Flagship

Asia feels tariff pain

Asia’s biggest economies reported worsening manufacturing and industrial output, an early sign that US tariffs are starting to bite. Chinese factory activity contracted in April, with a key indicator falling to its lowest level since late 2023, while Japanese industrial production and retail sales fell more than expected, prompting economists to cut their growth forecasts for Japan, the world’s fourth-largest economy. US President Donald Trump’s move to partially ease auto tariffs will offer some respite to Tokyo, a major car exporter, but other industries in the region might not be so lucky: South Korean behemoth Samsung warned of coming hits to its semiconductor and smartphone business, with analysts attributing record Q1 profits to stockpiling ahead of duties taking effect.

China seeks diplomatic wins

China sought to position itself as a defender of the global trading order and a stable partner for capitals reeling from chaotic US policy. China’s foreign minister told counterparts at a Rio de Janeiro meeting of the BRICS bloc that Beijing standing up to the US in the face of trade pressure was in “the common interest of all countries,” while a foreign ministry spokesman today said Beijing’s EU ties offered “precious stability and certainty.” The propaganda push has broader goals than simply winning a tariff standoff with Washington: “This is not just about China-US,” a Shanghai-based expert told Bloomberg. “It is really about the international trade and economic system.”

India looks to Latam

India is ramping up its Latin America presence to tap the region’s vast mineral reserves, with Prime Minister Narendra Modi hailing a “new energy” in relations with the region. New Delhi’s green targets have fed a push for greater access to key minerals such as copper and lithium, used in renewables technologies, with Chile a particular target: Modi recently met with Chile’s leader and hosted a meeting of Latin American businesses, and India has been expanding its continental embassy network in recent years. The moves reflect a growing awareness that securing access to critical minerals is “a strategic imperative,” an expert said. However, New Delhi will face competition from Beijing and Washington, the biggest trading partners for almost all the region.

India attack looks likely

India appeared poised to carry out military action against Pakistan, as tensions between the nuclear-armed neighbors neared boiling point following a deadly attack in Kashmir. India’s prime minister today gave his military “complete operational freedom” to respond to the shooting of 26 people in territory it controls, blaming the assault on Pakistan. Islamabad — which denies the charge — said it had “credible intelligence” of an imminent Indian attack. A military response has wide backing within India, with a respected former minister and government critic arguing in The Indian Express for “something more kinetic” than diplomatic missives and economic sanctions. The rhetoric has heightened fears, with one India expert noting in Foreign Affairs that “the risks of escalation… are higher than ever.”

Pakistan temperatures surge

Pakistan may break a global temperature record this week. An area of high pressure over South Asia and the Middle East is causing heatwaves, and 21 countries saw temperatures top 110°F (43°C) this week. Nawabshah in southern Pakistan saw 118°F, and is predicted to near — and potentially exceed — 122°F, an April record also set in Nawabshah, in 2018. Last year was the hottest ever globally, thanks to a strong El Niño climate pattern, but the corresponding La Niña has not brought temperatures down as much as expected. The pressure dome is set to move over central Asia, and as summer approaches in the Northern Hemisphere, billions can expect “unusual and dangerously hot weather conditions,” The Washington Post reported.

Boko Haram makes comeback

A surge in attacks in northern Nigeria raised fears jihadi groups may be making a comeback. Attacks carried out in the past week have killed almost 50 people, with a regional governor warning that Boko Haram and a rival militant group were making territorial gains in Africa’s most populous nation. An analyst said the assaults reflected the groups’ increased boldness and growing use of sophisticated technologies. The spiraling violence has heaped pressure on President Bola Tinubu, who vowed to solve the country’s security challenges during his 2023 election campaign. The lack of action is leading to “explosive situations” that have displaced thousands, an expert told the Financial Times.

China’s major chip advances

Chinese firms announced startling advances in the design and manufacture of semiconductors, fueling questions over how long the West can maintain its lead. Washington has sought to curb Beijing’s access to cutting-edge chips and chipmaking equipment, driving China to push domestic advancements. Researchers at the Chinese Academy of Sciences hailed a key breakthrough in developing advanced “EUV” lithography machines used to design chips, defying a recent prediction by the CEO of the world’s lone firm making the equipment that “it would take many, many years” for China to catch up. Huawei, meanwhile, has reportedly begun delivering advanced artificial intelligence chips to Chinese firms cut off from Western technology.

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Vaccine trial offers hope

The world’s first trial of a room-temperature vaccine began in the UK. Existing vaccines need to be kept in refrigerators — and, in some cases, ultra-low-temperature freezers, a huge obstacle to getting them to where they are needed, especially in low-income countries with limited electricity supplies. A British biotech company said its technology can ensure existing vaccines are stable at room temperature. The initial test is on a tetanus and diphtheria jab, but the company estimates that up to 60 other vaccines could use the same technique. If successful, the technology could transform vaccine availability and hugely reduce wastage: The World Health Organization estimates that cold-chain issues mean 50% of doses are currently thrown away.

UK warns of cashless risks

British lawmakers warned that shops could be required to take cash. Similar moves are planned in the European Union and Australia. A parliamentary committee said many people, often elderly or vulnerable, rely on cash, and an increasingly cashless society risks excluding them. Cash has other advantages: During this week’s blackouts in Spain and Portugal, card payments were offline for hours, while Madrid residents told the BBC that long queues formed at the few working ATMs, leaving people who carried no physical money unable to buy goods. Spain has been actively trying to reduce cash use to reduce tax evasion, but its move toward electrification leaves it more vulnerable to outages.

Paris restaurants’ wine fraud

Tourist-trap Parisian restaurants often serve cheap plonk when customers ask for higher-end wine, an investigation found. Two sommeliers posing as English-speaking customers ordered a premium chablis worth around €9 ($10) a glass but were instead served a sauvignon worth half that, a practice repeated in several cafés and bistros, Le Parisien reported. Waiters said the trick was commonplace, especially in tourist-heavy areas: “You can serve the wine you want,” one said. “People don’t have the sense of taste to spot it… I sometimes even empty leftover wine into one bottle.” Wine fraud is a centuries-old problem in France, The Times of London reported, although it’s easily avoided by just ordering the house red, which in France is almost always perfectly nice.

• US President Donald Trump is expected to hold a cabinet meeting.
• Vietnam holds a military parade to mark 50 years since the end of the Vietnam War.
• Edinburgh holds its annual Beltane Fire Festival, inspired by an Iron Age Celtic ritual.

The portion of Microsoft’s code written by artificial intelligence, according to CEO Satya Nadella. Meta Chief Executive Mark Zuckerberg, when asked the same question, was unsure how much of his company’s code was AI-generated, while Sunder Pichai of Google recently gave a similar figure to Nadella’s. TechCrunch noted that exactly how you measure “what’s AI-generated versus not” is unclear, saying “these figures are best taken with a grain of salt,” but it’s certainly no longer as obvious as it used to be that “learn to code” is good career advice: Nadella’s chief technology officer has previously said he expected the share of AI-generated code to reach 95% by 2030.

Master and Commander, dir. Peter Weir. Forgive Flagship a little indulgence here: Semafor’s Ben Smith and Liz Hoffman noted yesterday that the excellent Margin Call, about the 2008 financial crisis, is Wall Street’s favorite movie. But they also noted with confusion that, “for reasons passing understanding,” traders’ third favorite is 2003’s Napoleonic war movie Master and Commander. Flagship would like to aid that understanding: It’s because Master and Commander is a masterpiece. The Guardian, in a 20th-anniversary piece, noted that the film has stood the test of time: It is “an action movie with a brain” and an “inspiring” view of male friendships. Find where to stream Master and Commander here.

Some of the biggest US power companies are at odds with senior Trump administration officials on how to fill the country’s looming electricity deficit and beat China at the AI race, Semafor’s Tim McDonnell reports.

Interior Secretary Doug Burgum told Semafor’s World Economy Summit last week that the continued use of federal tax credits to replace fossil fuels in the electric grid with renewables “would be catastrophic for our country.”

But executives of companies actually managing the delivery of power to new data centers have a more nuanced view: Even as rising trade barriers with China make some technologies more expensive, renewables plus batteries are still the cheapest and fastest way to put new electrons on the grid.