Good morning and welcome to FirstFT. In today’s newsletter:
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China threatens retaliation against ‘economic D-Day’ measures
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Imran Khan may not survive Pakistan prison, son says
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The Brazilian town at the heart of the US-China rare earths race
Beijing has warned the US that it will retaliate if Chinese companies are included in any significant expansion of the Trump administration’s new secondary sanctions relating to Iran.
The measures unveiled on Monday by US Treasury secretary Scott Bessent targeted companies based in Hong Kong and mainland China but stopped short of listing large Chinese financial institutions.
“China will take all necessary measures to firmly safeguard its rights and interests,” a Chinese foreign ministry spokesperson said yesterday in response to questions about US secondary sanctions on Iran.
While China’s large state-owned refiners largely comply with sanctions on Iranian crude, Beijing allows private sector refiners known as “teapots” to import and process oil from the country.
Any serious increase in US sanctions on China, which buys 90 per cent of Iran’s oil, would risk exploding the relationship only a month before presidents Donald Trump and Xi Jinping are scheduled to meet in Washington.
But Zhu Feng, an international relations expert at Nanjing University, said that behind the scenes, China was deeply interested in encouraging the warring parties in the US-Iran conflict to find a solution.
“From a Chinese perspective, we don’t want to get involved in a US-Iranian fight,” he said. “On the other hand, we are also very highly aware that if the Strait of Hormuz dilemma continues, it will also be more dangerous for China. China’s main oil imports come from the Middle East, not from Iran but from Saudi Arabia and Iraq.” Read the full story.
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The FT View: The US cannot fully isolate Iran unless other trade partners co-operate, writes the editorial board. The biggest of those, China, has already signalled little intention to play ball.
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Middle East news: Iran and Oman have edged towards an interim agreement on managing shipping through the Strait of Hormuz, the first hint of diplomatic progress in weeks.
Here’s what else we’re keeping tabs on today:
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Economic data: Australia reports July inflation figures and Japan publishes PPI data for the month.
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Monetary policy: The Bank of Thailand announces its interest rate decision.
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Results: AI chipmaker Nvidia reports its closely watched earnings as some investors question the sustainability of the AI spending boom. (Reuters)
Five more top stories
1. Pakistan’s imprisoned former leader Imran Khan may not survive his imprisonment in indefinite solitary confinement unless he is given proper medical treatment, one of his sons has said. After weeks of concern about the cricket star-turned-politician’s health, Pakistan’s military-backed government last week allowed Khan to be taken to a state hospital for a brief check-up and pronounced him fit afterwards.
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Pakistan seeks US funding: Pakistan is focused on securing US financing as it plots a return to global capital markets, the country’s finance minister has said, in a major shift after years of relying on state loans from China.
2. An Nvidia employee has been charged in Taiwan with smuggling advanced AI chips into China in the first known indictment of a worker at the US chipmaker over alleged illegal exports. Prosecutors accused the defendants of colluding in pursuit of huge profits and “seriously damaging Taiwan’s international image”. Many of Nvidia’s chips and servers are made in Taiwan.
3. Canada has announced retaliatory tariffs of up to 50 per cent on US$20bn worth of US imports a day after Trump said he would raise duties on Canadian cars. The latest salvo of an escalating trade war between the two neighbours comes at a perilous moment for the US economy and weeks before crucial midterm elections.
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‘Embarrassing’: The Trump administration’s attacks on Canada have sparked a backlash among former US national security officials and Republicans.
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US affordability tracker: The FT is tracking changes to the cost of living that will affect American voters ahead of the midterm elections in November.
4. OnlyFans paid out more than $700mn in dividends to its owner before his death earlier this year, according to annual accounts for the British streaming platform to be filed in the UK this week. The majority of profits in its 2025 accounts went in dividends to its owner, Ukrainian-American entrepreneur Leonid Radvinsky, who died from cancer in the spring.
5. Tokio Marine, the Japanese insurer backed by Berkshire Hathaway, is closing in on its largest acquisition after months of due diligence on Australian and Canadian targets. Pursuing a multibillion-dollar international takeover is part of chief executive Masahiro Koike’s push to diversify Tokio Marine’s operations.
The growing threats to ‘Swiss Made’
Manufacturing accounts for 19 per cent of Switzerland’s GDP — twice the contribution of the country’s celebrated financial services industry. But the “Swiss Made” model of premiumisation is under pressure from a strong franc, US tariffs and rising protectionism. This is leading to a heated debate about “Swissness”.
We’re also reading . . .
Chart of the day
China enjoys a tight grip over much of the world’s rare earths. When Beijing curbed exports last year in retaliation against Trump’s tariffs, the hunt for new sources intensified. A Brazilian mining town that formerly churned out asbestos is now emerging as a keystone of US plans to unshackle itself from Chinese dominance of the critical minerals.
Take a break from the news . . .
The Rich Collection in London’s Shoreditch was set to close at the end of this summer until TikToker Caroline Rivier posted a video that went viral and inspired the shop owner’s daughter to post her own content, unwittingly kicking off one of the most wholesome fashion trends of the season.
