Zerohedge

Many Chinese exports bound for the U.S. have been rerouted to Canada to skirt tariffs as the trade war continues to escalate between the U.S. and many of its international partners, Truenorth wire reports.

This means that, just like Europe which is facing a deflationary tsunami as Chinese dumping is unleashed on its now largest trading partner, Canadian consumers will soon have an abundance of discount goods as warehouse storage reaches its capacity.

As much as 50% of consignments from China were diverted to Canada in mid-April as many industries look to stockpile their inventory north of the border instead of in the US. 

Third-party sellers for companies such as Amazon and Walmart have also begun to hoard goods in Canada so that their items may be held in a country where they won’t face any immediate payment of duties.

The long term strategy of these companies is to hope that they will outlast the Trump administration’s tariffs, some of which are currently as high as 145%, while warehousing their products just north of the world’s largest source of demand for products and services: the US consumer.

The US has long been the world’s largest consumer market, taking in roughly 15% of global imports last year. This was largely due to its previously low tariffs, which averaged around 3.3%, the lowest among all developed nations.  That, however, is now over.

One year ago, realizing that China would quietly decimate its own domestic producers, Canada slapped hefty tariffs on imports of Chinese electric vehicles, steel and aluminum, positioning itself with allies including the U.S. to protect domestic manufacturing. Then-finance minister Chrystia Freeland unveiled a range of measures she said are aimed at leveling the playing field for Canada’s EV industry and steel and aluminum producers to protect them from unfair competition from Chinese companies.

More recently, in late March, China retaliated by imposing 100% tariffs on Canadian agircultural products, including rapeseed oil, oil cakes, and peas. Canada is among the world’s top producers of canola — a rapeseed crop that is used to make cooking oil, animal feed and biodiesel fuel — and China has historically been one of its largest customers.

“New tariffs from China on Canadian canola oil and meal will have a devastating impact on canola farmers and the broader value chain at a time of increased trade and geopolitical uncertainty,” said Chris Davison, President of the Canola Council of Canada. “We urge the federal government to immediately engage with China, with a view to resolving this issue,” he said.

While the jury is still out on how Canada’s EV industry is doing, it is certain that unless Ottawa imposes similar tariffs on all other imports from China, its local manufacturing base will be decimate in the coming weeks as China unleashes a historic dumping wave in the Canadian market, sparking all-out deflation.

Separately, China is now importing record amounts of Canadian crude oil after cutting its purchases of U.S. oil by nearly 90%. The Vancouver port saw an unprecedented 7.3 million barrels shipped to China in March and that number is only likely to grow.

While China still primarily imports oil from the Middle East and Russia, Canadian oil provides a source of relatively cheap crude that is high in sulfur, which can be refined using some of China’s most-advanced equipment.

By Peter Tchir of Academy Securities

U.S. stocks finished the week up around 3% (which was in line with markets globally). 10-year Treasury yields finished 7 bps higher, while the 2-year Treasury gyrated from 3.75% to 3.6% and all the way back to 3.83% to finish the week. Much of the move is because we had some clarity on topics discussed in last weekend’s Deep Breaths, and Dealpalooza prior to that.

Before we update where we stand, we just wanted to highlight this month’s Around the World, where Academy’s Geopolitical Intelligence Group focuses on Israel/Hamas, U.S. and Iran, Ukraine and Russia, tensions with China, and fighting in the Congo. The last one brings back memories of Academy’s version of We Didn’t Start the Fire from October 2023, which actually fits in the “vibes” section quite well.

Policies

There are three policies that matter the most right now:

• Tariffs. Market is pricing in ongoing reductions and delays in implementation. Hoping/waiting for deals. They may come, but it is possible that the theme of “tariffs as a source of revenue” retakes the lead in the constantly evolving game of what tariffs are meant to do. DOGE hasn’t delivered the savings expected, and with budget negotiations coming up, we might see a shift in focus from the administration (which had been clearly backtracking on the tariffs and global trade war since April 2nd). We may start to see the impact on shipping, freight, and most importantly, store shelves, in the coming weeks as well as some hints about who is expected to pay the tab for the tariffs. Those potential effects do not seem fully priced in here (and might be avoided with deals).
   
• Federal Reserve Interest Rate Policy. After Friday’s jobs report (Instant Reaction) it would be shocking if the Fed cut rates (market is pricing in 3%). I think the report was likely flawed primarily due to the enormous impact of the birth/death model on the report (and the ongoing issue of low survey response rates). Could the Fed be a little more dovish, pushing the June meeting from a 35% chance to something higher? That would make some sense, as June is probably my base case. But in the end, expect the Fed to stand still and focus on jobs, selective inflation data (GDP Core PCE, ISM Prices Paid), and policy uncertainty backing their decision. Expect some angry responses from the administration which can easily select some inflation measures that show a different story and can insist that the policies are all working to lower inflation.
   
• The 2026 Budget. This will become increasingly important in the coming days and weeks, as it will become actual legislation as opposed to executive orders. On the surface it is “heavy on austerity.” Unlike in Trump 1.0 (and pretty much in every other administration which all claimed to be somewhat cautious on the deficit but then spent on everything), there is austerity here. That should help interest rates if it looks like the budget can progress without the austerity measures being dramatically reduced (always a possibility in D.C.). It will add some fears about the health of the economy which has become dependent (even overly dependent) on government spending. While Tax Cuts are included, only additional or new tax cuts will really be stimulative. The extension of existing cuts put in place during Trump 1.0 won’t be a boost to the economy since virtually no one is adjusting their spending on the assumption that those won’t be extended. If they don’t get them extended, it will be a big hit, but extending them will not be a big stimulus – so they need to get some new measures incorporated. Early in the process, but negotiations will start to move markets in the coming weeks.

Dealz

So far, no official outlines of any deal have been announced.

• India still seems to be a front runner for first deal. We will be looking to see how aggressive the terms of any deal are in order to get a sense of likely future deals as well as their impact. Larger trading partners are the key here and markets will likely ignore deals with smaller or low per capita GDP nations.
   
• Potential talks with China helped turn weak futures on Thursday night into strength that only grew after the payroll data hit the tape. A deal with China is key and the market seems optimistic about progress. I am increasingly concerned that the optimism is becoming too great, versus what is likely. I could be wrong, but the headlines coming out of D.C. seem to be going above and beyond the call of duty to make everything seem positive on that front. That might be the case, but it doesn’t ring completely true to me.
   
• Ukraine Deal. The deal was finally signed. One thing missing from the U.S. perspective is that the money/profits will be used towards paying for future aid and are not being used to pay for aid already given. That had been a feature of the deal that did not get incorporated. It seems highly likely that any country negotiating with the U.S. will notice that important shift and negotiate harder than they would have otherwise. With no troops on the ground and presumably a lag between getting this deal signed and any serious presence in the region trying to extract these resources, there is plenty of “opportunity” for Russia to continue to attack. Yes, once American companies and workers are there, it will be a deterrent, but that could take some time (especially since I have yet to find a commodity person overly excited about the deal – it could be that I haven’t looked hard enough, or it could be that this is similar to what is in Greenland and the commercial viability is limited). It will be interesting to see how the deal plays out over time, but for now, it is difficult to get too excited about it from either side’s perspectives.

Expect more deal headlines, and hopefully, the outline of an actual deal. I do think that we need to be cautious about “China deal progress” headlines. While I’m not sure what to make of it, the fact that Japan seemed to threaten Treasury holding reductions was also interesting (not in a good way).

Vibes

The U.S. has now apparently impacted elections in Canada and Australia. Not sure what that means, but it is curious to think about as we all try to figure out what the world will look like in the coming years. I do think it is another warning about the American Brand (which will affect sales of American products overseas, and not in a good way).

Israel ramping up in Gaza and the Houthis launching successful attacks after being pounded by the U.S. for the past few weeks is also concerning. A nuclear deal with Iran would be great, but much like the situation between Russia/Ukraine, the risk of more violence in the region seems to be increasing even as talks are ongoing.

China is interfering with the Philippines’ territorial claims. It seems crazy that things could escalate over reefs and shoals, but crazier things have happened.

While I look at a lot of data, I think I can safely say, in my 30+ years in the business, I have never looked at the Taiwan dollar – well, now I have.

An extreme move. It has had other large moves (though nothing quite as aggressive), but the fact that it is happening in the midst of a growing trade war, and heightened tensions, makes me nervous.

India and Pakistan, which wasn’t high on our risk radar last week, is becoming increasingly so.

The People’s Armed Forces Maritime Militia (PAFMM) is something I fear we will all learn a lot more about this year. It completely fits into the Gray Zone of warfare that Academy has been harping on (cyber, cable cutting, etc.). This fleet could be used to disrupt trade in and around the South China Sea. It could be used as a way to increase the chances of an “accident” occurring that risks escalation.

Lots of weird things going on that, at least for me, create this unpleasant vibe (almost like when the sky turns a weird color and the wind dies down right before the storms rages in intensity).

Bottom Line

Rates and risk assets will continue to be headline driven. Policies and deals will take their turns driving markets.

On the bright side, the pivot from less aggression on tariffs, the indications of some cooling with China, and getting the budget going are all positives (I’d like to see more aggressive measures taken to help the chip industry, biotech, and the processing/refining of commodities).

But with the Fed unlikely to help, a lot has already been priced in.

We’ve argued since the start of Trump 1.0, that Trump is willing to pivot and shift his direction. But that also tends to mean that whenever things are really good, be cautious (like in January), and whenever things are really bad, they can change (like in April).

I wish we had more clarity on the direction of policy and deals and weren’t surrounded by all of these “vibes,” but we are. I’m less optimistic than at the start of last week (markets moved and more is being priced in), but have to remain nimble as the headlines could come out in any direction (I’m leaning towards the negative, but am by no means convinced) and we have to respect what seems like a complete lack of liquidity out there.

With everyone trading the same headlines, the moves are abnormally large, and I just don’t see that changing yet.
Guess that is a long way of saying that I am “neutral” with a slight negative bias on risk and bonds.

I do think that everyone, and every corporation, will have to remain slightly cautious in their decisions which will put pressure on the economy, especially if we start seeing real signs of disruption from the tariffs that have already been implemented.

Sen. Joni Ernst (R-IA), chairwoman of the Senate DOGE Caucus, slammed the U.S. government this week for shelling out taxpayer dollars to employees who are busy doing union work instead of serving the American people.

In fiscal year 2019, the Office of Personnel Management reported that federal employees spent 2.6 million hours on union activities, costing taxpayers $135 million. The Biden administration temporarily halted OPM’s data reporting, but the Trump administration resumed it after a request from Ernst.

“Through the course of the past 10 years and studying government efficiency and fraud, waste, and abuse, we have uncovered the issue of taxpayer-funded union time. It’s where we see federal employees—and they can legally do this right now—work during their regular workday, and do that as taxpayer-funded dollars going to their paycheck, but they’re not actually working on their duties as a federal employee,” Enrst said during a panel discussion on government bureaucracy at the The Hill & Valley Forum this week. “What they’re doing is working for their union, maybe to increase their wages or increase their benefits, on the taxpayers’ dime.”

Ernst also sounded off on “egregious” examples of federal employee misconduct. “Federal employees who were caught, you know, one taking a bubble bath when he was on a Zoom call with other employees—he got ratted out, of course. Those that are on the golf course, we get those all the time,” senator said. Even more shocking cases included a HUD employee who was in prison for driving drunk during work hours, unbeknownst to her supervisor, and a remote worker who ran a full-time business while his mother answered his work emails.

“Somehow her supervisor did not know she was in jail,” she explained about the HUD employee, adding, “And one of the most egregious was one federal employee that was working remotely that had started his own business, full-time business, and during the work hours, his mother was responding to his emails.”

Last month, Ernst introduced the Taxpayer-Funded Union Time Transparency Act to revealed just how much federal employee unions are subsidized by tax dollars after the Biden administration paused the public release of the figures. Rep. Scott Franklin (R-FL) introduced companion legislation in the House of Representatives.

“Taxpayers shouldn’t pay for empty federal office buildings or for federal employees to unionize on the clock. It’s just common sense — Americans deserve a full, detailed account of how bureaucrats use both their official time and office space for union-related work,” said Rep. Franklin. “This is exactly the kind of waste and abuse my friend, Senator Joni Ernst, and I are fighting to root out alongside the Trump Administration. The President was right to order federal employees back to the office —but if taxpayers are footing the bill, workers must be accountable for how they spend their official time.“

As Ernst and her DOGE caucus colleagues continue in exposing waste and abuse across the federal government, the success of Elon Musk’s cost-cutting initiative hinges on whether Congress will approve President Donald Trump’s budget, which aims to make these reductions permanent.

In March, President Donald Trump threw his support behind a rescission package to implement major spending cuts spearheaded by DOGE. “It would be great. I think we’re going to do that,” Trump told reporters.

According to a memo from the Office of Management and Budget (OMB) obtained by the New York Post, the administration is pushing two proposals to slash $9.3 billion. “The first includes a rescission of $8.3 billion in wasteful foreign aid spending (out of $22 billion) that does not expire in Fiscal Year (FY) 2025. The second is a separate rescission of all Federal funding for the Corporation for Public Broadcasting (CPB) — which funds the politically biased public radio and public television system,” the Post said.

Authored by T.J. Muscaro via The Epoch Times (emphasis ours),

The United States on Thursday announced the creation of a second military zone along its southern border with Mexico, further expanding the military’s presence in the area.

Dubbed the “Texas National Defense Area,” and announced late on May 1, it is a 63-mile stretch that runs east from the Texas-New Mexico state line in El Paso.

The zone’s creation follows the creation in April of a first military zone along a 60-foot-wide corridor called the Roosevelt Reservation. The corridor runs along the border lands of New Mexico, Arizona, and California.

Nearly 110,000 acres of federal land along the border were transferred from the Department of the Interior to the Army on April 15, granting military control in the zone for three years.

According to court documents filed on April 28, the United States has initiated criminal prosecutions for 28 illegal immigrants for allegedly crossing into the new military zone, charging them with “violations of security regulations,” and entering a “restricted and controlled” New Mexico national defense area on top of illegal entry.

“Any illegal attempting to enter that zone is entering a military base—a federal, protected area,” Secretary of Defense Pete Hegseth said in a video message on April 25 during a visit to the area. “You will be detained. You will be interdicted by U.S. troops and Border Patrol working together.”

“If you have attempted to evade, that’s evading law enforcement, just like you would any other military base,” he added. “You add up the charges of what you can be charged with misdemeanors and felonies, you can be looking at up to 10 years in prison when prosecuted.”

The U.S. Attorney’s Office said that 82 illegal immigrants have been charged with crossing into the New Mexico military zone. The federal government announced in March that the number of illegal immigrant crossings had dropped to the lowest level ever recorded.

New Mexico Gov. Michelle Lujan Grisham has opposed the operation, calling it a “deportation buffer zone” in her state, and “a waste of resources and military personnel, especially when migrant crossings are at the lowest in decades.”

Meanwhile, Texas Gov. Greg Abbott, who continued to send his state’s National Guard to secure the border during the Biden administration, has welcomed the federal assistance. Posting pictures of razor wire barriers on May 1, he said in a Facebook post, “Texas continues to work with the Trump Administration to stop illegal immigration.”

Around 11,900 troops are stationed on the border. According to the Department of Defense, U.S. Customs and Border Protection retains jurisdiction over illegal border crossings. Troops detain and hand over illegal immigrants to the U.S. Border Patrol.

Aldgra Fredly and Reuters contributed to this report.

California has significantly revised its population estimates upward, crediting a larger-than-expected influx of international immigrants for reversing recent trends of population decline, according to Just the News.

Governor Gavin Newsom framed the shift as a testament to California’s enduring appeal: “People from across the nation and the globe are coming to the Golden State to pursue the California Dream, where rights are protected and people are respected.”

According to the state Department of Finance (DOF), the population grew by 108,000 in 2024, bringing the total to approximately 39.5 million residents. The key driver was an upward revision of immigration figures, with 277,468 more immigrants arriving between 2021 and 2024 than previously estimated. This shift turned 2023’s reported population decline into net growth and further boosted 2024’s numbers.

Meanwhile, domestic outmigration continues but is slowing. The DOF reported that California lost 197,016 residents to other states in 2024, down from 249,308 in 2023. Natural increase—births minus deaths—also contributed, rising modestly from 105,550 to 114,805 over the same period.

The Just the News report says that out of California’s 482 cities, 241 saw population gains, 240 experienced declines, and one—Morro Bay—held steady. Among the state’s ten most populous counties, only Contra Costa in the East Bay reported a net loss, shedding just 24 residents.

Despite the population rebound, questions remain about the state’s fiscal outlook. Earlier Census data revealed that those leaving California generally earn more than those arriving, with outmigration from mid-2021 to mid-2022 causing a net loss of $24 billion in personal income. This demographic shift raises concerns that increased population won’t necessarily translate into higher tax revenues.

Compounding the issue, California’s Legislative Analyst’s Office warned in November 2024 that the state has “no capacity” for new spending and is on track for annual deficits rising to $30 billion by 2026, as expenditures outpace stagnant revenue growth.

Authored by Tom Ozimek via The Epoch Times (emphasis ours),

A 25 percent tariff on imported automobile parts took effect on May 3, marking a significant step in President Donald Trump’s effort to reduce U.S. dependence on foreign supply chains and boost domestic manufacturing jobs.

The new duties—authorized under a March 26 proclamation—apply to key components used in passenger vehicles and light trucks, including engines, transmissions, and electrical systems.

The tariffs affect imports from all countries, although parts that meet U.S.-Mexico-Canada Agreement (USMCA) requirements are exempt, in a bid to preserve the tightly interwoven North American auto supply chain.

According to updated guidance issued by U.S. Customs and Border Protection (CBP) on Thursday, USMCA-compliant parts will not face the new duties—so long as they are not part of knock-down kits, or bulk component packages intended for assembly.

The tariffs are part of a broader trade policy agenda that includes earlier duties on imported vehicles and steel. However, an executive order signed by Trump on April 29 prohibits overlapping tariffs—known as “stacking”—on the same item. The order is intended to prevent the compounding of multiple tariffs and to reduce the cost burden on manufacturers operating in the United States.

To further soften the impact on domestic producers, the administration also unveiled an “import adjustment offset.” Available to automakers that conduct final vehicle assembly in the United States, the program allows them to reduce their tariff obligations on imported parts based on their total domestic output.

Specifically, manufacturers can offset 3.75 percent of the total Manufacturer’s Suggested Retail Price (MSRP) value of U.S.-assembled vehicles produced from April 3, 2025, through April 30, 2026, and 2.5 percent for those assembled in the following year. The offset roughly corresponds to imported parts making up 15 percent of a vehicle’s value in year one, and 10 percent in year two.

In a proclamation, Trump said the revised tariff structure would “more effectively eliminate the national security threat” by accelerating the shift away from foreign manufacturing and reinforcing U.S. capacity to produce critical automotive components.

A White House fact sheet accompanying the proclamation highlighted the scale of the challenge. In 2024, only 25 percent of the content in vehicles sold in the United States was American-made. Although 8 million vehicles were assembled domestically, their average U.S. content hovered between 40 and 50 percent. The nation also ran a $93.5 billion trade deficit in auto parts.

While the Trump administration says the tariffs will ultimately revitalize the U.S. auto industry, industry analysts warn of short-term consequences, including higher prices and supply disruptions.

A recent estimate from the Center for Automotive Research projected that the tariffs could increase costs for U.S. automakers by as much as $108 billion this year alone.

Stephanie Brinley, associate director of auto intelligence at S&P Global, cautioned that the most severe impacts on production and sales are likely to emerge in 2026.

“Based on the activity in the past three months and the trajectory of the latest actions across the globe, the impact of the tariffs has potential to have a massive near-term impact on global sales and production, with the US and North America feeling the worst of the impact,” she wrote in a note.

While the full impact of the auto parts tariffs may not be felt immediately, the May 3 rollout represents another milestone in Trump’s global trade policy reset.

Authored by Amin Haqshanas via CoinTelegraph.com,

Tokenization of real-world assets (RWAs) is evolving from an abstract concept to a practical financial tool as institutional players increasingly test and deploy blockchain-based infrastructure at scale.

This past week alone saw a flurry of announcements from both traditional financial institutions and blockchain-native firms advancing their RWA initiatives.

On April 30, BlackRock filed to create a digital ledger technology shares class for its $150 billion Treasury Trust fund. It will leverage blockchain technology to maintain a mirror record of share ownership for investors.

The DLT shares will track BlackRock’s BLF Treasury Trust Fund (TTTXX), which may only be purchased from BlackRock Advisors and The Bank of New York Mellon (BNY).

On the same day, Libre announced plans to tokenize $500 million in Telegram debt through its new Telegram Bond Fund (TBF). The fund will be available to accredited investors and usable as collateral for onchain borrowing.

The week’s biggest headline came from Dubai, where MultiBank Group signed a $3 billion RWA tokenization deal with United Arab Emirates-based real estate firm MAG and blockchain infrastructure provider Mavryk. The deal is touted as the largest RWA tokenization initiative to date.

Source: MultiBank

“The recent surge isn’t arbitrary. It’s happening because everything’s lining up,” Eric Piscini, CEO of Hashgraph, told Cointelegraph:

“Rules are getting clearer in major markets. The tech is stronger, faster, and ready to scale. And big players are actually doing it — BlackRock is tokenizing funds, Citi is exploring digital asset custody, and Franklin Templeton has tokenized money market funds on public blockchains.”

Tokenization has moved beyond theory

Marcin Kazmierczak, co-founder of RedStone, said the recent announcements “demonstrate that tokenization has moved beyond theoretical discussions into practical application by market leaders.”

He added that the growing adoption by big institutions gives the space more credibility, making others feel more confident to join in and help boost new ideas and investments.

Kazmierczak stated that the renewed interest in RWA tokenization is primarily driven by US President Donald Trump’s pro-crypto administration and growing regulatory clarity.

Trump, who has pledged to “make the US the crypto capital of the world,” has taken a different approach to crypto compared to the Biden administration. That era saw an aggressive crackdown from the US Securities and Exchange Commission (SEC) and the Department of Justice (DOJ), prompting many firms to withdraw from US operations.

However, the narrative appears to be shifting. Since Trump’s election victory, the SEC has dropped or paused over a dozen enforcement cases against crypto companies.

Additionally, the DOJ recently announced the dissolution of its cryptocurrency enforcement unit, signaling a softer approach to the sector.

Source: ALX

Aside from regulatory clarity, advancements in technological capabilities, especially in wallets, have also played a key role in driving tokenization adoption, Felipe D’Onofrio, chief technology officer at Brickken, said.

“In parallel, macroeconomic pressures are pushing institutions to search for efficiency and liquidity in traditionally illiquid markets,” he added.

Ethereum remains main hub for tokenization

Ethereum continues to serve as the primary hub for RWA tokenization, thanks to its mature ecosystem, broad developer support and robust infrastructure.

“Ethereum remains by far the most suitable blockchain for large-scale RWA issuance due to its unparalleled security, developer ecosystem, and institutional adoption,” Kazmierczak said.

However, he noted that dedicated RWA-specialized ecosystems like Canton Network, Plume, and Ondo Chain are building compelling alternatives with features designed explicitly for compliant asset tokenization.

According to data from RWA.xyz, the market value of tokenized US Treasurys currently stands at $6.5 billion. Ethereum accounts for the lion’s share of the market, hosting over $4.9 billion in tokenized Treasurys.

Source: RWA.xyz

Herwig Koningson, CEO of Security Token Market, said companies like BlackRock have shown that it’s possible to build large-scale tokenized products, worth billions of dollars, using more than one blockchain at the same time.

He said this shows that the success of tokenizing assets doesn’t depend so much on which blockchain is used, but rather on what the company needs the system to do.

“This is why you will see many banks and traditional firms use permissioned blockchains or even private DLT systems,” Koningson said.

Challenges remain, but growth potential is huge

Yet hurdles remain. Regulation continues to be a significant barrier, especially for risk-averse institutions requiring guarantees around compliance and privacy.

Technical limitations also persist, chiefly the lack of interoperability between blockchain platforms, according to Piscini. However, he said hybrid models are gaining traction by offering the privacy of permissioned systems with optional future interoperability with public chains.

Looking ahead, Piscini estimated that more than 10% of global financial assets could be tokenized by the end of the decade. D’Onofrio also made a modest projection, estimating that between 5% and 10% of global financial assets could be tokenized by 2030.

On the other hand, RedStone’s Kazmierczak predicted that approximately 30% of the global financial system will be tokenized by the end of this decade.

In terms of numbers, STM.co predicted that the world’s RWA market will be anywhere between $30 and $50 trillion by the end of 2030.

Most firms predict that the RWA sector will reach a market size of between $4 trillion and $30 trillion by 2030.

If the sector were to achieve the median prediction of about $10 trillion, it would represent more than 50 times the growth from its current value of around $185 billion, including the stablecoin market, according to a Tren Finance research report.

On Sunday Yemen’s Houthis (Ansarallah movement) launched another ballistic missile on Israel – but this time instead of the projectile landing in the desert or being intercepted, as with most prior such launches – the Houthis scored a direct hit on Israel’s major international airport in Tel Aviv.

“A ballistic missile fired by the Iran-backed Houthis in Yemen impacted on the grounds of Ben Gurion Airport on Sunday morning, injuring six people, none of them seriously,” Times of Israel confirms. “The blast occurred in a grove of trees alongside an access road close to the airport’s main Terminal 3, several hundred yards from the airport control tower.”

The military said there were several failed efforts to intercept the missile as it was inbound. “An impact was identified in the area of Ben Gurion Airport,” an IDF statement said.

The US-supplied THAAD missile as well as the Arrow defense system failed to intercept the ballistic missile. Israel’s defenses tend to be most effective for the type of shorter-range missiles launched by Hamas and Hezbollah.

Video taken from near the blast site at moment of impact on the airport:

אזעקה ואז פיצוץ אדיר: “וואו איזה בום” | תיעוד חדש מהנפילה בנתב”גhttps://t.co/bQeqHjLptK pic.twitter.com/cQOwt9rlmi

— החדשות – N12 (@N12News) May 4, 2025

While over the course of the Gaza war Houthi missiles have impacted in the vicinity of Tel Aviv and central Israel, this was the first time that grounds within the international airport have ever been hit.

Emergency authorities identified “a man in his 50s in good-to-moderate condition with trauma to his limbs and two women, aged 54 and 38, in good condition who were hit by the shockwave.”

Additionally an elderly person was hit with an object that was ejected from the impact site, while two younger women were injured while running for shelter amid the blast. Others were reportedly treated for acute anxiety.

The Houthis successfully landed a ballistic missile at Israel’s main airport.

A few Israeli civilians were injured.

Israel’s response should be unprecedented.pic.twitter.com/7gVIjyRdJn

— Vivid.🇮🇱 (@VividProwess) May 4, 2025

There were reportedly at least 40 flights disrupted for international flights, mainly due to disrupted landings and inbound planes being turned around. An update by Al Jazeera details:

A data analysis conducted by Al Jazeera’s fact-checking agency Sanad shows more than 40 cases of disrupted landings for international flights at Ben Gurion Airport in Tel Aviv because of the Houthi missile strikes.

The disruptions tracked were ones occurring since Israel’s renewed escalation of war on Gaza beginning in late March. The analysis relied on aviation data provided by the specialized flight tracking website Flight Radar.

Sanad cross-referenced the timing of Houthi missile strikes with the activation times of alarm sirens at Ben Gurion Airport. It then analysed aviation records to determine the exact number of flight delays caused by the incidents.

Airport surveillance footage also captured the impact:

Surveillance camera footage shows the moment of the Houthi missile impact at Ben Gurion Airport.

The missile struck a grove adjacent to an access road, within the airport’s perimeter. pic.twitter.com/AUyQwKrEOy

— Emanuel (Mannie) Fabian (@manniefabian) May 4, 2025

Pressure is likely to increase on Iran over the attack, given the Trump administration has alleged Tehran is behind basically all Houthi decision-making, which Iranian leaders have vehemently denied.

Iranian Defense Minister Aziz Nasirzadeh on Sunday has warned Tehran will strike back if the United States or Israel attack the Islamic Republic. “If this war is initiated by the US or the Zionist regime [Israel], Iran will target their interests, bases and forces – wherever they may be and whenever deemed necessary,” Nasirzadeh told a state broadcaster. “The countries in the region are our brothers, but America’s bases are our targets,” he added.

Authored by Pepe Escobar,

Late next month, Huawei will be testing its new powerful AI processor, the Ascend 910 D, even as by early May the previous 910C will start to be mass-delivered to scores of Chinese tech companies.

These serious breakthroughs are the next chapter of Huawei’s drive to counter Nvidia’s global monopoly in GPUs. The Ascend 910D is supposed to be more powerful than Nvidia’s extremely popular H100.

Huawei is pulling no punches in its race to manufacture a new generation of processors. Huawei has collaborated with SMIC – China’s largest semiconductor foundry – to apply Deep Ultraviolet Lithography (DUV) on what was previously only possible on EUV (Extreme Ultra-Violet technology). Once again, Huawei and SMIC defied the proverbial American “experts” with creative engineering solutions.

Huawei arrived at fabricating 5nm chips with DUV even as the process is more expensive than with EUV. If Huawei had access to EUV they would be already manufacturing 2-3nm chips. That will come, in short time, as both China and Russia, under permanent US high-tech blockade, must by all means develop their own EUV technology.

Shanghai geeks are convinced that Huawei will switch on 6G networksbefore the end of the decade. Their current breathless drive is not just aimed at the smartphone front – where Huawei is peerless; the new Huawei Mate 70 Pro + is by far the absolute top smartphone in the world, running on Harmony OS. Huawei is looking at cloud computing, AI and enterprise servers – and to become no less than the core player in the AI infrastructure race.

Ditching Any Reliance on American Technology

Earlier this month, Huawei introduced the CloudMatrix 384, a system connecting 384 Ascend 910C chips. The tech word in Shanghai is that this configuration, under certain conditions, and of course consuming much more power, already outperforms Nvidia’s flagship rack system – which is powered by 72 Blackwell chips.

Meanwhile, Huawei’s Kirin X chip is targeting the PC market, offering stiff competition to Apple, AMD, Intel and Qualcom while Harmony OS plus removes the necessity of using US software such as Microsoft and Android.

Shanghai geeks swear that China essentially doesn’t need to beat Nvidia or other US chips developers. After all, China already has the largest consumer market in the world – by volume and by value. If a parallel tech universe is the likely result of the Trump Tariff Tizzy (TTT), so be it. China already controls over 60% of the global gadget consumer market.

Kirin X may not – yet – match the power of Nvidia’s H100 GPUs. But Huawei chips are already the real deal for every Chinese company which is following the new Beijing-defined direction to reduce any reliance on American technology.

All of the above naturally brings us to the enormous AI elephant in the (digital) room: Nvidia.

A recent book, The Thinking Machine: Jensen Huang, Nvidia, and The World’s Most Coveted Microchip, is quite helpful to track not only the personal story of CEO superstar Huang, a Taiwanese who played the American Dream to the hilt and became a tech multi-billionaire, but Nvidia’s enviable tech accomplishments.

Huang does not interpret AI as emergent machine superintelligence, and firmly dismisses any direct analogy to biology. For this all-round pragmatist, AI is merely software – running on hardware that his company sells for a fortune.

Still, Nvidia has ventured into virgin territory way beyond the American biz-tech Valhalla, complete with holding the most valuable stock on the planet: arguably, when it comes to AI, Nvidia unveiled a new phase of evolution.

It’s crucial to understand how Huang sees China. It is indeed a key market for his AI chips – and he wants to keep selling them in droves. Trump’s tariffs though make sure that won’t happen.

And that’s what moved Huang to ditch his proverbial leather jackets and don a crisp business suit for a strategic visit to Beijing, where he affirmed the sacred importance of the Chinese market, whatever the new Trump-dictated gimmicks.

By 2022, the China market represented 26% of Nvidia’s business; this year, it has fallen to 13%, because of euphemistic “technology export controls”.

The problem is the US government, already by 2022, under the previous automatic pen administration, had blocked sales to China of advanced A100 and H100 chips. Nvidia started selling modified versions – and even after the ban chips continued to arrive in China. By June 2023, it was easy to find A100s for double their price in the black market in Shenzhen.

Huang is convinced that “no AI should be able to learn without a human in the loop” – even as he admitted, two years ago, that “reasoning capability is two or three years out”. Translation: according to Huang AI will start thinking for itself within the next few months.

Even as Nvidia prepares to invest billions of dollars to build AI supercomputers in Texas, the Chinese essentially are not losing any sleep on “thinking AI”: their focus is extremely practical, to conquer not only the Chinese market but also the supply chains of most of Eurasia.

The US National Security Council has concluded that it’s too dangerous for China to buy Nvidia’s high-end chips, even the H20 – designed for the Chinese market. Huawei, anyway, already produces chips somewhat comparable to the H20.

Huang is losing his sleep because, essentially, Nvidia is losing the immense Chinese market to Huawei – with Trump’s direct input. Nvidia has tens of thousands of H20s specially designed for China which they simply cannot sell. Each chip cost between $12,000 to $20,000.

How China Is Opening a Digital “Pandora’s Box”

Huawei’s new drive is yet another example of Chinese will capable of staring down any challenge – based on indigenous talent, tech expertise and national pride. The record, even before Trump 1.0 sanctions, shows that Huawei does eat massive uphill battles for breakfast. In fact Ascend in many aspects was ahead of Nvidia as early as in 2019 – and that’s why two different US administrations banned it.

China is already light years ahead of the US on chip research. Chinese universities amass most places in the global Top Ten for published papers on semiconductors and on citations – a distinction shared, among others, by the Chinese Academy of Sciences (number one), Tsinghua University (one of China’s top two universities), the University of Electronic Science and Technology of China (number four), and Nanjing, Zhejiang and Pekin Universities.

Two weeks ago in Shanghai I first heard that Huawei would catch up with US semiconductor giants in maximum two years. Now, after the announcement of the Ascend 910D, the buzz shifted to only one year for China to overtake Nvidia and develop better lithography machines than the ones currently produced by ASML.

And the debate is fast switching to how far Huawei will be able to go within the next 2 to 3 years.

In several aspects we are already in the early stages of a US-China tech decoupling. For years Nvidia has dominated the AI hardware space. Their GPUS are the brains behind most contemporary advanced AI. The H100 chip is the gold/platinum standard for AI infrastructure worldwide. Nvidia’s chips had huge demand from Chinese tech giants – Alibaba, Tencent, Baidu, Bytedance.

Soon that may not be the case – and that goes way beyond Nvidia’s certified loss of market share in China. China is now all out focused on building a successful, self-sufficient AI hardware ecosystem. The coup de grace will be to restrict the export of all rare earth minerals to the US. Huaweii then will pull up in no time.

Everyone remembers how DeepSeek R1 wiped out over $1 trillion from Wall Street only three months ago. DeepSeek R2 will be released soon; training was a whopping 97% cheaper than OpenAI. And training happened on Huawei’s Ascend. No Nvidia.

Quantum Bird, a world-class physicist formerly with the CERN in Geneva, puts everything in much needed context. He stresses how indigenous chip development by China – and in a near future, Russia and probably India – is “multi-faceted; what we are observing are the initial stages of a redefinition of the notion of recognizing patterns and machine learning, technologies that are popularly referred to as ‘AI’ by the media.”

Nvidia chips, Qantum Bird remarks, are indeed “computational beasts”, but they work better around “processing models and workloads typical of ‘AI’ models developed by Western scientists.” DeepSeek’s development, on the other hand, showed a transgression of established models: “The possibilities opened for performance leaps are huge, even using relatively modest hardware, with alternative approaches based on advanced math and different calculus flows.”

In a nutshell: “This is the Pandora’s box that Nvidia now fears the Chinese may have opened”. And that totally ties in with Huang’s red alert, prompting his visit to Beijing.

We may be heading indeed towards a serious tech decoupling. Or as Quantum Bird frames it: “A technological and scientific divergence medium and long-term. If the architectures that emerge from these developments are incompatible when it comes to their usage on specific ‘AI’ models, Nvidia will lose its global monopoly and will become just a company reduced to a corporate/scientific Western niche.”

Even as Huawei, from its privileged base in the Chinese market, will go on to win most markets across the Global Majority – from BRICS to BRI.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of ZeroHedge.

The Department of Justice has reached a settlement with the family of Ashli Babbitt, the Jan 6 rioter who was unjustifiably shot and killed by a Capitol Police officer’s pistol shot, despite her being unarmed and posing no threat of significant harm to anyone in the vicinity. The news comes weeks after President Trump promised to look into the Department of Justice’s effort to defeat the claim. As of a few months ago, the case had been expected to reach trial phase in July. 

On Friday, lawyers representing the DOJ and Babbitt’s family notified a Washington DC judge that they’d reached an agreement in principle. When filing suit early last year, Babbitt’s surviving loved ones sought $30 million in compensation for her being killed by officer Michael Byrd. The value of the pending settlement has not yet been revealed, and family attorneys say precise details are still being worked out. Beyond a potential monetary reward, there’s also the question of to what extent the federal government will acknowledge Byrd’s wrongdoing. Babbitt family lawyer Robert Sticht said he expects a signed agreement within three weeks. 

Byrd killed then-35-year-old Babbitt as she attempted to climb through a broken window that was part of an interior doorway close to the House chamber. Though the unarmed, 5’2″, 115-pound Babbitt posed no imminent threat of inflicting death or serious injury as she awkwardly navigated the narrow space — with a furniture barricade still ahead of her —  Boyd opted against using any type of nonlethal force, and instead shot her from an ambush position, killing her with a bullet that perforated her trachea and lung. 

In a softball interview, Byrd told NBC News, “I showed the utmost courage on January 6…I know that day I saved countless lives.” To the contrary, he’s the only person who took a life that day. The family’s 32-page complaint alleged Byrd’s weapon-handling violated Capitol Police Policy, saying that he:

• Took it out of his holster before any proportionate threat had been presented
• Didn’t hold the weapon at “low ready,” and proceeded to point it at a variety of people who, like Babbitt, posed no immediate threat
• Put his finger inside the trigger guard, “tapping it on and off the trigger for at least 14 seconds before he shot and killed Ashli.” A finger shouldn’t be put inside the guard until the officer has decided to fire the weapon 

While it’s been little-publicized by major media or leftists who screech that Babbitt “got what she deserved,” Byrd had some serious disciplinary issues before Jan. 6, with some of the incidents involving the irresponsible handling and even firing of his weapon.  Despite the damning facts of the case, leftists in and out of media have treated Byrd as a hero for fending off a nonexistent “insurrection.” The left’s reaction to the wrongful killing demonstrated a glaring double-standard on cop misconduct. 

Byrd was not only officially cleared of wrongdoing, but promoted to the rank of captain in 2023. In a March interview, Newsmax’s Greg Kelly asked Trump how he felt about Byrd still being on duty, with a pay raise and higher authority. The president replied: 

“I think it’s a disgrace. I’m going to take a look at it. I’m going to look at that, too. His reputation was … I won’t even say; let’s find out about his reputation. We’re going to find out. But I watched that and I saw that. And by the way, she was killed, but nobody else was killed.”

He also vowed to look into the DOJ’s decision to fight Babbitt’s family in court: 

“Well, I’ll look into that. I mean, you’re just telling me that for the first time, I haven’t heard that. I’m a big fan of Ashli Babbitt. And Ashli Babbitt was a really good person who was a big MAGA fan, Trump fan. And she was innocently standing there; they even say trying to sort of hold back the crowd. And a man did something to her that was unthinkable when he shot her. And I think it’s a disgrace. I’m going to look into that. I did not know that.”

President Trump addresses the latest on the case of Ashli Babbitt, the Trump supporter who was shot and killed at the Capitol on Jan 6, 2021, rips the police shooting, the overall treatment of now-pardoned defendants, and the actions of the former House J6 select committee. pic.twitter.com/kPXPyGVuJT

— NEWSMAX (@NEWSMAX) March 26, 2025

Hours after being inaugurated in January, Trump granted clemency to some 1,600 Americans who’d either been convicted or charged out of their actions on Jan 6. The move combined both full pardons and sentence commutations. In March, Trump entertained the possibility of a compensation fund for all of them. 

Cover your ears: the left is about to blow its collective stack in irrational indignation that the government will compensate the family of a dead woman who was clearly on the receiving end of wildly excessive force.  

What If Ashli Babbitt Was Black?

If the scenarios were reversed and Ashli Babbitt was a black woman at a BLM protest/riot and Michael Byrd was a white police officer, how would the left have responded to the killing of an unarmed black woman on video? pic.twitter.com/uXq9b00ozx

— Gain of Fauci (@DschlopesIsBack) May 2, 2025