How should China respond to Trump? Ask DeepSeek

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From the sharply political to the deeply personal, Chinese internet users have described questions asked of the DeepSeek artificial intelligence app, including what Beijing should do in response to U.S. President Donald Trump's import tariffs.

China's launch of a ground-breaking AI service from DeepSeek came during the country's biggest holiday, Lunar New Year, leaving millions of Chinese users with a week of vacation to try the predictive and analytical powers of the new platform that has become a source of national pride and fascination.

Wang Jiangyu, a law professor at City University of Hong Kong whose posts on Weibo are widely followed, tested the model by asking how China should react to Trump's imposition of 10% tariffs on goods from China.

The seven-point DeepSeek answer covered possible responses from Beijing from targeting industries in states like Michigan and Wisconsin with new tariffs to launching new tax breaks for industries in China. It also suggested China could set technical standards for EV charging that would "build insurmountable barriers for U.S. companies."

None of those possibilities have been flagged by Chinese policymakers to date.

"The thinking is comprehensive, basically pragmatic and relevant," Wang said of DeepSeek.

The detailed answer stands in contrast to the blanket way DeepSeek censors the responses to other political questions for Chinese users, including seemingly simple queries like, "Who is Xi Jinping?"

That question and others on hot-button issues for Beijing like the 1989 Tiananmen Square pro-democracy demonstrations prompt DeepSeek to change the subject: "Let's talk about something else."

Chen Zhihao, a celebrity stock market commentator, asked DeepSeek for investment advice on Chinese stocks when markets reopen later this week in light of the Trump tariff.

DeepSeek's response offered a surprise prediction: Beijing, it said, could increase stimulus measures "to hedge against external pressures" or launch new measures to support the tech industry.

DeepSeek's recent launch of its latest AI models, on par with industry-leading models in the United States at a fraction of the cost, rocked the technology sector over the past week.

The attention also made the Hangzhou-based startup and its founder Liang Wengfeng pop-culture celebrities.

Some Chinese described how they had turned to DeepSeek to tell their fortunes or detail their marriage prospects. One user on RedNote social media app said the AI had offered insight into a previous life based on her dreams. "It really reads my dream," the user named Qiu Ranran wrote.

DeepSeek's AI app replaced ChatGPT as most-downloaded in Apple's App Store over the past week.

In a paper published in December, the Chinese startup said it had trained DeepSeek-V3 with less than $6 million in computing power from Nvidia H800 chips. Some experts have raised questions about that claim.

Even so, DeepSeek's breakthrough raised doubts about the payoff for the billions of dollars U.S. tech giants have pledged for AI development.

Authorities in Japan, South Korea, France, Italy and Ireland and other countries have also been looking into DeepSeek's use of personal data.

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Asia’s postholiday markets plunge on DeepSeek, Trump tariff fallout

Asian markets got an unpleasant return from the holidays as investors digested a week’s worth of bad news. Several Asian exchanges were closed for some, if not all, of the past week owing to the Lunar New Year holiday, making Monday the first chance that many investors could react to DeepSeek’s challenge to the tech sector and U.S. President Donald Trump’s tariff moves on China, Mexico, and Canada.

As East Asia was enjoying the holiday, U.S. investors were frantically selling off shares in Big Tech in response to the sudden popularity of DeepSeek, a Chinese AI startup with a high-performing model trained on a much smaller amount of computing power.

Then, over the weekend, the U.S. imposed 25% tariffs on Canada and Mexico, and an additional 10% tariff on China. The taxes fulfill a pledge made by Trump after his election last November.

There’s still one Asian exchange that has yet to react to the past week’s news. Markets in mainland China will reopen Tuesday, after being closed for a week because of the Chinese New Year.

Hong Kong

Hong Kong’s Hang Seng Index dropped as much as 1% on Monday, before paring back losses in the afternoon. The Chinese city’s stock exchange closed for the holiday on Wednesday, just after the DeepSeek news roiled U.S. markets.

Consumption-focused companies sank on Monday trading, with e-commerce firm JD.com falling around 3.5%. Trump’s tariffs could be a drag on the Chinese economy, already struggling with low domestic consumption and a property crisis.

Still, optimism about China’s AI prospects lifted some Hong Kong–traded stocks. Alibaba rose almost 6% after the e-commerce company unveiled the newest iteration of its Qwen model last week; local chipmaker SMIC rose over 9% following reports that DeepSeek is using its Ascend AI chips (produced in partnership with Huawei) for inference.

Taiwan

Taiwan’s stock market has been closed since Jan. 23, meaning investors on Monday had to grapple with more than a week’s worth of news, including Trump’s threat to impose tariffs on Taiwan-made semiconductors.

The benchmark Taiex Index fell around 3.5%, driven by declines in major firms like TSMC, which makes most of the world’s advanced chips, and Foxconn, the world’s largest contract electronics manufacturer with an in-progress Mexico plant for bundling Nvidia chips. TSMC fell almost 6%, while Foxconn was down by as much as 8%.

Quanta Computer, which is working with Nvidia to build AI servers, fell by almost 10%.

Taiwanese tech firms like TSMC and Foxconn have benefited from the generative AI boom. But DeepSeek’s development is challenging bullish projections of how many chips and servers are needed to run an AI model. Similar concerns about capital investment helped drive shares in U.S. tech firms lower last week.

Taiwan’s government is already reacting to Trump’s tariff threats. On Monday, the Ministry of Economic Affairs said it will set up a hotline to help Taiwanese businesses affected by tariffs, such as providing relocation services to places like the U.S. or Southeast Asia.

South Korea

Korea’s KOSPI Index fell by 2.5% on Monday, as Trump’s tariff moves could threaten both South Korea’s export-heavy economy, as well as the supply chains of its major manufacturers. Electronics giants Samsung and LG, and automakers Kia and Hyundai, all have manufacturing facilities in Mexico.

Foreign direct investment from South Korea to Mexico reached $1.3 billion just for the first nine months of last year, according to data from the Mexican government.

South Korea also enjoys a trade surplus with the U.S., potentially putting it at risk for tariff measures (like Canada and Mexico).

The DeepSeek shock is having an effect in Korea as well. SK Hynix, a major supplier of memory to Nvidia, is down 13% since South Korea’s market reopened Friday following the Lunar New Year break.

Japan

Unlike other East Asian markets, Japan stayed open for all of last week—but Trump’s tariff shock still sent its stocks lower on Monday.

The Nikkei 225 fell by around 2.7% as investors grappled with what Trump’s Mexico tariffs meant for Japanese supply chains.

Shares of Toyota Motor, the world’s largest auto producer, fell 5% on Monday while Honda Motor and Nissan Motor shares declined by around 7.2% and 5.6% respectively. The three automakers all have production facilities in Mexico.

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