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BMW and Alibaba Partner to Develop AI-Powered Smart Cars in China

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German automaker BMW and Chinese tech giant Alibaba Group have announced a strategic partnership to develop artificial intelligence (AI) for smart vehicles in China. The collaboration marks an important step for both companies—BMW seeks to strengthen its position in the highly competitive Chinese automotive market, while Alibaba continues its push to integrate AI-driven solutions across industries.

AI Integration in BMW’s Future Models

As part of the partnership, BMW’s upcoming Neue Klasse models, set for production in China from 2026, will feature an advanced AI-powered Intelligent Personal Assistant (IPA). The AI system will be co-developed by BMW and Alibaba and will be based on the Yan AI engine, a Qwen-empowered smart cockpit solution from Alibaba’s Banma, a leading intelligent cockpit provider.

According to Alizila, Alibaba’s digital newsroom, the AI-enhanced IPA will set “a new benchmark for intelligent, intuitive, and engaging human-vehicle interaction.” The system is designed to improve mobility services such as real-time navigation, voice assistance, and personalized in-car experiences.

The Neue Klasse models will debut with two AI agents: the Travel Companion and Car Genius. These features will offer customized lifestyle services and real-time assistance, such as planning outings by analyzing restaurant ratings, real-time traffic conditions, and user preferences.

Strengthening Ties Between Tech and Auto Industries

Sean Green, President and CEO of BMW Group Region China, highlighted the significance of the collaboration, stating: “Our long-term partnership with Alibaba Group is exemplary of common growth achieved with co-creation. BMW will work closer with Chinese tech partners on electric mobility and intelligent technologies to write our renewed win-win story.”

Alibaba Group CEO Eddie Wu also emphasized the impact of AI on the automotive sector. “Our partnership with BMW marks a pivotal leap in deploying AI-powered large language models at the forefront of advanced manufacturing,” he said. “AI is a driving force to advance productivity across industries, and we look forward to pioneering AI applications in mobility that drive innovation and elevate user experience.”

BMW’s Push for Electric Vehicles

The collaboration comes as BMW accelerates its shift toward electric vehicles (EVs). The company aims for fully electric models to make up 50% of its deliveries from this year onwards.

BMW has already made significant progress, with fully electric vehicles accounting for over 17% of its total sales in 2024. When including plug-in hybrids, nearly one in four BMW vehicles sold last year was electrified. The launch of Neue Klasse is expected to further increase this share.

Speaking at BMW’s Annual Conference 2025 in Munich, Oliver Zipse, Chairman of BMW AG, highlighted the company’s milestones in the EV sector: “We will reach a total of more than three million electrified vehicles and over 1.5 million battery electric vehicles (BEVs) sold since the launch of the BMW i3 and i8.”

Challenges in the EV Market

Despite its ambitious goals, BMW—along with other European automakers—faces challenges in the EV market. Companies like Volkswagen and Volvo have adjusted their EV targets due to weaker-than-expected demand and a renewed focus on hybrid models.

Rising competition from Chinese automakers such as BYD, SAIC, and Geely, combined with reduced government subsidies for EVs in key European markets like Germany, the UK, and France, have added to the industry’s uncertainty.

However, BMW remains committed to its electrification strategy, betting on innovation and AI-driven advancements to enhance its market position, particularly in China—the world’s largest EV market.

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DHL Express to Suspend High-Value Consumer Shipments to U.S. Amid Regulatory Changes

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DHL Express, the international courier division of Germany’s Deutsche Post, announced it will temporarily suspend global business-to-consumer (B2C) shipments valued over $800 to individuals in the United States starting April 21. The move comes in response to new U.S. customs regulations that have extended clearance times for incoming goods.

According to a notice published on the company’s website, the suspension affects only shipments above the $800 threshold sent to private individuals. Business-to-business (B2B) shipments will continue but may experience delays due to the new processing requirements. Shipments under $800, whether destined for individuals or businesses, remain unaffected.

The change follows an April 5 update to U.S. customs rules, which now require formal entry processing for all imports valued over $800. Previously, this threshold stood at $2,500. DHL cited the revised policy as the reason for the temporary suspension, as the additional paperwork and procedural requirements have significantly slowed customs clearance.

“This is a temporary measure,” the company stated, without specifying when services might resume.

While the announcement was undated, online metadata indicates it was compiled on Saturday. The update marks a significant shift for international logistics companies that rely on streamlined processes to handle high-volume e-commerce shipments.

DHL’s decision comes amid rising trade tensions and shifting import policies in the United States, particularly concerning packages from China and Hong Kong. Last week, Hongkong Post suspended sea mail services to the U.S., accusing Washington of “bullying” after the United States revoked duty-free trade provisions for packages from the region.

In response to earlier inquiries from Reuters, DHL emphasized its commitment to compliance, saying it would continue processing shipments from Hong Kong “in accordance with the applicable customs rules and regulations.” The company also said it is working with customers to help them adapt to the upcoming changes, particularly those set to take effect on May 2.

Industry analysts say the new U.S. customs policy could have a wide-reaching impact on cross-border e-commerce, as formal entry requirements typically involve additional documentation, processing fees, and longer delivery times. Retailers and logistics firms alike are now reassessing their operations to minimize disruption for customers.

DHL has not provided a specific date for when high-value B2C shipments to the U.S. will resume but indicated that the pause is a precautionary response to the evolving regulatory environment.

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Trump Administration Imposes New Fees on Chinese Ships, Escalating Trade Tensions

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The Trump administration on Thursday announced new fees targeting Chinese-built and Chinese-owned vessels docking at U.S. ports, escalating the ongoing trade war between Washington and Beijing. The move is aimed at countering China’s growing dominance in the global shipbuilding industry and protecting U.S. maritime interests.

The announcement, made by the Office of the United States Trade Representative (USTR), follows a year-long investigation launched under the Biden administration into China’s shipbuilding practices. USTR Ambassador Greer said the decision is designed to “begin to reverse Chinese dominance, address threats to the U.S. supply chain, and send a demand signal for U.S.-built ships.”

The new policy will introduce fees based on net tonnage per voyage for Chinese-built and owned vessels entering U.S. ports. This first phase is set to take effect in 180 days. A second phase, targeting foreign-owned liquefied natural gas (LNG) vessels built in China, will be implemented within three years.

The fees could reach as high as $1 million for each Chinese-built ship and $1.5 million for foreign-owned carriers with Chinese-built vessels in their fleets, according to findings from the USTR investigation. The move marks a significant shift in maritime trade policy, as the U.S. seeks to reduce its dependency on Chinese-made ships.

The USTR probe, launched in April 2024 under Section 301 of the 1974 Trade Act, was prompted by a petition from five national labor unions raising concerns over China’s increasing control over global shipping. The USTR concluded that China’s practices unfairly displaced foreign competitors and reduced global competition in maritime logistics.

China currently dominates the global shipbuilding market, with Chinese-built vessels accounting for 81% of the total market share in 2024. In the energy sector, China controls 48% of the liquefied petroleum gas (LPG) vessel market and 38% of the LNG sector, according to Veson Nautical.

In response to last year’s proposal, China’s Ministry of Commerce criticized the U.S. investigation as “a mistake on top of a mistake.” However, no official statement has been issued following the latest U.S. policy announcement.

Despite the new maritime fees, President Trump appeared to signal a pause in further tariff hikes. Speaking to reporters, he said, “At a certain point, I don’t want [tariffs] to go higher because… you make it where people don’t buy.” Trump indicated he may lower existing tariffs to avoid further disruption in trade flows.

Currently, the Trump administration has imposed tariffs of 145% on all Chinese imports, while China has retaliated with 125% tariffs on U.S. goods. In response, Beijing has hinted at shifting its countermeasures to the U.S. services sector, including legal consultancy, tourism, and education.

As tensions continue to rise, the shipping fee move represents a broader effort by Washington to reshape global trade and strengthen domestic manufacturing — though it risks inflaming economic ties with China even further.

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Global Luxury Sector Faces New Blow as US-China Trade War Escalates

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The global luxury industry, already grappling with declining demand and changing consumer habits, faces a new hurdle as the trade war between the United States and China intensifies. Analysts warn that the sector’s fragile recovery may be further threatened by President Donald Trump’s recent decision to hike tariffs on Chinese goods to as high as 245%.

According to a memorandum seen by Euronews, the luxury market is forecasted to grow modestly at 1% to 3% annually between 2024 and 2027. This is a sharp slowdown compared to the 5% yearly growth seen between 2019 and 2023, and 9% between 2021 and 2023, as highlighted in a report by McKinsey.

China and the US are two of the largest luxury markets globally. In 2023, China accounted for 22%–24% of global luxury consumption, while US consumers contributed around 21% of total revenue in 2024, according to Bain & Company and Bank of America. Popular products in both markets include handbags, cosmetics, footwear, and leather goods, with brands such as Chanel, Dior, Louis Vuitton, Gucci, and Prada dominating sales.

However, economic slowdowns in both countries, combined with rising inflation and interest rates, have already caused luxury shoppers to scale back. The cost of living crisis in several regions has shifted consumer preferences toward more durable and budget-conscious purchases. Furthermore, luxury brands that raised prices post-pandemic without matching innovation are losing their exclusivity appeal.

The latest round of US tariffs, coupled with retaliatory Chinese tariffs currently at 125%, have added fresh uncertainty to the sector. Global stock markets have responded negatively, wiping billions in market capitalization from luxury giants. Shares of Lululemon Athletica dropped 20.7% on Nasdaq, Prada Group fell 23.4% on the Hong Kong Stock Exchange, and Kering and LVMH declined 26.3% and 19.9% respectively on Euronext Paris.

LVMH, often seen as a bellwether for the luxury industry, reported a 2% dip in Q1 2025 revenue to €20.3 billion. Fashion and leather goods revenue dropped 4%, perfumes and cosmetics remained flat, and wines and spirits fell 8%. Only watches and jewelry showed growth with a modest 1% increase.

Beyond China, US tariffs on EU goods—although reduced to 10% temporarily—also pose risks. The US imports various luxury products from Europe, including wine, chocolate, high-end apparel, and cars. These tariffs could increase prices for American consumers, potentially leading to reduced spending.

Additionally, the fragmented and globalized supply chains of luxury brands may incur hidden costs due to tariffs, further squeezing margins and complicating logistics.

In a surprising twist, the rising cost of luxury imports has led some Chinese manufacturers to promote knock-off products directly to US consumers via platforms like TikTok. Claiming to be original equipment manufacturers, they offer imitations of products like Birkin bags and Lululemon leggings at steep discounts. While their claims are largely unverified, Chinese wholesale platform DHgate has surged to the number two spot on the US Apple App Store, signaling growing consumer interest in alternatives amid rising prices.

As trade tensions deepen, the luxury sector is bracing for further disruptions in an already turbulent market landscape.

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