US president Donald Trump has found a way to legitimise his plan to take a 25% cut of chip firms’ China sales: more tariffs.

There are also additional signs India and the EU could finalise their trade pact imminently as well as more meetings set for Greenland and the US, as Trump continues to eye the territory.

Chip tariffs

Trump announced new 25% tariffs on chips produced by leading US semiconductor manufacturers, Nvidia and AMD.

After giving firms the go-ahead to export some of their most advanced chips to China in exchange for a 25% cut last year, Trump has introduced the tariff as a way of legitimising the payment.

As the chips, like most similar products, are manufactured at the Taiwan Semiconductor Manufacturing Company’s facility and then imported to the US before being exported elsewhere, the US is able to levy extra duties via their initial import.

Speaking to reporters in the Oval Office on Wednesday (14 January) Trump said:

“We’re going to be making 25 per cent on the sale of those chips, basically.

“So we’re allowing them to do it, but the United States is getting 25 per cent of the chips in terms of the dollar value. And I think it’s a very good deal.”

Exports of Nvidia’s H200 chips and AMD’s MI325X were previously prohibited under export controls, and Trump has introduced the new rates using Section 232 tariffs, which also pertain to national security. This means the rates should avoid the legal scrutiny his global tariffs are being subjected to by the Supreme Court.

That decision has yet to be made. The court delivered three rulings on Wednesday, though these did not include the tariff decision.

Reuters reports that it did not announce when the next set of rulings will be issued, meaning that the tariff regime will continue for the immediate future, while its longevity remains uncertain.

EU-India deal?

Negotiations with the EU to secure a trade deal could be completed this month, India’s trade secretary has said.

Reuters reports Rajesh Agrawal said a deal is “very close” after another round of talks were held in New Delhi.

German chancellor Friedrick Merz has said that EU leaders will be travelling to the Indian capital to conclude the deal by the end of January.

You can read more about the negotiation's progress in our European Trade Digest.      

Greenland talks

Uncertainty also continues to surround Greenland, following talks held at the White House yesterday between US, the semiautonomous Danish territory and Denmark.

The discussion hasn’t shifted perspectives on Greenland’s sovereignty, with Danish foreign minister Lars Løkke Rasmussen saying late on Wednesday that “we didn’t manage to change the American position”.

“It’s clear that the president has this wish of conquering Greenland.”

Trump reiterated his view of the territory’s importance to US national security:

“Greenland is very important for the national security, including of Denmark.

“And the problem is there’s not a thing that Denmark can do about it if Russia or China wants to occupy Greenland, but there’s everything we can do.”

He then directly compared the situation to the US’ intervention in Venezuela, extracting the country’s president and taking over its oil industry.

The talks yielded an agreement between the three parties to form a working group designed to find a compromise, with the first meeting set to be held in the next couple of weeks, according to Rasmussen, who said that while there’s still “fundamental disagreement”, it would still be “productive to start discussions at a high level”.

While stating Trump’s claims of Chinese and Russian warships circling the island aren’t true, the Danish foreign minister agreed that there was a need to enhance security in the region.

EU and Nato allies of Greenland including Germany, France, Sweden and Norway, agreed to send resources to the support Arctic security.

As well as its strategic significance within the region, Greenland is rich in many critical minerals needed for advanced manufacturing.

UK GDP boost

Preliminary figures released by the ONS suggest that the UK economy grew 0.3% in November, outperforming economist predictions of 0.1%.

The boost was partially attributed to car manufacturer Jaguar Land Rover resuming production after a cyberattack last year. A 25.5% increase in vehicle manufacturing was recorded in November.

Economists were tentatively optimistic for the UK’s economic performance in the wake of the results, attributing the uptick to an end to uncertainty about the county’s fiscal policy following chancellor Rachel Reeves’ Autumn Budget.

Institute of Chartered Accountants in England and Wales economics director Suren Thiru described the results as “unexpectedly upbeat”, with “easing uncertainty post-Budget likely to have supported growth in December”.

Yesterday in trade

• China’s trade surplus with the US continued to grow, despite tariffs
• The World Bank predicted the global economy would remain resilient in the face of ongoing uncertainty
• UK business and trade secretary Peter Kyle outlined the country’s industrial strategy in a pre-Davos address

You can read those stories here.