Good morning, happy Friday and return to Firstft Asia. In today’s newsletter, we cover:
Confusion in the automotive industry
A ruthless bonus day at HSBC
Geopolitical competition over Canada’s Arctic frontier
The global automotive industry has been plunged into chaos after Donald Trump’s decision to impose a 25% tariff on imports of foreign-made cars and parts. This move was the most aggressive trade policy move of the US president to date.
Global Reaction: Asia, Europe and North American countries warned of possible retaliation. French finance minister Eric Lombard attacked the US for “a complete change in economic policy,” saying “the only solution for the EU is to raise its own tariffs on American products.” The Japanese Prime Minister said “all options” are under consideration while South Korea has pledged to respond to emergency response.
“Devastating” Results: It soon became clear that all automakers, including Tesla and the US’s Big Three General Motors, will be affected.
Almost half of vehicles sold in the US are imported, but vehicles averagely assembled in the US are sources of almost 60% of parts from overseas. Analysts at Bernstein said the policy could introduce up to $110 billion in automakers’ annual tariff costs. Customs policies that analysts and investors described as “worst scenarios,” “heavy-handed,” and “catastrophic,” have not been scaled down unless it reaches its reach.
Tariffs aim to boost the US industry, but Ford and GM shares fell 4.4% and 8.2% on the morning of the New York morning, respectively.
Next comes: From April 2nd, tariffs will come into effect with mutual collections from US trading partners, which are expected to be announced on the same day. Market research firm Cox Automotive predicted supply chain disruptions will destroy vehicle production in North America by mid-April, with US plants counting 20,000 vehicles per day, about 30% less than they currently do.
Others that keep tabs today and weekends are:
Economic Data: Japan reports trade statistics, Canada and the UK release estimates of GDP.
Greenland: US Vice President JD Vance is planning to visit US military bases in Greenland today as Washington puts pressure on a geopolitical and important island.
Results: Petrocina, China’s Industrial & Commercial Bank and China Construction Bank, reports today’s results for 2024.
US Relations: Trump’s Secretary of Defense visits Japan on Sunday for high-level consultations.
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Five more top stories
1. HSBC fired the banker on the day they were scheduled to learn bonus numbers and gave up no bonuses to many who let it go. The move has impacted some staff above the Vice President level of the UK investment banking unit, and is an indication of how lenders are taking a more ruthless approach to costs under the new Chief George El Hedery.
More Financial News: Private credits “not a bubble,” said Jim Selter, president of Apollo Global Management, at an event held in Hong Kong yesterday. Read more about Zelter’s comments.
2. China’s financial authorities told some companies and advisors that they could start the process of re-starting the initial public offering for the mainland again amid early signs of a rebound in the country’s economy’s listing. The technology, advanced manufacturing and consumer sector groups are said to be able to submit IPO documents in the past few weeks. Here’s why Beijing shifted its approach to listings:
3. The US is seeking a radical new contract to control Ukraine’s key minerals and energy assets, but Kyiv is not offering security guarantees in return. The new draft deal seen by the FT is a proactive expansion of Washington’s previous demands as Trump pushes to end Russia’s invasion of Ukraine and regain billions of dollars of military aid.
4. TSMC’s pledge to spend $100 billion will hardly help the US recover its global lead in chipmaking, said former Inter chief Pat Gelsinger. The Taiwanese semiconductor manufacturer recently announced its US factory, but its research and development is still in Taiwan, he said. “Without R&D in the US, there is no semiconductor leadership in the US.”
5. The US federal debt burden is set to surpass the peak reached in the wake of World War II over the next few years, Congressional Finance Watchdog warns. The forecast highlights growing concerns about the US finances, and highlights that it will come just days after Moody’s issued a warning about the sustainability of the country’s financial position.
Detailed news
©ft Montage/Getty Images
The Trump administration’s cuts to the federal workforce have raised concerns about the quality and reliability of US economic data. Economists are concerned that Elon Musk’s cost-cutting drive will undermine their ability to collect, analyze and explore statistics on the world’s largest economy, dealing with “a death blow to an already highly-growing research project.”
We’re reading too. . .
The day’s map
Canada’s Arctic Frontier – a tundra 200 km north of the Arctic Circle – is emerging as the new frontline for geopolitical competitions with the US, Russia and China. Improved regional accessibility as a result of climate change and Trump’s expansionist rhetoric has elevated it on the Canadian military agenda.
Take a break from the news. . .
Heathrow’s chief executive went to bed at 12:30am last Friday, leaving his lieutenant to decide whether to close the UK’s biggest airport after a fire broke out at a nearby power substation. The decision to leave has received some criticism, but do CEOs need to always work to do a good job? Read Emma Jacobs about the power of sleep in the midst of a crisis.
Fatigue is associated with many disasters, including the Chernobyl Nuclear Power Plant and the accident at the Exxon Valdes oil spill © Shutterstock
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