EV industry watching Musk’s role in tariff fixing

New Delhi — The electric vehicle industry is closely watching to see how Tesla boss Elon Musk, who played a key role in the victory of Republican President-elect Donald Trump, will use his influence with the incoming president to steer the industry’s future.

At stake are several issues including the new administration’s approach to tariffs on Chinese EVs and tax credits. In anticipation of decisions favorable to Tesla, shares in the company rose 27% after the election result was announced, taking its market capitalization to $1 trillion.

During the campaign, Trump said he would increase tariffs on Chinese goods and roll back tax credits available to EV buyers in the U.S. He also vowed to reduce or eliminate many vehicle emissions standards under the Environmental Protection Agency, which support the EV industry.

Industry analysts are divided on whether high tariffs on Chinese EVs are advantageous or disadvantageous for Tesla’s business. Some analysts have suggested that Musk could persuade the Trump administration to reduce the tariffs on Chinese EVs and might even temper the overall tariff regime against Chinese goods.

However, Musk is likely to support the elimination of the $7,500 tax credit given to EV buyers in the United States. The absence of tax credits would make it difficult for legacy carmakers to introduce EV versions of their cars in competition with Tesla.

“As Elon Musk played a very important role in funding Trump’s campaign, he will no doubt have the ear of the U.S. president and play a role that will help shape policies that are advantageous to Tesla and his other businesses,” Bill Russo, founder and CEO of Automobility Limited, a Shanghai-based strategic consulting and investment platform, told VOA.

To be sure, Musk opposed U.S. tariffs on China-made EVs last May. “Neither Tesla nor I asked for these tariffs. In fact, I was surprised when they were announced. Things that inhibit freedom of exchange or distort the market are not good,” Musk said after the Biden administration enhanced tariffs on Chinese EVs.

The question is whether he will continue to oppose tariffs on Chinese EVs after Trump enters the White House. A section of analysts has predicted that Musk would continue this line of argument because China accounts for one-third of Tesla sales.

“Tesla is in China because Elon Musk needs the scale and efficient cost structure of the Chinese supply chain to make the company more competitive around the world,” Russo said.

China makes over 70% of the EV batteries in the world and almost two-thirds of all EVs and related components. “Tariffs make accessing this supply chain more costly, and that does not help Tesla,” he said.

Between January and May this year, Tesla sold almost as many cars in China as it did in the United States. Chinese consumers bought one-third of Tesla cars of all models totaling 513,644. In the same period, the company sold 522,444 vehicles in the U.S.

Wedbush Securities analyst Dan Ives argued that higher tariffs would help Tesla compete better with Chinese EVs in the U.S. market.

“Tesla has the scale and scope that is unmatched in the EV industry and this dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players (BYD, Nio etc.) from flooding the U.S. market over the coming years,” Ives said in a note to clients this week.

Taking a different view, Beatrix C. Keim, director of Germany-based Centre Automotive Research, said the next president is unlikely to listen to arguments for reducing tariffs on Chinese EVs.

“There is a 100% tariff for Chinese EVs in place. I don’t think that Trump will weaken this,” she said. The high tariff does not affect Tesla because it does not export cars from its Shanghai plant for the U.S. market, and builds them in the U.S.

Keim said Musk will do whatever serves Tesla’s business in China. “Chinese people are very likely to react emotionally if he is perceived as acting against China’s interest,” she said. “Chinese customers had once blocked the sales of Tesla cars, and this can happen again.”

Musk said last April that he loved the Chinese people.

“I’m a big fan of China. I also have a lot of fans in China. Well, the feelings are reciprocated,” Musk, who has often been described in Chinese social media as a “friend of China,” said in April.

Tesla is set to introduce a new fully self-driving (FSD – Supervised) car in the coming months, though the vehicle’s safety remains under review. Musk must have sufficient influence in both Washington and Beijing to obtain the regulatory approvals necessary to sell it.

“China is likely to approve FSD as it would like to show goodwill toward foreign technology,” Russo said. However, Tesla’s FSD may have a limited market in China where local manufacturers play a much bigger role.

Keim said Tesla’s FSD might not face regulatory challenges in Europe, but it may be difficult for it to find enough customers in the face of local competition.

One of the questions that is often asked is whether China would retaliate by imposing higher tariffs on American goods, including Tesla.

“This is very unlikely, as Tesla has invested in China and is used as an example of how foreign brands are still welcome in China, and Tesla is held up as a benchmark for Chinese companies to measure against,” Russo said.

“Killing competition is not viewed as healthy for the forward development of the Chinese automakers. This is in stark contrast to the way the U.S. has acted so far.”

Canada orders TikTok’s Canadian business to be dissolved but won’t block app

Canada announced Wednesday it won’t block access to the popular video-sharing app TikTok but is ordering the dissolution of its Canadian business after a national security review of the Chinese company behind it.

Industry Minister François-Philippe Champagne said it is meant to address risks related to ByteDance Ltd.’s establishment of TikTok Technology Canada Inc.

“The government is not blocking Canadians’ access to the TikTok application or their ability to create content. The decision to use a social media application or platform is a personal choice,” Champagne said.

Champagne said it is important for Canadians to adopt good cybersecurity practices, including protecting their personal information.

He said the dissolution order was made in accordance with the Investment Canada Act, which allows for the review of foreign investments that may harm Canada’s national security. He said the decision was based on information and evidence collected over the course of the review and on the advice of Canada’s security and intelligence community and other government partners.

A TikTok spokesperson said in a statement that the shutdown of its Canadian offices will mean the loss of hundreds of local jobs.

“We will challenge this order in court,” the spokesperson said. “The TikTok platform will remain available for creators to find an audience, explore new interests and for businesses to thrive.”

TikTok is wildly popular with young people, but its Chinese ownership has raised fears that Beijing could use it to collect data on Western users or push pro-China narratives and misinformation. TikTok is owned by ByteDance, a Chinese company that moved its headquarters to Singapore in 2020.

TikTok faces intensifying scrutiny from Europe and America over security and data privacy. It comes as China and the West are locked in a wider tug of war over technology ranging from spy balloons to computer chips.

Canada previously banned TikTok from all government-issued mobile devices. TikTok has two offices in Canada, one in Toronto and one in Vancouver.

Michael Geist, Canada research chair in Internet and E-commerce Law at the University of Ottawa, said in a blog post that “banning the company rather than the app may actually make matters worse since the risks associated with the app will remain but the ability to hold the company accountable will be weakened.”

Canada’s move comes a day after the election in the United States of Donald Trump. In June, Trump joined TikTok, a platform he once tried to ban while in the White House. It has about 170 million users in the U.S.

Trump tried to ban TikTok through an executive order that said “the spread in the United States of mobile applications developed and owned” by Chinese companies was a national security threat. The courts blocked the action after TikTok sued.

Both the U.S. FBI and the Federal Communications Commission have warned that ByteDance could share user data such as browsing history, location and biometric identifiers with China’s government. TikTok said it has never done that and would not, if asked.

Trump said earlier this year that he still believes TikTok posed a national security risk, but was opposed to banning it.

U.S. President Joe Biden signed legislation in April that would force ByteDance to sell the app to a U.S. company within a year or face a national ban. It’s not clear whether that law will survive a legal challenge filed by TikTok or that ByteDance would agree to sell.

Australia proposes ‘world-leading’ ban on social media for children under 16

sydney — The Australian government will legislate for a ban on social media for children under 16, Prime Minister Anthony Albanese said on Thursday, in what it calls a world-leading package of measures that could become law late next year.

Australia is trying out an age-verification system to assist in blocking children from accessing social media platforms, as part of a range of measures that include some of the toughest controls imposed by any country to date.

“Social media is doing harm to our kids and I’m calling time on it,” Albanese told a news conference.

Albanese cited the risks to physical and mental health of children from excessive social media use, in particular the risks to girls from harmful depictions of body image, and misogynist content aimed at boys.

“If you’re a 14-year-old kid getting this stuff, at a time where you’re going through life’s changes and maturing, it can be a really difficult time, and what we’re doing is listening and then acting,” he said.

A number of countries have already vowed to curb social media use by children through legislation, though Australia’s policy is one of the most stringent.

No jurisdiction so far has tried using age verification methods like biometrics or government identification to enforce a social media age cut-off, two of the methods being tried.

Australia’s other world-first proposals are the highest age limit set by any country, no exemption for parental consent and no exemption for pre-existing accounts.

Legislation will be introduced into the Australian parliament this year, with the laws coming into effect 12 months after being ratified by lawmakers, Albanese said.

The opposition Liberal Party has expressed support for a ban.

“The onus will be on social media platforms to demonstrate they are taking reasonable steps to prevent access,” Albanese said. “The onus won’t be on parents or young people.”

“What we are announcing here and what we will legislate will be truly world-leading,” Communications Minister Michelle Rowland said.

Rowland said platforms impacted would include Meta Platforms’ Instagram and Facebook, as well as Bytedance’s TikTok and Elon Musk’s X. Alphabet’s YouTube would likely also fall within the scope of the legislation, she added.

TikTok declined to comment, while Meta, Alphabet and X did not respond to requests for comment.

The Digital Industry Group, a representative body that includes Meta, TikTok, X and Alphabet’s Google as members, said the measure could encourage young people to explore darker, unregulated parts of the internet while cutting their access to support networks.

“Keeping young people safe online is a top priority … but the proposed ban for teenagers to access digital platforms is a 20th Century response to 21st Century challenges,” said DIGI Managing Director Sunita Bose.

“Rather than blocking access through bans, we need to take a balanced approach to create age-appropriate spaces, build digital literacy and protect young people from online harm,” she added.

France last year proposed a ban on social media for those under 15, though users were able to avoid the ban with parental consent.

The United States has for decades required technology companies to seek parental consent to access the data of children under 13, leading to most social media platforms banning those under that age from accessing their services.

French families sue TikTok over alleged failure to remove harmful content

PARIS — Seven French families have filed a lawsuit against social media giant TikTok, accusing the platform of exposing their adolescent children to harmful content that led to two of them taking their own lives at 15, their lawyer said on Monday.

The lawsuit alleges TikTok’s algorithm exposed the seven teenagers to videos promoting suicide, self-harm and eating disorders, lawyer Laure Boutron-Marmion told broadcaster franceinfo.

The families are taking joint legal action in the Créteil judicial court. Boutron-Marmion said it was the first such grouped case in Europe.

“The parents want TikTok’s legal liability to be recognized in court,” she said, adding: “This is a commercial company offering a product to consumers who are, in addition, minors. They must, therefore, answer for the product’s shortcomings.”

TikTok, like other social media platforms, has long faced scrutiny over the policing of content on its app.

As with Meta’s Facebook and Instagram, it faces hundreds of lawsuits in the U.S. accusing them of enticing and addicting millions of children to their platforms, damaging their mental health.

TikTok could not immediately be reached for comment on the allegations.

The company has previously said it took issues that were linked to children’s mental health seriously. CEO Shou Zi Chew this year told U.S. lawmakers the company has invested in measures to protect young people who use the app.

US tech firms warn Vietnam’s planned law to hamper data centers, social media

HANOI, Vietnam — U.S. tech companies have warned Vietnam’s government that a draft law to tighten rules on data protection and limit data transfers abroad would hamper social media platforms and data center operators from growing their businesses in the country.

The Southeast Asian nation with a population of 100 million is one of the world’s largest markets for Facebook and other online platforms, and is aiming to exponentially increase its data center industry with foreign investment in coming years.

The draft law “will make it challenging for tech companies, social media platforms and data center operators to reach the customers that rely on them daily,” said Jason Oxman, who chairs the Information Technology Industry Council (ITI), a trade association representing big tech companies including Meta, Google and data centers operator Equinix.

The draft law, being discussed in parliament, is also designed to ease authorities’ access to information and was urged by the ministry of public security, Vietnamese and foreign officials said.

The ministry of public security and the information ministry did not respond to attempts to contact them via email and phone.

Vietnam’s parliament is discussing the law in its current month-long session and is scheduled to pass it on Nov. 30 “if eligible,” according to its program, which is subject to changes.

Existing Vietnamese regulations already limit cross-border transfers of data under some circumstances, but they are rarely enforced.

It is unclear how the new law, if adopted, would impact foreign investment in the country. Reuters reported in August that Google was considering setting up a large data center in southern Vietnam before the draft law was presented in parliament.

Research firm BMI had said Vietnam could become a major regional player in the data center industry as limits on foreign ownership are set to end next year.

Among the provisions of the draft law is prior authorization for the transfer overseas of “core data” and “important data,” which are currently vaguely defined.

“That will hinder foreign business operations,” Oxman told Reuters.

Tech companies and other firms favor cross-border data flows to cut costs and improve services, but multiple jurisdictions, including the European Union and China, have limited those transfers, saying that allows them to better protect privacy and sensitive information.

Under the draft law, companies will have to share data with Vietnam’s ruling Communist Party and state organizations in multiple, vaguely defined cases including for “fulfilling a specific task in the public interest.”

The U.S. tech industry has raised concerns with Vietnamese authorities over “the undue expansion of government access to data,” Oxman said.

The new law “would cause significant compliance challenges for most private sector companies,” said Adam Sitkoff, executive director of the American Chamber of Commerce in Hanoi, noting talks were underway to persuade authorities to “reconsider the rushed legislative process” for the law.

Germany’s Scholz summons top ministers over rival plans to fix economy 

Berlin — German Chancellor Olaf Scholz will hold meetings with his top two ministers to try to find common ground after they put forward contradictory plans to fix the nation’s ailing economy, a government source told Reuters on Sunday.  

A document leaked by Christian Lindner’s finance ministry raised eyebrows in Berlin last week, with its push for tax cuts and fiscal discipline widely interpreted as a challenge to the multibillion-euro investment plan put forward by Economy Minister Robert Habeck just days earlier.  

The stand-off is the latest escalation in a row over economic and industrial policy between the FDP, the Greens and Scholz’s Social Democrats that has fueled speculation of the coalition’s potential collapse, less than a year before elections are due.  

But a government source told Reuters that Scholz and the ministers would hold several meetings in the coming days, saying that “now that everyone has submitted their paper, we have to see how they fit with each other.”  

A worsening business outlook in Europe’s largest economy has widened divisions in Scholz’s ideologically disparate coalition over policy measures to drive growth, protect industrial jobs, and reinforce Germany’s position as a global industrial hub.  

While Habeck wants the creation of a fund to stimulate investment and to get around Germany’s strict fiscal spending rules, Lindner advocates tax cuts to spur the economy and an immediate halt on all new regulation.  

SPD leader Lars Klingbeil signaled openness to discussing Lindner’s proposals in a local newspaper interview, but said that some of them were untenable for his party, which released its own economic plan earlier in October.  

“Giving more to the rich, letting employees work longer and sending them into retirement later – it will come as no surprise to anyone that we think this is the wrong approach,” Klingbeil told the Augsburger Allgemeine newspaper. 

California attempts to regulate election deepfakes

The state of California has passed several laws attempting to regulate artificial intelligence, including AI used to create realistic looking but manipulated audio or video — known as a deepfake. In this U.S. election season, the aim is to counter misinformation. But it has raised concerns about free speech. From California, Genia Dulot has our story.

US employers add 12,000 jobs last month as hurricanes, strikes reduce payrolls

WASHINGTON — America’s employers added 12,000 jobs in October, a total that economists say was held down by the effects of strikes and hurricanes that left many workers temporarily off payrolls. The report provided a somewhat blurry view of the job market at the end of a presidential race that has pivoted heavily on voters’ feelings about the economy.

Last month’s hiring gain was down significantly from the 223,000 jobs that were added in September. But economists have estimated that hurricanes Helene and Milton, combined with strikes at Boeing and elsewhere, had the effect of pushing down net job growth by tens of thousands of jobs in October.

Friday’s report from the Labor Department also showed that the unemployment rate remained at 4.1% last month. The low jobless rate suggests that the labor market is still fundamentally healthy, if not as robust as it was early this year. Combined with an inflation rate that has tumbled from its 2022 peak to near prepandemic levels, the overall economy appears to be on solid footing on the eve of Election Day.

The government did not estimate how many jobs were likely removed temporarily from payrolls last month. But economists have said they think the storms and strikes caused up to 100,000 jobs to be dropped. Reflecting the impact of the strikes, factories shed 46,000 positions in October.

Health care companies added 52,000 jobs in October, and state and local governments tacked on 39,000.

The employment report for October also revised down the government’s estimate of the job gains in August and September by a combined 112,000, indicating that the labor market wasn’t quite as robust then as initially thought.

“The big one-off shocks that struck the economy in October make it impossible to know whether the job market was changing direction in the month,’’ Bill Adams, chief economist at Comerica Bank, wrote in a commentary. “But the downward revisions to job growth through September show it was cooling before these shocks struck.’’

Still, economists have noted that the United States has the strongest of the world’s most advanced economies, one that has proved surprisingly durable despite the pressure of high interest rates. This week, for example, the government estimated that the economy expanded at a healthy 2.8% annual rate last quarter, with consumer spending — the heart of the economy — helping drive growth.

Yet as voters choose between former President Donald Trump and Vice President Kamala Harris, large numbers of Americans have said they are unhappy with the state of the economy. Despite the plummeting of inflation, many people are exasperated by high prices, which surged during the recovery from the pandemic recession and remain about 20% higher on average than they were before inflation began accelerating in early 2021.

With inflation having significantly cooled, the Fed is set to cut its benchmark interest rate next week for a second time and likely again in December. The Fed’s 11 rate hikes in 2022 and 2023 managed to help slow inflation without tipping the economy into a recession. A series of Fed rate cuts should lead, over time, to lower borrowing rates for consumers and businesses.

In the meantime, there have been signs of a slowdown in the job market. This week, the Labor Department reported that employers posted 7.4 million job openings in September. Although that is still more than employers posted on the eve of the 2020 pandemic, it amounted to the fewest openings since January 2021.

And 3.1 million Americans quit their jobs in September, the fewest in more than four years. A drop in quits tends to indicate that more workers are losing confidence in their ability to land a better job elsewhere.

Thousands of passenger flight signals jammed over war zones in Ukraine, Middle East

The navigation systems of thousands of passenger aircraft are being disrupted every day as they fly close to conflict zones, according to researchers. They are warning that the blocking or “spoofing” technology behind it could put lives at risk. Henry Ridgwell has more from London.

Residents in Ethiopia’s Oromia region report network disruptions as government forces fight rebels

ADAMA, ETHIOPIA — Residents in Ethiopia’s Oromia region say access to phone communication and internet service has been disrupted for months as government forces fight against two rebel groups.

The disruption of mobile phone calls and internet data has been concentrated in conflict-hit Oromia zones, where government forces have engaged in fighting against the Oromo Liberation Army, or the OLA.

A resident from South Oromia of Guji Zone Wadera Wereda, who spoke to VOA on condition of anonymity for safety reasons, said phone and internet data connections have been cut in his area due to the fighting.

He said there was fighting on Monday and the week before in Wadera Wereda, where regional security personnel including local police were killed. Other residents confirmed the same clashes without giving specific casualty figures. Local authorities could not be reached for comment.

The data outage and network disruptions were also reported in the North Shewa Zone administration of Oromia region.

“The zone has been under network blockade for the last two months due to the insurgency,” said a second resident from Dera Wereda in North Shewa, who also sought anonymity due to safety reasons.

Residents also said people who lost their SIM cards or want replacements could not do so at local telecom offices because the conflict has affected supplies. Network disruptions also impacted schools in the area that access materials online.

He says his school had to transfer all its grade-12 students this year to neighboring Wereda due to a lack of service.

“We cannot manage to send their details and credentials to relevant bodies,” with the downed service, he told VOA in a phone interview.

Journalists have waited for hours to speak to residents in Kelem Welega Zone, whose network is down during morning hours. One resident traveled to Dembi Dolo, about 620 kilometers west of the capital, Addis Ababa, to speak with the media about the network outages.

The disruptions have been present since the yearslong fighting between federal forces and the OLA began in 2019. In one of the latest deadliest attacks, suspected OLA fighters killed as many as 17 pro-government militiamen in the West Showa zone of Oromia on October 17, according to residents and local officials.

A second rebel group, Fano, is also fighting in the neighboring Amhara region, which spills over on either side.

Residents say as the intensity of the clashes increases, the network situation becomes worse, as the government resorts to shutting down communication.

“It’s a very unfortunate tactic that is usually used by governments that are struggling with legitimacy issues,” said Horn of Africa security analyst Samira Gaid.

“It only serves to convince the masses that the government has something to hide. Rather than controlling the narrative or news reporting, it elevates mistrust in government, adds to misinformation and disinformation, and contributes to groups becoming more covert with their communications,” she told VOA.

Ethiopia’s state-run communication outlets have not responded to repeated VOA requests for comment.

Speaking at a press conference in Addis Ababa last month, Frehiwot Tamiru, CEO of Ethio Telecom, admitted that such problems exist in conflict areas. She declined to give specific answers, referring reporters to other government entities.

In June, the company said it has repaired and restored service to dozens of mobile stations that had previously been damaged in the western region of the country.

This story originated in VOA’s Horn of Africa Service.

Chinese online retailer Temu faces EU probe into rogue traders, illegal goods

LONDON — The European Union is investigating Chinese online retailer Temu over suspicions it’s failing to prevent the sale of illegal products, the 27-nation bloc’s executive arm said on Thursday.

The European Commission opened its investigation five months after adding Temu to the list of “very large online platforms” needing the strictest level of scrutiny under the bloc’s Digital Services Act. It’s a wide-ranging rulebook designed to clean up online platforms and keep internet users safe, with the threat of hefty fines.

Temu started entering Western markets only in the past two years and has grown in popularity by offering cheap goods — from clothing to home products — that are shipped from sellers in China. The company, owned by Pinduoduo Incorporated, a popular e-commerce site in China, now has 92 million users in the EU.

Temu said it “takes its obligations under the DSA seriously, continuously investing to strengthen our compliance system and safeguard consumer interests on our platform.”

“We will cooperate fully with regulators to support our shared goal of a safe, trusted marketplace for consumers,” the company said in a statement.

European Commission Executive Vice President Margrethe Vestager said in a press release that Brussels wants to make sure products sold on Temu’s platform “meet EU standards and do not harm consumers.”

EU enforcement will “guarantee a level playing field and that every platform, including Temu, fully respects the laws that keep our European market safe and fair for all,” she said.

The commission’s investigation will look into whether Temu’s systems are doing enough to crack down on “rogue traders” selling “noncompliant goods” amid concerns that they are able to swiftly reappear after being suspended. The commission didn’t single out specific illegal products that were being sold on the platform.

Regulators are also examining the risks from Temu’s “addictive design,” including “game-like” reward programs, and what the company is doing to mitigate those risks.

Also under investigation is Temu’s compliance with two other DSA requirements: giving researchers access to data and transparency on recommender systems. Companies must detail how they recommend content and products and give users at least one option to see recommendations that are not based on their personal profile and preferences.

Temu now has the chance to respond to the commission, which can decide to impose a fine or drop the case if the company makes changes or can prove that the suspicions aren’t valid.

Brussels has been cracking down on tech companies since the DSA took effect last year. It has also opened an investigation into another e-commerce platform, AliExpress, as well as social media sites such as X and Tiktok, which bowed to pressure after the commission demanded answers about a new rewards feature.

Temu has also faced scrutiny in the United States, where a congressional report last year accused the company of failing to prevent goods made by forced labor from being sold on its platform.

China tells carmakers to pause investment in EU countries backing EV tariffs, sources say

China has told its automakers to halt big investment in European countries that support extra tariffs on Chinese-built electric vehicles, two people briefed about the matter said, a move likely to further divide Europe.

The new European Union tariffs of up to 45.3% came into effect on Wednesday after a year-long investigation that divided the bloc and prompted retaliation from Beijing.

Ten EU members including France, Poland and Italy supported tariffs in a vote this month, in which five members including Germany opposed them and 12 abstained.

Chinese automakers including BYD, SAIC, and Geely were told at a meeting held by the Ministry of Commerce on Oct. 10 that they should pause their heavy asset investment plans such as factories in countries that backed the proposal, said the people.

They declined to be named, as the meeting was not public.

Several foreign automakers also attended the meeting, where the participants were told to be prudent about their investments in countries that abstained from voting and were “encouraged” to invest in those that voted against the tariffs, the people said.

Geely declined to comment. SAIC, BYD and the commerce ministry did not immediately reply to requests for comment.

The move by Chinese authorities to suspend some investment in Europe would suggest the government is seeking leverage in talks with the EU over an alternative to tariffs, keen to avoid a sharp fall in EV exports to the key market.

Europe accounted for more than 40% of EVs shipped from China in 2023, according to Reuters’ calculations using data from the China Passenger Car Association.

Given 100% tariffs on Chinese-made EVs in the United States and Canada, a drop in EV exports to Europe would risk deepening overcapacity Chinese automakers face in their home market.

Investments in Europe

During a visit to China by Spanish Prime Minister Pedro Sanchez last month, a Chinese company agreed to build a $1 billion plant in Spain to make machinery used for hydrogen production. Spain was one of the 12 EU states that abstained.

Italy and France are among EU countries that have been courting Chinese automakers for investments, but they have also warned of the risks that a flood of cheap Chinese EVs pose to European manufacturers.

State-owned SAIC, China’s second-largest auto exporter, is choosing a site for an EV factory in Europe and has been separately planning to open its second European parts center in France this year to meet growing demand for its MG-brand cars.

An aide to France’s junior trade minister Sophie Primas said they had no comment to make ahead of her trip to China next week.

The Italian government is in talks with Chery, China’s largest automaker by exports, and other Chinese automakers, including Dongfeng Motors, about potential investments.

Italy’s industry ministry declined to comment. Dongfeng didn’t immediately respond, while Chery declined to comment.

BYD is building a plant in Hungary, which voted against the tariffs. The Chinese EV giant has also been considering relocating its European headquarters from the Netherlands to Hungary due to cost concerns, two separate people with knowledge of the matter said.

Even before Beijing issued its guidance, Chinese companies were cautious about independently setting up production sites in Europe, as it requires large sums of investment and a deep understanding of local laws and culture.

The automakers were also told at the Oct. 10 meeting that they should avoid separate investment discussions with European governments and instead work together to hold collective talks, the people said.

The directive follows a similar warning in July when the commerce ministry advised China’s automakers not to invest in countries such as India and Turkey, and to be cautious with investments in Europe.

Musk’s X ineffective against surge of US election misinformation, report says

The crowd-sourced fact-checking feature of Elon Musk’s X, Community Notes, is “failing to counter false” claims about the U.S. election, the Center for Countering Digital Hate (CCDH) said in a report Wednesday.

Out of the 283 misleading posts that CCDH has analyzed on the digital social media platform, 209 or 74% of the posts did not show accurate notes to all X users correcting false and misleading claims about the elections, the report said.

“The 209 misleading posts in our sample that did not display available Community Notes to all users have amassed 2.2 billion views,” CCDH said, urging the company to invest in safety and transparency.

X did not immediately respond to a Reuters request for comment.

X launched its “Community Notes” feature last year, which allows users to comment on posts to flag false or misleading content, in effect crowd-sourcing fact checking to users rather than a dedicated team of fact checkers.

The report comes after X lost a lawsuit brought by CCDH earlier this year that faulted it for allowing a rise in hate speech on the social media platform.

Social media platforms, including X, have been under scrutiny for years over the spread of misinformation and conspiracy theories, including false information about elections and vaccines.

Secretaries of state from five U.S. states urged billionaire Musk in August to fix X’s AI chatbot, saying it had spread misinformation related to the November 5 election.

Musk, who endorsed Republican presidential candidate Donald Trump in July, himself has been accused of spreading misinformation. Polls show Trump is in a tight race with Democratic Vice President Kamala Harris.

US economy grew at a solid 2.8% pace last quarter on strength of consumer spending 

Washington — The U.S. economy grew at a healthy 2.8% annual rate from July through September, with consumers helping drive growth despite the weight of still-high interest rates. 

Wednesday’s report from the Commerce Department said the gross domestic product — the economy’s total output of goods and services — did slow slightly from its 3% growth rate in the April-June quarter. But the latest figures still reflect surprising durability just as Americans assess the state of the economy in the final stretch of the presidential race. 

Consumer spending, which accounts for about 70% of U.S. economic activity, accelerated to a 3.7% annual pace last quarter, up from 2.8% in the April-June period. Exports also contributed to the third quarter’s growth, increasing at an 8.9% rate. 

On the other hand, growth in business investment slowed sharply on a drop in investment in housing and in nonresidential buildings such as offices and warehouses. But spending on equipment surged. 

The report is the first of three estimates the government will make of GDP growth for the third quarter of the year. The U.S. economy has continued to expand in the face of the much higher borrowing rates the Federal Reserve imposed in 2022 and 2023 in its drive to curb inflation. Despite widespread predictions that the economy would succumb to a recession, it has kept growing, with employers still hiring and consumers still spending. 

In a sign that the nation’s households, whose purchases drive most of the economy, will continue spending, the Conference Board said Tuesday that its consumer confidence index posted its biggest monthly gain since March 2021. The proportion of consumers who expect a recession in the next 12 months dropped to its lowest point since the board first posed that question in July 2022. 

At the same time, the nation’s once-sizzling job market has lost some momentum. On Tuesday, the government reported that the number of job openings in the United States fell in September to its lowest level since January 2021. And employers have added an average of 200,000 jobs a month so far this year — a healthy number but down from a record 604,000 in 2021 as the economy rebounded from the pandemic recession, 377,000 in 2022 and 251,000 in 2023. 

On Friday, the Labor Department is expected to report that the economy added 120,000 jobs in October. That gain, though, will probably have been significantly held down by the effects of Hurricanes Helene and Milton and by a strike at Boeing, the aviation giant, all of which temporarily knocked thousands of people off payrolls. 

Wednesday’s report contained some encouraging news on inflation. The Fed’s favored inflation gauge — called the personal consumption expenditures index, or PCE — rose at just a 1.5% annual pace last quarter, down from 2.5% in the second quarter and the lowest figure in more than four years. Excluding volatile food and energy prices, so-called core PCE inflation was 2.2%, down from 2.8% in the April-June quarter. 

Despite the continued progress on inflation, average prices still far exceed their pre-pandemic levels, which has exasperated many Americans and posed a challenge to Vice President Kamala Harris’ prospects in her race against former President Donald Trump. Most mainstream economists have suggested, though, that Trump’s policy proposals, unlike Harris’, would worsen inflation. 

At its most recent meeting last month, the Fed was satisfied enough with its progress against inflation — and concerned enough by the slowing job market — to slash its benchmark rate by a hefty half percentage point, its first and largest rate cut in more than four years. When it meets next week, the Fed is expected to announce another rate cut, this one by a more typical quarter-point. 

The central bank’s policymakers have also signaled that they expect to cut their key rate again at their final two meetings this year, in November and December. And they envision four more rate cuts in 2025 and two in 2026. The cumulative result of the Fed’s rate cuts, over time, will likely be lower borrowing rates for consumers and businesses. 

Beijing files WTO complaint over EU’s new taxes on Chinese EVs  

Beijing — Beijing said Wednesday it had lodged a complaint with the World Trade Organization over the European Union’s decision to impose hefty tariffs on Chinese-made electric cars.

The extra taxes of up to 35% were announced Tuesday after an EU probe found Chinese state subsidies were undercutting European automakers, but the move has faced opposition from Germany and Hungary, which fear provoking Beijing’s ire and setting off a bitter trade war.

China slammed Brussels’s decision on Wednesday morning, saying it did not “agree with or accept” the tariffs and had filed a complaint under the World Trade Organization’s (WTO) dispute settlement mechanism.

“China will… take all necessary measures to firmly protect the legitimate rights and interests of Chinese companies,” Beijing’s commerce ministry said.

EU trade chief Valdis Dombrovskis said Tuesday that “by adopting these proportionate and targeted measures after a rigorous investigation, we’re standing up for fair market practices and for the European industrial base.”

“We welcome competition, including in the electric vehicle sector, but it must be underpinned by fairness and a level playing field,” he said.

But Germany’s main auto industry association warned the tariffs heightened the risk of “a far-reaching trade conflict,” while a Chinese trade group slammed the “politically motivated” decision even as it urged dialogue between the two sides.

The duties will come on top of the current 10 percent on imports of electric vehicles from China.

The decision became law following its publication in the EU’s official journal on Tuesday, and the duties will enter into force from Wednesday.

Once they do, the tariffs will be definitive and last for five years.

The extra duties also apply, at various rates, to vehicles made in China by foreign groups such as Tesla, which faces a tariff of 7.85%.

Chinese car giant Geely — one of the country’s largest sellers of EVs — faces an extra duty of 18.8%, while SAIC will be hit with the highest at 35.3 percent.

Ailing companies

The tariffs do not have the support of the majority of the EU’s 27 member states but in a vote early this month, the opposition was not enough to block them, which would have required at least 15 states representing 65% of the bloc’s population.

The EU launched the probe in a bid to protect its automobile industry, which employs around 14 million people.

France, which pushed for the investigation, welcomed the decision.

“The European Union is taking a crucial decision to protect and defend our trade interests, at a time when our car industry needs our support more than ever,” French Finance Minister Antoine Armand said in a statement.

But Europe’s bigger carmakers, including German auto titan Volkswagen, have criticized the EU’s approach and have urged Brussels to resolve the issue through talks.

The extra tariffs are “a step backwards for free global trade and thus for prosperity, job preservation and growth in Europe,” the German Association of the Automotive Industry’s president Hildegard Mueller said on Tuesday after the announcement.

Volkswagen, which has been hit hard by rising competition in China, has previously said the tariffs would not improve the competitiveness of the European automotive industry.

That warning came weeks before the ailing giant announced plans on Monday to close at least three factories in Germany and cull tens of thousands of jobs.

Retaliatory moves

Talks continue between the EU and China, and the duties can be lifted if they reach a satisfactory agreement, but officials on both sides have pointed to differences.

Discussions have been focused on minimum prices that would replace the duties and force carmakers in China to sell vehicles at a certain cost to offset subsidies.

“We remain open to a possible alternative solution that would be effective in addressing the problems identified and WTO-compatible,” Dombrovskis said.

The Chinese Chamber of Commerce to the EU urged Brussels and Beijing “to accelerate talks on establishing minimum prices and, ultimately, to eliminate these tariffs.”

The EU could now face Chinese retaliation, with Beijing already saying on October 8 it would impose provisional tariffs on European brandy.

Beijing has also launched probes into EU subsidies of some dairy and pork products imported into China.

Trade tensions between China and the EU are not limited to electric cars, with Brussels also investigating Chinese subsidies for solar panels and wind turbines.

The EU is not alone in levying heavy tariffs on Chinese electric cars.

Canada and the United States have in recent months imposed much higher tariffs of 100 percent on Chinese electric car imports.

China launches new crew to its space station as it seeks to expand exploration

JIUQUAN, China — China declared a “complete success” after it launched a new three-person crew to its orbiting space station early Wednesday as the country seeks to expand its exploration of outer space with missions to the moon and beyond.

The Shenzhou-19 spaceship carrying the trio blasted off from the Jiuquan Satellite Launch Center in northwest China at 4:27 a.m. local time atop a Long March-2F rocket, the backbone of China’s crewed space missions.

“The crew condition is good and the launch has been successful,” the state broadcaster China Central Television announced.

China built its own space station after being excluded from the International Space Station, mainly because of U.S. concerns over the People’s Liberation Army, the Chinese Communist Party’s military arm’s overall control over the space program. China’s moon program is part of a growing rivalry with the U.S. and others, including Japan and India.

The team of two men and one woman will replace the astronauts who have lived on the Tiangong space station for the last six months. They are expected to stay until April or May of next year.

The new mission commander, Cai Xuzhe, went to space in the Shenzhou-14 mission in 2022, while the other two, Song Lingdong and Wang Haoze, are first-time space travelers, born in the 1990s.

Song was an air force pilot and Wang an engineer with the China Aerospace Science and Technology Corporation. Wang will be the crew’s payload specialist and the third Chinese woman aboard a crewed mission.

Besides putting a space station into orbit, the Chinese space agency has landed an explorer on Mars. It aims to put a person on the moon before 2030, which would make China the second nation after the United States to do so. It also plans to build a research station on the moon and has already transferred rock and soil samples from the little-explored far side of the moon in a global first.

The U.S. still leads in space exploration and plans to land astronauts on the moon for the first time in more than 50 years, though NASA pushed the target date back to 2026 earlier this year.

The new crew will perform spacewalks and install new equipment to protect the station from space debris, some of which was created by China.

According to NASA, large pieces of debris have been created by “satellite explosions and collisions.” China’s firing of a rocket to destroy a redundant weather satellite in 2007 and the “accidental collision of American and Russian communications satellites in 2009 greatly increased the amount of large debris in orbit,” it said.

China’s space authorities say they have measures in place in case their astronauts have to return to Earth earlier.

China launched its first crewed mission in 2003, becoming only the third nation to do so after the former Soviet Union and the United States. The space program is a source of enormous national pride and a hallmark of China’s technological advances over the past two decades.

US finalizes rule restricting investment in Chinese tech firms

The Treasury Department on Monday finalized a new rule meant to prevent U.S.-based people and companies from investing in the development of a range of advanced technologies in China, thereby preventing Beijing from accessing cutting-edge expertise and equipment.

The rule, which implements an executive order signed by President Joe Biden in 2023, focuses particularly on advanced semiconductors and microelectronics and the equipment used to make them, technology used in quantum computing, and artificial intelligence systems.

When it takes effect on January 2, the rule will prohibit certain transactions in semiconductors, microelectronics and artificial intelligence. It also establishes mandatory reporting requirements for transactions that are not banned outright.

In the field of quantum computing, the rule is more far-reaching, banning all transactions “related to the development of quantum computers or production of any critical components required to produce a quantum computer,” as well as the development of other quantum systems. Unlike the fields of AI and semiconductors, the rule does not allow for transactions that can be completed so long as they are reported to the government.

The rule also announced the creation of the Office of Global Transactions within Treasury’s Office of Investment Security, which will administer the Outbound Investment Security Program.

Justification and opposition

“Artificial intelligence, semiconductors, and quantum technologies are fundamental to the development of the next generation of military, surveillance, intelligence and certain cybersecurity applications like cutting-edge code-breaking computer systems or next generation fighter jets,” Paul Rosen, assistant secretary for investment security, said in a statement.

“This Final Rule takes targeted and concrete measures to ensure that U.S. investment is not exploited to advance the development of key technologies by those who may use them to threaten our national security,” Rosen said.

Beijing has repeatedly complained about U.S. technology policy, arguing that the U.S. is dedicated to preventing China’s rise as a global power. In a press conference on Tuesday, Chinese Foreign Ministry spokesperson Lin Jian reiterated China’s longstanding objections to U.S. efforts to withhold advanced technology from Chinese companies.

“China deplores and rejects the U.S.’s Final Rule to curb investment in China,” Lin said. “China has protested to the U.S. and will take all measures necessary to firmly defend its lawful rights and interests.”

Not just equipment

The language of the rule frequently notes that it applies to transactions with “countries of concern,” but the specific language in the text makes it plain that the targets of the rule are companies and individuals doing business in mainland China as well as the “special administrative districts” of Hong Kong and Macao.

The Final Rule’s ban on transactions is not limited to the physical transfer of finished goods and machinery in the specified fields. Explanatory documents released on Monday make it clear that several intangible benefits are also covered.

Countries of concern “are exploiting or have the ability to exploit certain United States outbound investments, including certain intangible benefits that often accompany United States investments and that help companies succeed,” an informational statement accompanying the rule said. “These intangible benefits include enhanced standing and prominence, managerial assistance, investment and talent networks, market access, and enhanced access to additional financing.”

Signaling to US companies

The onus will be on U.S. companies to comply with the new rule, Stephen Ezell, vice president for global innovation policy at the Information Technology & Innovation Foundation, told VOA.

“This is the U.S. government signaling to U.S. entities and investors that they need to think twice about making investments on the prohibited transaction side of the equation that would advance China’s capabilities in these areas,” Ezell said.

He added that the impact of the rule on investment in Chinese technology companies would have effects far beyond any reduction in funding.

“It’s not just the dollars,” he said. “A key target here is getting at the intangible benefits that come with those investments, such as managerial capability, talent networks.” He described that loss as “very significant.”

Closing loopholes

In an email exchange with VOA, Daniel Gonzales, a senior scientist at the RAND Corporation, explained that the purpose of the rule was, in part, to prevent U.S. investment firms from supporting Chinese firms in the development of certain kinds of technology.

“These rules were put in place after many episodes where U.S. [venture capital] companies helped to transfer or nurture advanced technologies that have relevant military capabilities,” Gonzales wrote. “One particular case was that of TikTok and its AI algorithms, which were developed with the help of Sequoia Capital of California.”

Sequoia did not break any laws in assisting TikTok, Gonzales said. But “it has since become known to U.S. authorities that TikTok does possess an AI algorithm that has a variety of applications, some of which have military implications. This new rule is intended to close this loophole.”

Gonzales said the U.S. government’s concern with quantum computing is also born of worries about Chinese offensive capabilities.

“Chinese researchers are working on developing quantum computer algorithms that can break encryption codes used by the U.S. government and the U.S. financial sector to protect private and confidential information,” he wrote. “China has several startup companies working to develop more powerful quantum computers. This new rule is intended to prevent the leakage of U.S. quantum technology to China through U.S. VCs.”

Companies find solutions to power EVs in energy-challenged Africa

NAIROBI, KENYA — Some companies are coming up with creative ways of making electric vehicles a more realistic option in power-challenged areas of Africa.

Countries in Africa have been slow adopters of battery-powered vehicles because finding reliable sources of electricity is a challenge in many places.

The Center for Strategic and International Studies described Africa as “the most energy-deficient continent in the world” and said that any progress made in electricity access in the last five years has been reversed by the pandemic and population growth.

Onesmus Otieno, for one, regrets trading in his diesel-powered motor bike for an electric one. He earns his living making deliveries and ferrying passengers around Nairobi, Kenya’s capital, with his bike.

The two-wheeled taxis popularly known as “boda boda” in Swahili are commonly used in Kenya and throughout Africa. Kenyan authorities recently introduced the electric bikes to phase out diesel ones. Otieno is among the few riders who adopted them, but he said finding a place to charge his bike has been a headache.

Sometimes the battery dies while he is carrying a customer, he said, while a charging station is far away. So, he has to end that trip and cancel other requests.

To address the problem, Chinese company Beijing Sebo created a mobile application that allows users of EVs to request a charge through the app. Then, charging equipment is brought to the user’s location.

Lin Lin, general manager for overseas business of Beijing Sebo, said because the company produces the equipment, it can control costs.

“We can deploy the product … in any country they need, and they don’t need to build or fix charging stations,” Lin said. “We can move to the location of the user, and we can bring electricity to electric vehicles.”

Lin said the mobile charging vans use electricity generated from solid waste and can charge up to five cars at one time for about $7 per vehicle — less for a motorbike.

Countries in Africa have been slow to adopt electric vehicles because there is a lack of infrastructure to support the technology, analysts say. The cost of EVs is another barrier, said clean energy expert Ajay Mathur.

”Yes, the capital cost is more,” Mathur said. “The first cost is more, but you recover it in about six years or so. We are at the beginning of the revolution.”

Electric motor bike maker Spiro offers a battery-swapping service in several countries to address the lack of EV infrastructure.

But studies show that for many African countries, access to reliable and affordable electricity remains a challenge. There are frequent power cuts, outages and voltage fluctuations in several regions.

Companies such as Beijing Sebo and Spiro are finding ways around the lack of power in Africa.

”We want to solve the problem of charging anxiety anywhere you are,” Lin said. 

This story originated in VOA’s Mandarin Service.

Cryptocurrency promoters on X amplify China-aligned disinformation

Washington — A group of accounts that regularly promote cryptocurrency-related content on X have amplified messages from Chinese official accounts and a China-linked disinformation operation covertly pushing Beijing’s propaganda toward Western social media users known as “Spamouflage”.

Spamouflage accounts are bots pretending to be authentic users that promote narratives that align with Beijing’s talking points issues, such as the COVID-19 pandemic, China’s human rights record, the war in Ukraine and the conflict in Gaza.

The cryptocurrency accounts were discovered by a joint investigation between VOA Mandarin and DoubleThink Lab, a Taiwan-based social media analytics firm.

DoubleThink Lab’s analysis uncovered 1,153 accounts that primarily repost news and promotions about cryptocurrency and are likely bots deployed by engagement boosting services to raise their clients’ visibility on social media.

The findings suggest that some official Chinese X accounts and the Spamouflage operation have been using the same amplification services, which further indicate the link between the Chinese state and Spamouflage.

Beijing has repeatedly denied any attempts to spread disinformation in the United States and other countries.

From cryptocurrency to Spamouflage

A review of the accounts in the VOA-DTL investigation shows that the majority of the posts were about cryptocurrency. Users regularly repost content from some of the biggest cryptocurrency accounts on X, such as ChainGPT and LondonRealTV, which belongs to British podcaster Brian Rose.

But these accounts have also shared content from at least 17 Spamouflage accounts that VOA and DTL have been tracking.

VOA recently reported on Spamouflage networks’ adoption of antisemitic tropes and conspiracy theories.

Spamouflage was first detected by the U.S.-based social media analytic firm Graphika, who coined the name because the operation’s political posts were interspersed with innocuous but spam-like content such as TikTok videos and scenery photographs that camouflage the operation’s goal of influencing public opinions.

All cryptocurrency accounts have reposted content from a Spamouflage account named “Watermelon cloth” at least once. A review of the account revealed that “Watermelon cloth” regularly posted content critical of social inequalities in the United States, the Ukrainian and Israeli governments, and praised China’s economic achievements and leadership role in solving international issues.

In one post, the account peddled the conspiracy theory that Washington was developing biological weapons in Ukraine.

“The outbreak of the Russo-Ukrainian war brought out an ‘unspeakable secret’ in the United States. US biological laboratory in Ukraine exposed,” the post said. X recently suspended Watermelon cloth’s account.

Since Watermelon cloth’s first posting in March 2023, its content has been reposted nearly 2,600 times, half of which were by the cryptocurrency accounts. Most of the remaining reposts were either by Spamouflage or other botlike accounts, according to data collected by DoubleThink Lab. The investigation also found that the cryptocurrency accounts’ amplification on average almost tripled the view number of a post.

Robotic behavior

All 1,153 cryptocurrency accounts have demonstrated patterns that strongly suggest they are bots instead of human users.

They were created in batches on specific dates. On April 6 alone, 152 of them were registered on X.

Over 99% of their content were reposts. A study of their repost behaviors on September 24 shows that all the reposts took place within the first hour after the original content was posted. Within each wave of reposts, all took place within six seconds, an indication of coordinated action.

At least one such account offered engagement boosting services in its bio with two Telegram links for interested customers. VOA Mandarin contacted the service seller through the links but did not receive a response.

Chinese official accounts amplified

The cryptocurrency group has also promoted posts from Chinese official accounts, including several that belong to Chinese local governments, state media and at least one Chinese diplomat.

The Jinan International Communication Center was the third most amplified account whose posts the cryptocurrency groups have shared. Its content was reposted over 2,200 times.

The Jinan International Communication Center was established in 2022 to promote the history and culture of Jinan, capital of the Shandong province in Eastern China, to the rest of the world as part of Beijing’s “Tell China’s Story Well” propaganda initiative.

A local state media account boasted in an article last year that Jinan was the third most influential Chinese city on X, which was then called Twitter.

Other Chinese cities, including Xiamen and Ningbo, and provinces, such as Anhui and Jilin, had their official accounts amplified by the cryptocurrency group.

Other amplified accounts include Xi’s Moments, a state media project propagating Chinese leader Xi Jinping’s speeches and official activities; China Retold, a media group organized by pro-Beijing politicians in Hong Kong; and the English-language state-owned newspaper China Daily.

Zhang Heqing, a cultural counselor at the Chinese Embassy in Pakistan, was the sole Chinese diplomat whose posts were promoted by the cryptocurrency group.

DoubleThink Lab wrote in an analysis of the data and findings that Chinese official accounts and the Spamouflage operation have “likely” used the same content boosting services, which explains why they were amplified by the same group of cryptocurrency accounts.

The Chinese Embassy in Washington, D.C., declined to answer specific questions about what appears to be a connection between the cryptocurrency group, Chinese official accounts and Spamouflage.

But in a written statement, spokesperson Liu Pengyu rejected the notion that China has used disinformation campaigns to influence social media users in the U.S.

“Such allegations are full of malicious speculations against China, which China firmly opposes,” the statement said.

US farmers weigh tariffs, farm bill as Election Day nears

U.S. farmers are facing economic headwinds as they head to the polls this election year. VOA’s Kane Farabaugh has more from Illinois