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Good morning. A short notice before we begin: there will be a special edition of FirstFT tomorrow morning to answer readers’ questions about the first 100 days of Donald Trump’s second term in office. Now, on with today’s agenda:
Apple moves more iPhone production to India
PwC US internal probe
Adidas in fresh racism row
And we go inside Interpol’s innovation lab
Apple plans to double its iPhone production in India, people close to the company have told the Financial Times, and shift all production for the US market to the country by the end of next year.
Why is Apple making this shift? The California-based company currently sells 60mn iPhones annually in the US, four-fifths of which are made in China, according to researcher Counterpoint. By partnering with local companies, such as Foxconn, Apple has built a highly sophisticated manufacturing operation in China over the past two decades but Donald Trump’s tariffs are pushing up production costs and threatening profit margins. Trump’s “liberation day” tariff announcement on April 2 wiped $700bn off Apple’s stock market valuation.
Why has Apple chosen to base production in India? Apple is accelerating a move that had already begun as it tries to diversify its supply chain. In recent years, Apple has been strengthening ties with local Indian manufacturers like Tata Electronics. Imports from India currently face tariffs of 26 per cent but US vice-president JD Vance, on a visit to the country this week, said the two countries were making “very good progress” towards a bilateral trade agreement. Apple publishes results next week and investors will be keen to learn more about the impact of Trump’s tariffs on Apple’s supply chain. Read more of this exclusive story.
US-China trade war latest: China has granted some tariff exemptions on American imports and is considering lifting other duties, according to the local US business lobby group.
To understand more about Trump’s tariffs and their impact on global supply chains sign up to Alan Beattie’s premium Trade Secrets newsletter. Standard subscribers can upgrade their subscription here.
And here’s what else we’re keeping tabs on today and over the weekend:
US-Russia relations: Steve Witkoff, Donald Trump’s special envoy, has arrived in Moscow for a meeting with Vladimir Putin, according to local media reports. The visit comes a day after Trump urged Putin to stop bombing Ukraine.
Luigi Mangione: Prosecutors told a court yesterday that they plan to seek the death penalty for the alleged killer of former health insurance executive Brian Thompson. Mangione will appear in a Manhattan federal court later for an arraignment.
India-Pakistan relations: India’s army chief will review security arrangements and visit the site of a deadly attack on tourists in Indian Kashmir earlier this week.
Vatican: More than 200,000 people, including around 50 heads of state, are expected to attend the funeral of Pope Francis tomorrow in Rome. Read more about the plans for the service and the pope’s burial.
Canadian election: It is the final weekend of campaigning in the general election ahead of Monday’s vote. Polls suggest the Liberal Party, under Mark Carney, will win.
How well did you keep up with the news this week? Take our quiz.
Five more top stories
1. Exclusive: PwC has ordered nearly 300 of its US partners to cut ties with a tiny brokerage firm offering speculative small-cap investments after an internal investigation into the relationships. The ruling has alarmed senior executives at the Big Four accounting firm, who touted their access to lucrative and hard-to-find investments. Stephen Foley has the full report.
2. Alphabet shares rose in after-hours trading after it reported a 46 per cent rise in first-quarter profits, calming fears about the ability of the Google owner to weather a trade war and US recession. The rise in earnings was driven by another good performance in its search business and the boom in artificial intelligence-related demand for cloud computing power. Here’s more on Alphabet’s outperformance.
More tech earnings news: Intel plans on “streamlining the organisation, eliminating management layers and enabling faster decision-making” it said in a downbeat set of results that sent its shares lower.
3. Mexico’s President Claudia Sheinbaum is pushing lawmakers to swiftly ban advertising by foreign governments after the Trump administration launched television spots threatening to “hunt” down “illegal” immigrants. “If you come to our country and you break our laws, we will hunt you down,” US homeland security secretary Kristi Noem says on the advert.
4. Adidas is being sued by a former US employee, who claims she was unlawfully fired after complaining about racist and sexist comments made by senior directors. The latest allegations come during a period in which the German sportswear group has been accused of mishandling and playing down incidents of racism at the company.
5. The Trump Organization has indicated it will fire William Burck, the Quinn Emanuel lawyer it hired as its ethics adviser, after President Donald Trump said he should be removed because of his work for Harvard University. The Trump Organization hired Burck in January to help it develop ethics policies. Here’s more on the organisation’s change of direction.
Today’s Big Read
In the leafy Singapore suburb of Tanglin, over the road from the British High Commission and the US embassy, and a block away from the Botanic Gardens, sits a modest research facility at the heart of efforts by law enforcement agencies to stay one step ahead of their increasingly sophisticated and professionalised criminal adversaries. Owen Walker goes inside Interpol’s innovation lab.
We’re also reading . . .
Trump tariffs: Beneath all the craziness over import taxes, it is easy to lose sight of basic facts. Tim Harford refreshes us with seven truths about trade.
Surfing waves of volatility: Amid the choppy markets, foiling negative portfolio returns this year remains a balancing act, writes Stuart Kirk.
The Americas’ Fastest-Growing Companies: IT and financial services companies are the main drivers of corporate growth in the FT’s sixth annual ranking for the region.
UK economy: Britons are hoarding more bank notes than ever before. Claer Barrett explains why.
Chart of the day
Recent turbulence in the Treasury market has partly been the result of trading strategies using derivatives. But the very same investors are increasingly important buyers of US government debt. Find out how the US bond market got hooked on hedge fund leverage.
Take a break from the news
The head curator of The Met’s Costume Institute, Andrew Bolton, talks to the FT about his favourite painting and the most recent books he enjoyed reading as well as his favourite place.
