Note: The Global Morning Briefing summarizes international news reported by Seoul Economic Daily.
Beyond Tariffs to an Import Ban: Trump's Unprecedented Trade Weapon
With 54 days to go before the U.S. midterm elections, President Donald Trump's Middle East policy and tariff strategy are both faltering. The confrontation with Iran, which he said would end within four to six weeks, has dragged on for more than half a year, and the fighting has spread to the Red Sea, adding to the burden on his administration.
U.S. Central Command said on the 8th that it had sunk five Iranian oil tankers in response to ballistic missile launches by Iran's Revolutionary Guard against U.S. Navy vessels over two days. The Revolutionary Guard, for its part, claimed it had struck 20 vessels in total, including U.S. ships, oil tankers and vessels transiting the Strait of Hormuz, and released photographs it said showed the seizure of a U.S. military unmanned submersible. In addition, Yemen's pro-Iran Houthi rebels attacked a Saudi Arabian air base and Aramco refining and power facilities, damaging four cities in southern Saudi Arabia.
Hard-line measures also continued on the tariff front. Trump signed a proclamation banning imports of billions of dollars worth of Canadian goods, including alcoholic beverages, dairy products and motorcycles, effective the 29th of this month. While there have been many precedents for raising tariffs, this is the first time imports themselves have been blocked, and the action was said to cite Section 338 of the Trade Act of 1930 and a related Supreme Court ruling in February. Because the effective date leaves room for negotiation, some observers say similar pressure tactics could be used against other countries, including South Korea.
Meanwhile, public opinion is moving against Trump. His approval rating stood at just 33% in a recent survey, while Canadian Prime Minister Mark Carney's approval rating was 62%, up 11 percentage points from a month earlier. To reverse this trend, Trump will hold the first-ever Republican convention for a midterm election in Dallas on the 9th and 10th, though there are also concerns that the prolonged war and inflation pressures could instead rally the opposition.
Hormuz and the Red Sea Both Ablaze as Oil Returns to $100
The war between the United States and Iran has intensified simultaneously in the Strait of Hormuz and the Red Sea, pushing international oil prices back above $100 a barrel. It is the first time prices have topped $100 since July 24. After Iran-backed Houthi rebels in Yemen launched a large-scale attack on the Saudi Arabian mainland, the United States and Iran traded retaliatory strikes targeting oil tankers and warships, shaking both of the Middle East's main crude shipping routes at once.
According to Reuters, the Houthi rebels attacked four cities in southern Saudi Arabia with drones and ballistic missiles, injuring at least 73 people, while the Khamis Mushait air base and part of an Aramco energy facility halted operations because of fires. Reuters assessed this as the largest expansion of the Houthi front since the war broke out in late February. Saudi Arabia was also reported to have retaliated against Houthi strongholds, deepening the pattern of all-out war once again.
In the Strait of Hormuz, the exchange between the United States and Iran escalated more rapidly. U.S. Central Command said it had destroyed five Iranian oil tankers in response to two attempted attacks on U.S. Navy vessels by Iran's Revolutionary Guard over two days, and the Revolutionary Guard immediately claimed it had attacked 10 vessels in total, including two U.S. ships and eight oil tankers, and had targeted 10 more. Iran also fired 20 ballistic missiles at a U.S. military base in Jordan, 18 of which were intercepted, and announced that it had seized a U.S. military unmanned submersible.
The escalation pushed oil prices up immediately. Brent crude futures rose to as high as $100.02 a barrel during trading on the 9th, and crude exports from Middle Eastern oil producers are estimated to have fallen to about 11 million barrels a day from 18 million before the war. Goldman Sachs forecast that Brent could exceed $120 if Gulf output continues to decline, while Bank of America warned that prices could spike to $150 in the worst case. The surge in oil prices sent all three major New York stock indexes lower on the 8th, and the probability of a September rate increase rose to 59%.
Prices Up, Stock Up: What Happened at Intel
Intel's strategy to revive its foundry business is delivering results and winning market confidence. Buoyed by expanding semiconductor demand driven by artificial intelligence, Intel has continued to raise prices and is showing a lead in next-generation lithography technology, lifting investor expectations.
According to Taiwanese outlet DigiTimes, Intel plans to raise prices for PC central processing units by about 10% in October. When the news emerged, Intel shares surged 9.1% to close at $104.47 even on a day when all three major New York indexes fell, bringing its cumulative gain this year to about 144%. Intel also raised CPU prices in the first quarter and again in July, continuing a strategy that prioritizes improving profitability over expanding market share. In second-quarter results, its gross margin jumped to 42% from 2.5% a year earlier, and in April it secured a contract to supply 1.4-nanometer-class 14A process technology to the Terafab project led by Tesla and SpaceX.
The foundry business itself, however, remains in the red. Intel's foundry revenue was $5.8 billion in the second quarter, but its operating loss reached $2.1 billion, and revenue from external customers came to just $293 million, exposing its heavy reliance on in-house volume. Intel is trying to break through this limitation with next-generation technology. Intel and ASML said on the 8th that they had processed more than 1 million wafers cumulatively using High NA EUV lithography equipment. While not all of that is production volume yet, it is seen as a signal that operation of the technology has entered a stage of stability. Given that cumulative wafer output on such equipment worldwide is about 1.35 million, some analysts say Intel's share is overwhelming.
By contrast, TSMC has set its timeline for adopting the same equipment at 2030 and Samsung Electronics at 2028 to 2029, taking a cautious stance that prioritizes optimizing existing processes over an equipment investment of as much as $400 million. Another limitation cited is that while preliminary talks are under way on an 18A process based on High NA EUV, no confirmed large-customer contract has been announced.
A Year of Results Drawn From One Strong Month: The AI Startup Illusion
Controversy is growing among Silicon Valley AI startups over so-called revenue inflation, in which growth rates are overstated. Critics say that companies preparing to go public are interpreting a metric known as annualized revenue in ways favorable to themselves, potentially exaggerating growth beyond what is real.
According to Business Insider, AI startups generally calculate results based on annual recurring revenue. This method estimates revenue expected to recur based on subscription contracts with customers and was originally used mainly by software companies. But because AI startups also generate usage-based revenue charged by tokens or hours of use in addition to monthly subscription fees, a growing number are also applying annualized revenue, which converts a single month's results directly into a yearly figure. The problem is the suspicion that some companies inflate their results by disclosing annualized revenue based on a month in which sales were unusually concentrated. Akshay Narisetty, chief executive of AI recording device maker Pocket, noted that there is no guarantee that revenue that rose in a particular month will continue all year.
OpenAI and Anthropic are no exception to this practice. OpenAI calculates ChatGPT subscription revenue as annual recurring revenue while using annualized revenue for its newly launched advertising business. Anthropic measures its total revenue on an annualized basis while including all revenue sold through clouds such as Amazon Web Services. Axios pointed out the difference that Anthropic counts the full amount customers pay through cloud providers as revenue, whereas OpenAI recognizes only the amount excluding partners' shares. Because such differences in calculation methods directly affect valuations, industry observers say it is difficult to compare the two companies' revenue directly.
