Canada announces steep tariffs on Chinese EVs and steel

Good morning. Today we’re covering:

• Terror attacks in Pakistan

• The US astronauts stranded in space

• Narendra Modi’s policy U-turns

But first, Canada announced yesterday it would impose 100 per cent tariffs on imports of Chinese electric vehicles and 25 per cent levies on Chinese steel and aluminium, in a move replicating recent US measures.

Canada’s Prime Minister Justin Trudeau said Ottawa was introducing the EV tariffs because China was “not playing by the same rules”. It marks the latest example of the US and its allies taking actions to counter what they say are unfair economic practices.

The announcement came one day after US national security adviser Jake Sullivan met the Canadian prime minister in Canada and urged Ottawa to follow Washington in imposing tariffs. Sullivan said a “united front” would benefit the US and its partners.

The Canadian government is also launching a 30-day consultation to determine where else Ottawa needs to take action. Here are the sectors it will examine.

And here’s what I’m keeping tabs on today:

• Economic data: China reports July industrial profit figures and the Bank of Japan publishes its services producer price index.

• US-China relations: Jake Sullivan arrives in Beijing for talks with Chinese foreign minister Wang Yi. Don’t miss our recent Big Read on their secret backchannel that has played a vital role in cooling tensions.

• Results: BHP reports full year 2024 results and Woodside reports interim earnings.

Thank you for reading FirstFT. Do you have questions about today’s stories or about the newsletter itself? Email us at [email protected] and we’ll answer as many as possible in a special weekend edition. Please remember to include your name and where you’re writing from.

Five more top stories

1. Armed insurgents in Pakistan’s south-western Balochistan province killed at least 23 people in a spate of attacks on Sunday night and yesterday morning. The Baloch Liberation Army, an armed separatist group in the mineral-rich province, claimed responsibility for the attacks.

2. American tech group IBM is closing down the majority of its research and development efforts in China, becoming the latest US company to pull back from the country amid increasing tensions between Washington and Beijing. An executive from the company cited tougher competition when he informed staff of the cuts in a virtual meeting yesterday.

• Chinese tech giants splurge on AI: Alibaba, Tencent and Baidu have doubled their combined capital spending this year to buy artificial intelligence infrastructure, despite US sanctions designed to limit the country’s progress in the crucial technology.

3. Emmanuel Macron has hit back at accusations that the arrest of Telegram chief executive Pavel Durov in France is politically motivated, after the surprise move raised tensions with Moscow and escalated a global debate over free speech. The arrest of the Russian-born billionaire, who is now a French-Emirati citizen, marks the most drastic national action against a social media chief to date.

4. Rising geopolitical tensions have led to record levels of cash for the world’s largest aerospace and defence companies. The leading 15 defence contractors are forecast to log free cash flow of $52bn in 2026, according to analysis by Vertical Research Partners for the FT — almost double their combined cash flow at the end of 2021. 

• War in Ukraine: Central Kyiv was rocked by explosions yesterday as Ukrainian air defences intercepted incoming Russian missiles and drones during a huge aerial bombardment of targets across the country.

5. ExxonMobil has said global oil demand will remain virtually unchanged by 2050 and warned that any move to curtail investment in fossil fuels would trigger a new energy price shock. The bullish forecast from the US supermajor contrasts sharply with predictions of a rapid transition from fossil fuels.

Explainer

The return to Earth of two US astronauts stranded on the International Space Station will be delayed until February, extending their planned eight-day mission to eight months. Michael Peel and Sylvia Pfeifer explain what went wrong and how Nasa plans to bring them home.

We’re also reading . . . 

Chart of the day

An emerging market revival has begun, writes Ruchir Sharma, but investors have yet to take heed of the dramatic global implications.

Take a break from the news

Abu Dhabi is encouraging toned-down weddings amid long-simmering anxieties about the ballooning extravagance of the ceremonies. The modesty initiative offers a rare insight into the tensions between tradition and modernity that permeate Emirati society, writes Chloe Cornish.

Additional contributions from Tee Zhuo and Sarah Ebner