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Good morning and welcome back to FirstFT Asia. In today’s newsletter:
Big Tech’s hopes for a tariff reprieve dealt a blow
A British MP is denied entry to Hong Kong
India’s maritime ambitions in Africa
Donald Trump has signalled that smartphones and other consumer electronics imported to the US would face tariffs, dealing a blow to hopes of a reprieve for Big Tech companies such as Apple, Nvidia and Microsoft.
What happened: Trump wrote on social media: “NOBODY is getting “off the hook” for the unfair Trade Balances, and Non Monetary Tariff Barriers, that other Countries have used against us, especially not China which, by far, treats us the worst!”
His administration this weekend excluded phones, chipmaking equipment and certain computers from steep “reciprocal” tariffs in what was a significant boost for tech groups whose stocks plunged after the president unleashed a global trade war on “liberation day”. But yesterday, US officials played down the exemptions, warning that such products would be re-examined as part of a government probe into semiconductors, which face a separate round of tariffs.
“What he’s doing is he’s saying they’re exempt from the reciprocal tariffs,” said US commerce secretary Howard Lutnick, referring to Trump. “But they’re included in the semiconductor tariffs, which are coming in probably a month or two.”
A let-down for Big Tech: Lutnick and Trump’s comments deal a blow to hopes of a reprieve for companies such as Nvidia, Microsoft and Apple, which makes about 80 per cent of its iPhones in China, according to analyst estimates. Trump’s administration has asserted that Apple can build iPhones in the US as part of its push to revive American manufacturing. But experts say this would be unrealistic given the company’s deep supply chain ties to China and South east Asia.
In the immediate term, Apple has instead pivoted to its second iPhone manufacturing base, India, where it seems likely to face lower tariffs than in China.
Wall Street worries: Ray Dalio, the billionaire founder of hedge fund firm Bridgewater Associates, warned yesterday that Trump’s tariffs were “very disruptive”. Speaking on NBC yesterday, Dalio said: “I think that right now we are at a decision-making point and very close to a recession . . . And I’m worried about something worse than a recession if this isn’t handled well.”
Daniel Ives, global head of technology research at Wedbush Securities, told the FT: “The mass confusion created by this constant news flow out of the White House is dizzying for the industry and investors and creating massive uncertainty and chaos for companies trying to plan their supply chain, inventory, and demand.”
Read the full story here — and follow Trump’s latest moves with our tariff tracker.
The Chinese goods Americans most rely on: Smartphones and laptops are now exempt from Trump’s tariffs, but video game consoles, electric fans and toys are still subject to 125 per cent levies.
Opinion: China is well positioned to weather Trump’s trade war, writes Arthur Kroeber, founding partner and head of research at Gavekal Dragonomics.
‘Stuff should be made here’: Company owners in Ohio say Trump’s measures can trigger a renaissance in US manufacturing.
Here’s what else I’m keeping tabs on today:
Economic data: China publishes a batch of trade data and Singapore releases its advance first-quarter GDP estimate.
Xi Jinping tours south-east Asia: The Chinese leader visit Vietnam today, before travelling to Malaysia and Cambodia, as Beijing looks to strengthen ties in export-reliant economies rattled by Trump’s escalating trade war.
Singapore monetary policy statement: The Monetary Authority of Singapore is expected to loosen policy, according to analysts polled by Reuters.
Five more top stories
1. A Russian ballistic missile strike on the northeastern Ukrainian city of Sumy has left at least 34 civilians dead and 117 injured, according to President Volodymyr Zelenskyy and government officials. The strike hit as Ukrainians celebrated Palm Sunday and came less than a day after Trump’s special envoy Steve Witkoff met President Vladimir Putin to discuss bringing his full-scale war to an end.
2. Hong Kong has barred a British member of parliament from entering the Chinese territory, adding uncertainty to UK-China ties just as the Labour government seeks to step up bilateral economic relations. Wera Hobhouse, a Liberal Democrat MP, said she was refused entry upon arrival to Hong Kong this week without specific reasons provided by authorities. Read more about the incident.
3. Some of the world’s biggest pension funds are halting or reassessing their private market investments into the US, saying they will not resume until the country stabilises after Trump’s erratic policy blitz. Top Canadian and Danish funds are rethinking their exposure to the US because of tariffs and talk of territorial expansion.
4. A Bangladeshi arrest warrant has been issued for former UK City minister Tulip Siddiq over allegations that she abused political power to unlawfully acquire land in an upscale township near Dhaka. A court issued the warrant for Siddiq, alongside her mother Sheikh Rehana, her aunt and former prime minister Sheikh Hasina, and other members of the family, an official at the Bangladesh Anti-Corruption Commission told the FT. Here are more details.
5. A remote gold and copper mine beneath a volcano in south-west Pakistan could provide key leverage for trade talks with the US, according to its operator. Tim Cribb, project director of Barrick’s Reko Diq mine, said the strategic metal resource “ticks a lot of boxes” for the Trump administration and could help Islamabad reduce “reciprocal” tariffs originally set at 29 per cent.
News in-depth
India has launched its biggest-ever joint naval exercise with African nations, part of a push to boost its influence on the continent and presence in the Indian Ocean, where China is exercising growing commercial and military clout. The Indian Navy has played a growing role in counter-piracy operations, helping project the country as a regional security power. But those ambitions should be “tempered with realism”, analysts said.
We’re also reading . . .
Lunch with the FT: Former UK prime minister Theresa May discusses tariffs, Boris Johnson’s manoeuvring — and the time Trump held her hand.
Digital economy: The explosion of storage units around the world shows that digital possessions will never match the attachment felt for things in the real world, writes Elaine Moore.
The end of American exceptionalism: The US will pay a market penalty for Trump’s turmoil, writes Rana Foroohar.
Chart of the day
The US and China’s dizzying tariff tit-for-tat has been a “boon” for Brazil’s agricultural sector. Latin America’s largest economy is poised to extend its lead over the US as China’s top food supplier as American farmers plead with Trump to make a deal with Beijing.
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Take a break from the news
Go inside Japan’s most beautiful bathhouses with HTSI’s Clara Baldock. These bastions of traditional living are buoyant once again as efforts to preserve, revitalise and celebrate their cultural value have put them back at the centre of communal life.
