Economy

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. Here’s what’s on today’s agenda: Lutnick hails Trump’s $5mn investor visaUS president exits G7 summit early How the culture wars are remaking advertisingFT writers and critics choose their favourite reads of the year so farWall Street executives are counting on their traders to offset tepid deal fees this quarter, after Donald Trump’s trade war threats made markets gyrate.What is the evidence? Senior bankers say the market swings prompted by the US president’s “liberation day” declaration of higher tariffs led to a flurry of buying and selling by investors, even as corporate boardrooms put deals on ice. “Trading continues to be helped by volatility, with equity trading likely to continue to outperform fixed-income trading,” said Mike Mayo, a banking industry analyst at Wells Fargo.What about other business lines? The continued surge in equity trading is expected to be partly offset by slower growth in revenue from desks that trade fixed income, foreign exchange and commodities. Wall Street banks are also braced for a drop in fees from advising companies on mergers and acquisitions, share and debt sales, and IPOs, due to a reluctance to launch big deals without more clarity on US trade policy. Read the full story.Here’s what else we’re keeping tabs on today:G7 summit: World leaders will conclude talks in Canada without Trump, who left early to manage the US response to the Israel-Iran conflict. The FT blog has live updates here.Economic data: The US commerce department’s Census Bureau reports retail sales for May. Meanwhile, the labor department’s Bureau of Labor Statistics reports import and export prices for last month. Interest rates: Chile‘s central bank is likely to keep its benchmark interest rate unchanged at 5%.The FT Women in Business Summit 2025 takes place today. You can register here and watch it live here. Five more top stories1. Iran has told other countries in the Middle East that it will only agree to negotiate an end to the war with Israel and resume talks over its nuclear programme if Israeli forces halt their bombing campaign against the Islamic republic, according to diplomats. One diplomat in the region said Tehran’s message in discussions with neighbouring Gulf states was “very clear”. Here’s the latest on the diplomatic efforts to end the war.2. Senate Republicans released a long-awaited version of Donald Trump’s flagship tax bill yesterday, setting up a possible clash with House Republicans over the so-called “big, beautiful bill”. Here’s more on the draft bill, including keeping the “Salt” tax deductions at the current level of $10,000.3. The EU has refused to hold a flagship economic meeting with Beijing ahead of a summit next month because of a lack of progress on numerous trade disputes, people familiar with the matter said. The bloc’s stonewalling of the talks underlines the deep divisions between the sides despite Beijing’s efforts to court Europe.4. Nearly 70,000 people have signed up for the new golden Trump Card, a visa scheme led by commerce secretary Howard Lutnick that will grant the “world’s best and brightest” legal residency in the US at a cost of $5mn. The commerce secretary said the Trump Card will appeal to business leaders and companies seeking legal residency in the US for themselves or their employees. Here’s how the scheme works.5. Central banks expect to keep buying more gold this year, and anticipate their holdings of US dollars will fall over the next five years, according to a survey of global monetary authorities. Gold prices have surged 30 per cent since January and doubled in the past two years, as global uncertainty and market volatility have propelled investor demand for bullion.The Big Read© FT montage/DreamstimeAfter years of corporate messaging that highlighted purpose and inclusion, the advertising industry is shrinking away from making socially progressive statements as the movement intensifies against diversity, equity and inclusion. Daniel Thomas reports from the annual Cannes Lions advertising festival on how the culture war is remaking the sector.We’re also reading and listening to . . . Chart of the day Some content could not load. Check your internet connection or browser settings.Oil markets have shrugged off Israel’s threat to topple the Iranian regime, with crude exports from the Middle East so far unaffected by the escalating conflict. About 21mn barrels of oil from Iran, Iraq, Kuwait, Saudi Arabia, Qatar and the United Arab Emirates pass daily through the Strait of Hormuz, a narrow but critical waterway separating the Islamic republic from the Gulf states. About one-third of the world’s seaborne oil supplies pass through it and Iran has historically threatened to block it in times of conflict.Take a break from the newsFrom politics, economics and history to art, food and, of course, fiction — FT writers and critics choose their favourite reads of the year so far. More

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Chinese brands are reshaping the global marketplace and extending their influence among international consumers — even as US tariffs cast uncertainty over the year ahead. BYD’s electric vehicle sales have overtaken Tesla’s in Europe, and in Brazil seven out of 10 fully electric cars sold are made by BYD. Xiaomi, the world’s third-largest phonemaker, which has put its logo on everything from suitcases to smart washing machines, just added EVs to its list of planned exports. And this year’s must-have handbag accessory, the Labubu doll, is a Chinese export by Pop Mart, which generates almost 40 per cent of its sales outside China. According to agencies focused on Asia-Pacific brands, the number of Chinese companies pursuing international sales and entering new markets has grown significantly over the past 18 months. “There’s been a pretty massive acceleration led by companies seeking growth outside of China — a highly competitive market where growth has slowed,” says Chris Reitermann, chief executive of Ogilvy Asia-Pacific and China president at WPP.He adds that the shift towards ecommerce outside China has made it easier for Chinese brands to expand abroad without having to spend large sums on distribution. Equally, Chinese companies tend to be much more digital-focused and quick to incorporate artificial intelligence, which is reflected in their spending on digital marketing. “Platforms like TikTok and Facebook have been key to Chinese brands expanding abroad,” he adds. Ami Qian, chief transformation officer and head of client business at Japanese agency Dentsu, says Chinese companies’ overseas expansion has led to the “Chinese way” of digitally focused brand-building becoming more defined.More from this reportLast summer, the Paris Olympics and the Euro 2024 football tournament provided valuable opportunities for Chinese companies to boost their global profile. While Mengniu, the dairy company, and ecommerce group Alibaba have long-term sponsorship deals in place, newer sponsors included smartphone maker Vivo and BYD. Smaller brands, such as drinks companies Heytea and Chagee, set up tea rooms to entice Olympic spectators. At Euro 2024, five of the 13 official global sponsors were Chinese: BYD; Ant Group, the parent of Alipay; Vivo; television manufacturer Hisense; and AliExpress, Alibaba’s ecommerce arm, which also appointed former England footballer David Beckham as a brand ambassador for the competition.Reitermann, who has worked with Chinese companies for more than 20 years, says brands such as BYD, which are gaining significant global recognition and awareness, are just starting their branding journey. BYD’s marketing is based around “telling consumers about specific features” of the product rather than building the brand, he says. While the cars are relatively new and “super competitive” now, when the product is more established and perhaps less competitive, branding will help by having built loyalty among consumers.China’s global relations are a factor driving which markets brands are targeting. “They tend to go where there is less friction, where China has friendly relations,” says Scott Spirit, chief growth officer and executive director at marketing agency S4 Capital.That is the reason for the shift to the Middle East, Brazil, Indonesia and south-east Asia — where a few years ago Germany, the UK and Italy would have been the main focus. “The market sellers in Yiwu are all learning Arabic and Spanish now,” Spirit adds, referring to the vast wholesale market in China’s Zhejiang province.Last year, Alibaba’s fastest-growing division was international ecommerce, which includes platforms such as AliExpress, Lazada (south-east Asia), Daraz (south Asia) and Trendyol (Turkey). This year the group is pivoting towards AI and cloud services, but Alibaba remains the second-highest ranked global Chinese brand, at 29th out of 100 global brands, according to Kantar.Tencent holds the highest ranking, at 11th. The tech giant scored a brand win earlier this year when its WeChat platform was removed from the US Trade Representative’s list of counterfeit sellers, which it had been on since 2022. Danny Marti, head of public affairs and global policy at Tencent and intellectual property (IP) tsar under the Obama administration, says the removal recognised WeChat’s progress in IP protection. WeChat recently published a brand protection report for 2024 with details of how users report IP infringements in private chats and groups. “IP protection for the brands on our platforms is something we take seriously,” Marti says. Tencent’s broader brand recognition stems from its role as a major investor, creator, producer, distributor and licenser of TV, video, film, games, books and comic books, he adds. “Everything we do is dependent on a strong, well-functioning IP system within a regulatory framework. Effective IP protection underpins Tencent’s entire business model,” Marti says. Marti is optimistic about the global outlook for Chinese brands. “Consumers everywhere want high-quality content, great products and great user experience. Asia is home to most of the world’s population and the digital era has fundamentally shifted global influence,” he says. “It’s no surprise we’re seeing Asian brands in global markets. Why wouldn’t there be if they bring innovation and creativity that consumers value?” More

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A high-profile mistake in the UK’s inflation data is prompting scrutiny of other weaknesses in the way the indicator is compiled, as the Office for National Statistics battles to restore faith in the quality of its output. The ONS admitted this month to an “error” in its regular consumer prices index report, which wrongly added 0.1 percentage points on to the headline rate of inflation.However, the mistake — which the ONS blamed on faulty data from the Department for Transport — comes as other aspects of its methodology come under greater focus, from hotel costs and live music tickets to the price of video games. Some analysts argue the ONS should widen the array of data it collects, while others criticise delays in the introduction of supermarket scanner data meant to make grocery prices more accurate. The issues add to a steady drip of wider problems in UK official statistics that is leading to a reduction of faith in the overall quality of the country’s economic data. CPI inflation, as the basis for the Bank of England’s primary mandated target, is one of the ONS’s most prominent and closely watched data series. “When I’m talking to hedge funds around the world, all they’re hearing is issue after issue after issue,” said Sanjay Raja, an economist at Deutsche Bank. “The more you hear, the more noise you have, the more you start to discredit a national statistics body like the ONS.”Some analysts criticised delays in the introduction of supermarket scanner data meant to make grocery prices more accurate.  More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The EU has refused to hold a flagship economic meeting with Beijing ahead of a leaders’ summit next month because of a lack of progress on numerous trade disputes, according to four people familiar with the matter.The bloc’s stonewalling of the talks, known as the EU-China High-Level Economic and Trade Dialogue, underlines the deep divisions between the sides despite Beijing’s efforts to court Europe as a counterweight to the US amid President Donald Trump’s tariff war.The economic dialogue often serves to lay groundwork for the EU-China leaders’ summit, which the people said was this year set for July 24-25 in Beijing. The leaders’ summit this year has particular diplomatic significance, marking 50 years of bilateral relations. “China would like to have it [the economic dialogue], but we are seeing no progress in all of our talks,” one of the people said.The bloc would hold the meeting only if there were agreements at the summit to implement, said a senior EU official who requested anonymity.The EU and China are locked into a growing number of trade disputes. Brussels last year imposed tariffs on Chinese electric vehicles after it found the industry benefited from huge state subsidies. In response, China imposed anti-dumping duties on EU brandy and opened anti-subsidy investigations into pork and some dairy products, which could lead to further tariffs.In recent weeks, the EU has banned Chinese medical devices from most public procurement contracts and placed anti-dumping duties on Chinese hardwood plywood, a construction material.Tensions had been exacerbated by Chinese restrictions on rare earths exports, which Beijing introduced in retaliation for US tariffs in April, the people said. China holds a near monopoly on production and processing of many rare earths, which are used in electronics, electric vehicle motors, wind turbines and defence applications. Beijing’s slow issuance of export licences has prompted some European producers to warn of shutdowns.The omission of the talks will lower expectations for any concrete gains at the leaders’ summit, though another EU official who asked not to be named noted that the economic dialogue was held irregularly and did not always precede the summit. China will be represented at the summit by premier Li Qiang, the country’s second-highest ranking official, rather than President Xi Jinping, despite the meeting taking place in Beijing and the historic half-century anniversary, which was seen as a snub in Brussels.The last EU-China leaders summit in December 2023 was preceded by talks between economy and trade commissioner Valdis Dombrovskis and Chinese vice-premier He Lifeng.At that meeting, Dombrovskis raised the issue of European businesses’ access to the Chinese market, particularly for agrifood exports, medical devices, cosmetics and infant formula.Most of these issues remain unresolved, according to Maria Martin-Prat, the EU’s top China trade official. “There’s a huge amount of work that needs to be done between now and the summit,” she told a conference in Brussels on June 5. She added that much of that work consisted of “issues which we have been discussing with them for a long time”.“We’re talking about the manner in which they apply some of their horizontal laws to the detriment of foreign players. Whether we’re talking about data regulation [or] . . . espionage laws.”A European Commission spokesperson said the bloc was focused on preparations for the summit. They added that Maroš Šefčovič, the EU’s trade commissioner, was in regular contact with Wang Wentao, China’s commerce minister, with technical discussions on areas including export controls, market access and trade.China’s commerce ministry did not immediately respond to request for comment. In a statement, China’s foreign ministry said that “deepening dialogue and co-operation between China and the EU benefits both sides” amid “increasingly turbulent” global relations, “rising unilateralism and economic bullying”.“We are willing to work together with the EU side to . . . promote the stable and long-term development of China-EU relations,” the ministry added. More