A tech war is brewing between China and the US. Recently a Chinese AI tech start up called deep seek innovated with an AI model that is good in problem solving and reasoning skills. The chatbot of deep seek is called R1. This was found to be as excellent as open Ai's model. However deep seek made this without using expensive chips sold by nvidya the most important producer of semi conductor chips. Deep seek also allows others to freely use its methodology for creating R1. Open AI has accused several Chinese companies including deep seek of using open Ai's technology to create R1. The prices of Nvidya's shares plummetted in this connection. This is the tech war.
The trade war is between US, China, Mexico and Canada.
The new government in the US has been threatening to increase tariffs on imports from these three countries.
Economists and governments of these three countries fear this will result in damaging consequences to their economies.
US economists are also not sure the tariffs will completely benefit the US economy.
If tariffs are raised the price of the commodity imported from that country goes up in the US.
If a raw material that is used for manufacturing is purchased from Canada with higher tariffs then US manufacturers will be discouraged to buy that product due to the high price.
This will put a halt to manufacturing.
So tariffs may back fire.
It will affect the Canadian economy deeply since Canada exports maximum to the US
The earlier threat was 25% tariffs on everything that was imported from Canada and Mexico.
Later the US government said they will not impose this just yet.
I don't know the latest status on the tariffs situation.
I hope you have a lovely day!
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