Issue #68

US and China reset, foreigners break records in Japan, AI fails to bring ROI, and more.

News from May 8 - May 15, 2025

US and China Reset

US and Chinese officials agreed this week to lower tariffs and start negotiating a trade deal.  Under the terms of this truce, both sides will lower tariffs by 115% for 90 days: the US (30%) and China (10%). This will give both sides time to work out the terms of a trade deal. Trump called it a “total reset” of US-China relations. 

The US stock market soared at the news, with US stock indexes now trading close to what they were at the start of the year. The S&P 500 rose 2.6%, the Dow by 2.5%, and the Nasdaq by 3.3%. 

Beijing resident Doli Yan: "I didn't expect them to come to an agreement so fast. Based on how the US operates, I thought it would be a prolonged struggle and the negotiations would take a long time."

Source

AI Can’t Grade Homework

A new study by the School of Computing at the University of Georgia found that LLMs are worse at grading student homework than humans. This comes after the New York Times found that new ‘reasoning’ models hallucinated 79% of their answers. 

Mixtral accurately graded student work 33.5% of the time, even after researchers enabled it to create its own grading system. When supplied with a human-created grading system, the model had an accuracy rate of 50%. 

Researchers noted the LLM’s propensity to create shortcuts instead of using logic. In one instance, a student mentioned ‘temperature increase’, causing the LLM to assume the student understood that particles move faster when temperatures rise. UG researcher Xiaoming Zhai: “As humans, we’re not able to infer whether the students know whether the particles will move faster or not." 

Source

UK Gets Shafted

Last week, the US and UK agreed to a trade deal that will see the US lower tariffs on some British goods in exchange for preferential market treatment. 

Under the terms of the deal, the US will lower car tariffs (10%) and remove tariffs on aluminium, steel and jet engines in exchange for tariff-free access to the UK ethanol market and preferential access to British aerospace components. Boeing and Rolls-Royce share prices rose at the news.

Leader of the Opposition Kemi Badenoch said the UK had been “shafted”. Trump told reporters he expects a “bigger” deal soon and suggested it would make other countries jealous. Trump: “Many countries want to make a deal, and many countries are very unhappy we happened to choose this one, to be honest with you.”

Source

Bulletin Board

• AI Fails to Bring ROI. Most business leaders haven’t seen a return on investment (ROI) from their company-wide implementation of AI. In a recent survey by IBM, only a quarter of respondents said AI had made an expected return and half said they had realised any value from it whatsoever. This comes after tech leaders have warned of a looming AI bubble caused by the significant overvaluation of AI companies. Curioser.AI CEO Stephen Klein: "Are we using GenAI to solve real problems, or just optimizing slide decks?" Source
• China Launches Self-Driving Taxis. The company behind China’s largest search engine will launch the world’s first self-driving car rental service later this year, following their successful trial of robotaxis in Hong Kong. Baidu, in partnership with car rental platform CAR Inc., will market these to elderly or disabled tourists travelling to a selected group of cultural landmarks and popular destinations. Tesla’s similar scheme led to a series of deadly road accidents. Elon Musk: “Full self-driving isn’t ready.” Source
• Foreigners Break Records in Japan. Foreign investors bought $57 billion in Japanese equities and bonds last month, the highest monthly rush since 2005. It is believed that investors were shifting their funds to the country because they viewed it as a more stable alternative to the US. Bank of Singapore chief economist Mansoor Mohi-uddin: “There is probably some truth to the idea that Japan was seeing the effects of de-dollarising in April.” Source
• Microsoft Cuts 3% of Workforce. The tech giant will lay off roughly 6,500 of its total global workforce, which comprises 228,000 employees. This comes after Microsoft reported an 18% increase in net income profits this quarter. Unlike previous redundancies, these will not be performance-related, and it follows the decision of other companies like Meta and Amazon to lay off employees earlier this year. Microsoft spokesperson: “We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace.” Source
• British Employer Confidence Sinks. UK employer confidence declined to its lowest level since 2014, according to a survey by the human resources association CIPD. Increased national insurance contributions and minimum wage, and the uncertainty of a looming trade war, caused employers to lay off staff and stop hiring. CIBD’s senior labour market economist James Cockett: “The employment rights bill is landing in a fundamentally different landscape to the one expected when it formed part of the Labour manifesto in the summer of last year.” Source

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