16/01/2026

BIZ & FINANCE FRIDAY | JAN 16, 2026

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Lower-income Americans increasingly price sensitive

US sets tariff on certain chips as part of Nvidia’s China deal WASHINGTON: President Donald Trump signed an order on Wednesday imposing tariffs on imports of certain semiconductors, a necessary step in the White House’s decision to allow Nvidia to sell advanced AI chips to China. The 25% tariff, effective yesterday, applies to chips that are “transshipped through the United States to other foreign countries,“ White House staff secretary Will Scharf said at an event. This covers technology like the Nvidia H200 chip and AMD’s MI325X, a government fact sheet added. Trump said last month that he reached an agreement with Chinese President Xi Jinping to allow US chip giant Nvidia to export the H200s into China, with the US government getting a 25% cut of sales. The deal was confirmed by the US Commerce Department on Tuesday. The change will permit Nvidia to sell its powerful H200 chip to Chinese buyers if certain conditions are met – including proof of “sufficient” US supply – while sales of its most advanced processors would still be blocked. “China wants them, and other people want them, and we’re going to be making 25% on the sale of those chips,”Trump said at an event on Wednesday. However, uncertainty has grown over how much demand there will be from Chinese companies, as Beijing has reportedly been encouraging tech companies to use homegrown chips. The move marked a significant shift in US export policy for advanced AI chips, which Joe Biden’s administration had heavily restricted over national security concerns about Chinese military applications. Lawmakers on both sides of the political aisle in Congress have criticized the move as a mistake that will help China’s military and economy. Separately, Wednesday’s order directed US trade officials to continue negotiations relating to the imports of semiconductors and chip-making equipment into the United States, as Washington tries to spur domestic manufacturing in the critical sector. The order follows an investigation into imports of chips and chip-making equipment launched last year. The probes were initiated under Section 232 of the Trade Expansion Act, the same legal mechanism that Trump previously used to impose other sector-specific duties. – AFP and funds worth more than 5.7 billion reais (RM4.05 billion). Police displayed firearms, watches and luxury cars that were among the confiscated items. Police said they they were investigating “crimes of criminal organisation, financial fraud, market manipulation, and money laundering”. Banco Master majority shareholder Daniel Vorcaro has been in pre-trial detention since November, when he was arrested as he prepared to board an international flight. At the time, federal police chief Andrei Rodrigues told lawmakers that fraud at the bank could amount to around 12 billion reais. The bank was insured by the Brazilian Deposit Guarantee Fund which estimates it will have to pay out 41 billion reais to 1.6 million investors. – AFP

announce its next decision on interest rates. Markets widely expect policymakers to keep rates unchanged for now, as officials assess the impact of recent back-to-back reductions. The Fed balances between the need for rate cuts to boost the economy as the employment market cools, and the risk of persistent inflation as President Donald Trump’s tariffs work their way through supply chains. Employment was mostly unchanged recently while wages grew moderately, the Fed said Wednesday. But “cost pressures due to tariffs were a consistent theme across all districts” monitored by the central bank. “Several contacts that initially absorbed tariff-related costs were beginning to pass them on to customers as pre-tariff inventories became depleted or as pressures to preserve margins grew more acute,” the Fed said. Even though firms expect price hikes to ease, they anticipate that costs will remain elevated in the near future. – AFP

“Meanwhile, low to moderate income consumers were seen to be increasingly price sensitive and hesitant to spend on nonessential goods and services,” the survey added. The report underscores uneven conditions within the world’s biggest economy – despite resilient GDP growth figures – where higher-income Americans are seeing wealth and salaries rising while those with lower incomes grapple with fewer gains and high costs. Banking conditions were generally stable or improving, the central bank added, although there was some increased demand in credit cards, home equity loans and commercial lending. Overall, the Fed noted that “outlooks for future activity were mildly optimistic with most expecting slight to modest growth in coming months”. The latest report comes around two weeks before the American central bank is due to

WASHINGTON: US consumers in lower income groups are becoming more sensitive to prices when making spending decisions, showing reluctance to fork out for non-essentials, the Federal Reserve said in a report on Wednesday. While consumption saw a boost in recent weeks from the holiday shopping season, spending patterns continued to diverge among income groups, the Fed added in its “beige book” survey of economic conditions. Some parts of US reported that “spending was stronger among higher-income consumers”, who were willing to splurge on luxury goods, travel and other experiences, the Fed said. o They show reluctance to fork out for non-essentials, says Fed report

A person with a hot dog cart sits outside a department store in New York. – AFPPIC

Brazil bank collapse sparks billion dollar asset seizures in fraud probe

Coinbase cannot support crypto bill: CEO WASHINGTON: Coinbase CEO and co-founder Brian Armstrong said on Wednesday the company cannot support a draft legislation US senators introduced earlier this week aimed at creating a regulatory framework for cryptocurrencies.

an erosion of the CFTC’s authority and draft amendments that would “kill rewards on stablecoins”. CFTC did not immediately respond to a Reuters request for comment. Cryptocurrencies need to be treated on a level playing field with other financial services, Armstrong said. “We’d rather have no bill than a bad bill,” the Coinbase CEO said, adding that he is “quite optimistic that we will get to the right outcome with continued effort”. The bill, which could change as senators consider amendments, prohibits crypto companies from paying interest to consumers solely for holding a stablecoin. However, it allows crypto companies to pay rewards or incentives to customers for certain activities, such as sending a payment or participating in a loyalty programme. – Reuters

BRASILIA: Brazilian authorities on Wednesday announced the seizure of over US$1 billion (RM4.05 billion) worth of assets as part of a high-profile fraud probe launched after the collapse of a small private bank. “We may be facing the largest banking fraud in the country’s history,” Finance Minister Fernando Haddad said on Tuesday, as fallout grew from the November 2025 liquidation of Banco Master. Brazil’s Central Bank ordered the shutdown of Banco Master due to a major liquidity crunch and “serious violations” of financial regulations. On Wednesday, police said in a statement they had conducted 42 raids of properties linked to the owner of Banco Master and his entourage in Sao Paulo, Rio de Janeiro and several other states, seizing and blocking assets

The legislation, unveiled on Monday, seeks to define when crypto tokens are securities, commodities or otherwise and would also hand policing of spot crypto markets to the Commodity Futures Trading Commission. Without the backing of Coinbase, it is unclear if the markup of the bill can proceed. The firm donated millions of dollars to political action committees (PACs) aimed at getting pro-crypto candidates elected in 2024, and has been a key stakeholder in the bill negotiations. Armstrong said the bill had “too many issues”, including a de facto ban on tokenised equities,