Persistent Tensions Between Global Powers: U.S.–China Trade Disruptions

In a complex global landscape, economic warnings intersect with bold moves in digital currencies
and rising technological escalation

reflecting ongoing geopolitical and trade tensions despite attempts at de-escalation.

Contents

Fitch
El Salvador
Washington

Fitch

U.S.–China Trade De-escalation Doesn’t Signal “Normalization” as Risks Persist

Credit rating agency Fitch has warned that the recent temporary easing in trade relations between the United States
and China does not represent a full normalization of trade interactions between the two countries,
emphasizing that the lack of a lasting agreement keeps uncertainty high.

In its report issued Tuesday, Fitch stated that the unclear future of tariffs,
along with the cumulative effects of previously imposed duties,
remain among the top pressures on macroeconomic outlooks, both in the U.S. and globally.

The agency pointed out that the 0.3% contraction in U.S. GDP during the first quarter of 2025 was partially driven
by companies rushing to import goods ahead of a new round of tariffs.

While recent tariff reductions may help ease direct economic pressures,
Fitch believes that global trade and supply chains remain exposed to major risks
limiting the impact of any de-escalation steps unless crowned with a comprehensive and
sustainable agreement between the world’s two largest economies.

El Salvador

Continues Buying Bitcoin Despite IMF Pressure

Despite its commitments under a loan agreement with the International Monetary Fund (IMF),
El Salvador’s government continues to boost its bitcoin reserves—a move reflecting President Nayib
Bukele’s commitment to digital currency as part of the country’s financial strategy.

The government’s “Bitcoin Office” revealed that the country purchased 6 additional bitcoins last week,
raising total government holdings to 6,175.18 BTC—worth over $639 million.
Over the past 30 days, El Salvador bought 29 bitcoins at a cost exceeding $3 million.

These purchases come in spite of the $1.4 billion loan agreement signed with the IMF last December,
which included terms prohibiting the use of public funds to buy bitcoin. In January,
the national parliament repealed the law recognizing bitcoin as legal tender
an effort to ease international financial concerns.

However, Bukele—well-known for his strong advocacy of cryptocurrencies—has ignored the IMF’s demands to halt bitcoin purchases,
insisting on his vision of integrating bitcoin into an economic strategy aimed at financial independence and boosting tech-sector investment.

Washington

Escalates Pressure: Global Warning Against Using Huawei AI Chips

The United States has intensified its pressure on China over artificial intelligence
by tightening export controls on technologies used in developing AI applications.
It issued a global warning to companies against using Huawei chips without a license—under threat of criminal penalties.

The Bureau of Industry and Security at the U.S. Department of Commerce confirmed
that using Huawei’s “Ascend” chips—advanced semiconductors used in AI—violates export control laws due to
their likely incorporation of American technology or manufacturing via U.S. equipment.

This warning was backed by reports in the Financial Times,
which indicated that three of Huawei’s key chips are now officially subject to U.S. export restrictions
—putting global users of these chips at legal risk unless they obtain prior licensing from Washington.

These developments come as Huawei has started distributing its own domestic AI systems to clients in China,
claiming performance superior to some U.S.-made Nvidia chips in terms of computing power and memory.
The U.S. views this as a direct challenge to Western dominance in the AI sector.

Persistent Tensions Between Global Powers: U.S.–China Trade Disruptions

Persistent Tensions Between Global Powers

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