IFF Newsletter | Trump Raises Aluminum Tariffs to 25 pct

TIME：2025-02-13

From the Editor

Chinese Premier Li Qiang presided over a State Council executive meeting on February 10. The meeting put forward measures to boost domestic consumption, including strongly supporting the increase of household incomes, promoting reasonable wage growth, broadening property - related income channels, and enhancing consumption capacities.

The meeting also emphasized the important role of foreign enterprises in job creation, export stabilization, and industrial upgrading. Practical and effective measures were urged to stabilize existing foreign investment and attract new investment.

U.S. President Donald Trump signed proclamations on February 10 to increase aluminum tariffs from 10 percent to 25 percent and eliminated all exemptions for steel and aluminum tariffs.

Trump also revealed that his administration was considering implementing "reciprocal tariffs" on various products including chips, cars, and pharmaceuticals, declaring it was time for American industries to return home.

Newsletter

China News

China Unveils Measures to Boost Consumer Spending, Foreign Investment

Chinese Premier Li Qiang presided over a State Council executive meeting on February 10 that outlined measures to boost domestic consumption and approved an action plan to stabilize foreign investment in 2025.

The meeting called for strong support to increase household incomes, promote reasonable wage growth, broaden property-related income channels, and enhance consumption capacities.

The meeting also noted that foreign enterprises play an important role in job creation, export stabilization and industrial upgrading, and urged more practical, effective measures to stabilize existing foreign investment and expand new investment.

It called for the optimization of a comprehensive services sector opening-up pilot program and the expansion of industries that encourage foreign investment.

It encouraged foreign capital to undertake equity investment in China, and urged efforts to optimize rules and procedures for foreign mergers and acquisitions.

China’s Consumer Inflation Quickens, Factory Prices Keep Falling in January

China’s consumer inflation rose at the fastest pace in five months in January, mainly driven by a surging demand for travel, dining and shopping during the Spring Festival holiday, the country's most celebrated festival, the National Bureau of Statistics (NBS) said on February 9.

The consumer price index rose 0.5 percent in January from a year earlier, compared with a 0.1 percent increase the previous month, NBS data showed.

On a monthly basis, the CPI expanded 0.7 percent in January, with service prices accounting for more than half of the overall CPI increase, contributing about 0.37 percentage points.

The producer price index fell 2.3 percent last month from a year earlier, unchanged from December’s decline, according to NBS data. On a monthly basis, the PPI dropped 0.2 percent in January.

China Launches Pilot Scheme for PICC, Nine Other Insurers to Invest in Gold

China launched on February 7 a pilot program allowing 10 insurance firms to invest in gold as part of their medium-to-long-term asset allocation strategies because of low interest rates, shrinking investable assets, and rising gold prices.

People's Insurance Company of China, China Life Insurance, China Pacific Property Insurance, China Pacific Life Insurance, and six other insurers can conduct gold investment activities effective immediately, the National Financial Regulatory Administration said in a statement.

Spot contracts for gold, deferred delivery contracts for gold, centralized pricing agreements, spot inquiry contracts, swap contracts for gold inquiries, and gold leasing operations listed or traded on the Shanghai Gold Exchange were included in the scope of the pilot scheme.

Insurance companies participating in the pilot program must adhere to investment proportion requirements, with the total book value of gold investments not exceeding 1 percent of their total assets at the end of the previous quarter.

China's Gold Reserves Hit Record-High Proportion to Central Bank’s Total Reserve Assets in January

The value of gold reserves held by China's central bank soared to a new record as a proportion of total reserve assets at the end of last month, mainly because of the rising prices of the safe-haven asset, the State Administration of Foreign Exchange (SAFE)announced on Feb. 7.

The People's Bank of China had 73.45 million ounces of gold as of Jan. 31, up from 73.29 million ounces a month earlier, according to the data from the SAFE. The value of China's gold reserves jumped by USD15.2 billion to USD206.5 billion, accounting for 5.9 percent of its total reserve assets.

The reserve assets of the PBOC consist of foreign exchange, gold, International Monetary Fund reserve positions, special drawing rights, and others.

The PBOC increased its forex reserved by about USD6.7 billion as of Jan. 31 from Dec. 31, remaining above the USD3.2 trillion for the 14th consecutive month, data from the SAFE also showed.

China Remains World's Largest Trading Nation in Goods For 8 Consecutive Years: Official

China has maintained its position as the world's largest trading nation in goods during the past eight years, the country's customs regulator said on February 7.

The nation's total goods imports and exports surpassed 43 trillion yuan (about 6 trillion U.S. dollars) for the first time last year, up 5 percent year on year, according to Sun Meijun, Party chief of the General Administration of Customs (GAC).

In 2024, the GAC introduced and implemented 16 measures aimed at further optimizing the business environment at ports and facilitating trade for enterprises throughout the year, Sun said at a national customs work conference.

China's Spring Festival Holiday Box Office Hits Record High of 9.51 Billion Yuan

China's film industry set a new record during the 2025 Spring Festival holiday, as the box office for the period from Jan. 28 to Feb. 4 reached a staggering 9.51 billion yuan (1.33 billion U.S. dollars), the China Film Administration announced on February 5.

The number of moviegoers also soared, with 187 million people attending theaters during the holiday, marking both a box office and attendance milestone.

Leading the charge was the animated feature "Ne Zha 2," which grossed around 4.84 billion yuan.

Newsletter

International News

U.S. Fed Chair Says No Hurry to Cut Rate Given Strong Economy

The U.S. Federal Reserve is in no rush to cut federal funds rate given the strong economy, Fed Chair Jerome Powell said on February 11.

"With our policy stance now significantly less restrictive than it had been and the economy remaining strong, we do not need to be in a hurry to adjust our policy stance," he said at a hearing before the Senate Banking Committee, adding that reducing policy restraint too fast or too much could hinder progress on inflation.

"Labor market conditions have cooled from their formerly overheated state and remain solid. Inflation has moved much closer to our 2 percent longer-run goal, though it remains somewhat elevated," he said.

At its January meeting, the Fed held the policy rate steady in the range of 4.25 percent to 4.5 percent after cutting a full percentage point in the last three meetings of 2024.

Trump Raises Aluminum Tariffs to 25 pct, Ends Exemptions on Steel and Aluminum

U.S. President Donald Trump on February 10 signed proclamations to raise tariffs on aluminum from 10 percent to 25 percent and ended duty-free quotas, exemptions and exclusions for steel and aluminum tariffs.

"This is a big deal. This is the beginning of making America rich again," Trump said when signing the proclamations in the Oval Office. "It's time for our great industries to come back to America."

The U.S. president added that there will be no exceptions for these tariffs.

When signing the proclamations, Trump said his administration was weighing so-called "reciprocal tariffs" on products such as chips, cars and pharmaceuticals.

Two Major North American Economies See Employment Growth and Lower Unemployment Rates in January

Both the United States and Canada experienced an increase in employment and a decline in unemployment rates in January, as reported on February 7 by the respective labor agencies of the two countries.

In the U.S., nonfarm payroll employment rose by 143,000, aligning closely with the average monthly gain of 166,000 observed in 2024. However, this latest data indicates a slowdown in job growth compared to previous months, according to the U.S. Labor Department.

The unemployment rate in the United States decreased by 0.1 percentage point to 4.0 percent in January, marking the lowest level since May 2024.

In Canada, employment rose by 76,000, or 0.4 percent, in January, continuing a trend of growth for the third consecutive month, as reported by Statistics Canada.

The unemployment rate in Canada also fell by 0.1 percentage points to 6.6 percent, reflecting the second consecutive monthly decline from a recent peak of 6.9 percent in November 2024.

U.S. Trade Deficit Widens Sharply in December

The U.S. trade deficit widened sharply in December, as imports reached an all-time high, according to data released on February 5.

The Commerce Department's U.S. Census Bureau and the Bureau of Economic Analysis (BEA) announced that the goods and services deficit was 98.4 billion U.S. dollars in December, up 19.5 billion dollars, or 24.7 percent from that in November, the report showed.

December exports were 266.5 billion dollars, which is 7.1 billion dollars, or 2.6 percent, less than November exports. December imports were 364.9 billion dollars, which is 12.4 billion dollars, or 3.5 percent, more than November imports.

European Commission President Vows Firm Countermeasures to U.S. Tariffs on EU

European Commission President Ursula von der Leyen said on February 11 that U.S. tariffs on steel and aluminum imports from the European Union (EU) "will trigger firm and proportionate countermeasures."

In a statement, von der Leyen said, "I deeply regret the U.S. decision to impose tariffs on European steel and aluminum exports. Tariffs are taxes-bad for business, worse for consumers."

U.S. President Donald Trump announced on February 10 that steel and aluminum imports would be subject to a 25-percent tariff upon entering the United States, regardless of their country of origin.

"Unjustified tariffs on the EU will not go unanswered," von der Leyen said. "The EU will act to safeguard its economic interests. We will protect our workers, businesses and consumers."

France to Receive 109 Billion Euros in AI Investment in Coming Years, Macron Says

French President Emmanuel Macron announced on February 9 that France is set to receive a total investment of 109 billion euros (113 billion U.S. dollars) in artificial intelligence (AI) in the coming years.

Macron described the investment as the "equivalent for France of what the United States announced with 'Stargate'." He noted that the funds will come from the United Arab Emirates, major American and Canadian investment funds, as well as French companies.

Addressing concerns over China's DeepSeek, Macron stated that France has no plan to ban it at the moment. "I do not think that it's appropriate to ban a technology because of its country of origin," Macron said, adding that France does not share the U.S. approach of restricting technologies due to their nationality while accepting others.