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Good afternoon, friends, and welcome to the end of a condensed workweek. Today’s issue takes a look at the future of how manufacturing auto parts will be taxed, Trump’s softening stances, and cashflow guidelines set by industry titan Warren Buffett.
THE BIG STORY TODAY-
Gov’t mulls scrapping development fees on imported auto parts: The Finance Ministry is looking into exempting imported vehicle components used in local assembly from the 3% state development fee, and instead collecting the fees upon commercial sales and during the renewal of licenses, a government source told EnterpriseAM. The move would come as part of government efforts to localize the auto industry, the source said.
This isn’t the first industry that the gov’t exempts from the development fee: The Finance Ministry implemented a similar exemption from development fees for imported mobile phone components back in March 2023 — a step that has borne fruit over the years, with local manufacturers having doubled their combined output over the past three months to 110k phones, a senior government source told EnterpriseAM recently.
THE BIG STORY ABROAD
The foreign press is still honing in on Trump’s softened tone on Powell: US President Donald Trump said he has “no intention of firing” Federal Reserve Chair Jerome Powell after launching a pressure campaign on Powell in recent days that rattled global markets. “I would like to see him be a little more active in terms of his idea to lower interest rates,” he told reporters in the Oval Office on Tuesday. The statement marks a stark shift in tone from Trump, who last week said that “Powell’s termination cannot come fast enough” and lambasted him repeatedly in recent days for being “too late” in cutting interest rates.
Trump also dialed back the hardline rhetoric on China, saying he will be “very nice” in any trade talks with the country and that tariffs could be lowered if an agreement is reached. “We’re going to be very nice and they’re going to be very nice, and we’ll see what happens,” Trump said on Tuesday in Washington, adding that tariffs “will come down substantially but it won’t be zero.”
Markets welcomed the shift: Futures tracking the S&P 500 climbed 2.5% on Wednesday, the USD index gained 0.3%, and US government bonds rebounded. Meanwhile, Chinese stocks listed in Hong Kong closed 2.1% up on Tuesday, boosted by hopes that tensions with the US might ease.
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☀️ TOMORROW’S WEATHER- Tomorrow’s weather continues the downturn after yesterday’s sudden spike, with the mercury projected to peak at 28°C throughout the day and dip to 17°C later at night, according to our favorite weather app.
