Aurelia Butler

UK prime minister Boris Johnson was clinging to power on Tuesday night after chancellor Rishi Sunak and health secretary Sajid Javid resigned from the cabinet within minutes of each other. A number of junior government members also quit, with many Tory MPs believing the ministerial mutiny could signal the beginning of the end for Johnson. But there was relief in Downing Street when a number of other senior figures — including deputy prime minister Dominic Raab, foreign secretary Liz Truss, defence secretary Ben Wallace and levelling-up secretary Michael Gove — indicated they were staying. Johnson immediately began reshuffling his cabinet. Javid and Sunak’s resignations came after Downing Street was forced to admit that Johnson had been personally briefed about past allegations of sexual misconduct by the now disgraced former Conservative deputy chief whip Chris Pincher.The truth is now starting to catch up with Johnson. Conservative MPs believe Johnson’s premiership is approaching its end; last month more than 40 per cent of MPs expressed no confidence in their leader and cabinet unity has broken. Still, Johnson’s instinct will be to hold, writes Robert Shrimsley.Full text: Read the damning letters with which Sunak and Javid announced they were quitting Johnson’s government.Do you think the latest resignations signal the end of Johnson’s premiership is coming? Tell us in our poll below. Thanks for reading FirstFT Asia. — Emily

Five more stories in the news1. BYD overtakes Tesla in global electric vehicle sales BYD, the Chinese carmaker backed by Warren Buffett’s Berkshire Hathaway, has dethroned Elon Musk’s Tesla as the world’s biggest electric vehicle producer by sales, signalling China’s rising dominance over the sector.Go deeper: Analysts view the rise of China’s domestic car industry as a forerunner to a tectonic shift in the global auto market as Chinese EV makers start to sharpen their focus on export markets.2. Sequoia Capital China targets $9bn fundraising China’s premier venture capital group is close to raising $9bn to plough into start-ups desperate for cash, defying global investor apprehension about Beijing’s zero-Covid policies, a crackdown on technology groups and heightened geopolitical risk. 3. Twitter launches legal challenge to Indian government Twitter is challenging the Indian government in court for the first time over its orders to block tweets and accounts, saying some were excessive and outside the scope of officials’ legal authority. The legal fightback is a potential test case in the struggle between social media platforms and prime minister Narendra Modi’s government.4. South Korean consumer prices rise at quickest rate since 1998 South Korea’s consumer prices rose 6 per cent in June from a year earlier, the fastest rate since November 1998 and up from a 5.4 per cent increase in May. Rising inflation has put intensifying pressure on the Bank of Korea to deliver the first 50 basis point rate rise in its history.

5. Norway government halts oil and gas strike Norway’s government has intervened to end a strike by oil and gas workers that threatened to slash production at a time when Europe is scrambling for supplies to offset cuts to Russian output.Oil market: Oil prices dived on Tuesday, falling by the most in almost four months, as a broad sell-off in commodities markets reflected fears that an economic downturn will undercut fuel demand.The day aheadHong Kong leader faces first legislative Q&A Chief executive John Lee will hold his first question and answer session with lawmakers. Lee has requested to limit the scope of the questioning to seven specific areas. (Hong Kong Free Press) Fed minutes The US Federal Open Market Committee will publish the minutes of its June meeting. Details from the meeting may give further clues about the extent to which the central bank is willing to tighten monetary policy.Women’s Euro 2022 The tournament, which kicks off in England today and runs through to the end of the month, is expected to set records for a broadcast audience for women’s football as well as attendance figures in the 10 stadiums that will host the 31 matches.We are now accepting entries for the High-Growth Companies Asia-Pacific 2023. Apply for a place in the fifth annual FT ranking, compiled with Statista.What else we’re reading and listening toMy garlic for a home Developers in some parts of China have in recent weeks promised to accept stocks of garlic — as well as watermelons, wheat and barley — as down payments from farmers on new apartments. The food-for-property barter deals reflect increasing desperation among real estate developers after a sharp fall in the industry.Knocking on the door of a porn empire Financial pressure pushed porn giant MindGeek to alter its practices radically. But one of its biggest rivals changed almost nothing. For this episode of the Hot Money podcast, reporter Patricia Nilsson travels to the company’s Prague headquarters to understand why.Related read: Moscow’s fresh wave of missile attacks has rekindle Kyivans’ fear.Who pays for climate change? A Peruvian farmer is suing German utility RWE for the emissions it produced over 124 years, which he argues contributed to warming that threatens his hometown Huaraz. The case is just one of a ballooning number of climate-related lawsuits that have been filed since the Paris Agreement was signed six years ago.

Island nations that are battling rising sea levels, such as Tuvalu in the South Pacific, are discussing suing countries for the effects of their emission © Mario Tama/Getty Images

How close is Russia to taking Donbas after the fall of Luhansk? The fall of the entire Luhansk province was hailed as a victory by Vladimir Putin. But it is a symbolic more than a strategic one, say military experts. The Russian president is still a long way from his objective of “liberating” the whole of the Donbas region, of which Luhansk is one half.Hong Kong’s IPO market still lags behind other exchanges The central problem is that Hong Kong Exchanges and Clearing has focused overwhelmingly on the same disruptive Chinese internet and digital platform companies that were left reeling after an intense crackdown from Beijing. As with so much in Hong Kong, the city’s IPO market must increasingly take its direction from the mainland, writes Hudson Lockett.Work & CareersSome of the most successful CEOs share a pattern of leaving the company they started — and returning again. Apple’s Steve Jobs and Superdry’s Julian Dunkerton are among their ranks. Meet the founders with the boomerang factor. More

NEW YORK (Reuters) -Hedge fund manager Bridgewater Associates’ flagship Pure Alpha 18% volatility fund gained 32.2% in the first half of the year, according to a source familiar with the matter, beating sharp market declines.Pure Alpha’s return net of fee increase was helped by the Federal Reserve’s decision to raise interest rates to tame surging inflation. Increasing rates caused extreme swings in asset prices, the source added. In the first half of 2022, the S&P 500 was down roughly 20%.The fund posted gains in 65% of the markets where it trades, beating a historical average of 55%.Since its inception in 1991, Pure Alpha has returned an average of 11.4% annually. The firm also believes the fund is well-positioned to take advantage of this new tightening environment, said the source. Bridgewater, founded by legendary billionaire Ray Dalio, told investors on Tuesday the fund posted gains across several different assets. This more than offset some losses, such as in inflation-linked bonds and emerging market currencies.Pure Alpha’s good performance comes in a year the firm reshuffled its top management, appointing two new co-Chief Executive Officers, Nir Bar Dea and Mark Bertolini, and creating a new investment committee, which includes Chief Investment Officers Greg Jensen and Bob Prince, its asset class heads and some senior investors. More

Biden is weighing a decision to remove some of the tariffs on more than $300 billion in Chinese imports imposed by his predecessor, Donald Trump, according to people familiar with the deliberations, as his administration desperately tries to curb fast-rising US prices.When is this happening?As soon as this week, according to people familiar with the deliberations, who asked not to be identified without permission to discuss private conversations. As of Tuesday, Biden hadn’t yet made a final decision on what to do with the duties, and the timing could slip, they said.The timing is significant because Wednesday marks the four-year anniversary of the first wave of Trump-era tariffs, and the administration’s review is required to keep them from starting to automatically expire. Trump used section 301 of the Trade Act of 1974 to hit China with the duties starting in July 2018 after an investigation concluded China stole intellectual property from American companies and forced them to transfer technology.Biden in recent weeks has held a number of meetings with senior economic advisers where options for a decision on the tariffs were discussed, according to the people.What products will be affected? The tariffs hit goods including industrial inputs such as microchips and chemicals, and consumer merchandise such as apparel and furniture. While there’s been no direct indication of which duties may be removed, senior administration officials have said reducing them on household items could help ease consumer inflation, which accelerated at the fastest pace since 1981 in May from a year earlier.Last month, US Treasury Secretary Janet Yellen said reductions “could help to bring down the prices of things that people buy that are burdensome.” That’s similar to the view held by Commerce Secretary Gina Raimondo, who in June said removing duties on household goods “may make sense,” but favored keeping tariffs on steel and aluminum products from China as a way to protect American workers and national security. Still, ending tariffs on merchandise like bicycles and clothing won’t help Americans where inflation hurts most — food, fuel and housing. The White House has asked retail companies for a commitment to lower prices following any duty reductions but executives rebuffed that request and told US officials it was an unrealistic expectation, the people said. Will it give Americans relief from sky-high inflation?Some — but not much — is the consensus view. Barclays (LON:BARC) Plc said any rollback of tariffs on Chinese goods would be “a drop in the bucket” for lowering the US inflation rate, which climbed an annual 8.6% in May. The bank estimated the maximum direct effect of a complete end to the duties is a one-time reduction of 0.3 percentage point, given the relatively small share of Chinese imports in the US consumption basket. Supply constraints, exacerbated by Russia’s war in Ukraine this year, account for about half of the surge in US inflation, with demand currently making up a third of the increase, according to research from the Federal Reserve Bank of San Francisco. Lockdowns in China have also worsened pandemic-era supply-chain disruptions that raised prices.As Yellen noted in June: “I honestly don’t think tariff policy is a panacea with respect to inflation.” US Trade Representative Katherine Tai, who last month called the tariffs “a significant piece of leverage,” told senators there’s “a limit to what we can do” to ease inflation through tariff changes.March research from the Peterson Institute for International Economics estimated that eliminating a wide array of tariffs, including those on Chinese goods, could reduce the inflation rate by 1.3 percentage points. However, such broad tariff elimination has never been on the table for the Biden team, people familiar with the discussions said.  What Bloomberg Economics Says…“The impact of removing tariffs on inflation would be limited because imports from China affected by the trade-war duties comprise only a fraction of the US consumer basket. Inflation in food, energy and shelter costs — items for which these tariff discussions have limited relevance — matter a lot more than electronics, textiles, toys, furniture, floor coverings and bedding products. Tariffs weren’t really a game changer for US inflation when they went on, and likely won’t be if they come off either.”– Andrew Husby and Yelena Shulyateva, economists Tariff relief will bring down consumer costs, but the timing and extent is difficult to forecast, said David French, senior vice president of government relations at the National Retail Federation. “Billions of dollars in tariffs have already been paid on a large number of items that are currently working their way through retail supply chains, “French said. “Retroactive tariff relief may have more of an immediate impact on costs for items that have already arrived in the US.” Excluding some goods from tariffs has to date only provided a limited amound of relief and takes weeks to administer, he said. How will the issue play in the US midterm elections?Biden has struggled to contain the economic and political fallout from rising prices for gasoline, food and other products, endangering Democrats’ chances of holding onto their congressional majorities in the November midterm elections.While removing tariffs on Chinese goods could help the president demonstrate he’s taking every possible step to try to lower prices, it could open a rift with Democrats running in Rust Belt states that have seen manufacturing jobs vanish over the last several decades.  Tim Ryan, the Democratic nominee for Ohio’s pivotal open Senate seat, won’t join Biden in Cleveland Wednesday, communications director Caty Payette said, citing previously scheduled campaign stops in southern Ohio. The congressman said it would be a “major mistake” to lift tariffs on certain Chinese goods.  The move would be doing “nothing to ease inflationary pressures on American consumers and rewarding a human-rights abusing, communist government for years of cheating American workers and stealing jobs,” Ryan said in a statement. “I will fight like hell against any move — by either political party — that incentivizes predatory trade practices that put China ahead of our workers.”In May, Ryan skipped Biden’s visit to Cincinnati designed to promote his stalled China competition bill.Does this mean China-US relations are thawing?US-China ties are likely at their worst since former President Richard Nixon’s historic trip in 1972 helped re-establish diplomatic ties between Washington and Beijing, Nicholas Burns, the US ambassador, said last month.But with Biden and Xi expected to speak by phone later this month, official interactions by senior officials are increasing. Secretary of State Antony Blinken is due to meet Foreign Minister Wang Yi on the margins of a Group of 20 meeting in Bali, Indonesia. And this week, Yellen discussed economic matters with Chinese Vice Premier Liu He.Will the US and China economies decouple?The tariffs haven’t achieved the intended goal of slowing down imports from China and rebalancing the trade relationship with the US. While China’s economy has been undermined by Covid-related shutdowns this year, exports to the US in the first five months of 2022 still grew 15.1% from a year earlier, after jumping almost 28% in 2021 and 8% in 2020. But American company executives have been highlighting plans to relocate production — using buzzwords like “onshoring,” “reshoring” or “nearshoring” — at a greater clip this year than they even did in the first six months of the pandemic, according to a review of earnings calls and conference presentations transcribed by Bloomberg.There are concrete signs that many of them are acting on these plans: The construction of new manufacturing facilities in the US has more than doubled over the past year, dwarfing the 10% gain on all building projects combined, according to Dodge Construction Network.©2022 Bloomberg L.P. More