks to the labor market and employment, and that is something that takes some of the upside risk off of inflation," he said. WORRISOME POINT FOR JOB MARKET San Francisco Fed President Mary Daly, speaking late Thursday in California, largely echoed Williams' view, saying that with inflation having risen less than feared from tariffs, her focus has shifted more to the labor market. "We're to a point now where the softening in the labor market looks like it could be more worrisome if we don't risk-manage it," Daly said. "That interest rate cut we took — and we projected we might take more — those were cuts designed to risk-manage as we move both our inflation goal and our employment goal to a more perfect balance." But at a time when some recent data points to stronger economic growth and consumer spending is buoyed, at least in part, by higher stock market prices, other Fed policymakers say they are worried about cutting rates. In his first speech on monetary policy since June, Fed Governor Michael Barr on Thursday leaned heavily into the risks of inflation, even as he acknowledged the potential vulnerabilities in a "roughly balanced" labor market. "The FOMC should be cautious about adjusting policy so that we can gather further data, update our forecasts, and better assess the balance of risks," Barr said, referring to the central bank's policy-setting Federal Open Market Committee. The  Fed's policy committee voted 11-1 last month to cut its policy rate by a quarter of a percentage point to help stave off potential weakness in the labor market. The only dissent, from new Fed Governor Stephen Miran, was in favor of a bigger rate cut. Minutes of the meeting that were released on Wednesday show that the committee may have been more divided than the vote itself indicated, with "a few" participants at last month's session seeing merit in not cutting rates. Still, the majority of the Fed's 19 policymakers felt at least two more quarter-percentage-point reductions would be needed by the end of this year, forecasts showed. Williams endorsed that rate path in his interview with the New York Times, so long as the economy evolves as he expects – with inflation rising to 3% even as underlying inflation excluding tariffs heads lower, and unemployment, now at 4.3%, ticks up. Financial markets also reflect that expectation, with bets in interest-rate futures now pricing about a 95% chance that the Fed will lower its policy rate by a quarter of a percentage point to the 3.75%-4.00% range at its October 28-29 meeting. "The Fed is taking its cue from weak labor data," wrote Evercore ISI Vice Chairman Krishna Guha, noting that the recent stock market rally, fueled by huge expectations for the impact of artificial intelligence, isn't making Fed leaders like Williams rethink the need for easing policy further. Even so, Fed Chair Jerome Powell may need to corral more skeptics to deliver a rate cut later this month. With both upside inflation risks and downside risks to the labor market, the Fed is in a "challenging position" with no risk-free path forward on monetary policy, Barr said on Thursday, explicitly borrowing the way Powell phrased the central bank's current quandary. WORRIES ABOUT INFLATION REMAIN But Barr did not repeat Powell's view that a "reasonable base case" is that tariffs will only deliver a one-time upward thrust on inflation. Instead, while Barr acknowledged such a case is a possibility, he said trade policy poses "some significant risks" to the central bank's goal of keeping inflation low and stable. Barr said he forecasts underlying inflation by the Fed's key measure, the core Personal Consumption Expenditures Price Index, to rise to above 3% by the end of this year, and noted that central bank officials do not expect headline inflation to fall to their 2% goal until the end of 2027. "After the high inflation Americans have endured, two more years would be a long time to wait for a return to our target, and that possibility weighs on my judgment for appropriate monetary policy," he said. Barr isn't alone in worrying about inflation. Kansas City Fed President Jeffrey Schmid, who is a voting member of the FOMC this year, signaled last week that he would be hesitant about further rate cuts; two other Fed presidents who don't vote this year on policy also have argued that cutting rates risks reigniting inflation. A softer labor market could help mitigate inflation risks, Barr said, adding that it's difficult to tell, particularly without official data during the current federal government shutdown, how much demand for labor has actually softened. "We need to be prepared for the possibility that the softening in the labor market will become something worse, especially if there is a further adverse shock to demand," he said, adding that if it does, the Fed "can, and I believe would, act forcefully to stabilize the economy if necessary." (Reporting by Ann Saphir; Editing by Paul Simao and Shri Navaratnam)

(The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)