Investors will be keeping a close watch on chip stocks following U.S. President Donald Trump’s vow to impose 100% tariffs on imported semiconductors and chips, unless they are made by companies “building in the United States.”
Japan’s benchmark Nikkei 225 was set to open lower, with the futures contract in Chicago at 40,785 while its counterpart in Osaka last traded at 40,790, against the index’s last close of 40,794.86.
Futures for Hong Kong’s Hang Seng index stood at 24,903, pointing to a weaker open compared with the HSI’s Wednesday close of 24,910.63.
Australia’s S&P/ASX 200 was set to start the day lower with futures tied to the benchmark at 8,779, compared with its last close of 8,843.70.
— Amala Balakrishner
Trump calls for 100% tariff on semiconductors and chips
President Donald Trump said late Wednesday that he would slap a 100% duty on imports of semiconductors and chips – with an exception for companies that are “building in the United States.”
“We’re going to be putting a very large tariff on chips and semiconductors,” he said, speaking in the Oval Office on Wednesday afternoon.
“But the good news for companies like Apple is if you’re building in the United States or have committed to build, without question, committed to build in the United States, there will be no charge,” Trump added.
Shares of Apple advanced 3% in extended trading, fresh off a 5% gain in the regular session.
Apple shares in the past day
–Kevin Breuninger, Darla Mercado
U.S. stock futures open little changed Wednesday evening
Stocks close higher Wednesday
All the three major averages finished with gains on Wednesday.
The S&P 500 advanced 0.73% to finish at 6,345.06, while the Nasdaq Composite jumped 1.21%, closing at 21,169.42. The Dow Jones Industrial Average also rose 81.38 points, or 0.18%, to end the day at 44,193.12.
Donald Trump said he would impose a 100% tariff on computer chips, likely raising the cost of electronics, autos, household appliances and other goods deemed essential for the digital age.
“We’ll be putting a tariff on of approximately 100% on chips and semiconductors,” Trump said in the Oval Office while meeting with Apple CEO Tim Cook. “But if you’re building in the United States of America, there’s no charge.”
The Republican president said companies that make computer chips in the US would be spared the import tax. During the Covid-19 pandemic, a shortage of computer chips increased the price of autos and contributed to an overall uptick in inflation.
Inquiries sent to chip makers Nvidia and Intel were not immediately answered.
Demand for computer chips has been climbing worldwide, with sales increasing 19.6% in the year-ended in June, according to the World Semiconductor Trade Statistics organization.
Trump’s tariff threats mark a significant break from existing plans to revive computer chip production in the United States. He is choosing an approach that favors the proverbial stick over carrots in order to incentivize more production. Essentially, the president is betting that higher chip costs would force most companies to open factories domestically, despite the risk that tariffs could squeeze corporate profits and push up prices for mobile phones, TVs and refrigerators.
By contrast, the bipartisan Chips and Science Act signed into law in 2022 by Joe Biden provided more than $50bn to support new computer chip plants, fund research and train workers for the industry. The mix of funding support, tax credits and other financial incentives were meant to draw in private investment, a strategy that Trump has vocally opposed.
Solvay’s rare earths processing facility in western France is one of only two in Europe
For almost 80 years rare earth metals have been pumped out of this industrial plant in La Rochelle on France’s west coast.
But as the materials become more and more crucial to the global economy, chemicals firm Solvay is expanding its processing plant next to the glistening Atlantic Ocean to meet surging demand across Europe.
This group of 17 metals are essential to huge amounts of modern technology such as smartphones, electric vehicles and wind turbines and MRI scanners.
However, around 70% of rare earths mining, and 90% of refining, happens in China, as a result of years of support from the Chinese government.
Europe, like many other parts of the world, is trying to reduce its dependence on importing these key metals from China. The future of Solvay’s plant will be critical to those ambitions.
“This is a market that is growing fast, and, also, there is a greater demand for shorter supply chains,” says Solvay’s CEO Philippe Kehren.
The Covid pandemic and the war in Ukraine have made companies and politicians try to remove some of the vulnerabilities in their supply chains.
“When you have a material that is coming almost 100% from one specific location, if you are dependent on this, you want to diversify your sourcing. This is what we can offer,” explains the boss of the Belgian chemicals giant.
That is why the EU’s Critical Raw Materials Act came into force last year. It sets targets for reducing dependence on imports for the extraction, processing and recycling of the most important substances by 2030.
Europe only has two rare earth processing facilities, one in Estonia and this one in western France. It is the only plant outside of China that can process all 17 different rare earths.
The increased investment in the facility comes as it is moving away from focusing on supplying rare earths for catalytic convertors, to instead focus on soaring demand for the magnets that are essential to electric car batteries, advanced electronics and defence systems.
For now the focus is on recycling rare earths that are already in Europe. “We think that we can probably produce 30% of the rare earths needed by Europe just by recycling end of life motors and other equipment,” says Mr Kehren.
As demand continues to grow that will change, and more virgin material will be needed from countries such as Brazil, Canada and Australia.
BBC / Jonathan Josephs
Solvay CEO, Philippe Kehren, who is cutting the ribbon, says the facility aims to provide 30% of Europe’s rare earths by 2030
There are no operational rare earth mines in Europe. Projects in Norway and Sweden are amongst the most advanced, but its likely to be another decade before they are ready.
“I think it’s absolutely necessary to have our own mines, not necessarily a lot of them, because we can have a mix, but it’s important to have our own sourcing,” says Mr Kehren.
It is a complex process to turn those materials into the powders that are the end product of this plant.
It requires approximately 1,500 processes, and given the unique capabilities of this facility, outsiders are rarely allowed in. This is due to concerns about rivals potentially gaining some of the knowledge that is currently otherwise concentrated in China.
However we’ve been granted special access to one of the separation rooms that are a vital part of the closely-guarded know-how built up since this plant started operating in 1948.
“The objective of the liquid separation unit will be to purify cerium on one side, lanthanum on the other side,” explains production manager Florian Gouneau as we walk up a flight of metal stairs.
“It’s basically like if you have a multi fruit juice with orange juice, apple juice, pineapple juice, the objective of the liquid separation unit will be to separate apple juice on one side, orange juice on the other side, and so on.”
The room itself is about the size of a football pitch, and home to row after row of huge metal vats within which chemical reactions force the different rare earths apart.
This 40-hectare site employs more than 300 people. A vast collection of industrial buildings are joined together by an array of metal pipes moving substances through the processes.
Significant amounts of chemicals are stored in cylindrical tanks, and give the facility a distinct smell that is similar to a freshly-cleaned hospital ward.
I ask Mr Gouneau if he’s used to it after working here for three years. “What smell?” he jokingly replies.
BBC / Jonathan Josephs
Vials demonstrate how the rare earths neodymium and praseodymium are separated
The site is also distinctly noisy and warm as vents continually hum. They expel hot air into an atmosphere that is also punctuated by seagulls unaware that they have a unique view of one of the most important frontlines in the global economy.
The French government is supporting this facility with about €20m ($23m; £17.4m) in tax credits.
“Having a dependency on a single source – it is dangerous because you cannot know what will happen to this source for various reasons,” says Benjamin Gallezot, who is President Macron’s adviser on strategic minerals and metals.
“It can be a geopolitical reason, but it can also be, you know, natural disaster or whatever.”
In the blazing sun he won’t be drawn on the impact of China trying to restrict access to its rare earths exports, a subject at the heart of continuing US China trade talks.
But Mr Gallezot does say: “I think economic cooperation is clearly more powerful than just only pure competition.”
BBC / Tracey Langford
Rare earth metals are sent to manufacturers as sacks of powder after a lengthy purification process
The European Parliament wants the European Commission to do more to reduce that dependence on Chinese rare earths. It says Beijing’s controls are “unjustified” and “intended to be coercive”.
On a recent visit to Germany, China’s foreign minister Wang Yi said it was his country’s “sovereign right”, as well as being “common practice”, to control exports of goods that have both commercial as well as military uses.
That stance explains why securing access to raw materials has been at the heart of recent EU trade deals, such as the one it signed with Argentina, Brazil, Paraguay and Uruguay last year.
Western firms in the rare earths sector say they need more government support if they are going to catch-up with their Chinese rivals.
Rafael Moreno, the CEO of Australia’s Viridis Mining, says this backing, both regulatory and financial, “is the key right now”. His business is developing a vast rare earths mine in Brazil, which hopes to provide as much as 5% of the world’s rare earths.
This huge kiln turns liquids into solids as part of the process to separate rare earths
One reason China has forged ahead of the rest of the world regarding rare earths is that it has been more willing to handle the radioactive pollution that can be caused by the mining and processing.
Solvay also has rare earth operations in China, and Mr Kehren says “there are solutions to do it in a very responsible way without polluting”. He adds: “It costs a bit of money, so you need to be ready to pay a little bit more.”
Pricing is key to the future of the expanded La Rochelle plant, he says. He needs his customers, who supply carmakers and big tech firms, to commit to buying certain volumes of rare earths at certain prices.
The EU has written its targets for lowering imports into law, but he wants to see how they make them happen. “Are there going to be [financial] incentives, for example, for the different players in this value chain to source rare earth elements from Europe?”
Doing so would, he says, be good for the continent’s economy.
UK interest rates are widely expected to be cut on Thursday, taking the cost of borrowing to its lowest level for more than two years.
Financial markets predict that the Bank of England will reduce interest rates to 4% from 4.25% in its fifth cut since last August, taking it to the lowest since March 2023.
A lower base rate can reduce monthly mortgage costs for some homeowners but it also means a smaller return for savers.
The Bank of England will also publish its forecasts for an economy that failed to grow in April and May – potentially creating a yawning spending gap which the government could choose to fill by announcing tax rises in the Autumn Budget.
Next week, the Office for National Statistics will release data on how the UK economy performed between April and June.
It grew by 0.7% in the first three months of the year.
If the Bank does trim rates, repayments on an average standard variable rate mortgage of £250,000 over 25 years will fall by £40 per month, according to Moneyfacts.
But for savers, the average return rate would fall from 3.9% in August last year to 3.5%, the financial data firm said.
“Savings rates are getting worse and any base rate reductions will spell further misery for savers,” said Rachel Springall, finance expert at Moneyfacts.
Inflation
Interest rates are expected to be cut despite inflation – which measures the pace of price rises – climbing above the Bank of England’s 2% target.
In the year to June, inflation rose to 3.6% due in part to the higher cost of food and clothing as well as air and rail travel.
However, there are signs that the UK employment market is cooling which could weigh on inflation.
Recent figures show that the number of people on payrolls is falling, vacancies are lower and the jobless rate has ticked higher.
Meanwhile, annual growth in average regular earnings, excluding bonuses, slowed to 5% between March and May.
Employers are facing higher costs, including an increase in National Insurance Contributions and the national minimum wage.
We will bring you live reporting from the Bank when we get the decision at 1200 along with expert analysis on what it means for you and your money.
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A government-funded program to test the true performance of vehicles has found the driving range of five popular electric cars is between 5% and 23% lower than results from laboratory testing.
The Australian Automobile Association tested vehicles from Tesla, BYD, Kia and Smart – the first EVs to be put through its four-year, federally funded Real World Testing Program to give consumers more accurate information on vehicle performance.
The extended range variant of the BYD Atto3 had the largest discrepancy, according to the AAA, with a real-world range of 369km, 23% lower than the 480km achieved in laboratory testing. The Smart #3 had the lowest, with only a 5% difference.
The Tesla Model 3 had a real-world range 14% lower than the lab test. Tesla’s Model Y and the Kia EV6 both had a real world range 8% lower.
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Despite showing a gap between lab and real-world results, the AAA and electric vehicle industry representatives said the results should reduce range anxiety among consumers looking to buy an EV.
The Electric Vehicle Council industry body’s head of legal, policy and advocacy, Aman Gaur, said the AAA’s results should “give confidence that EVs have more than enough range for everyday Australians”.
“The average Australian drives 33km per day. This means that an EV with a range of 350km can be driven for more than 10 days before needing to be recharged,” he said.
The results come after the AAA released a summary last month of tests on 114 petrol, diesel and hybrid vehicles that showed 77% used more fuel than advertised. One in five also broke noxious emissions that were advertised from lab tests.
Carmakers advertise the results of government-mandated laboratory tests on emissions, fuel efficiency and, in the case of EVs, their energy consumption and range with a fully charged battery. The government’s Green Vehicle Guide lists the results for all vehicles.
Tesla Model 3 had a real-world range 14% lower than the lab test. Photograph: Australian Automobile Association
The AAA’s managing director, Michael Bradley, said the Real World Testing Program had found consumers couldn’t always rely on the laboratory tests as an indicator of real-world performance.
“As more EVs enter our market, our testing will help consumers understand which new market entrants measure up on battery range,” he said.
Vehicles tested in the AAA program are taken on a 93km circuit of urban, rural and highway roads around Geelong in Victoria using protocols based on European regulations. For electric vehicles, the program also measures how much electricity is needed to run the vehicle.
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A table showing results of AAA testing of the range of five popular electric vehiclesResults of the first five EVs to go through the Australian Automobile’s Real World Testing Program showed the vehicles range in the lab was higher than in real-world conditions.
Gaur from the EVC said laboratory tests were in controlled conditions while real-world driving “throws in all sorts of variables: traffic flows, hills, rough roads, weather, extra passenger or luggage weight, and the unique driving styles of motorists.”
He added: “Given the unpredictable nature of driving, it’s inherently challenging for manufacturers to provide real-world estimates. Electric vehicle manufacturers are following the rules and advertising the test results that are required by law.”
John Kananghinis, a spokesperson for LSH Auto, the importer and retailer of Smart EVs in Australia, said it was inevitable the “stringent testing criteria of the AAA” would give different results than in a laboratory.
“To achieve such a low 5% variation is, we consider, a testament to the leading battery and overall EV technology that underpins the smart brand,” he said.
“We thank AAA for the work they undertook to give consumers a real-world view of the performance of EVs that, hopefully, further alleviates any residual range anxiety and helps to act as incentive to experience the future of urban motoring.”
Battery and plug-in hybrid cars accounted for 12% of new car sales in the first half of 2025, up from 9.6% for the same period last year, EVC data shows.
Guardian Australia has also contacted Tesla, BYD and Kia for comment.
DETROIT/SEOUL, August 6, 2025 – Hyundai Motor Company and General Motors announced plans for their first five co-developed vehicles, marking a significant milestone in their previously announced strategic collaboration.
The two companies will co-develop four vehicles for the Central and South American market, including a compact SUV, car and pick-up, as well as a mid-size pick-up, all with the flexibility to use either internal combustion or hybrid propulsion systems. Hyundai and GM also will co-develop an electric commercial van for North America.
Hyundai and GM expect sales of the co-developed vehicles to be more than 800,000 vehicles a year once production is fully scaled.
GM will lead the development of the mid-size truck platform, while Hyundai will lead on the compact vehicle and electric van.
The two companies will share common platforms and develop unique interiors and exteriors consistent with their respective brands.
Design and engineering work is underway on the new vehicles for the Central and South American markets, which will launch in 2028. The electric commercial van will be manufactured in the U.S. as early as 2028.
“Hyundai’s strategic collaboration with GM will help us continue to deliver value and choice to our customers across multiple vehicle segments and markets,” said José Muñoz, President and CEO of Hyundai Motor Company. “Our combined scale in North and South America helps us to more efficiently provide our customers more of what they want – beautifully designed, high-quality, safety focused vehicles with technology they appreciate.”
Shilpan Amin, GM senior VP and global chief procurement and supply chain officer, said the vehicles announced today were targeted at the largest segments in the Central and South American markets, as well as the commercial segment in North America.
“By partnering together, GM and Hyundai will bring more choice to our customers faster, and at lower cost,” Amin said. “These first co-developed vehicles clearly demonstrate how GM and Hyundai will leverage our complementary strengths and combined scale.”
The two companies also plan joint sourcing initiatives in North and South America for materials, transport, and logistics. Further areas for potential joint operations include raw materials, components, and complex systems.
Hyundai Motor and GM also agreed to explore collaboration on low-carbon emissions steel as part of their commitment to sustainable manufacturing.
Following the signing of a framework agreement in September 2024, the companies continue to assess additional joint vehicle development programs for global markets, as well as collaboration opportunities across propulsion systems, including internal combustion engines, hybrid, battery electric, and hydrogen fuel cell technologies.
Apple said Wednesday that it would expand its planned investment in the United States as it faces pressure from President Donald Trump to shift its supply chain to American soil.
The splashy announcement came hours before Trump’s wave of country-specific tariffs were set to go into effect. The president’s levy barrage isn’t over yet. Trump has warned he will be announcing tariffs on semiconductors, which could affect iPhones, iPads, MacBooks and other popular Apple products.
Speaking alongside Apple CEO Tim Cook in the Oval Office on Wednesday, Trump said his administration is “going to be putting a very large tariff on chips and semiconductors,” but for any company “building in the United States of America, there’s no charge.” Trump said the semiconductor tariff would be approximately 100% and apply to all chips imported into the country.
Apple also said it will manufacture the glass covers on all iPhones and Apple Watch devices sold worldwide in the United States. Apple said manufacturing firm Corning will produce that glass at its Harrodsburg, Kentucky, plant under a $2.5 billion commitment.
“Apple will massively increase spending on its domestic supply chain for the iPhone, and will build the largest and most sophisticated smart glass production line in the world,” Trump said.
That plant has been producing glass products for over 60 years, according to a post on Corning’s website. In 2021, Apple said Corning already supplied glass for iPhone, Apple Watch and iPad. Apple also said at the time that “every generation of iPhone glass has been made” at the plant named in Wednesday’s announcement.
Corning will dedicate the entire facility to manufacturing for Apple, and that would boost the glass maker’s manufacturing and engineering workforce in Kentucky by 50%, the tech giant said in a news release.
“I’m glad to be here with you today, and I’m very proud to say that today, we’re committing an additional $100 billion to the United States,” Cook told Trump during their White House event.
Cook also said the company has “already signed new agreements with 10 companies across America” to do additional manufacturing.
“Second, we’re committed to buying American made, advanced rare earth magnets,” he added, noting an agreement announced in July.
Apple supplier Applied Materials also announced that it would invest $200 million in an Arizona factory that manufactures chip-making equipment. That equipment will be used by Texas Instruments, another Apple supplier, to make some semiconductors used in Apple’s products.
Apple said the glass manufacturing announcement was part of a $600 billion commitment to bring parts of its supply chains to the U.S. Previously, the company had vowed to invest $500 billion over the next four years.
“Apple will also build a 250,000-square-foot server manufacturing facility in Houston, and invest billions of dollars to construct data centers across the country from North Carolina to Iowa to Oregon,” Trump also said.
Apple had previously announced the Houston server plant, which is estimated to open in 2026.
However, Wednesday’s announcement doesn’t mean manufacturing or assembly of any of the company’s major products, such as the iPhone, iPad or MacBook, will come to the States. Cook told reporters that final assembly of iPhones wouldn’t happen in the U.S. “for a while,” even though “there’s a lot” of pieces made in the U.S. Most iPhones are manufactured in India and China.
Most of Apple’s most popular products are currently exempt from tariffs while the Commerce Department conducts a so-called Section 232 investigation to determine the national security impact of importing those products and their parts. Despite the exemptions, Apple took an $800 million hit in the last quarter from tariffs and predicted it will take another $1.5 billion hit in the next three months.
In a May social media post, Trump said: “I have long ago informed Tim Cook of Apple that I expect their iPhone’s that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else.”
Trump on Wednesday conceded that some recent factory announcements may take a number of years to materialize.
“So I don’t know when it shows up, but there are a lot of factories and a lot of plants that are either under construction or soon we’ll be starting construction,” he said. “So can’t tell you exactly when, but I want to be around in about a year from now and two years from now, because we’re going to see an explosion, I think.”
Apple’s investment pledge bears some similarities to recent announcements from the president. OpenAI, Oracle and Japan’s Softbank collectively pledged $500 billion to invest in building out data centers across the country to power artificial intelligence applications.
But months after being announced, the plans reportedly hit some snags. The three firms said they would “immediately” begin investing but now the plans call for just one small data center in Ohio by the end of the year.
A trade agreement between the Trump administration and the European Union included what they said would be $600 billion of investments in the United States and $750 billion of energy purchases.
“They gave me $600 billion, and that’s a gift,” Trump said on CNBC Tuesday. “They gave us $600 billion that we can invest in anything we want.”
However, the E.U. said in a statement that European companies have only “expressed interest in investing at least $600 billion.” The E.U. does not have any mechanism in place to incentivize those investments. Similarly, the E.U. has said $750 billion is only a projection of potential energy purchases over the next three years.
BBC
BBC / Jonathan Josephs
BBC / Jonathan Josephs
BBC / Tracey Langford
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