One of the defining features of the past few years has been the continued rise of the US tech giants. In 2025, however, momentum in innovation appears to have started to shift towards the other side of the Pacific. Chinese technology firms, long viewed as playing catch-up, are now emerging as contenders in the global AI race. Leading this surge is DeepSeek, a Chinese startup that, on 24 January 2025, unveiled its R1 large-language model — reportedly developed at a fraction of the cost of similar models from US counterparts. Despite its modest budget, R1 is said to perform competitively,

When it took office, the Trump administration correctly perceived that there was an imbalance in the trading relationship between the US and China. The bilateral trade deficit was not the issue — such deficits exist between many pairs of countries, and usually reflect their relative appetites for saving and the underlying patterns of comparative advantage that each partner enjoys. A bilateral deficit, no matter how large, is not in itself evidence of imbalance in the relationship. Rather, the evidence arises from two sources: first, the tariff regime implemented by China on imports from the US; and second, the net trade