Japanese business leader says Tokyo made ‘big mistake’ in US trade talks strategy

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

• Japan’s trade talks strategy comes under fire

• Shein files for Hong Kong IPO

• China’s weaponisation of rare earths

The head of one of Japan’s most powerful business lobbies has accused the government of a “mistake” in its trade negotiating strategy with the US. The unusually blunt comments came just hours after President Donald Trump announced 25 per cent tariffs on Washington’s closest Asian ally.

What to know: Takeshi Niinami, chief executive of Suntory and chair of the influential Japan Association of Corporate Executives, said that Japan’s insistence on a total exemption from Trump’s tariffs may have left the US president feeling “betrayed”, adding that the country could have secured a 10 per cent base tariff had its negotiators shown more flexibility.

“They underestimated the determination of Trump,” Niinami told the FT yesterday. “They thought time was on Japan’s side. It was a big mistake.”

‘It could be too late’: Niinami said Tokyo could be forced into making major concessions to secure an agreement. He added that there was a narrowing window to make a deal ahead of an upper house election this month, when Prime Minister Shigeru Ishiba’s ruling Liberal Democratic party risks losing its grip on power.

Niinami also accused the government of squandering the legacy of the late prime minister Shinzo Abe, who had achieved friendly relations with Trump.

Read the full interview.

• More trade news: Trump said that the US will impose a roughly 50 per cent tariff on copper imports, sending prices for the industrial metal soaring.

• Wall Street optimism: Big banks are turning more bullish on US stocks, despite Trump’s renewed threats of steep tariffs on major trading partners.

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

• Economic data: China publishes June inflation figures, which are expected to show that one of the country’s longest bouts of factory price deflation is running unchecked.

• Monetary policy: Central banks in Malaysia and New Zealand announce their rate decisions.

• Taiwan: The annual “Han Kuang” military drills — to simulate defending the island against Chinese attacks — begin, continuing until July 18.

Five more top stories

1. Shein has confidentially filed for a Hong Kong initial public offering as the online fast-fashion retailer seeks to accelerate a drawn-out listing process and pressure the UK regulator into approving a London listing. Zijing Wu has the details.

• FT View: The outlook for Hong Kong’s stock market has brightened this year, but the city’s standing as a global financial hub still faces several hurdles.

2. Elon Musk’s SpaceX is preparing to sell about $1bn of its shares in a deal that would value the rocket and satellite group at $400bn, according to people familiar with the matter. The valuation places SpaceX on par with the top 20 most valuable public companies in the S&P 500.

3. The Trump administration plans to ban Chinese groups from buying farmland in the US, particularly near military bases. The announcement follows mounting concerns from US lawmakers that Chinese farmland acquisitions could be used for espionage.

• AI imposter: The US Department of State has said it was tightening its cyber security after an imposter used artificial intelligence to impersonate secretary of state Marco Rubio.

• More US news: The Supreme Court has allowed Trump’s administration to proceed with mass job cuts that could fundamentally reshape and downsize the federal government.

4. The biggest US private equity firms have abandoned a controversial practice of hiring promising graduates about to start work at investment banks for roles due to begin years later. The decision comes after JPMorgan Chase chief executive Jamie Dimon said last month that the bank would terminate junior analysts accepting future-dated jobs. 

5. BCG’s chief executive said its involvement with a postwar plan for Gaza that envisioned relocating a quarter of the population had been “reputationally very damaging”. The message came amid international criticism of the consulting firm and concern from clients.

The Big Read

Some parts of rural France have a shortage of doctors so severe they have been labelled “medical deserts”. The French capital has a very different problem: an excess of bankers. Prestigious houses Lazard and Rothschild & Co battle with Wall Street’s biggest banks, but in recent years a new breed of banker has swept into Paris.

​​We’re also reading . . . 

• Critical minerals: China’s export controls on rare earths and magnets have proved much more effective than previous economic sanctions, writes Chris Miller.

• Doge cuts: Private credit lenders have extended a lifeline to US government contractors short-changed by Elon Musk’s cost-cutting drive.

• Martin Wolf: In just under six months, Trump has made huge strides in his war on everything that made the US successful.

Chart of the day 

Chinese investors are driving a sharp rally in mainland bank stocks listed in Hong Kong, as they hunt for alternatives to the near-record low yields offered by government debt.

Take a break from the news

More executives have been incorporating hot yoga into the working day. Enthusiasts say high-temperature sessions sharpen focus, improve health and offer a chance to build contacts. Is the yoga studio the next hot place for networking?