Good morning, happy Friday and welcome back to FirstFT Asia. In today’s newsletter:
We start with yesterday’s skirmishes between India and Pakistan, which pushed the nuclear-armed neighbours closer to war and deepened their most serious crisis in decades.
The latest developments: The Indian defence ministry said it had “neutralised” Pakistani drone and missile attacks on military targets in the north and west of the country yesterday. It also said that Indian forces had “targeted air defence radars and systems at a number of locations in Pakistan” and knocked out an air defence system in Lahore, Pakistan’s second-largest city. Earlier in the day, Pakistan’s armed forces spokesperson Ahmed Sharif Chaudhry said that the country’s air defences shot down 25 Indian drones near several cities, which had killed one civilian and injured four Pakistani soldiers.
Death toll: The attacks brought the official toll in Pakistan this week to 32 killed and 61 injured. India said Pakistan’s military had “increased” firing over the Line of Control, the de facto border in Kashmir, which both countries claim and control parts of, killing 16 civilians, including women and children, and injuring 59. Pakistani officials said 40 to 50 Indian army soldiers had been killed since Tuesday.
‘The old rules have been thrown out’: Christopher Clary, a professor at the University at Albany in New York, said that “attacks on cities by military drones have never occurred in the India-Pakistan rivalry.”
“This is a very serious allegation [by Pakistan] and a sign . . . to show the old rules have been thrown out the window.” He added: “The new rules have not been written, so we are in for a dangerous period.” Read the full story.
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Trump offers to mediate: The US president’s administration is pushing to prevent Indian missile strikes against Pakistan from spiralling into a nuclear stand-off.
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Go deeper: India’s assault, in response to last month’s deadly attack on tourists in Kashmir, has sparked a groundswell of support in Pakistan for retaliation.
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Opinion: At a time of crisis, Pakistan is being led by a general not known for his restraint, writes Ayesha Siddiqa, a senior fellow at King’s College London.
Here’s what else we’re keeping tabs on today and over the weekend:
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Economic data: China reports April trade data today and inflation figures on Saturday.
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US-China trade war: Washington and Beijing will this weekend hold their first trade talks since US President Donald Trump launched a tariff war against China.
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China-Russia relations: Xi Jinping will attend a Moscow parade for the 80th anniversary of the Soviet Union’s second world war victory. Yesterday the Chinese leader likened US “hegemony” to “fascist forces” ahead of a summit with Vladimir Putin.
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Results: Macquarie Group, Mitsubishi Heavy Industries and Nippon Steel report earnings.
How well did you keep up with the news this week? Take our quiz.
Five more top stories
1. Cardinal Robert Francis Prevost has been elected as the new pope, becoming the first American to lead the world’s 1.4bn Catholics. Prevost, who will be known as Pope Leo XIV, is seen as a compromise candidate who could find broad support in a divided Catholic church.
2. The UK has clinched the first deal with the US since Trump ignited a trade war, winning cuts to punitive tariffs on car and steel exports but failing to reverse a flat 10 per cent levy that applies to most goods. While the White House and Downing Street celebrated the deal, critics warned of a thin agreement that could face legal challenge.
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Instant Insight: By capitulating to US pressure and rushing for a quick deal, the UK has encouraged others to do the same, writes Alan Beattie.
3. Billionaire philanthropist Bill Gates has accused Elon Musk of “killing the world’s poorest children” through what he said were misguided cuts to US development assistance. Gates said the abruptness of the cuts had left life-saving food and medicines expiring in warehouses and could cause the resurgence of diseases such as measles, HIV and polio. Read his explosive remarks in an interview with the FT.
4. Toyota has warned operating profits will fall 21 per cent this fiscal year due to the fallout from Trump’s trade war, increasing the pressure on Japan to reach a deal on tariffs with the US. The forecast “tentatively” includes an estimated US tariff impact of ¥180bn ($1.25bn) for the months of April and May.
5. Trump has proposed raising taxes on the wealthiest Americans, in a breach of Republican orthodoxy that he hopes could pay for broader tax breaks being debated in Congress. The US president also signalled his willingness to end the preferential tax treatment of hedge fund and private equity profits known as “carried interest”, in a potential blow to Wall Street.
The Big Read
In the past few years, Japanese anime has shifted from niche fandom to one of Japan’s most potent vectors of soft power. The global market for the distinctive Japanese cartoons is expected to almost double from $31.2bn in 2023 to $60.1bn by 2030. Global private equity firms and Hollywood studios alike are hungry to buy Japanese entertainment companies and the valuable IP they possess. But who will reap the rewards of this growth potential?
We’re also reading . . .
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Japan: Trump’s trade crisis will answer whether the country’s corporates have saved or danced all summer, writes Leo Lewis.
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The case for universities: Institutions everywhere are in crisis, writes Simon Kuper, but they will survive.
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Joseph Nye: The international relations expert, who served in the administrations of former US presidents Jimmy Carter and Bill Clinton and coined the term “soft power”, has died. He was 88.
Chart of the day
It will look pretty bad in the medium term, but the evidence of recent years suggests that both international trade and the US economy are entirely capable of dealing with big shocks without incurring long-lasting damage, writes Alan Beattie.
Take a break from the news
Don’t miss our six films to watch this week, including The Wedding Banquet, where Bowen Yang and Han-Gi Chan star in a millennial update of Ang Lee’s 1993 sham-marriage movie.
Read the full article here