Hello and welcome to White House Watch! Today, let’s dig into:
-
Selling chips to China
-
Putin in Alaska
-
How Pakistan wooed Trump
President Donald Trump said yesterday that he might allow Nvidia to sell a more advanced artificial intelligence chip in China, after confirming he had “negotiated a little deal” to give the US a share of the chipmaker’s revenues from the country.
As part of the unprecedented agreement, which the FT revealed on Sunday, the US would take 15 per cent of Nvidia’s revenue on Chinese sales of its H20 processor, which the company introduced to comply with Biden-era controls on AI semiconductors. AMD, another chipmaker, would also provide the same percentage from revenues for its MI308.
The H20 is based on Nvidia’s older architecture, but Trump said yesterday that he planned to discuss a new deal with chief executive Jensen Huang to allow the company to sell chips based on its latest Blackwell models to China. That could unlock billions of dollars in sales for Nvidia, which has been lobbying for years for greater access to the Chinese market despite Washington’s national security concerns.
The deal — which sparked surprise and outrage among political opponents — comes as US and Chinese officials continue trade negotiations that the president hopes will lead to a summit with China’s leader Xi Jinping.
“Beijing must be gloating to see Washington turn export licences into revenue streams,” said Liza Tobin, a China expert who served on the National Security Council in Trump’s first administration, and is a senior fellow at the Jamestown Foundation.
John Moolenaar, the Republican head of the House China committee, said: “Export controls are a frontline defence in protecting our national security, and we should not set a precedent that incentivises the government to grant licences to sell China technology that will enhance its AI capabilities.”
People familiar with the situation said that some national security officials within the administration were even considering resigning over signals that Trump would allow China to obtain advanced technology from the US.
The latest headlines
-
Trump has extended a trade war truce with China for another 90 days, two US officials have said, just hours before his deadline today to raise tariffs.
-
EJ Antoni, a Trump ally from the rightwing Heritage Foundation, will head the Bureau of Labor Statistics, after the president fired the former commissioner.
-
European leaders are urging Washington to ratchet up sanctions pressure on Russia ahead of Trump’s meeting with Vladimir Putin in Alaska on Friday.
-
Here are some standout moments from the surreal history of Donald Trump and Vladimir Putin’s private meetings.
-
Trump deployed the National Guard in Washington and took control of the city’s police force over what he called a “public safety emergency.”
-
Small businesses are increasing their prices in response to tariffs — an early sign of the inflation storm coming for US consumers. [Free to read]
What we’re hearing
Many in Pakistan assumed that relations with Washington were heading for the rocks under the new administration. In his first term, Trump had accused the country of offering the US “nothing but lies and deceit,” while striking a friendly bond with rival India’s Prime Minister Narendra Modi.
This year, however, US ties with Islamabad appear to be blossoming, while New Delhi has faced both scorn and punitive tariffs from Trump.
That turnaround is partly thanks to a charm offensive concocted by Pakistan’s senior generals. Leaders in Islamabad leveraged counterterrorism co-operation, outreach to business figures close to Trump, and deals covering energy, critical minerals and cryptocurrencies — all accompanied by flattery for the White House.
“Pakistan has very successfully understood how to engage with such an unconventional president,” said Michael Kugelman, a non-resident senior fellow at the Asia Pacific Foundation of Canada.
In particular Asim Munir, Pakistan’s chief of army staff, has been essential to the country’s strategy. Munir has been welcomed by the heart of the US establishment — sharing a two-hour private lunch with Trump in June — and has worked to position Pakistan as a trusted back channel between the US and its adversaries Iran and China.
“Pakistan is a rare country that is friends with China, Iran, the Gulf states, to a lesser extent Russia, and now, again, the US,” said Marvin Weinbaum, a senior fellow at the Middle East Institute in Washington. “The US sees Munir as someone who can play a useful strategic role.”
But Pakistani officials and analysts warn that Trump could still turn on Islamabad, especially if he tries to patch things up with New Delhi.
Shahid Khaqan Abbasi, a former prime minister of Pakistan, said his country must “be wary” of the administration’s volatility. “Modi was once the good guy, now he’s being beaten up. Zelenskyy got a public berating,” he said. “Pakistan needs to protect both its interests and its dignity.”
Viewpoints
-
Europe need to humour Trump, while also keeping sight of a strategic vision to secure the future of Ukraine, writes Gideon Rachman.
-
Silicon Valley investor Michael Moritz says Intel must stand up to Trump’s “vindictive” attacks on chief executive Lip-Bu Tan.
-
Economic sanctions can be just as deadly as wars, writes Francisco Rodríguez, a senior research fellow at CEPR.
-
American Eagle may get a sales bump from its brush with the culture war, but investors shouldn’t hope for a durable boost to the brand’s struggling stock, writes Pan Yuk in Lex. [Available for Premium subscribers]