Shein’s Hong Kong IPO, 50% Tariffs on Copper? & Why China is Winning the EV Race

Ed breaks down Trump’s latest tariff updates, explains why Shein is pursuing a Hong Kong IPO, and unpacks why Tesla is falling behind Chinese competitors in the EV race. Check out our latest Prof G Markets newsletter Further reading: Michael Dunne for the NYT on why Americans can’t buy the world’s best electric car Order "The Algebra of Wealth" out now Subscribe to No Mercy / No Malice Follow Prof G Markets on Instagram Follow Ed on Instagram and X Follow Scott on Instagram Learn more about your ad choices. Visit podcastchoices.com/adchoices

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• 0:00Speaker 00

  From the Goldman Sachs trading floor, in 10 minutes or less, investors and analysts share timely analysis on the week's market activity. The Markets Podcast from Goldman Sachs. Listen now.

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• 1:32Ed Elson?

  Today's number: 85 million. That's how many Lego pieces we used to build Legoland Shanghai, which just opened up this week. That makes it the largest Legoland in the world, and also the second-largest stockpile of synthetic assets in Asia. The number one is still SoftBank.

• 1:55Speaker 04

  Money markets mad. If money is evil, then that building is hell.

• 2:05Ed Elson?

  Welcome to Prof G Markets. I'm Ed Elson. It is July 9th. Let's check in on yesterday's market vitals. The major indices ended the day mixed after Trump said there would be no exceptions to his August 1st tariff deadline. We'll talk more about that in a second. The S and P and the Nasdaq closed nearly flat while the Dow fell slightly. The yield on 10-year treasuries rose and renewable energy stocks fell after Trump announced stricter eligibility requirements for clean energy tax credits.

• 2:35Ed Elson?

  Okay, what else is happening? Trump announced a 50% tariff on copper imports and signaled that more sector-specific duties are on the way. The market responded accordingly with copper prices jumping 13% to a record high after the announcement. He also threatened to impose a 200% tariff on pharmaceuticals, stating that he'd be, quote, "announcing something very soon." Trump clarified that the tariffs would not take effect immediately, giving companies up to 18 months to reshore supply chains. This news comes after he decided to push his original July 9th deadline to August 1st. Remember the 90-day tariff pause, which was supposed to end today?

• 3:15Ed Elson?

  Well, that will now end in three weeks. Trump later added in a cabinet meeting yesterday that that change, quote, "wasn't a change," but that it was, quote, "a clarification." He also changed his tune on the strictness of that August 1st deadline. At first, he called it, quote, "firm, but not 100%." But then yesterday, he said that actually, no, there will be no further extensions to that deadline. Okay, so we have a new tariff. Copper, 50%, copper prices rose 13%, record high. That's probably a big deal. When will the tariff go into effect?

• 3:58Ed Elson?

  Well, we don't know. Howard Lutnick said maybe the end of July, maybe August 1st. Trump said he was going to give 18 months. In other words, we actually have no idea when this copper tariff will even happen, or if it will even happen. As we've seen countless times, I mean, you can't, you just can't really take Trump's word when he makes these threats about tariffs, which is honestly why I was a little surprised by how the price of copper reacted. We also have no idea if those pharmaceutical tariffs will happen. That one was really soft. As for all the other Liberation Day tariffs, well, we have no idea when those

• 4:40Ed Elson?

  will happen either. He said August 1st, but before that, he was saying it was July 9th. That was the 90-day pause. And then he said August 1st was a soft deadline, but now it's a hard deadline. In some, no one actually knows. In the meantime, we should probably check in on our deal progress. Remember, Trump said over the weekend that he would be announcing trade deals this week. He said, yes, that we were going to see some tariff letters, but remember, he said and/or trade deals. So let's just check in on how many deals we've secured. So far, we are at zero, zero deals. So no deals, maybe some tariffs.

• 5:24Ed Elson?

  We'll see, but again, not really sure. And then an extension on the tariff deadline, which by the way, he keeps on saying, oh, it wasn't a change. This was just a clarification. But the more I look at the situation, the more it is becoming clear to me that basically nothing has gotten done this week. And this is the same thing we keep on seeing time and time again. There's a lot of headlines. There's a lot of stuff that it feels like we have to cover. 50% tariffs on copper, that is a big deal. But over and over again, none of these deals or these negotiations or these tariffs, none of them really have any consequence. They don't really mean anything.

• 6:06Ed Elson?

  And yeah, we saw that that increase in the price of copper, but you look at the overall stock markets, you look at the S and P, you look at the Nasdaq, you look at the Dow, the market's largely shrugged. So this feels again like this is the taco trade at work. We will see, but what is clear to me right now is Trump has said a lot of stuff. He's sent out a lot of letters. He's said a lot of stuff about these tariffs, but ultimately, nothing has really changed. It's July 9th today. This was supposed to be the end of the tariff pause, but no, that's not going to happen anymore. Apparently it's going to happen August 1st, but who knows if that's going to happen either.

• 6:47Ed Elson?

  So I don't have much to tell you here. We'll keep on checking in on this, but as of now, I don't think there's much to say. More talk and still no action.

• 7:04Ed Elson?

  Shein has filed to go public in Hong Kong. The fast fashion retailer filed the prospectus privately with the Hong Kong Stock Exchange last week. This is a significant turnaround from their London IPO filing, which they filed about 18 months ago, and which we have discussed on the podcast before. So Shein possibly switching from London to Hong Kong. I think we should quickly just review the Shein IPO story, which we have been following for a long time. As a reminder, Shein is the fast fashion retailer that was started in China, but that is now headquartered in Singapore. Their supply chain is still mostly in China,

• 7:45Ed Elson?

  but they say they are a Singaporean company. They sell extremely cheap clothes, mostly to people my age, mostly to Gen Z. And in the past few years, they have been kind of crushing it. Last year, they did $38 billion in revenue, up 20% from the year before.

• 8:03Ed Elson?

  Now, for the past three-ish years, they have been trying to go public. That's been their big goal, but each time they try, they've gotten a lot of pushback, mostly because of their ties to China and also because of their supply chain practices. As I have flagged on the podcast before, there has been some evidence that Xi in sources their products from Xinjiang, which is a very important location for forced labour camps in China. And while Xi in has tried to address this, it's still just, you know, not a great look. So every time Xi in has tried to go public, usually some government authority has stepped in and said, hold on, we need to review this. So first, they tried to go

• 8:45Ed Elson?

  public in the US. They submitted that filing in 2022. They were later told that they were going to receive scrutiny from the SEC, at which point they decided to pivot. And two years later, they filed for an IPO in London. The UK authorities actually approved that filing, but interestingly, the Chinese authorities did not accept it. Supposedly, China had issues with how the filing discussed those very supply chain issues with Xinjiang that I just discussed. But the UK said, no, those are important disclosures and those disclosures need to stay in. So now, amid this argument between China and the UK, now Xi in is saying,

• 9:25Ed Elson?

  okay, we're going to go public in Hong Kong. That might be because they actually do want to go public in Hong Kong. It also might be because they want to put some pressure on the London Stock Exchange and they want to force the UK into compromising with China and to ultimately let them go public in London. Remember, it's been actually quite a bad time for London in terms of the IPO markets. Fundraising this year has fallen to a 30-year low. So the London IPO market is drying up. And there is an argument to be made that maybe the London IPO market needs Xi in. Maybe they can't afford to let another big

• 10:06Ed Elson?

  IPO go somewhere else. So that's what's happening to Xi in right now. Now, the other side of this is what is happening in Hong Kong. And that is that the Hong Kong IPO market is having this unbelievably explosive rise right now. So far this year, more than 200 companies have applied to go public on the Hong Kong Stock Exchange. That is a record high for Hong Kong. The previous record was set in 2021, when 189 companies filed in the first half. But you also have to remember, that was a record year for all IPO markets, especially the US, because we had this zero interest rate environment, we had the SPAC boom, and you

• 10:49Ed Elson?

  know, all around the world, there was just a lot of demand for new IPOs. But what we have right now in 2025 is a waning IPO market in America, and in the UK, and across Europe. And yet, while that is happening, the Hong Kong IPO market is exploding. And that is strange. So for more on what's going on in Hong Kong, our producer Claire spoke with Alice Han, China economist and director at Greenmantle.

• 11:19Speaker 05

  There are a couple of factors at play. I think number one, there has been a positive policy tailwind from Beijing, in the sense that Beijing is now actively encouraging Chinese state-owned companies and companies to dual-list, meaning to do an H-share listing in Hong Kong in addition to the mainland. That has created more impetus for listings in the Hong Kong ecosystem. Number two, mainland and foreign investors alike are trying to get a version of China exposure, especially on the China tech and AI side, and they are opting largely for Hong Kong. In order to do this, Hong Kong has a better regulatory framework, a more trusted financial ecosystem for foreigners, and the Hong Kong dollar

• 12:03Speaker 05

  itself is pegged to the US dollar, which gives more diversity for even mainland investors who are looking to find diversification in a currency exposure outside of onshore markets. And number three, I would say, is really a story about China, people getting more bullish about China. There are obviously structural issues, but I sense that the market is starting to see the beginnings of potentially a tech bull market on the mainland, largely driven by AI and positive policy support from Beijing. So I think for those three reasons, we're seeing a record activity and record listing in the Hong Kong market.

• 12:39Speaker 06

  All of this is good news for Hong Kong. Who is the loser in this situation?

• 12:45Speaker 05

  I wouldn't say that the mainland is directly the loser, but certainly on the margin, it means that there will be less interest in getting Chinese exposure through mainland stocks. So I could see the HK Stock Exchange outperform the mainland CSI 300 index. So these are the mainland Shanghai Composite Index. Secondly, I think other, and certainly this is the case for the US too, other markets are going to see, I think, underperformance potentially relative to Hong Kong. Certainly, we started to see this more recently, independently of the Hong Kong story, in London, where you've seen record declines in listing, but also a lot of people are

• 13:30Speaker 05

  delisting from the London Stock Exchange. So I could see a scenario in which the Hong Kong Stock Exchange outperforms some of these other stock exchanges. The big question mark is over the US Stock Exchange, we haven't seen a real decline in performance as of yet, but certainly Trump's erratic policies are taking a hit and reducing investor confidence, potentially also reducing the cadence and speed at which companies are listing in the US. In the short term, it probably incentivizes these Chinese companies like Shein, who would have otherwise listed in London or potentially even the US, to actually opt to list first in Hong Kong.

• 14:08Ed Elson?

  That was Alice Han, one of our favorites on the program. Just going back to Shein, one thing I would flag here, there's been a lot of debate over whether Shein is a Chinese company. This has been the big concern with the US IPO, that was the concern that was raised by Marco Rubio, who sought to block that IPO because he believed that we needed more disclosures about the business and specifically its ties to China. And I once brought that up to Scott, who by the way is an investor in Shein, and he made the point that, no, it isn't a Chinese company, they moved to Singapore, they cut ties, they don't have ties to the CCP. So all of this concern from Marco Rubio and from regulators like him, this is all kind

• 14:53Ed Elson?

  of much ado about nothing. And by the way, that is the claim that Shein made too. Well, I would just note that for a company that isn't Chinese, that supposedly isn't Chinese, it is very unusual that in order to go public in the UK, they need to get approval from the Chinese government. That is just strange. I mean, if this company is truly separate from China, if it is truly Singaporean, as they so often claim, then they shouldn't need the Chinese Securities Commission to give them their blessing. They should just go public in London. They got the approval, but they're not doing that. And they're not doing it because they need China to give them the green light.

• 15:36Ed Elson?

  Put another way, this company that keeps on telling us that it isn't controlled by the CCP is in fact actively being controlled by the CCP. That is what is happening in front of our very eyes right now. That is what is influencing this IPO. So, you know, before Shein comes out with some press release, which I'm sure is going to happen, about how difficult the regulatory environment is, how difficult the London Stock Exchange was, how they had maybe these unfair regulations, they didn't want these Chinese companies, et cetera, et cetera. I'm sure they're going to say that. Before that happens, let's just remember why Shein didn't go public in the UK. It wasn't because the UK denied it.

• 16:21Ed Elson?

  That's not what happened. It was because China denied it. It was because China didn't like whatever that prospectus said about their Chinese supply chain and their ties to Xinjiang. In other words, this was China's call. And as much as Shein might want to distance itself from China, probably to make it more marketable to investors, I don't really know, that is the reality of the situation. It is a Chinese company. Yes, it is based in Singapore, but be clear, they are influenced by China and all those products are made in China. We'll be right back after the break. And for even more content, check out our latest Prof G Markets newsletter, where our

• 17:05Ed Elson?

  team shares how you can be irreplaceable in the age of AI. You can find it in the show notes or subscribe at profgmarkets.com/subscribe. Stay with us.

• 17:22Speaker 07

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• 18:37Speaker 07

  Your heart can tell you a lot about your health. Apple Watch Series 12 measures your heart rate every five seconds with the most accurate heart rate sensing in wearable. So your vitals app, now with heart rate variability, can tell you when something is off. And your readiness score can let you know when to rest and when to push. Hear the story in every heartbeat with Apple Watch Series 12. The features described are for wellness purposes only and not for medical use. iPhone 11 or later required. Based on Apple conducted study of heart rate accuracy, August 2026. Visit apple.com slash Apple Watch Series 12.

• 19:11Ed Elson?

  We're back with Prof G Markets. Tesla stock is still under pressure after Elon Musk said he would form a new political party. Investors are worried that Elon is getting distracted with politics again, instead of focusing his time and his energy on running Tesla. And that makes sense. As you will recall, Tesla had a big rebound when Elon said he would be returning to the company full time. And now that that return has been called into question, the stock has fallen back down. Now, I don't think this needs that much analysis. It's been covered plenty by the media and the story has gotten a lot of attention. But there is another side to this that is getting less attention.

• 19:52Ed Elson?

  And that is the extent to which Tesla, and by extension, America, is losing ground in the EV race to China, not just in terms of stock performance, but also in terms of fundamental business. Tesla deliveries are, of course, in decline. We've talked about that. But at the same time, you've also got a GOP bill that is cutting off investment into electric vehicles. All the while, the Chinese government is doing the opposite. China actually extended its electric vehicle subsidy program this year. And over the past decade, the government has invested more than $230 billion. And now, just as Tesla is beginning to decline,

• 20:34Ed Elson?

  China is reaping the benefits. According to the Chinese Car Association, in the first half of this year, Chinese EV exports jumped by 48%. And in last month alone, China shipped 200,000 electric vehicles, which is more than double what they shipped in the same month last year. Meanwhile, 17 of the top 20 best-selling electric vehicles in the world are Chinese. Put another way, China is officially crushing the US when it comes to electric cars. And with this new bill, well, we can only really expect that they will continue to crush us even more. Our producer Claire spoke with auto analyst Michael

• 21:16Ed Elson?

  Dunn for more on this. He is the founder of Dunn Insights.

• 21:20Speaker 08

  Right. So, starting 10 years ago, 2015, China's top leadership decided that they were no longer happy playing the role of follower, fast follower to Western technology. They wanted to take the lead. So they put together a blueprint and said, in tomorrow's technologies, electric vehicles, batteries, AI, chips, China wanted to be the leader, not the follower. And they set aside hundreds of billions of dollars to pursue.

• 21:52Speaker 08

  Overwhelming leadership in batteries electric vehicles and they've gotten there 10 years later today. China accounts build more electric vehicles and more batteries than all other countries combined. To put it in perspective, they'll build about 12 billion cars, electric cars this year. America will be lucky to build 1 million. So they're 10 years and 10x ahead of us on electrics. That's how they got there. That's what we're confronting as a nation.

• 22:21Speaker 06

  It sounds like essentially China has been playing offense for years and meanwhile, the US is currently just playing defense.

• 22:29Speaker 08

  That's right. We find ourselves in that uncharacteristic, not American position of being on the defensive and being the underdog and needing terrorists to protect ourselves. So what's going on? I think that one way to think about it is that all things being equal, say we said, okay, China wants to go electric vehicles in the future and we're happy doing gasoline and diesel. Fine. But the trouble with that is if we look at future technologies from drones to humanoid robots to AI, all of these components, all these future weapons and tools are powered by batteries.

• 23:11Speaker 08

  And without batteries, we're just sunk. And without EVs, we have no reason to build batteries here. So it's almost as if, never mind if you like electric vehicles or not, as a nation, we need to have batteries and battery supply chains for national defense, national sovereignty, and to be competitive in electric vehicles too.

• 23:33Speaker 06

  What do you think we need to see from the US if America's going to be able to keep up with China in EVs?

• 23:41Speaker 08

  As an American from Detroit. I would love to see the Detroit Three hold their own, compete with the Chinese. But to get there, we are going to have to make some monumental changes in the way we compete. So for example, the average cost of a new car in America this year is close to $50,000. In China, it's less than half that. Chinese can make cars that start at $12,000. We don't, we're not even close to that. So we have to rethink what it means to be competitive into the future. And that means making some serious changes in the way we think about paying ourselves, including people on the line, including management.

• 24:23Speaker 08

  We're the high cost producer right now, and that doesn't hold for long in any industry.

• 24:31Ed Elson?

  So this is obviously an ongoing story, and it's a big one. And it's one that we're going to be keeping very close tabs on throughout the year. But the through line is becoming clearer. And that is that when it comes to EVs, when it comes to electric vehicles, China is winning. And this might have been a debate in the past. It might have been a debate when Tesla was rising and when our government was investing further into clean energy and into electric vehicles. But at this point, it's not a debate today. You know, BYD has overtaken Tesla. And you look at the numbers, Beijing has overtaken Detroit. And with this new government bill, which remember goes short on clean energy

• 25:14Ed Elson?

  and doubles down on gasoline, just as Michael says, the picture is getting a lot clearer now. American dominance in the auto industry is fast becoming a thing of the past. Okay, that's it for today. Thanks for listening to Procter & markets from the Vox Media Podcast Network. I'm Ed Elson, and I'll see you tomorrow.

• 26:01Speaker 09

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