FirstFT: China redirects exports by way of south-east Asia in bid to evade Trump’s tariffs

Good morning and welcome again to FirstFT Asia. On right now’s agenda:

• China reroutes exports by way of south-east Asia

• Tony Blair’s employees participated in ‘Gaza Riviera’ undertaking

• How doing enterprise in Hong Kong is altering

We begin with new knowledge suggesting that Chinese language companies are sending growing volumes of products to the US by way of south-east Asia in a bid to evade Donald Trump’s tariffs. Right here’s what to know.

What the info reveals: The worth of Chinese language exports to the US dropped by 43 per cent 12 months on 12 months in Might, based on figures printed by the US census bureau — equal to $15bn-worth of products. However the nation’s total exports rose by 4.8 per cent in the identical interval, official Chinese language knowledge confirmed, because the shortfall in commerce with the US was offset by a 15 per cent improve in transport to the Affiliation of Southeast Asian Nations commerce bloc and a 12 per cent rise to the EU.

The info confirmed “a really striking pattern”, stated Mark Williams, chief Asia economist at consultancy Capital Economics. “We saw this during the first US-China trade war. There was a fairly immediate shift. US imports from China dropped off, but they picked up from Vietnam and Mexico,” he stated.

Trans-shipping crackdown: Final week Washington struck a commerce take care of Vietnam that features a 40 per cent levy on items which might be trans-shipped by the nation, in a transfer that was broadly considered concentrating on Chinese language re-exports to the US. Many nations haven’t but reached commerce offers with Washington. The pause on Trump’s “reciprocal” tariffs ends on Wednesday, and any future offers might additionally embody extra trans-shipment levies.

Right here’s what else I’m holding tabs on right now:

• Financial knowledge: Thailand publishes inflation figures for June.

• Brics summit: The gathering of the group of creating nations continues in Rio de Janeiro, Brazil. The absence of Chinese language chief Xi Jinping has thrown a query mark over the assembly.

• Trump-Netanyahu assembly: The Israeli chief meets with the US president to debate a potential ceasefire with Hamas.

5 extra high tales

1. The Tony Blair Institute participated in a undertaking to develop a postwar Gaza plan that envisaged kick-starting the enclave’s financial system with a “Trump Riviera” and an “Elon Musk Smart Manufacturing Zone”. The plan outlined in a slide deck, seen by the FT, was led by Israeli businessmen and used monetary fashions developed inside Boston Consulting Group to reimagine Gaza as a thriving buying and selling hub.

2. Chinese language mining acquisitions abroad have hit their highest stage in additional than a decade as corporations race to safe the uncooked supplies that underpin the worldwide financial system. Consultants stated that Chinese language teams are “trying to get a lot of M&A done before geopolitics get difficult”. Right here’s extra on China’s mining rush.

3. The crew of a Greek-owned cargo ship was compelled to desert the vessel within the Crimson Sea yesterday after the first suspected assault by Yemen’s Houthis this 12 months on a business vessel. Hours after the assault, Israel’s defence minister wrote on X that Israel had “forcefully” struck Houthi-linked targets, together with the ports of Hodeidah, Al-Salif and Ras Isa and an influence station.

4. Elon Musk stated he had fashioned a brand new political celebration to struggle the “one-party system” afflicting the US, after falling out with Trump over the president’s landmark home coverage invoice. The billionaire advised that the celebration would initially goal key congressional races.

5. The seek for 11 women lacking from a summer time camp in Texas continued for a 3rd day because the demise toll from flash flooding climbed to virtually 70 folks, together with 21 youngsters. The Guadalupe River that runs by the Hill Nation in central south Texas rose by eight metres in 45 minutes within the early hours of Friday, based on officers, bursting its banks and destroying roads and property.

FT Journal

Can Hong Kong reprise its position as a world monetary hub? The Chinese language territory has lots to bounce again from: huge pro-democracy protests in 2019 and 2020; a troublesome new nationwide safety legislation imposed by Beijing; then there have been its strict Covid-19 insurance policies. Contemporary off a two-year posting in Hong Kong, the FT’s Kaye Wiggins explores how doing enterprise within the metropolis is altering.

We’re additionally studying . . . 

• ‘Dragon-Bear’ embrace: The China-Russia partnership seeks to construct a brand new world order. However is that this bond as shut because it appears?

• Biohacking: FT Journal goes inside a “neurohacking” camp that guarantees 40 years non secular enlightenment in 5 days.

• Weak leaders: Admissions of overwhelm present humanity, writes Pilita Clark — if folks in cost are strategic with their weaknesses.

Chart of the day 

Japan is mounting its most formidable push in a long time to revitalise its shipbuilding business — and compete in opposition to China’s dominance of the sector — by consolidation and a proposed $7bn nationwide fund.

Take a break from the information

China’s first Legoland, one of many world’s largest, formally opened in Shanghai on Saturday. Among the many sights to lure guests: a Lego reconstruction of the Nice Wall and duplicate of town’s distinctive skyline.