Update 2 May on Trade War & Ukraine

US stocks extended gains Thursday as tech titans powered stock markets up. The Nasdaq rose 1.5% and the Dow Jones climbed 0.2%. The S&P 500 achieved its ninth consecutive daily gain, reflecting broad market strength beyond just tech stocks.

Despite better-than-expected earnings from Amazon and Apple after market close Thursday, both stocks experienced declines in after-hours trading, indicating cautious investor sentiment.

The Nasdaq took center stage, fueled by strong post-earnings performances from Microsoft and Meta Platforms. Meta soared by $23.20 or 4.2% after delivering strong earnings and upbeat guidance. Meta also raised its full year capital expenditures from $113bn-$118bn to $114bn-$119bn. Microsoft also impressed investors, jumping $30, or 7.5%, to end the session at $425, on the back of impressive cloud and AI-related results.

Meanwhile, the Commerce Department said Wednesday that the first quarter gross domestic product (GDP) declined at a 0.3% rate, a rapid reversal from a 2.4% increase in the fourth quarter. Some traders noted that the figures were skewed by a 41% surge in imports in the last quarter as companies looked to get ahead of President Trump’s tariffs. The report also showed a big slowdown in consumer spending and a decline in government expenditures amid Elon Musk’s DOGE cuts.

Other data pointed to an economy that was still hanging in there. Consumer spending in the first quarter grew at its slowest quarterly pace since 2023. A separate report showed that spending was up 0.7% in March, topping the 0.5% economists expected.

In a post on Truth Social, Trump blamed a “Biden Overhang” following the weak GDP numbers, telling people to “BE PATIENT!” and that his policies “will take a while” to take effect.

Stocks climbed out of session lows on Wednesday after a Chinese social media account affiliated with the country’s state-run channel posted the US had been reaching out to China seeking to negotiate on tariffs.

On the inflation front, the March reading of the Federal Reserve’s preferred inflation gauge showed prices eased last month as investors brace for an uptick in pricing pressures following the implementation of Trump tariff agenda.

At the same time, inflation in the first quarter clocked in hotter than expected, complicating the path forward for the Fed. The “core” Personal Consumption Expenditures index, which excludes the volatile food and energy categories, grew by 3.5% in the first quarter, above estimates for 3.2% and above the 2.6% seen in the prior quarter.

Trump removed his national security adviser

The New York Times, May 2, 2025

President Trump announced yesterday that he was removing his national security adviser, Michael Waltz, naming Secretary of State Marco Rubio as his interim replacement. It was the first major personnel overhaul of top White House aides, and the kind of move he had wanted to avoid in his second term.

Waltz had been on thin ice since he organized a group chat on the app Signal to discuss a sensitive military operation in Yemen and accidentally included a journalist. Trump has nominated Waltz to be U.S. ambassador to the U.N.

But even before the group chat leak, most of Trump’s advisers viewed Waltz as too hawkish to work for a president who was eager to reach a nuclear deal with Iran and normalize relations with Russia.

Rubio will hold both positions for now, something that no other official has done simultaneously since Henry Kissinger held the titles under the Nixon and Ford administrations.

What’s next: The selection of the next national security adviser will be a critical one, at a moment when the president’s top aides have differed sharply on how to handle China, Russia and Iran.

Scott Bessent slaps down tariff guru's tease that first major trade deal is 'done'

MSN news, May 1, 2025

There were more conflicting signals on President Trump's tariffs Wednesday, with Commerce Secretary Howard Lutnick saying he had a trade deal that was 'done' but the Treasury secretary and trade officials stopping far short of that.

Trump put in place a 90-day pause of his 'reciprocal tariffs' after a market swoon at the start of the month. Now, Trump and his team have repeatedly sought to calm markets by stating that deals are at hand.

But Treasury Secretary Scott Bessent was making no promises in an interview on Fox Business Tuesday evening.

'I'm not going to get ahead of the president. Nothing's done until President Trump announces it,' he told interviewer former White House economic advisor Larry Kudlow.

'So we should wait to hear from President Trump over the next couple of days,' Bessent added.

That was far less definitive a way of putting it than Lutnick, who has been taking some of the blame for the multinational trade war in the press.

'I have a deal done, done, done, done, but I need to wait for their prime minister and their parliament to give its approval, which I expect shortly,' he said in a statement, the New York Post reported.

Trump himself has been talking up a potential deal with India. 'India’s coming along great. I think we’ll have a deal with India… they want to make a deal,' Trump said this week.

But Trump's trip to Michigan Tuesday came and went without a deal to announce.

Nor did Trump announce a new trade deal with any country Wednesday, when he held a cabinet meeting that ran for two hours.

Bessent was non-commital, even when asked about a potential deal with India, bringing up 18 countries the White House said is dealing.

'On the 18 key trading relationship, the president described them to the trade team as bespoke. Every deal is different, and he's going to be involved, so I'll wait to hear from him,' Bessent said.

Bessent was upbeat when saluting Trump publicly for his first 100 days at Wednesday's cabinet meeting. But once again, he stopped short of touting any specific deal.

'I view this 100 days as setting the table for peace deals, trade deals, tax deals. So the next 100 days will be harvesting. You've created negotiating leverage and leadership. They're going to yield remarkable results,' he said.

'Are you busy?,' Trump joked, with Bessent trying to navigate a sprawling trade war that now encompasses key competitors like China as well as traditional allies like Canada and Mexico. 'He's doing a great job,' Trump said.

At the meeting, U.S. Trade representative held up paper with the status of trade talks, but gave no hint that one deal was immediate.

'I don't see any results,' said one expert who deals with the White House who is skeptical of the trade war. 'Look at the ports on the West Coast. They're empty. I mean, we're going to start seeing a shortage of things on the shelves. We're going to start paying more for stuff. And you're also making winners and losers,' said the expert.

Greer in a Wednesday evening interview with Fox News name dropped multiple countries.

He said he has a meeting with Japan Thursday, then mentioned Saudi Arabia and a Friday meeting with the Philippines.

'I wouldn’t say finish line close,' he said in reference to India. As for South Korea, 'They’ve been very forward leaning. We’re going to see them again very soon,' he told Bret Baier on 'Special Report.'

EU Commission slams first US step towards pharmaceutical tariffs

Euronews, April 30, 2025

A European Commission official has criticised a recent US investigation into pharmaceutical imports, calling it an unjustified step toward potential tariffs that could harm both European and American healthcare systems.

Earlier this month, the Trump administration initiated a probe on pharmaceutical imports under Section 232 of the Trade Expansion Act of 1962, a law that allows tariffs on such imports deemed to threaten national security.

While no tariffs have been implemented yet, EU officials are concerned the investigation is a precursor to trade action.

"We do not agree with this investigation," Elena Kamilarova, a trade official at the European Commission, said at an event in Brussels. "[We do not agree with] the tool nor the concept of it, namely, looking at it as if imports of pharmaceuticals can pose national security risks.”

Pharmaceutical companies on both sides of the Atlantic have voiced alarm over the potential consequences of US tariffs, warning of rising drug prices and disruptions to vital global supply chains.

These concerns are particularly acute for Ireland, home to major manufacturing operations for American firms such as Pfizer, Johnson & Johnson, and Eli Lilly. Other key exporters include Germany, Belgium, and Denmark.

In 2024, pharmaceuticals were the largest EU export to the US, valued at $127 billion (€117 billion), a figure now at risk due to the ongoing investigation. Flow of medicines is now at risk of disruption, with potentially severe consequences for patients and businesses alike.

Thibaut L’Ortye from the American Chamber of Commerce in the EU also voiced concern about the probe, saying that its launch lacked support from US businesses and could strain the already fragile transatlantic trade relationship.

Despite challenges, pharma is one area where US and EU interests align, particularly in addressing supply chain vulnerabilities, L’Ortye said at the European Policy Event on critical medicines.

"You have a recognition on both sides of the Atlantic that you need to be thinking about vulnerabilities and supply chains," he added.

The EU has warned that any move toward tariffs could undermine access to critical medications, lead to shortages, and increase healthcare costs on both continents.

A new report commissioned by the industry’s US trade group and obtained by Reuters estimates that a 25% tariff on pharmaceutical imports would increase US drug costs by nearly $51 billion annually.

Conducted by Ernst & Young, the analysis predicts that US drug prices could rise by as much as 12.9% if the cost is passed on to consumers.

In 2023, the US imported $203 billion in pharmaceutical products, 73% of which came from Europe—mainly Ireland, Germany, and Switzerland. That same year, total US sales of finished pharmaceuticals reached $393 billion.

“European generic companies for once actually play quite a strong role in addressing shortages in the US, and the US has more shortages than we do and a higher dependence than us on suppliers in Asia, especially active pharmaceutical ingredients (APIs) suppliers,” said the Commission’s Kamilarova.

Washington sources around 80% of its active pharmaceutical ingredients (APIs) from China, India, and the EU. In 2024, pharmaceuticals were the top US import from the EU, including $127 billion (€117 billion) worth of semaglutide, a key component in popular weight-loss medications.

Here’s what’s in the Ukraine-U.S. minerals deal

The New York Times, May 2, 2025

The U.S. and Ukraine signed a deal late Wednesday allowing the U.S. to receive future revenue from Ukraine’s natural resources. Ukraine hopes it will clear the way for continued U.S. support.

The agreement, the text of which was made public yesterday, did not mention security guarantees, which Kyiv had wanted. Under this bargain, U.S. military aid in the future would have to be matched with Ukraine’s resource wealth. The deal also appears to keep the door open for Ukraine to eventually join the E.U. .

What’s next: Ukraine’s parliament still has to ratify the agreement, which will probably happen in the next two weeks, lawmakers said yesterday.

Analysis: It’s not clear how the deal will work in practice. It could bring untold money into a joint investment fund, but the resources will take years to extract and yield profits.

Ukraine signs historic rare earth minerals deal with Washington

Euronews, May 1, 2025

A Ukrainian official said on Wednesday that she had signed an agreement on behalf of the government that creates a US-Ukraine Reconstruction Investment Fund. The agreement aims to create an environment that promotes further economic growth for both countries.

"Together with the United States, we are creating the Fund that will attract global investment into our country," wrote Yulia Svyrydenko, First Deputy Prime Minister of Ukraine on X.

The deal has many variables, which Svyrydenko detailed in a lengthy thread of posts.

All resources in both land and sea in what’s defined as Ukrainian territory will remain under Ukrainian control and ownership.

Kyiv also reserves the right to determine what and where to extract, stressing that the subsoil remains state property, a term enshrined in the deal.

The fund is to be created on a 50-50 basis and will be managed jointly by both Ukraine and the United States. Neither party is to have a majority vote, reflecting a true equal partnership based on mutual gain, cooperation and respect.

The agreement will not impose any changes in the classification of companies’ legal registrations. State-owned companies like Ukrnafta and Energoatom are to remain state-owned.

The agreement makes no mention of any Ukrainian obligations to the United States. The implementation of the agreement will allow both countries to boost their economic potential through joint cooperation.

No interference with EU integration

The agreement complies with the Constitution of Ukraine and does not change the European integration course. The document is consistent with national legislation and does not contradict any of Ukraine’s international obligations.

Kyiv is hopeful that the agreement will signal to other countries that Ukraine is a reliable global player and highlight its intent to cooperate with partners and pursue long-term deals for decades to come.

50% of funds from new licenses for projects in the field of critical materials and oil and gas, which will be transferred to the budget after the creation of the fund.

Income from projects already under way or budgeted revenues is not included in the fund.

The agreement also obliges Washington to help attract more investment and technology for Kyiv. The fund will be directly supported by the US government through its International Development Finance Corporation (DFC).

The DFC will help bring in new investment and technology from companies and funds in both the US and EU, and other countries that support Kyiv’s fight against Moscow.

Technology was underscored as an important component of the deal, as Ukraine deems it important to secure not just capital, but also innovation.

Fund's generated income not to be taxed

The Fund's income and contributions will not be taxed in either the US or Ukraine, so that investments yield the greatest possible results for both parties.

Both countries will be equally contributing to the fund. Svyrydenko says that, in addition to direct funds, Washington can choose to provide further support in the form of weapons, such as air defence systems.

Kyiv will also do its part and reciprocate beyond the agreed-upon 50% of revenues generated from new rents and licenses, if deemed necessary.

The joint fund will then invest the capital in mineral and natural resource projects, as well as other related infrastructure.

The specific investment projects are to be decided on jointly by Ukraine and the US. The deal, however, stipulates that such investments are to be made exclusively in Ukraine.

US Treasury Secretary Scott Bessent said in a video posted to X that “this partnership allows the United States to invest alongside Ukraine, to unlock Ukraine’s growth assets, mobilise American talent, capital and governance standards that will improve Ukraine’s investment climate and accelerate Ukraine’s economic recovery.”

Both countries say the agreement is designed to be a long-term joint investment, planned to last for decades.

My take: This minerals agreement could mark the turning point in the Russia-Ukraine war. As expected by many, the US is getting what it wanted from Ukraine - the rare earth minerals under Ukraine soil.

The Trump administration has finally realised that Russia’s Putin had been dragging its feet in the peace talks with Ukraine, hence they forced Ukraine to sign the minerals agreement anyway trying to pressure the Russia to come to the table.

But it is unclear to me how the US would benefit from its initial proposed peace plan for Ukraine - Russia to keep the annexed Crimea peninsular and the four states occupied by Russian army in Eastern Ukraine. Earlier reports showed that most of the rare earth minerals of Ukraine are underneath the soil in Eastern Ukraine, the bulk of which is now occupied by Russia.

Perhaps the latest twist from Trump days ago was just to push Ukraine to accept for Crimea Peninsular to be recognised as Russian territory, but the four eastern states to return to Ukraine. However, I have doubts that Putin would ever agree to this. Russia’s foreign minister had earlier in the week reiterated Russian demands for a peace plan with Ukraine - 1) Russia to keep control of Crimea Peninsular and the 4 eastern states of Ukraine, 2) Ukraine will never join NATO, 3) to create a buffer zone corridor between the four eastern states of Ukraine from the western part, 4) neutral country army to maintain peace at the buffer zone, 5) Zelenskyy to step down and fresh general election to be held in Ukraine to elect the next leader.

I do not know how things are going to move forward in the Ukraine war. One worse scenario would be for the US to accelerate weapons supply to Ukraine for the latter to fight back against Russia and to retake the four eastern states of Ukraine. That would involve a lot more bloodshed and prolong the war for many years to come.

Russia rejects Trump peace plan as Kyiv scoffs at Putin's 'ceasefire'

MSN news, April 30, 2025

Russia-Ukraine peace talks have hit another impasse as the Kremlin rejected a seven-point plan to end the war set out by the United States that would recognise Moscow's control of Crimea and effectively freeze the frontline in place. The plan, presented by the Trump administration to European allies earlier this month, is widely seen as a land-for-peace deal that would allow Vladimir Putin to keep Ukrainian territory seized by his forces while assuring that Ukraine would not join NATO.

But Sergei Lavrov, Russia's veteran Foreign Minister, declared yesterday in a written interview with Brazilian outlet O Globo that the Kremlin would only accept a ceasefire if various strict terms are met. These include the removal of Ukrainian President Volodymyr Zelensky and what he called Ukraine's 'neo-Nazi' regime, international recognition of Russian sovereignty over the four annexed Ukrainian regions of Donetsk, Luhansk, Kherson and Zaporizhzhia, and a restriction on the size of Ukraine's army, among other measures. 'All the commitments Kiev assumes must be legally binding, contain enforcement mechanisms and be permanent,' Lavrov wrote. 'Demilitarising and de-Nazifying Ukraine is also on the agenda, along with lifting sanctions, withdrawing lawsuits and cancelling arrest warrants, as well as returning Russian assets subjected to the so-called freeze in the West.'

Lavrov's open rejection of the US devised plan came as Vladimir Putin's declaration of a three-day ceasefire from May 8-10 was ridiculed by Ukrainian officials and analysts as a 'trick' and 'cynical'. Dara Massicot, Senior Fellow at the Carnegie Endowment for International Peace think tank focusing on Russian defence, pointed out that Putin likely doesn't want the threat of Ukraine air attacks to disrupt Russia's Victory Day on May 9, with the nation set to celebrate the 80th anniversary of the Soviet Union's triumph in World War II. 'The Kremlin wants a ceasefire for those days because it can't suitably defend airspace from Ukrainian drones and they want a smooth 80th anniversary victory day parade,' she said.

Any withdrawal of US military aid to Ukraine could create serious difficulties for Europe, as Kyiv's ability to keep fighting would depend on European political will to muster money and weapons. If it were easy, Europe would 'already be doing things without America,' said a European diplomat, who spoke on condition of anonymity to an Associated Press reporter. No new US aid package for Ukraine has been approved since Trump came into office, even as European nations have collectively provided Ukraine with more aid than Washington, according to the Keil Institute. Europe's 'big mistake' was undertaking major military downsizing following the Cold War and thinking 'this war started in February 2022 and not in February 2014,' when Moscow invaded and then annexed Crimea, said Thomas Gomart, director of IFRI, a French international affairs think tank.

If Trump walks away, or if Kyiv rejects a deal and keeps fighting with European support, it won't necessarily mean 'the collapse of Ukraine' - although Heisbourg admitted that more people will almost certainly die if the US pulls its air defences and intelligence-sharing capabilities. The analysts all agreed on one thing - Trump has jolted European leaders into awareness that they need to take responsibility for their own defence, regardless of who occupies the White House. 'This issue is not a question about the next two months or the next two years. This issue is about the next two decades,' Gomart said.

A backlash in India as tensions with Pakistan soar

The New York Times, May 1, 2025

Public anger has swelled in India after last week’s attack in Kashmir in which 26 people — all but one of them Hindu tourists — were killed by militants. Thousands of Muslims have been detained and their homes demolished in a growing backlash.

India appeared to be preparing to strike Pakistan, with Prime Minister Narendra Modi vowing to hunt down the militants and “raze” their safe havens. A Pakistani minister said on Tuesday that Pakistan believed an Indian strike was imminent.

India has said that Pakistan had a supporting hand in the attack, an accusation that Pakistan denies.

The killings of Muslims were reported in two states, Uttar Pradesh and Karnataka, with media reports suggesting they were hate crimes. Inside Kashmir, security forces have arrested hundreds and have blown up the homes of people they have accused of having terrorist affiliations.

Background: The backlash was targeted at Kashmiris and soon spread to a wider anti-Muslim sentiment. That, analysts said, has furthered a demonization of Muslims that Modi’s party has long used to unite India’s Hindu majority.

Related: More than 80,000 Afghans have been expelled from Pakistan since March 31. Many Afghan migrants have Pakistani spouses and have lived in the country for years. Nevertheless, the government says they must leave.

Working to calm India-Pakistan tensions

Secretary of State Marco Rubio on Wednesday spoke separately with Pakistan’s prime minister and India’s foreign minister as tensions soared after a terrorist attack last week in Kashmir left 26 people dead. Rubio said the U.S. was committed to “cooperation with India against terrorism,” but urged the two countries, which are both nuclear powers, to work together. The U.N. offered to mediate.

Pakistan has claimed it has “credible intelligence” that India is planning to attack, and promised a forceful response. India has not commented on any such plans.

Israel’s military intervened in Syrian sectarian violence

The New York Times, May 1, 2025

Israel launched airstrikes on Syria yesterday and threatened to strike government forces if clashes persisted between pro-government fighters and militiamen from the Druse minority.

The Israeli military said its aircraft had struck a group of “operatives” accused of having “attacked Druse civilians” south of Damascus. At least 39 people — including 22 yesterday — have been killed in two days of clashes on the outskirts of Damascus, according to a war-monitoring group.

China’s manufacturing activity drops to a 16-month low as Trump’s tariffs bite

MSN news, April 30, 2025

China’s factory activity contracted in April to its lowest level since December 2023, despite ongoing government stimulus efforts, according to official data released by the National Bureau of Statistics on Wednesday.

The manufacturing purchasing managers’ index (PMI) — a leading economic gauge of business conditions — fell to 49.0 for the month, well below the 49.8 forecast by analysts. A reading below 50.0 indicates contraction.

This marks the first monthly decline in China’s manufacturing sector in 2025. In March, the PMI stood at 50.5, the highest reading this year, driven by businesses accelerating orders and shipments in anticipation of reciprocal tariffs imposed by US President Donald Trump.

“We expect that April's trade will show the biggest decline in terms of China's exports to the US. This is because importers have been in wait-and-see mode, hoping trade talks might lead to lower tariffs,” analysts at ING Group wrote in a report.

Business conditions deteriorate across the board

The latest PMI data showed that several key components weakened sharply in April. Both output and new orders recorded significant declines compared with the previous month, with foreign orders tumbling to 44.7 — the lowest level in eleven months.

Employment contracted at a faster pace, while buying activity declined for the first time in three months. Furthermore, both input costs and selling prices fell at the fastest rate in seven months. Business confidence also dropped to a seven-month low.

By contrast, China’s non-manufacturing PMI appeared more resilient, registering 50.4 in April — a slight decline from 50.8 in March. Nonetheless, the data marked the 28th consecutive month of expansion in the services sector.

Signs of US-China trade de-escalation

President Trump implemented sweeping reciprocal tariffs of up to 145% on all Chinese goods in April. In retaliation, Beijing imposed 125% import levies on US goods and pledged to “fight to the end”. Chinese officials have repeatedly insisted that no trade negotiations are taking place, despite Trump’s claims that talks are ongoing.

However, there are emerging signs of a potential de-escalation in the trade war. Last week, Trump vowed to “substantially” reduce tariffs on Chinese goods. US Treasury Secretary Scott Bessent acknowledged that high tariffs on both sides were unsustainable, telling reporters that while “de-escalation is up to China”, the US will not reduce tariffs “unilaterally”.

The Wall Street Journal reported that the Trump administration was considering lowering tariffs on Chinese goods to a range between 50% and 65%. A tiered approach may be introduced, with tariffs of 35% applied to goods not deemed critical to national security, while tariffs of at least 100% would be retained on essential imports from China.

Nevertheless, Beijing has shown no signs of readiness to engage in tariff negotiations.

Last week, China’s Ministry of Commerce stated: “Any claims about progress in China-US trade talks are purely speculative and have no factual basis.”

It urged Washington to “completely remove all unilateral tariff measures against China, and seek to resolve differences through equal dialogue”.

Nuclear breakthrough: China takes huge step towards limitless clean energy

Mailonline, May 1, 2025

In the quest to safely generate limitless clean energy, China has just taken a giant step closer.

Scientists in Gansu province in the country's west have achieved the milestone of reloading fuel to an operational nuclear fission reactor while it was running.

The achievement shows fission reactors can run and be refueled continuously – potentially offering a constant source of power generation.

Drawing upon declassified US research, Chinese engineers began constructing the experimental machine – a thorium molten salt reactor (MSR) – back in 2018.

Thorium MSRs are a type of advanced nuclear technology that use liquid fuels, typically molten salts, as both a fuel and a coolant – and are generally safer than existing fission reactors which use uranium.

It marks the first long-term, stable operation of the technology, reports South China Morning Post (SCMP), citing Chinese communist party newspaper Guangming Daily.

Xu Hongjie, the project’s chief scientist, said China 'now leads the global frontier' in the energy revolution, following decades of intensive research.

Xu said: 'The US left its research publicly available, waiting for the right successor. We were that successor.'

The world-first was announced by Mr Xu during a meeting at the Chinese Academy of Sciences in Beijing on April 8.

In a cheeky dig, Xu referred to America's research into molten salt reactors in the 1960s and 1970s, eventually abandoned in favour of uranium-based systems.

'In the nuclear game, there are no quick wins,' he was quoted as saying. 'You need to have strategic stamina, focusing on doing just one thing for 20, 30 years.'

In reference to Aesop's famous fable, he said: 'Rabbits sometimes make mistakes or grow lazy. That's when the tortoise seizes its chance.'

His team at the CAS Shanghai Institute of Applied Physics spent years dissecting declassified American documents and bettering their experiments, SCMP reports.

'We mastered every technique in the literature – then pushed further,' Xu added.

This experimental reactor is hidden away in the Gobi Desert city of Wuwei in Gansu province and can generate two megawatts (2MW) of energy – enough to power 2,000 households.

Only reaching full-power operation in June last year, it is the only operational thorium reactor in the world.

What is thorium?

Thorium is a naturally-occurring, slightly radioactive metal discovered in 1828 by Swedish chemist Jons Jakob Berzelius.

More abundant in nature than uranium, thorium can be used as a fuel source for nuclear energy, but not directly.

Thorium itself is not a nuclear fuel, although it can be used to create such a fuel (in conjunction with a fissile material such as recycled plutonium).

But a much bigger thorium molten salt reactor now being built is set to achieve its first sustained nuclear chain reaction by 2030.

Estimated to be 500 times more abundant than the uranium-232 used in conventional nuclear reactors, thorium has been hailed as a potential solution to the demand for nuclear power.

Nuclear reactors already in operation around the world create energy by forcing radioactive elements to undergo a process called fission.

During this process, the element breaks down into smaller, more stable elements and releases heat which can be used to drive steam turbines, in turn producing electricity.

Thorium on its own is not fissile, meaning it cannot be used for fission, but it can provide the basis for a fission reaction.

This is because thorium is 'fertile', meaning it can transmute into uranium-233 (U-233) when bombarded with neutrons.

In a molten-salt reactor, thorium is mixed with a chemical called lithium fluoride and heated to about 1400°C (2550°F).

This mixture is then bombarded with neutrons until some of the thorium starts to transform into uranium-232, which then decays in a fission reaction.

Nuclear fusion vs. nuclear fission

Nuclear fusion and fission are nuclear processes; they involve nuclear forces to change the nucleus of atoms.

Fusion joins two light elements (low atomic mass number), forming a heavier element. For fusion to occur, hydrogen atoms are put under high heat & pressure so they fuse together.

Meanwhile, fission splits a heavy element (with a high atomic mass number) into fragments.

In both cases, energy is freed because mass of the remaining nucleus is smaller than mass of reacting nuclei.

Both reactions release energy which, in a power plant, can boil water to drive a steam generator, making electricity.

Source: International Atomic Energy Agency

As it decays, this uranium then produces more neutrons which convert additional thorium into fuel. In theory, this reactor design could turn the extremely abundant element into a nearly limitless source of power.

Molten-salt reactors also produce significantly less nuclear waste and remove the risk of dangerous nuclear meltdown by keeping the levels of fissile material relatively low.

What's more, China has a thorium source that could supply enough fuel to power the country for 60,000 years, geologists in Beijing have claimed.

The Bayan Obo mining complex in Inner Mongolia, an autonomous region of northern China, could contain enough thorium to supply China's household energy demands 'almost forever', a national survey reportedly found.

It identified 233 thorium-rich zones across the country and, if accurate, suggests that thorium reserves in China significantly exceed previous estimates.

The Wuwei experimental reactor is different from the 'Experimental Advanced Superconducting Tokamak' (EAST), a fusion reactor located in Hefei in Anhui province.

Known as China's artificial sun, it set the record for running for as hot and as long as possible – for 1,066 seconds at 180million°F (100million°C) – seven times hotter than the sun's core.

EAST could be a precursor to the first ever fusion power plants that supply power directly to the grid and electricity to people's homes.

These power plants could reduce greenhouse gas emissions from the power-generation sector by diverting away from the use of fossil fuels like coal and gas.

Meanwhile, the SPARC nuclear fusion reactor, a US project involving MIT, is currently in development in Devens, Massachusetts and scheduled to start operations in 2026.

South Korea also has its own 'artificial sun', the Korea Superconducting Tokamak Advanced Research (KSTAR), which has run at 180million°F (100million°C) for 48 seconds.

And Japan's reactor, called JT-60SA and switched on in Naka north of Tokyo late 2023, is a six-storey-high machine measuring 50 feet high and 44 feet wide.

Built and operated jointly by Europe and Japan, JT-60SA will be the world's largest fusion reactor until the completion of the the International Thermonuclear Experimental Reactor (ITER) in France, set to begin delivering power in 2035.

My take: This is a massive achievement in China nuclear power technology and a giant step towards energy independence for the country that has abundant reserves in thorium. Having built the first thorium MSR in 2018, China has made another milestone in successfully adding fuel into the operational MSR.

I have earlier highlighted this thorium molten salt reactor experiment in China late last year or early this year, and now it is closer to a successful, constant operation for long term. Once fully operational, the bigger thorium MSR being built in China will likely drive the country towards substantial reduction in fossil fuel imports from 2030.

That would likely drive crude oil prices and LNG prices down, as China is the biggest importer of fossil fuel. Also, renewable energy such as solar and wind power in China will see a drop in energy selling prices, which may not be positive for renewable energy developers in China.

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