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Good morning, I’m back to Firstft Asia. In today’s newsletter:
Trump’s latest attack on the Fed Chair
The US has set it up to ban Chinese technology on submarine cables
FT investigates immigration detention facilities in the United States
Donald Trump asked lawmakers if Federal Reserve Chairman Jay Powell should be fired in a move to drive a dollar-hitting move, promoting new concerns about central bank independence.
What happened: According to White House officials, Trump asked Republican members during an oval office meeting later Tuesday if Powell should be removed at the oval office meeting. Lawmakers supported the idea, officials said. Speaking in the oval office yesterday, Trump pushed back the prospect of plundering Powell, who had ruthlessly criticised him for cutting interest rates in recent weeks. “We’re not going to do anything,” he said.
The dollar shook with volatile trading, with the index tracking the currency against its peers, slipping 0.9%, trimming its loss to about 0.3%.
Fed independence under attack: Trump repeatedly puts pressure on the Fed Chairman, saying lower borrowing costs will help reduce the public debt burden of his “big and beautiful” budget bill. However, Powell and many other members of the Fed policy setting committee are worried that Trump’s tariffs could increase inflation. JP Morgan chief Jamie Dimon warned on Tuesday that “Fed independence is absolutely important and not just for the next Fed Chairman, Jay Powell, the current Fed Chairman I admire.”
Magazine Split: Trump attacked his “past supporters” and accused them of pushing “Jeffrey Epstein hoax.”
Here is the other thing we keep tabs today:
Economic Data: Japan reports monthly trade data. Australia and Hong Kong have released employment figures for June.
Results: TSMC and Volvocar report second quarter revenue.
Five more top stories
1. US communications regulators are poised to introduce measures to guide businesses to connect submarine communication cables, including Chinese technology and equipment, to the United States. The new rules were partially affected by a massive Chinese ongoing attack on the US communications network called Salt Typhoon, which said Washington struggles to tackle the costs of replacing vulnerable systems.
Beijing’s Nvidia CEO Jensen Huang said that AI chip makers will “accelerate” sales recovery in China after Detente between Beijing and Washington can resume shipping major processors designed for the Chinese market.
US-China Business: Almost half of the largest US companies operating in China are affected by domestic overcapacity, according to a new survey.
2. China has been sentenced to three and a half years in prison for spying by Japanese pharmaceutical executives. The decision raises concerns among Chinese foreign companies regarding the transparency of the country’s judicial system, given that no details of the allegations against management have been made available. Please read the entire story.
3. Ursula von Der Leyen’s plan for the largest EU budget has sparked a stir within the European Commission, with colleagues warning that the president’s ultra-centered style already violating the 20 euro cash call. The rebellion highlights the long bubbling resilience in her “rubber stamp” approach to the committee.
4. Israel yesterday carried out a strike near the Syrian presidential palace and the military headquarters in Damascus. Israeli forces took a strike in southern Syria.
5. The dispute between the Vietnamese government and renewable energy developers over subsidies threatens to disrupt power sources. In a letter to Vietnam’s Ministry of Industry and Trade, provincial utilities warned that the government could cut subsidies, put the country’s credibility at risk, leading to electricity shortages.
Visual investigation
Trump has launched the largest domestic and international deportation operation in US history, and his administration has set up more facilities to recruit a record number of detainees. Most are run by commercial companies. It’s a multi-billion dollar industry that has exploded over 40 years. The FT investigation found that lawyers and detainees said some people were sleeping on the floor, but they housed hundreds more people than many people would hold.
We’re reading too. . .
GM’s Korea Factory: The company’s major Korean factory primarily serves the North American market, with Detroit automakers fully exposed to US tariffs.
“Fires” and “Ice”: The markets are closer to singles from inflation than growth and price freezes, writes Pimco co-founder Bill Gross.
Zohran Mamdani: The socialist mayoral candidate has won several critics in a personal meeting with the New York business elite.
The chart of the day
The US trading partners have largely refused to retaliate against Trump’s tariff war, with only China and Canada fighting back so far. This allowed the US president to raise nearly $500 billion in additional customs revenue for a small cost, as he is untiled to “always sprinting through chickens,” data from the US Treasury Department shows.
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Take a break from the news
Does a perfect hat exist? FT’s Robert Armstrong writes that his bald head (which is a “roof panel that collects heat and collects solar radiation”) requires coverage. When it comes to style, this creates challenges.
