FirstFT: Xi Jinping warns protectionism will ‘lead nowhere’

Good morning and welcome back to FirstFT. On today’s agenda:

• Xi Jinping begins south-east Asia tour

• Argentina agrees new currency regime

• Ecuador’s President Daniel Noboa wins re-election

• Why Trump’s nostalgia for manufacturing will make the US poorer

Xi Jinping has warned that US protectionism will “lead nowhere” and produce “no winner” as the Chinese leader embarked on a tour of Vietnam, Malaysia and Cambodia to strengthen ties with export-reliant south-east Asian economies rattled by Donald Trump’s escalating trade war.

Why is Xi visiting countries such as Vietnam and Cambodia? This is the Chinese leader’s first foreign trip this year and comes at a time of increased trade tensions between the US and China. The US has targeted countries in south-east Asia that have high trade surpluses in goods with the US with tariffs as high as 49 per cent. The US government’s approach to trade has unsettled countries in the region, allowing Beijing to speak up for the global international order and reassure these countries that China remains open for business, said Dylan Loh, assistant professor at Singapore’s Nanyang Technological University. The leaders of these countries are also under pressure from the US to crack down on trans-shipments of Chinese goods through their countries to bypass US tariffs.

Where are we on tariffs after the weekend? The mood in markets today is generally positive after Donald Trump’s administration indicated a tariff reprieve for mobile phones, laptops and other consumer electronics imported to the US from China. Asian and European markets rose today and futures trading suggests US shares will open higher later this morning. The carve-out will prove a boost for Apple, which relies heavily on imports from China to serve its customers in the US. Speaking last night to journalists, Trump said his administration would show “flexibility” for some products and indicated he would be discussing tariffs with key companies in the coming week. Asked what the tariff would be for semiconductors, the US president said he “would be announcing it over the next week”. Follow our live blog for the latest market updates, and keep pace with the tariffs with this interactive Trump tracker.

• Untangling the tariffs: Trump’s policies will severely test the financial system and America’s global standing, writes Mohamed El-Erian.

Here’s what else we’re keeping tabs on today:

• Argentina: The peso will start trading on a new exchange rate regime this morning after Javier Milei’s government agreed over the weekend to relax strict currency controls in return from a $20bn loan from the IMF.

• Companies: Meta faces an antitrust trial against the Federal Trade Commission in Washington, while Goldman Sachs reports first-quarter results.

• Monetary policy: Federal Reserve governors Thomas Barkin, Christopher Waller and Patrick Harker appear at different events today.

Submit your questions about how Trump is changing global trade and geopolitics, and have them answered by the FT’s experts in a live Q&A on Wednesday.

Five more top stories

1. Ecuador’s market-friendly president Daniel Noboa has won re-election, seeing off leftist rival Luisa González in a run-off vote. Pollsters had predicted a tight race after fewer than 17,000 votes separated the pair in February’s first round but Noboa, the 37-year-old son of a billionaire banana magnate, secured a comfortable victory.  

2. A group of US professors has sued Donald Trump’s administration over its threat to withhold $8.7bn in federal funding from Harvard University. The lawsuit, filed by the American Association of University Presidents and its Harvard affiliate, is one part of a growing effort by faculty, students and alumni to push back against attacks by the Trump administration.

3. Germany is willing to send Taurus long-range missiles to Ukraine, the country’s chancellor-in-waiting said yesterday, as he stressed the need to put Kyiv on the front foot and force concessions from Russian President Vladimir Putin. Friedrich Merz called a Russian attack on the Ukrainian city of Sumy “a serious war crime”.

• More on the Sumy attack: The ballistic missile strike left 34 dead and 117 injured, according to Ukraine’s President Volodymyr Zelenskyy and government officials.

4. Israel bombed one of Gaza City’s main functioning hospitals yesterday, after the country’s defence minister said its forces would expand their new offensive in the territory. The Diocese of Jerusalem said Israeli forces had given people in the Al Ahli hospital, which is run by the Anglican Church, “a mere 20 minutes” to vacate before the strike.

5. KKR has named General David Petraeus as chair of its expanding Middle East business as money managers pile into the oil-rich Gulf region. The US private equity firm announced the former CIA director’s appointment alongside the launch of a “dedicated investment team” for the region.

News in-depth

Mark Carney has been successfully positioning himself as an antidote to Trump, with three decades of experience in global finance and economy policymaking. But with just two weeks to go before a snap election, Canada’s prime minister is also trying to convince Canadians he has genuine roots in the country, despite having lived abroad for many years.

We’re also reading . . . 

• UK economy: Global turmoil is making Britain’s productivity predicament even worse, writes Martin Wolf, and only active policymaking can make a difference.

• John Browne: The former chief executive who led BP’s “Beyond Petroleum” rebrand speaks to the FT as he prepares to stand for election as Cambridge university chancellor.

• India’s debt crisis: A rise in unsecured credit among the country’s burgeoning middle class is hurting its economic ambitions.

• MBDA: The efforts of one of Europe’s largest missile makers to re-arm the continent has hit snags.

Chart of the day

Trump’s vision requires a belief that the US can, and should, bring back labour-intensive factory jobs, writes Tej Parikh in Free Lunch. But with an anti-immigrant stance and few Americans who like industrial work, it’s not clear who will fuel his onshoring drive. (Premium)

For more on economic policy, sign up for the Free Lunch newsletter if you’re a Premium subscriber or upgrade your subscription here.

Take a break from the news

Peruvian author Mario Vargas Llosa, a towering figure of Latin American literature, died on Sunday in Lima aged 89. He was best known for his 1969 novel Conversation in the Cathedral, which examined Peruvian society in the 1950s under the military dictatorship of Manuel Odría. He was awarded the Nobel Prize for literature in 2010.