Deploying state aid the big sticking point for PM with VDL?
in Q&A today Chancellor publicly sceptical actually using it
Re “state aid, I’m slightly cautious about Govt ability to sit here & pick precise winners..market better at figuring out than I am sitting in this office”
Could prioritisation of theoretical wider ability to subsidise bust industry, which Sunak inherently sceptical about even if we were flush with cash, but right now not, (esp when we didn’t use powers allowable even under EU laws) lead to tariffs on actually profitable industries?
Also worth recalling that the specific question on the Chancellor’s q&a to which he gave sceptical answer was about what proportion of state aid would be earmarked for the tech sector - exactly what was percolated out as the big plan last month...
So the negotiation win the Govt is going for in state aid, is full sovereignty to use powers they don’t generally show an appetite to use, for which there is not really the funds to use, and for which British govts have not tended to use to full extent EU rules allowed...
Going to be an intriguing Cabinet discussion on this one, if it does remain the fundamental sticking point between WTO tariffs and zero tariffs with EU. Obviously not just about economics but an interesting dilemma...
Also - if it is about pumping state money into the tech sector - that tends to be best done via the military budget... also German kurzarbeit wage subsidy scheme is a helpful backdoor subsidy to boost manf exporters etc. Plenty of ways to achieve state support through backdoor...
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🚨 Mind blowing interview with Turing award-winning Yoshua Bengio for @BBCNewsnight one of the three founding fathers of AI, is now warning:
“The worst-case scenario is human extinction.”
AI isn’t just risky — it could end us.
1/10 🧵
📺
2. 🤖 He warns that today’s most powerful AIs are already learning to lie, cheat, even blackmail —
because we’ve trained them to win.
Bengio reveals AI's "scary behavior" & self-preservation tendencies. #AI #AISafety #Blackmail
📺
👁️ In chilling experiments, AI lied to a human to get its task done, says Bengio
🤖 blackmailing an engineer after reading in an email it was going to be replaced.
♟️ choosing to hack a computer to win a chess game
US customs messaging note quietly slipped out last night shows that smartphones, the number 1 Chinese export to the US by value last year, exempted from the 125% tariff… alongside chips, processors, wafers, lcd panels, LEDs etc…
8517.13.00.00
Smartphones
US has excluded the single biggest Chinese export, and certainly the most high profile finished good from the tariffs, without publicly announcing it…
Avoiding the very public repricing of IPhones etc across Apple stores, but only in the US….
While obviously smartphones/ iPhones being exempted is big news for now…
Here’s full list of exemptions according to Harmonised US tariff codes that I plugged into its database… lots of semiconductor parts, circuits, processors, solid state storage, flat panel touchscreens 👀
Author of Mar A Lago accord concept that US tariff agenda is basically designed to cause negotiated dollar weakening, (now WH chief economist), gave speech yday which basically suggested that reserve status for dollar was a burden which others might need to “write checks” for
turns on its head the famous description of ex French President then fin minister Valéry Giscard d'Estaing the US enjoyed an “exorbitant privilege” with $ reserve status…
Instead Administration appears to believe this is an exorbitant burden for which US should be remunerated.
It’s part of a narrative that seeks to paint new tariffs (accepted without retaliation) as justifiable payment for burden of strong dollar (eg on US manufacturing exports and jobs)… this new mindset is extremely consequential. The tariffs aren’t going.
President just shared a video on Truth Social saying “Trump
Is purposely CRASHING the market” in order to lower US Treasury yields and the dollar.
The Mar A Lago theory I wrote about two months ago, written by his chief adviser that said tariff chaos would lead to $ deal
Here’s the video…
Dow down another 1000 points…
Obviously RT are not endorsements but why is the President choosing to share this stuff? And if you are another country seeing this, how do you negotiate with this?
👀 From Navarro’s numbers auto tariffs will raise $100bn a year (on $240bn imports) can replicate this calculation by assuming all imports hit by 25% and then US manufactured cars taxed about half that to reflect foreign content…
No exemptions tho…
…that assumes no behavioural change.
Note: will be a lot of behavioural change in supply and demand.
also says tariffs in general will raise $600bn a year of $6 trillion over a decade.
As total goods imports are only $3 trillion a year… “Liberation Day” equivalent of 20% universal tariff??
👀
Indeed Washington Posts chief Econ writer reports President instincts are to go bigger on “Liberation Day” … are we underpricing the return of the universal tariff? It would explain the otherwise inexplicable Navarro numbers this morning,..