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China Blasts US Over AI Chip Rules

China’s Ministry of Commerce accused the US on Thursday of undermining bilateral consensus from high-level Geneva negotiations after the administration revised export control guidelines targeting Huawei’s Ascend AI chips.

The US Commerce Department altered language in its May 12 policy, initially stating that using Huawei chips “anywhere in the world” violated export rules, to a softened warning about “risks” of using advanced Chinese semiconductors.

“The discriminatory nature and market-distorting essence of the guidelines remain unchanged,” the Chinese ministry declared, noting it had demanded corrections through bilateral channels.

You can read more on the matter here.

What’s going on?

• Did Perplexity Fudge Its Numbers? (theDeepDive)

• Canada’s inflation rate slows sharply to 1.7% in April as consumer carbon price ends (Globe)

• Canada Post, Union Deadlock Threatens Second Postal Disruption in Six Months (theDeepDive)

• EU to impose €2 tax on low-cost items in blow to Temu and Shein (FT)

• IEA’s Demand Revision Erases 3 Years of Oil Stockbuilds, Exposes 295M-Barrel Inventory Swing (theDeepDive)

• Trump struggles to convince Republican holdouts in Congress on tax bill (Reuters)

• Pro-EU Candidate Dan Defeats Hard-Right Rival in Romanian Presidency (theDeepDive)

• Migrant Labor Force Withstands Mass-Deportation Push (WSJ)

• Ontario Budget Invests $500M in Mineral Processing (theDeepDive)

• Elon Musk says he will spend a ‘lot less’ on politics (FT)

• Canada Post Is “Effectively Insolvent,” Says Mediator (theDeepDive)

What’s the latest?

• Microsoft: Microsoft may avoid an EU antitrust fine after offering to unbundle Teams from Office 365 and improve interoperability. The European Commission is testing the proposal with the market, following concerns that Microsoft unfairly tied Teams to its productivity apps since 2019. The offer includes maintaining separate versions without Teams for 7 years and enforcing price transparency between bundled and unbundled products. If accepted, this would resolve the case without penalties, aligning global pricing as well.

• Oil: China became the top buyer of Canadian oil via the expanded Trans Mountain pipeline, averaging 207,000 bpd since June 2024—up from 7,000 bpd in the previous decade. U.S. imports averaged 173,000 bpd over the same period. Canadian crude exports to non-U.S. countries rose nearly 60% to a record 183,000 bpd in 2024. The pipeline ran at 77% capacity last year and is expected to reach 84% in 2025.

• Strathcona: Strathcona Resources launched a $5.9B unsolicited takeover bid for MEG Energy, offering $23.27 per share (0.62 Strathcona share + $4.10 cash). MEG shares rose 22% to $25.91, indicating investors expect a higher offer. Strathcona, which already owns 9.2% of MEG, projects $175M in annual synergies and would become Canada’s 5th largest oil producer if the deal proceeds. Strathcona reported Q1 profit of $205.3M (up 104% YoY) and raised its quarterly dividend to $0.30.

• Consumer Sentiment: U.S. consumer sentiment dropped 2.7% in May to 50.8, its lowest level since July 2022, marking a nearly 30% decline since January. The ongoing trade war, including Trump's previous 145% tariffs on Chinese imports, has heightened inflation fears. A recent U.S.-China deal reduced tariffs to 30% and 10% respectively. Despite the easing, sentiment remains weak due to persistent economic uncertainty.

• Canada Post: Canada Post is "effectively insolvent" and must phase out daily door-to-door letter delivery to individual homes, according to a federal report. The report recommends keeping daily business delivery and lifting moratoriums on rural post office closures and community mailbox conversions. Canada Post should also gain flexibility to hire part-time workers and adjust delivery routes daily. Structural changes are needed immediately to reverse growing financial losses.

B2GOLD Q1 Earnings

The stock market and stuff

• Nvidia Takes $15B Hit as China Chip Restrictions Test US Tech Strategy (theDeepDive)

• MEG Energy could attract higher offers in wake of Strathcona’s $5.9-billion bid, analysts say (Globe)

• Drugmaker Regeneron Acquires 23andMe for $256M (theDeepDive)

• Elon Musk commits to leading Tesla for next five years (CNBC)

• Moody’s Cuts US Rating Down as Deficits, Interest Costs Soar (theDeepDive)

In the juniors

• Golden Cariboo Hits 37.0 Metres of 1.02 g/t Gold At Halo Zone (theDeepDive)

• Cerrado Gold Closes On All-Stock Acquisition Of Ascendant Resources (theDeepDive)

• Snowline Gold Begins 30,000 Metre Drill Campaign (theDeepDive)

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