Trump to send hundreds of Marines to Los Angeles

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

• Trump to deploy Marines to Los Angeles

• Jimmy Lai’s son blasts UK ‘weakness’

• Japan’s ‘indispensable’ companies

Hundreds of Marines will be deployed to Los Angeles despite calls by California’s governor not to send federal forces, marking a further escalation in a clash between the most populous US state and Donald Trump’s administration.

What’s happening: About 700 Marines would be dispatched to Los Angeles to protect “federal personnel and federal property”, the US Northern Command said yesterday. The mobilisation of Marines came after about 300 members of the National Guard arrived in Los Angeles on Sunday. Thousands of people have gathered downtown to protest against raids by federal immigration agents in the state. 

California to sue Trump: The decision to send Marines came just hours after California’s Democratic governor Gavin Newsom said the state would sue Trump over the deployment of national guard troops. Active-duty military frequently assist during natural disasters and other incidents, but it is very rare that they are deployed to assist in law enforcement. Newsom said in a statement issued yesterday with the state’s attorney-general: “This is a manufactured crisis to allow him to take over a state militia, damaging the very foundation of our republic.”

We have more on the protests and the escalating fight between Trump and California.

• Go deeper: The deployment of the National Guard in the second-largest US city, one that is largely liberal, was “clearly done as an authoritarian show of strength”, said experts.

• FT View: Trump’s deployment of federal troops to Los Angeles is a warning to states opposed to his immigration clampdown, the editorial board writes.

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

Five more top stories

1. A top White House official has said US President Donald Trump would ease restrictions on selling chips to China if Beijing agreed to speed up the export of rare earths, as the two countries began high stakes trade talks in London. It would mark a significant departure from Joe Biden’s administration, which introduced the measures to make it harder for China to obtain advanced US chip technology that could help its military.

• US-China trade: China’s exports to the US plunged last month by the most since the beginning of the Covid-19 pandemic.

• More trade news: American companies are urging Washington to lower tariffs on Vietnam, arguing that the country has become a vital part of their “China plus one” diversification strategy.

2. Starbucks will cut the prices of several iced and tea-based drinks in China, as the coffee chain grapples with the proliferation of cheaper domestic alternatives in its second-biggest market. Businesses in Chinese consumer sectors from cars to food and beverage have been under pressure to lower prices amid a weaker economic backdrop.

3. The son of Jimmy Lai has accused Sir Keir Starmer’s UK government of showing “weakness” towards China in the face of the continued detention of the former Hong Kong media tycoon and British citizen. Sebastien Lai told the FT that the health of his 77-year-old father, who was first arrested in Hong Kong in 2020, was rapidly deteriorating and called on Starmer to meet his family ahead of the G7 summit this month.

4. Shares in Japanese hotel developer turned bitcoin investor Metaplanet soared yesterday after it unveiled plans to raise about $5.4bn to add to its large stockpile of the cryptocurrency. Metaplanet’s target of 210,000 bitcoin — or 1 per cent of the total supply of the cryptocurrency — would make it the world’s second-largest corporate holder of the digital currency.

5. Brazil is hoping to sell its first sovereign debt in the Chinese market as soon as this year and is also keen to re-enter the euro-denominated bond market, a senior minister told the FT. The leftwing administration in Brasília is planning the so-called panda bond — debt issued in Chinese renminbi by a foreign borrower — as it seeks to consolidate links with Beijing.

The Big Read

While giant companies such as Toyota, Sony and Nintendo are well known outside of Japan, the country has a thick middle layer of so-called pocket champions with startlingly high shares in niche markets. For the government, hostile bids for these groups pose both an opportunity for consolidation and the threat of losing sensitive technologies. A chair of one such mid-cap company told the FT: “[If] we sell everything to foreigners at a high price, then what’s left at the end?”

We’re also reading . . . 

• Musk vs Trump: When money power and political power clash, there is only one way to bet, writes Gideon Rachman.

• How AI is shaking up jobs: New technology is starting to have a profound effect on work and employment, writes Anjli Raval.

• Who comes after MBS?: Saudi Crown Prince Mohammed is all but assured to become monarch, but his rapid ascent has upended the kingdom’s royal hierarchy.

Chart of the day

Overnight interest rates in Hong Kong have been stuck just above zero per cent for more than a month. While not immediately obvious, that is bizarre, unexpected and potentially alarming for global markets, writes Robin Harding.

Take a break from the news

Set in an impoverished ceramics village during China’s cultural revolution, Jia Pingwa’s monumental novel Old Kiln is an intimate narrative of how political violence maps on to older quarrels, clan feuds and existing struggles for power. And it has finally been translated into English. Read our review by Isabel Hilton.