Chinese exporters use ‘place-of-origin washing’ to keep away from Trump’s tariffs | Invesloan.com

Today’s agenda: Oil prices slump; Berkshire after Buffett; Israel vows to hit Houthis; China and the conclave; and WeightWatchers in the Ozempic era

Good morning and welcome back to FirstFT. Chinese exporters are trying to avoid Donald Trump’s tariffs by shipping goods via third countries, with social media platforms flooded with adverts offering “place-of-origin washing”.

What’s happening: US trade laws require goods to undergo “substantial transformation” in a country, usually including processing or manufacturing that adds significant value, to qualify as originating there for tariff purposes. But intermediaries are offering to help exporters ship goods to countries such as Malaysia, where the goods could then be moved into local containers, with altered tags and packaging. The goods would then be issued with a new certificate of origin and then sent to the US.

Why it matters: The growing use of the tactic underlines exporters’ fears that Trump’s new tariffs of up to 145 per cent on Chinese goods will deprive them of access to one of their most important markets. The inflow of goods from China has also raised alarm in countries such as South Korea, Vietnam and Thailand that are wary of becoming staging posts for trade destined for the US, and drawing Washington’s retaliation. American business partners are worried about the use of such tactics, which could risk confiscation of goods by US customs authorities.

Here are more details on the tariff workaround, and we have more analysis below on the continuing fallout from Trump’s tariffs:

• US business vs tariffs: Trump’s damaging trade war sparked a lobbying campaign by the world’s most powerful business leaders. Did it work?

• Duties on diamonds: De Beers chief Al Cook is confident the US will remove tariffs on precious stones, saying the levies were of “no benefit” to the country.

• ‘Movies made in America’: Trump has said he will slap a 100 per cent tariff on all films produced abroad, expanding his trade war to the cinema industry.

• ‘Marie Antoinette’ moment: The US president is facing a backlash after warning Americans they will have to make do with fewer toys at Christmas.

Here’s what else I’m keeping tabs on today:

• EU: Rail passengers in France are set to be hit by an indefinite strike seeking better pay for drivers. Milan hosts the Asian Development Bank’s annual board meeting for the first time.

• UK: Markets are closed for a bank holiday.

• Companies: Microsoft is turning off Skype after 14 years. Ford and Mattel report results.

How should central banks navigate the new world order? Pose your questions about monetary policy to Chris Giles and other FT experts, and have them answered in a live Q&A on Wednesday.

Five more top stories

1. Saudi companies are seeking to retrench after a sharp drop in oil prices, with businesses bracing for an economic slowdown as lower crude weighs on government spending. With oil’s recent fall far below the kingdom’s break-even price, groups are trying to protect themselves by diversifying revenue streams.

2. Prime Minister Benjamin Netanyahu has vowed to hit back against the Houthis and Iran after a missile fired by the Tehran-backed militants landed near Israel’s Ben Gurion airport. The attack, which injured four people and disrupted flights, came as Israel issued call-ups to thousands of reservists in preparation for an escalation of its offensive in Gaza.

3. China is emerging as a potentially significant factor in the outcome of this week’s papal conclave. Cardinal Pietro Parolin, the late Pope Francis’s right-hand man and the architect of the Vatican’s 2018 deal with Beijing, has emerged as an early favourite to succeed his former boss. But Parolin’s signature achievement in China now looms large over his prospects.

4. Rightwing candidate George Simion has won the first round of Romania’s presidential election, and will face a pro-EU centrist in the run-off on May 18. The vote was rerun after ultranationalist Călin Georgescu’s victory was annulled by a court over allegations of Russian interference. Here’s what the results mean for the region.

• More EU: Europe’s vast pig herds could become a “dangerous virus laboratory” if they are infected by the growing global bird flu outbreak, the bloc’s food safety chief has warned.

5. Private equity is past its peak and faces a huge challenge in selling off trillions of dollars in assets, Egyptian industrialist Nassef Sawiris has told the Financial Times. The billionaire investor also took aim at the industry’s use of “continuation funds” to recycle capital, calling it “the biggest scam ever”.

News in-depth

Warren Buffett received a standing ovation from 40,000 Berkshire Hathaway shareholders when he announced his departure on Saturday. By the time they gather for next year’s annual meeting, their eyes will be fixed on Greg Abel, Buffett’s handpicked successor, who will inherit a record cash pile — but also unprecedented scrutiny. Here’s more on Abel’s “impossible” task in taking over from the “Oracle of Omaha”.

We’re also reading . . . 

• The traditional right: With the far right ascendant in much of the west, one region is turning to leaders with more conventional agendas, writes Ruchir Sharma: Latin America.

• ‘Italian torpedo’: A decades-old litigation tactic that uses slow judicial proceedings to frustrate opponents has seen a resurgence in post-Brexit Britain.

• UK banks: Barclays’ CEO has broken ranks with other senior executives who want the government to ditch so-called ringfencing, writes Patrick Jenkins.

• AGMs: Is it the end of in-person protests and sandwiches? The UK will soon clarify whether companies can legally move to online-only general meetings.

Chart of the day

Extreme weather means wildfires and flooding are becoming more likely, posing a risk to urban areas around the world. Here are the cities some scientists call “sitting ducks” — the places most vulnerable to climate disasters.

Take a break from the news

Who still goes to WeightWatchers? FT Magazine looks at how the slimming group and its members are navigating the Ozempic era.