17/10/2025

FRIDAY | OCT 17, 2025

17

BIZ & FINANCE

US and China trade barbs in rare earths row

WASHINGTON: More US employers are reducing headcount on weaker demand and heightened economic uncertainty, the Federal Reserve said on Wednesday, adding in a report that prices have climbed in recent weeks as well. But overall, the US central bank’s “Beige Book” survey of conditions showed that economic activity changed little in recent weeks, even as “consumer spending, particularly on retail goods, inched down”. The Fed made its first interest rate cut this year in September as the key employment market weakened, but officials are proceeding cautiously as they balance risks to inflation as well. Since returning to the White House this year, US leader Donald Trump has slapped wide-ranging tariffs on trading partners, fueling worries among economists that these could cause consumer prices to rise. On Wednesday, the Fed said that business costs in some districts rose at a quicker pace recently due to higher import prices and steeper costs of services like insurance and health care. “Tariff-induced input cost increases were reported across many districts, but the extent of those higher costs passing through to final prices varied,” the Fed added. For now, many expect that elevated uncertainty will bog down economic activity, the Fed said. “In most districts, more employers reported lowering head counts through layoffs and attrition,” it added. The report said the Fed’s contacts cited “weaker demand, elevated economic uncertainty, and, in some cases, increased investment in artificial intelligence technologies”. The labour supply in sectors like agriculture, construction and manufacturing were also “reportedly strained” in some districts due to changes in immigration policies, the Fed said. – AFP Fed: More firms reducing workforce NEW YORK: United Airlines reported a slight dip in profit on Wednesday as operating expenses ticked higher, adding that a strengthening demand outlook would boost fourth-quarter results. The big US carrier reported third-quarter profit of US$949 million, down 1.7% from the year-ago level, as growth in operating expenses edged out the increase in revenue of 2.6% to US$15.2 billion. The airline estimated fourth quarter profit of between US$3.00 and US$3.50 per share, better than Wall Street estimates. The airline is poised for a “strong” fourth quarter “as the demand environment strengthens”, said a United press release. The outlook echoes bullish commentary about consumer appetite earlier this month from Delta Air Lines. Both carriers have billed themselves as able to provide a premium-travel experience that emphasises better onboard amenities in addition to reliable operations in an effort to strengthen brand loyalty. The press release emphasised perks such as Apple TV on board, increased investment on food quality and the introduction of Starlink Wi-Fi on flights. The company promises Starlink on “every plane by 2027”. – AFP

of its “Entity List” in late Sept ember to include companies in China and elsewhere that use subsidiaries to bypass export restrictions on chipmaking equip ment and other high-tech goods. Washington pins the start to China’s critical minerals move, which Trump described as “shocking.” “The United States has long overstated national security concerns and abused controls, adopting discriminatory practices against China,” read one of seven infographics published by People’s Daily , the official newspaper of the governing Communist Party. The poster added that Washington maintains a control list over 3,000 items long, compared to the 900 on Beijing’s catalogue. “Implementing such export established in 2024 that includes MGX, Nvidia and Microsoft. AIP itself plans to raise US$30 billion in direct investments and leverage debt to achieve a total investment capacity of US$100 billion. The partners have not disclosed how equity will be distributed among Aligned’s new shareholders following the transaction’s completion, expected in the first half of 2026. “We are entering a new era in which AI will fundamentally reengineer our economies and enable accelerated growth,” said Ahmed Yahia Al Idrissi, CEO of MGX and vice-chairman of AIP, in a press

controls is consistent with inter national practice,” the first poster said, reiterating Beijing’s stance on the measures since their announcement. Washington has had similar rules since the 1950s, and has been using them in recent years to stop foreign semiconductor companies selling chips to China if they are made using US technology. “Washington should not be surprised by China’s ‘tit-for-tat’,” read an editorial in the Global Times tabloid, which has often been first to report on China’s next steps in trade disagreements. “The sudden shift in the trade atmosphere caught many by surprise, yet that’s not surprising. “The direct trigger for this round of tension was Washington’s breach of promises – an all-too familiar pattern.” – Reuters release. US tech behemoths are all trying to keep pace with the AI infrastructure build-out, with ChatGPT-maker OpenAI announcing its own series of mega deals it says are necessary to meet the expected demand for AI capacity. Facebook giant Meta announced on Wednesday it is building a major AI data centre with one gigawatt capacity in El Paso, Texas, marking the tech giant’s 29th data facility and third in the state. Meta said it plans to invest up to US$72 billion in mostly AI-related capital expenditures in 2025. – AFP

o Washington accuses Beijing of supply chain power grab amid tariff threats

BEIJING: Chinese state media yesterday issued a seven-point rebuttal to US calls for Beijing to wind back its rare earth controls, as both sides struggle to move beyond a volley of barbs and accusations of blindsiding the other. US Trade Representative Jamieson Greer on Wednesday called China’s new rare earth export restrictions “a global supply-chain power grab”, and suggested Beijing could stave off President Donald Trump’s threat to reimpose triple digit tariffs on Chinese goods by shelving the measures set to take effect on Nov 8. NEW YORK: A consortium led by asset manager BlackRock, which includes chip giant Nvidia and Microsoft, announced on Wednesday it is acquiring data centre specialist Aligned Data Centres from Australian financial services group Macquarie for approximately US$40 billion (RM169 billion ). The deal marks another sign of the tech sector’s insatiable appetite for AI infrastructure, including chips, servers and data centers that provide the computing storage and processing power required by artificial intelligence. Founded in 2013, Aligned

Beijing maintains it not only notified Washington before announcing the new licensing regime, but that the controls are also consistent with measures long in place in other major economies. The US and China have been embroiled in a war of words since a September telephone call between Trump and Chinese leader Xi Jinping, with each accusing the other of stoking tensions weeks ahead of an expected meeting between the two men. Beijing attributes the ramped up rhetoric to the US Commerce Department’s surprise expansion currently operates more than 50 data centres in the United States, Mexico, Brazil, Chile and Colombia, with a projected capacity exceeding five gigawatts, equivalent to powering millions of homes. Macquarie initially acquired a stake in the Texas-based company in 2018 through its subsidiary Macquarie Asset Management and subsequently increased its investment in 2020. The acquiring consortium consists of BlackRock, Emirati sovereign tech fund MGX, and the Artificial Intelligence Infrastructure Partnership (AIP), a joint venture

Nvidia-backed group seals US$40b data centre deal

United Airlines planes are seen at the tarmac at Newark International Airport in New Jersey, US. – REUTERSPIC United Airlines sees demand ‘strengthening’ as profit edges lower