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UDN: FedEx’s Worsened China-U.S. Air Routes Dragged Down Its Financial Outlook

United Daily News (UDN), one of the primary Taiwanese news groups, recently reported that FedEx just announced its last quarter’s performance. However, unusually, the quarterly report did not provide full-year financial forecasts. The predicted profits for this quarter are lower than market expectations, indicating that weak demand and uncertainty in global trade are unlikely to ease in the short term. After the financial report was released, FedEx’s stock price plummeted more than five percent.

The global logistics giant explained that the lack of forecast is due to “an uncertain global demand environment.” The company’s China-U.S. routes, which are its most profitable, had “deteriorated sharply” in May. Cargo volumes are expected to remain under pressure. President Trump’s trade policies continue to limit the ability of corporate executives to predict the business outlook. The lack of visibility is particularly challenging for FedEx, whose customers span a wide range of industries, from manufacturing to consumer products.

However, there are signs that the company’s long-running push to cut costs and consolidate its ground and air networks is paying off. FedEx cut $2.2 billion in costs in its most recent fiscal year and expects to save another $1 billion this year.

Source: UDN, June 25, 2025
https://money.udn.com/money/story/5599/8829262

Briefings | | |   US-China Relations

Chinese State Media’s Commentaries on NATO Summit

The NATO summit was held on June 24–25 in The Hague. Chinese Communist Party controlled state media Xinhua News Agency and Huanqiu Times published commentaries.

Xinhua: The New NATO Plan Is Hard for Europe to Digest

The summit appeared largely as a performance of unity designed to appease the U.S. A key outcome was the commitment by NATO members to raise defense spending to 5 percent of GDP by 2035. However, this superficial consensus masks deep internal divisions.

The U.S. aims to maximize its global dominance at minimal cost, while Europe prioritizes security and strategic autonomy. Trump’s double standard – refusing to meet the 5 percent target for the U.S. while demanding other countries do – has caused resentment among European countries, many of whom are hesitant to speak out.

Moreover, the sharp increase in defense spending is expected to primarily benefit the U.S. military-industrial complex. Analysts argue this is more a massive wealth transfer to the U.S. than genuine progress toward European defense independence.

Huanqiu Times: Asia-Pacific Countries Distance Themselves from NATO

Notably, South Korean President Lee Jae-myung, Japanese Prime Minister Shigeru Ishiba, and Australian Prime Minister Anthony Albanese all skipped the summit. NATO’s attempt to extend its influence by labeling China a “challenge” conflicts with its own treaty, which limits its scope to the North Atlantic region and forbids interference in Asia-Pacific affairs. China has repeatedly warned against NATO’s overreach, describing its Asia-Pacific ambitions as blatant geopolitical expansion.

The absence of these Asia-Pacific leaders sends a clear message: they refuse to become pawns in great-power rivalry or endorse an expanding NATO. This may also signal a growing political awakening in the region.

Sources:
1. Xinhua, June 26, 2025
http://www.news.cn/world/20250626/2ec6f042517740d38f80e1232b8259ca/c.html
2. Huanqiu Times, June 26, 2025
https://opinion.huanqiu.com/article/4NFxMsLy2sc

Briefings | | |   Defense/Military Economy/Resources US-China Relations

CNA: Huawei’s Latest Laptops Use Outdated Chip Technology

Taiwan’s primary news agency, Central News Agency (CNA), recently reported that Canadian research firm TechInsights revealed Huawei’s latest laptop, the MateBook Fold, uses legacy chip technology from China’s SMIC. This highlights how U.S. export controls continue to hinder China’s semiconductor industry.

Market expectations had been that Huawei would use SMIC’s latest 5-nanometer N+3 process for the MateBook Fold. However, the Kirin X90 chip inside the laptop still relies on the 7-nanometer N+2 process, first launched by SMIC in August 2023. This same chip, which appeared earlier in Huawei’s Mate 60 Pro smartphone, reportedly caught U.S. export control officials by surprise. Meanwhile, industry leader TSMC plans to begin mass production of 2nm chips later this year – three generations ahead of SMIC’s 7nm technology.

Huawei’s use of older chip technology suggests that SMIC has yet to achieve mass production at the 5nm node. Additionally, the MateBook Fold was launched with Huawei’s own operating system, as Microsoft’s Windows license for Huawei has expired.

Source: CNA, June 24, 2025
https://www.cna.com.tw/news/aopl/202506240126.aspx

Briefings | | |   Information/Technology US-China Relations

Nike and GE Plan to Cut Production Capacity in China to Ease Tariff Impact

Singapore’s leading Chinese-language newspaper Lianhe Zaobao recently reported that Nike’s Chief Financial Officer revealed during an earnings call that about 16 percent of the company’s footwear sold in the United States currently comes from China. Nike plans to reduce this share to single digits by May 2026 by shifting part of its production to other countries. Consumer goods, especially footwear, have been among the sectors hardest hit by the U.S.-China trade dispute. Nike estimates that tariffs could cost the company around $1 billion. However, analysts believe Nike is unlikely to lose significant market share in the U.S., as competitors may also face similar price pressures. Following the earnings call, Nike’s stock rose by 11 percent.

Meanwhile, the Hong Kong Economic Journal reported that GE Appliances plans to invest $490 million to relocate some of its washing machine production from China to the United States. The company will establish a new manufacturing base in Louisville, Kentucky, expected to begin operations in early 2027 and create 800 jobs. The Kentucky state government will provide up to $113.5 million in tax incentives for the project. GE Appliances noted that the relocation plan was considered even before Trump’s tariffs, but the trade policies accelerated the decision. The company also plans to upgrade its Georgia electric furnace to shift some production currently based in Mexico back to the U.S. GE Appliances is owned by China’s Haier Group.

Sources:
(1) Lianhe Zaobao, June 27, 2025
https://www.zaobao.com.sg/news/china/story20250627-6987826
(2) HKEJ, June 27, 2025
https://tinyurl.com/5djnjeu2

Briefings | | |   Economy/Resources US-China Relations

CCP’s Influence Allegedly Behind LA Protests and LA Mayor’s Donor Network

On June 6, 2025, protests against Immigration and Custom Enforcement (ICE) raids on undocumented immigrants erupted in Los Angeles, escalating into riots and spreading to multiple cities. On June 14, the “No Kings Day” protest movement broke out. Reports suggest the Chinese Communist Party (CCP) intelligence and United Front operations may have been involved behind the scenes.

The Daily Caller News Foundation reported that the organization United Chinese Americans (UCA) and its partner, the Asian American Progressive Alliance (AAPA), helped promote the nationwide protests. Several UCA leaders were found to have ties to CCP agencies, including the United Front Work Department and the Ministry of State Security. Elaine Peng, AAPA president and UCA training director, is linked to CCP intelligence networks.

A June 13 U.S. House Committee letter revealed that Neville Singham, an American billionaire now living in Shanghai, has long funded the Party for Socialism and Liberation (PSL), which is allegedly connected to the LA protests. Lawmakers noted Singham’s close ties to the CCP and a secretive funding network with unclear financial flows.

The Daily Caller News Foundation also reported that Los Angeles Mayor Karen Bass received campaign support from Derek Ma, a Chinese-American donor. Derek Ma has long been involved in CCP United Front activities, having served as an overseas committee member of the All-China Federation of Returned Overseas Chinese (ACFROC) and a council member of the China Overseas Friendship Association (COFA). He was photographed with Xi Jinping in 2015 and delivered a speech at the Great Hall of the People in Beijing in 2018. Records show that Derek Ma held fundraising events for Bass, raising over $40,000 for her campaign.

Derek’s son, Adam Ma, later joined the mayor’s office in 2022 as an Asian and LGBTQIA+ community liaison. Adam Ma reportedly continued to participate in events involving the CCP’s Los Angeles consulate while representing Mayor Bass.

Source: Epoch Times, June 22, 2025
https://www.epochtimes.com/gb/25/6/18/n14534246.htm

Briefings | | |   @CS Government/Politics US-China Relations

CNA: Chinese Factories Operated by TSMC, Samsung, and Hynix’s will No Longer Be Exempted from US Technology Restrictions

Primary Taiwanese news agency Central News Agency (CNA) recently reported that, sources familiar with the matter revealed U.S. officials have informed global leading semiconductor companies that the United States plans to cancel exemptions that allow them to use U.S. technology in China.

Jeffrey Kessler, U.S. Undersecretary of Commerce for Industry and Security just notified TSMC, Samsung and Hynix on the decision. Shares of U.S. chip equipment manufacturers (such as Applied Materials) that supply China fell after the news broke.

“Chip manufacturers can still operate in China,” a U.S. Commerce Department spokesman said in a statement. “The new chip enforcement rule is similar to the permit requirements for other semiconductor companies exporting to China.”

Source: CNA, June 21, 2025
https://www.cna.com.tw/news/aopl/202506210004.aspx

Briefings | | |   Information/Technology US-China Relations

Beijing Reversed Its Stance on Fentanyl – Wang Xiaohong Expressed Willingness to Cooperate with the U.S.

Since taking office, Trump identified China’s supply of materials used to produce fentanyl as a key issue and imposed a 20 percent tariff on Chinese goods. China consistently denied involvement and refused to address the problem, claiming it was solely a U.S. issue. Fentanyl has been responsible for over 70,000 American deaths annually.

However, China has recently shifted its stance significantly.

On June 19, China’s State Councilor and Minister of Public Security, Wang Xiaohong, met with U.S. Ambassador to China David Perdue in Beijing and expressed China’s willingness to cooperate with the United States on anti-drug efforts.

According to China’s state-run Xinhua News Agency, Wang stated during the meeting that Beijing is prepared to work with Washington to implement the important consensus reached by the two heads of state. Based on the principles of mutual respect, peaceful coexistence, and win-win cooperation, both sides will carry out practical cooperation in law enforcement areas such as drug control and the repatriation of illegal immigrants, striving to achieve outcomes that benefit the peoples of both countries.

Source: Lianhe Zaobao, June 20, 2025
https://www.zaobao.com.sg/realtime/china/story20250620-6903140

Briefings | | |   US-China Relations

People’s Daily Editorial Downplays U.S.-China Trade Deficit, Blames U.S. Economic Structure

People’s Daily recently published an editorial under its pen name Zhongsheng (a homophone for “China’s Voice”) addressing the trade imbalance between China and the United States. The piece argued that the U.S. trade deficit with China is not as severe as portrayed and is primarily the result of structural issues within the U.S. economy.

“The U.S. trade deficit with China in goods is not only a natural outcome of structural issues within the U.S. economy, but also a result of the two countries’ comparative advantages and the current pattern of international division of labor,” the editorial stated.

The article presented several key arguments:

  • Services Trade: In 2024, the U.S. ran a $27.3 billion services trade surplus with China.
  • Multinational Operations: In 2022, U.S.-invested companies in China reported $490.5 billion in sales, far surpassing the $78.6 billion in sales by Chinese companies in the U.S. – a gap of over $400 billion.
  • Global Supply Chains: A significant portion of Chinese exports to the U.S. includes components from the global production network. However, trade statistics are currently calculated based on gross export value, attributing the full value to China. If measured using value-added methods, the U.S. trade deficit with China would be substantially smaller.
  • Declining Proportion: The share of the U.S. goods trade deficit attributed to China fell from 47.5 percent in 2018 to 24.6 percent in 2024, even as the overall U.S. trade deficit hit a record $1.2 trillion in 2024. This, the editorial argues, highlights that the root cause lies in the internal structure of the U.S. economy, not in China’s trade practices.

Source: People’s Daily, June 10, 2025
http://world.people.com.cn/n1/2025/0610/c1002-40497354.html

Briefings | | |   @CS Economy/Resources US-China Relations