A lot of people used to think that Chinese people lacked innovation, but the success of the DEEPSEEK large model has busted the Western stereotype that Chinese people just copy and can't create anything original. The West's idea of China being way behind in tech might not be as accurate as they thought, and this fear of being outpaced could make the trade tensions between China and the U.S. even worse.

On January 31, local time, the White House confirmed it will start imposing a 25% tariff on goods from Mexico and Canada starting February 1. Even though there were reports earlier saying some products might be exempt, or that the tariffs could be delayed until March 1, the White House shot those down, saying there won’t be big exemptions. They haven’t released the full list of goods yet, but they said the full details will be available on Saturday. 

WHY CANADA and MEXICO?  

Many Chinese manufacturers set up factories in Mexico and Canada, partly to take advantage of trade agreements like the USMCA (formerly NAFTA) which allows goods to be shipped to the U.S. with reduced or zero tariffs. This setup is often used to avoid higher tariffs when directly shipping from China to the U.S.

The U.S. has been cracking down on such loopholes, tightening rules about transshipment. This includes measures to ensure goods aren’t simply passing through Canada or Mexico to bypass tariffs. It’s become a cat-and-mouse game, with the U.S. trying to close loopholes while businesses try to find ways around them.