Aurelia Butler

Unlock the White House Watch newsletter for freeYour guide to what the 2024 US election means for Washington and the worldThe cost of flying goods to the US has surged as businesses rush to get products into the country before they are hit by US President Donald Trump’s sweeping tariffs.Exporters, from drugmakers to tech hardware manufacturers, have been paying almost 40 per cent more to fly goods into the US from China than they were four weeks ago. Some will continue to pay a premium to import goods by air before Trump’s latest round of tariffs are enforced in the coming days, freight executives said.But they added that the market was also bracing for a “seismic shock”, after Washington pledged to remove an exemption that excludes smaller shipments from tariffs and rigorous customs checks and has in recent years helped drive huge growth in air freight demand from Chinese online retailers.The average cost of flying cargo from China to the US at short notice rose 37 per cent to $4.14 per kg between the first and last weeks of March, after having fallen steadily since the peak Christmas shopping period, according to the most recent data from market tracker Xeneta.The average cost of sending goods by air from Europe to the US rose 7 per cent to $2.61 over the same period.The growing demand for air freight, which is faster but pricier than shipping by sea, is the latest example of businesses taking expensive measures to minimise their exposure to Trump’s even costlier tariffs.Freight executives have warned that higher costs caused by Trump’s actions will probably be passed on to consumers.China-US air cargo spot rates are still lower than levels reached a year ago, when high volumes of exports from Chinese retailers and the Houthi militant group’s attacks on ships in the Red Sea were driving significant growth in air transport.On what the president has dubbed “liberation day”, he on Wednesday announced new levies starting at 10 per cent on all US imports. For Chinese imports, Trump added a 34 per cent tariff on top of a 20 per cent charge imposed earlier this year.Ahead of his announcement, “lots of companies were trying to push in more products by air than they normally would, especially over the last three weeks”, said an executive at one of the biggest global logistics groups.This included producers of high-cost goods such as European pharmaceutical companies and Asian manufacturers of data centre equipment, he added.On Thursday, Danish shipowner and logistics group AP Møller-Maersk said it was still expecting “to see some rush airfreight orders in the US ahead of the announced tariffs going into effect”. Washington has said that its basic 10 per cent tariff will take effect on April 5, before higher taxes are enforced on April 9.But freight handlers that are benefiting from this rush are preparing for a subsequent decline in demand from China, after Washington announced on Wednesday that its “de minimis” duty exemption for goods under $800 will be lifted once “adequate systems are in place” to collect additional taxes.The exemption has long been used by retailers such as Shein and Temu to fly goods cheaply from China to their growing US customer base, boosting airlines and freight plane operators.“In my 30 years working in the air freight industry, I cannot remember any other unilateral trade policy decision with the potential to have such a profound impact on the market,” said Niall van de Wouw, chief air freight officer at Xeneta.“Ecommerce has been the main driver behind air cargo demand. If you suddenly and dramatically remove the oxygen from that demand, it will cause a seismic shock.” More

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Unlock the White House Watch newsletter for freeYour guide to what the 2024 US election means for Washington and the worldPresident Donald Trump has suggested he could cut tariffs on Chinese goods if Beijing allows ByteDance, the Chinese owner of TikTok, to divest the hugely popular video sharing app to avoid a ban in the US.“We have a situation with TikTok where China will probably say we’ll approve a deal, but will you do something on the tariffs,” Trump said aboard Air Force One. “The tariffs give us great power to negotiate.”The comments came one day after Trump imposed “reciprocal” tariffs on dozens of nations, including a 34 per cent levy on imports from China that followed the 20 per cent tariff he imposed earlier this year.Trump also said his administration was “very close” to reaching a deal with “multiple investors” that would allow TikTok to continue to operate in the US. Congress last year passed legislation requiring ByteDance to divest the app or face a nationwide ban. Trump extended the deadline for divestment until Saturday.Lawmakers passed the legislation to address security concerns about possible Chinese government influence over TikTok’s algorithm. Security officials are also concerned that ByteDance’s ownership of TikTok would enable Beijing to obtain the personal data of millions of Americans.Show video info“We’re very close to a deal with a very good group of people,” Trump said. Earlier on Thursday, vice-president JD Vance told Fox News the deal would “come out before the deadline”.The White House this week held talks to thrash out the contours of a deal that would be palatable to Republicans, as well as ByteDance and the Chinese government, which would need to give its blessing. The administration has been weighing a proposal to spin off TikTok from its Chinese parent. It would create a new US entity and include fresh American investment to dilute the ownership stakes of Chinese investors, according to multiple people familiar with the matter. Under the proposal, new outside investors, including Andreessen Horowitz, Blackstone, Silver Lake and other big private capital firms, would own about half of TikTok’s US business, the people said. Large existing investors in TikTok, including General Atlantic, Susquehanna, KKR and Coatue, would hold 30 per cent of the US entity, while ByteDance would keep a stake at just below 20 per cent. This would adhere to requirements in the US law that no more than a fifth of the company be controlled by a “foreign adversary”. Oracle, meanwhile, would provide data security to the company. But one big flashpoint is who would control TikTok’s highly sought-after algorithm. One option under discussion was that ByteDance would continue to develop and operate the algorithm — which has been a central demand of the Chinese government — while the new US group could access it through a licensing agreement, the people said. However, China hawks and legal academics have argued that the algorithm needs to be fully operated by the US entity to meet the requirements of the legislation. Several members of the Trump administration, including secretary of state Marco Rubio and national security adviser Mike Waltz, were vocal opponents of allowing China to retain control of the app when they served in Congress.The Chinese embassy in Washington did not respond to a request for comment. A ByteDance representative did not immediately respond to a request for comment. More

US stocks tumbled on Thursday while the dollar sank, as investors bet that Donald Trump’s sweeping tariffs would result in pain for the US economy.Some content could not load. Check your internet connection or browser settings.The S&P 500 was down 3.8 per cent. The Nasdaq Composite tumbled 4.9 per cent, dragged down by an 8.5 per cent fall for index heavyweight Apple. The dollar was down 1.7 per cent against a basket of rivals.Brent crude, the global oil benchmark, was down 6.8 per cent at $69.86 a barrel. WTI, the US benchmark, fell 7.1 per cent to $66.59 a barrel.“The collapse is a loss of confidence in dollar-denominated assets in general,” said Francesco Pesole, a currency strategist at ING. “It’s a vote of no confidence on 100 days of Trump.”Robert Tipp, PGIM’s head of global bonds, said markets were “very complacent” but now they are going into “spiral mode of trading toward a recession until they have probable cause to stop”. The moves came after Trump said a levy of 10 per cent would apply to nearly all US imports from April 5, and that dozens of countries, including China, would be subject to further “reciprocal” tariffs from April 9.European stocks were also hit on Thursday, with the continent-wide Stoxx Europe 600 index closing 2.6 per cent lower, led by a big sell-off in shares of export-focused companies.“THE OPERATION IS OVER! THE PATIENT LIVED, AND IS HEALING,” Trump wrote on Thursday on his Truth Social platform.“THE PROGNOSIS IS THAT THE PATIENT WILL BE FAR STRONGER, BIGGER, BETTER, AND MORE RESILIENT THAN EVER BEFORE,” he added. More

This article is an on-site version of our FirstFT newsletter. Subscribers can sign up to our Asia, Europe/Africa or Americas edition to get the newsletter delivered every weekday morning. Explore all of our newsletters hereGood morning and welcome back to FirstFT Asia. In today’s newsletter: Andreessen Horowitz could join US TikTok bidChina’s latest military exercises around TaiwanIndonesia’s new sovereign wealth fund vows transparencyUS venture capital giant Andreessen Horowitz is in talks to invest in social media platform TikTok as part of an effort led by Donald Trump to wrest control of the popular video app from its Chinese owners.What we know: The group, whose co-founder Marc Andreessen is a vocal supporter of the US president, is in talks to add new outside investment that will buy out TikTok’s Chinese investors. The talks come as part of a bid led by Oracle and other American investors to carve it out of its parent company ByteDance. Andreessen Horowitz was approached as TikTok’s advisers and the White House sought to add financial firepower to ongoing discussions. The firm was strongly considering making an investment, said three people familiar with the discussions. Looming deadline: The Oracle-led bid recently emerged as the frontrunner ahead of a deadline on April 5, when a federal law would ban the app in the US unless its Beijing-based owner sells the American arm to non-Chinese entities, according to multiple people familiar with the matter. Trump connections: Marc Andreessen’s close ties to the Trump administration include helping recruit staff for Elon Musk’s US government cost-cutting unit, while former Andreessen Horowitz general partner Sriram Krishnan is serving as a White House adviser for artificial intelligence. Here’s the full story — plus more tech news below:And here’s what else we’re keeping tabs on today:Trump’s “liberation day” tariffs: The US president could trigger a $1.4tn trade war today when he plans to announce sweeping new tariffs on imported goods. Here’s how the worse-case scenario could unfold.Economic data: March inflation figures are due from Singapore, South Korea and Australia. Benjamin Netanyahu: The Israeli prime minister will visit Hungary, defying an arrest warrant from the International Criminal Court over alleged war crimes in Gaza.Five more top stories1. China has begun large-scale military and coastguard exercises around Taiwan, the latest round in Beijing’s escalating campaign to assert its claims of sovereignty over the island nation. Two people briefed on the situation said the Shandong, a Chinese aircraft carrier, was approaching waters 24 nautical miles off Taiwan’s coast yesterday, the closest it has ever been to the Taiwanese mainland. Here’s how Taipei responded.2. Indonesia will run its colossal new sovereign wealth fund “like a public company”, its chief investment officer said as he acknowledged investor concerns about the governance of a vehicle with $900bn in assets. Danantara, which became one of the world’s largest sovereign wealth funds overnight when it launched last month, is set to invest billions of dollars into priority sectors identified by President Prabowo Subianto.3. The US labour watchdog froze two cases against Apple days after Trump nominated an attorney who represents the tech group to be the agency’s top legal official. The National Labor Relations Board filed multiple complaints against the iPhone maker last year alleging it intervened against employee attempts to organise, but abruptly pulled back from two of the cases late last week, according to documents seen by the FT.4. The EU has a “strong plan to retaliate” against US tariffs expected today, the president of the European Commission has said. Ursula von der Leyen told the European parliament yesterday that the bloc was prepared to hit services exports including those from Big Tech companies if Trump imposed “reciprocal tariffs” on all imports into the US.5. Vehicle sales at China’s BYD soared 58 per cent in the first quarter in a stark contrast to an expected fall in demand for Tesla’s electric cars, as European consumers shun Elon Musk’s brand. Analysts warned figures set to be released today for Tesla’s first-quarter sales were likely to show a drop of more than 10 per cent. News in-depth© Alex Wheeler/FT montage/Getty ImagesKlarna has brought “pay in four” loans to everything from food to fashion. Now it has a $15bn New York IPO in its sights. Can the Swedish fintech finally silence the “buy now, pay later” doubters?We’re also reading . . . Chart of the dayInvestors are pouring cash into gold funds at the fastest pace since the Covid-19 pandemic, amid mounting concerns over the economic impact of Trump’s trade war.Take a break from the news . . . HTSI goes inside the Aman Nai Lert Bangkok, a new hotel in the heart of the Thai capital that pays homage to the man who shaped the modern city.The swimming pool at Aman Nai Lert Bangkok, Thailand More

Unlock the White House Watch newsletter for freeYour guide to what the 2024 US election means for Washington and the worldInvestors are pouring cash into gold funds at the fastest pace since the Covid-19 pandemic, amid mounting concerns over the economic impact of US President Donald Trump’s tariff war.Gold reached a record $3,148.88 a troy ounce on Tuesday, as part of a broader flight to haven assets such as US Treasuries and cash. It later fell back to $3,114, up more than 17 per cent this year — including its strongest quarterly performance since 1986. Investors are bracing themselves for Trump’s expansive new tariffs, which are due to be announced on Wednesday, a day he has dubbed “liberation day”. Many economists fear the move will hit global growth, triggering a search for safe assets. “Uncertainty is one of the main factors that has led to a renewed interest in gold,” said Krishan Gopaul, senior analyst at the World Gold Council, an industry body. “There is a general risk-off sentiment in the market at the moment.”Amid mounting fears of a global trade war, investors have poured more than $19.2bn into gold-backed exchange traded funds during the first quarter of this year — the biggest inflows in dollar terms since the pandemic, according to calculations from Standard Chartered.The amount of cash in investors’ portfolios — viewed as a gauge of caution — jumped by the largest monthly amount in five years, according to a recent fund manager survey carried out by Bank of America.US Treasuries have also made gains in the run-up to the tariff announcement, as investors seek to protect themselves against further volatility and hedge against risks to the American economy. Ten-year Treasury yields, which move inversely to prices, fell as low as 4.13 per cent on Tuesday — not far above their lowest level of the year. Yields on German Bunds, viewed as the haven Eurozone asset, were sent sharply higher last month as the country planned a huge spending drive, but fell back below 2.7 per cent this week for the first time since early March. “With a homegrown US slowdown potentially unfolding behind the tariff headlines, government bonds look [like] attractive risk-reducers at this point,” said Sunil Krishnan, head of multi-asset at Aviva Investors. “Gold is hard to add to, given the force of the move.”Central bank buying has been the main driver of gold purchases in recent years, but the recent surge in gold ETF inflows highlights how fears over the economy and stock markets have drawn in a broader range of investors as part of a hunt for haven assets.“The resurgence in ETFs has been the most notable shift in gold dynamics in recent weeks,” said Suki Cooper, precious metals analyst at Standard Chartered. Expectations of lower yields on other assets, combined with concerns that tariffs could hit inflation and growth, have helped fuel the recent flows, she said.Bullion’s sharp rally in recent months has prompted several banks to increase their gold price forecasts, including Macquarie, which now expects it to touch $3,500 this year. Tariff concerns have also driven a huge surge in physical gold bars being flown into New York, where stockpiles on Comex have reached record levels, although that flow has recently started to slow down.On Wall Street, defensive stocks seen as less exposed to economic growth have prospered. Healthcare stocks such as UnitedHealth and HCA Healthcare are up more than 10 per cent over the past month, while the broader S&P 500 index is down by about 5 per cent.“Very few assets are showing up as attractive on our screens at the moment,” said Pete Drewienkiewicz, chief investment officer for global assets at consultancy Redington. “So I don’t think it is surprising to see people moving a bit more defensive after such a good strong run [for markets].” More

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