FT : Trump’s port fees will weaken China’s shipbuilding dominance, says shipping

Trump’s port fees will weaken China’s shipbuilding dominance, says shipping boss
Fleet owners are already rethinking orders from Chinese yards, says head of Japanese Shipowners’ Association

The Trump administration’s incoming fees on Chinese-made vessels visiting US ports will weaken China’s shipbuilding dominance and boost Japanese and South Korean rivals, said the head of one of the world’s biggest shipowners’ groups.

Hitoshi Nagasawa, president of the Japanese Shipowners’ Association, which represents the world’s second-largest ship-owning nation after China, said fleet owners were already rethinking orders to Chinese yards and exploring alternatives ahead of levies set to take effect next month.

“Relying solely on China for shipbuilding is risky,” he said in an interview at the association’s headquarters in Tokyo. “A shift is bound to happen where those ordering 100 per cent of ships from China until now might do 60 to 70 per cent with China and 40 per cent with Japan or South Korea.”

Starting on October 14, Chinese-built vessels must pay $18 a tonne or $120 per container discharged when docking at US ports, rates that will increase over three years. An average-sized container ship can expect to pay more than $680,000 a visit, based on UN figures of US port calls in 2023.

Fees may be cancelled or remitted if shipowners order a US-built vessel within three years, according to the plan by US President Donald Trump’s administration, which is partly aimed at reviving US shipbuilding.

The port fees have provoked a backlash from the shipping industry because China is the world’s largest builder of vessels, making about a third of the global commercial fleet by tonnage, according to Clarksons Research.


Chinese-built or operated ships accounted for 29 per cent of port calls to the US last year, according to Lloyd’s List. But analysis by Goldman Sachs showed only 4 per cent of total US port calls would fall under the new rules due to various exceptions, including for vessels that are small, on short voyages or empty upon arrival.

Critics have questioned whether the fees will reduce China’s grip on shipbuilding, after the Trump administration lowered them from an initial proposal of $1mn to $1.5mn per port call following industry pushback, especially from US farmers who export to China.

Nagasawa signalled support for the measure, saying: “Nobody thought there would be a person to say such a thing — we’re imposing port fees just on you, Chinese ships — but that person has come.”

Nagasawa, who is also chair of shipping company NYK Line, said “inquiries were indeed increasing significantly” to Japanese shipyards, but it was difficult to secure orders because the yards were “sold out for several years”.

Japan’s capacity-constrained shipbuilding sector is in crisis as its share of new-build orders has fallen to less than 7 per cent from a recent peak of 29 per cent in 2015, despite a global boom in demand. China, meanwhile, took 70 per cent worldwide share last year.

Trump’s move could provide a tailwind to Japan’s plan to revive its shipbuilding sector, once the world’s biggest but now behind China and South Korea. The country has proposed establishing a $7bn fund to upgrade and enlarge its yards.

However, Nagasawa said Japan would need to address labour shortages, outdated facilities and high steel prices.

Nagasawa admitted that South Korean rivals were better placed to invest in Trump’s shipbuilding drive, given their larger scale, but he saw potential to service US naval vessels in Japan and to collaborate on icebreakers.

Shipbuilding was singled out as a key sector for $550bn of Japanese investment into the US agreed in July as part of a trade deal.

FT : BNP Paribas drops pledge not to finance ‘controversial weapons’

BNP Paribas drops pledge not to finance ‘controversial weapons’
French bank updates policy on lending to defence companies as Europe undertakes rearmament drive

BNP Paribas has relaxed a policy that blocked it from financing “controversial weapons”, as the French bank attempts to boost its work with defence companies amid Europe’s rearmament drive.

The lender dropped a commitment that barred it from “financing the production and trade of controversial weapons” as part of an update to its defence and security sector policy earlier this year, according to people familiar with the matter.

The term “controversial weapons” was deemed to be too broad and could encompass activities such as certain drone manufacturing, one person said.

BNP Paribas’s defence policy now draws a distinction between weapons that are authorised under major international agreements and those that are not, the people added, which could increase the scope and scale of the bank’s lending to the defence industry.

The shift comes as European banks are preparing to step up lending to weapons manufacturers as governments embark on a historic rearmament push following pressure from the US to boost spending, and with growing threats to the bloc from Vladimir Putin’s Russia.

The defence industry is under pressure to increase production, but there have been warnings that small suppliers need more funding to step up their operations, and bigger companies have sometimes stepped in to bridge the gap when financing has been tight.

In an attempt to ease the path to investing in Europe’s arms industry, the European Commission in June said it would clarify that defence companies were in compliance with EU environmental, social and governance (ESG) rules, except for the makers of internationally banned weapons such as landmines.

This followed years of complaints by the sector that it was falling foul of ESG rules adopted by lenders, which forced some arms manufacturers to tap private markets for funding.

BNP Paribas’s policy around “controversial weapons” had been in place since 2010. The bank previously defined controversial weapons as “weapons having indiscriminate effects and causing undue harm and injuries”.

France is home to some of Europe’s big defence companies, such as Thales, whose products include systems for drones and radars; Dassault, the group behind the Rafale fighter jet; and submarine maker Naval Group.

BNP Paribas said that all of its sectoral policies were regularly updated, adding: “The update of the defence and security policy reflects the group’s long-standing commitment to supporting the financing of defence companies, primarily within Nato countries, mostly in Europe.”

Other European banks are also positioning themselves to benefit from the continent’s surge in defence spending. Deutsche Bank has set up a cross-divisional task force of about 40 bankers from corporate and investment banking to focus on defence and infrastructure.

The German lender said it had since initiated about 20 transactions ranging from capital markets deals to M&A and lending across the sector, and had already mobilised commitments in the “mid-double-digit billions of euros”.

FT : Stablecoin issuer Circle examines ‘reversible’ transactions in departure fo

Stablecoin issuer Circle examines ‘reversible’ transactions in departure for crypto
President says sector should learn from traditional finance and allow refunds in cases of fraud or disputes

Circle, the world’s second-biggest issuer of stablecoins, is examining ways to make it possible to reverse transactions involving its tokens, in a rare admission by a major crypto firm that it needs to take lessons from the traditional financial sector.

Circle president Heath Tarbert said a mechanism that allowed money to be refunded in cases of fraud or disputes would help the stablecoin industry’s push to become part of the financial mainstream.

“We are thinking through . . . whether or not there’s the possibility of reversibility of transactions, right, but at the same time, we want settlement finality,” Tarbert told the Financial Times.

“So there’s an inherent tension there between being able to transfer something immediately, but having it be irrevocable,” he added.

Such measures would be a major departure from the crypto industry’s previous emphasis on the “immutability” of the blockchain, a digital ledger that is public and records transactions that cannot be unwound.

They also mark a dramatic change in attitude in an industry that has often tried to distance itself from so-called “tradfi”, and will be seen by some crypto purists as tantamount to heresy. One prominent venture capitalist said it was “offensive” to still call Circle’s planned venture a blockchain.

Tarbert, a former chair of digital assets regulator the US Commodity Futures Trading Commission, said there were discussions taking place among software developers “as to whether on certain blockchains for certain circumstances, provided all the parties agree, there could be some degree of reversibility for fraud”.

He added: “People say blockchain technology, stablecoins, smart contracts, are superior in technology to the current system. But there are some benefits of the current system that aren’t necessarily currently present.”

Tarbert’s comments come as the US lays the groundwork for a potential surge in the use of stablecoins, as banks and credit card companies explore blockchain technology. The tokens act as a form of digital cash, pegged to sovereign currencies such as the US dollar, making them far less volatile than cryptocurrencies such as bitcoin, and can make payments outside the traditional banking system.

They play a central role in digital asset markets but financial services firms see the technology as a potential pathway for faster, cheaper cross-border payments. There are roughly $280bn of stablecoins in circulation and the Trump administration has strongly backed their development in the hope it will extend the reach of the US dollar into new markets. Congress in July passed a landmark bill to regulate the sector.

Circle, which currently has $74bn of USDC in circulation, has begun testing a new blockchain, called Arc, intended for use by financial institutions, in which companies, banks and asset managers could use stablecoins to make payments in foreign exchange deals.

However, some executives and developers have criticised Arc for being too centralised and contrary to one of the original goals of blockchain technology, which was to bypass intermediaries such as banks.

Circle said payments could not be directly unwound on its Arc blockchain but instead it could add another layer in which parties could agree to make counter-payments, akin to refunds on a credit card.

Its courtship of banks and big institutional investors is in marked contrast to that of Tether, which built its dominant position as the world’s biggest stablecoin issuer by focusing on high-volume crypto trading and offering itself as an alternative to the dollar in emerging markets.

Circle is also looking at offering users the ability to select transparency on the size of balances and transactions to shield sensitive financial information. While customers’ anonymous wallet addresses would remain visible on its blockchain, Arc would encrypt the value of the transfer.

“If you’re a financial institution or working with clients and you’re sending money around you don’t necessarily want . . . for the world to see every transaction so we created a confidentiality layer to shield the amount,” he added.

In August, Goldman Sachs said the sector was only at the start of a “stablecoin gold rush”, in which Circle’s USDC could grow by $77bn by 2027, or a compounded annual growth rate of 40 per cent for three years.

Tarbert said it was unclear where the flows will come from, but played down banks’ fears that they could come from long-term bank deposits.

While it is “possible” that people could take money out of their current accounts and put it into a stablecoin, “it’s [also] entirely possible people could move out of other asset classes into stablecoins and it’s entirely possible that new wealth could be created,” he said.

FT : Sanjeev Gupta’s business troubles hit his property portfolio

Sanjeev Gupta’s business troubles hit his property portfolio

British steel industrialist Sanjeev Gupta has spent years amassing a glittery collection of trophy homes around the world, from the UK to the United Arab Emirates to Australia. Now he’s turning out the lights at one of them.

Gupta last month sold his four-bedroom, 683-square-metre villa on Dubai’s Palm Jumeirah to an unknown buyer for Dh43.5mn ($11.8mn), according to the FT. (A spokesperson for Gupta declined to comment.)

He’s plugging that money into his UK business, which has gone through some trying times recently.

Last month, part of his Liberty Steel business was declared insolvent, with the UK government preparing to fund its operations and pay the salaries of its nearly 1,500 employees across several sites in the north of England.

Gupta built his property empire even as his businesses faced severe financial difficulties. He’s lost control of several of the businesses over the past year, the FT has reported, encountering troubles in Singapore and Australia.

The industrialist has been trying to offload other assets in Dubai, said people familiar with the matter, including a much larger house on the tip of one of the Palm’s fronds.

The 16 palatial villas at the end of these fronds are some of the most sought-after and expensive properties in Dubai, offering unobstructed seafront views.

Gupta renovated that home at substantial cost in recent years. The house also has a dedicated whisky room, said one person who has visited.

Gupta still has other places to rest his head: he’s got a £42mn mansion in London’s exclusive Belgrave Square, which he bought in 2020 around the time his UK businesses began drawing hundreds of millions of pounds in government-guaranteed Covid-19 loans, and an estate in Wales. Quite the portfolio.

FT : The twin crises roiling credit markets

The auto groups confounding Wall Street
Two big blow-ups in US debt markets are prompting some soul-searching among debt investors.

In quick succession, subprime car lender Tricolor Holdings and auto parts supplier First Brands Group have unravelled, just months after getting strong credit ratings and winning the support of many debtholders. 

Tricolor won triple-A ratings for its bond issuances earlier this year before it collapsed into Chapter 11 bankruptcy at the start of September.

FBG is thought to have accrued as much as $10bn in debt and off-balance sheet financing and was close to raising even more last month. It’s now exploring bankruptcy proceedings.


DD has written previously about the fates of both companies and the concerns they raise over the quality of due diligence that’s being carried out.

Now investors, who were ready to dismiss each incident separately as a one-off, are putting the two together as signs of trouble within credit markets, according to DD’s Eric Platt and Robert Smith.

The twin crises raise questions about the diligence going on in the hottest parts of credit markets such as direct lending and asset-backed finance, which have turbocharged the growth of private capital in recent years.

In both cases, investors are asking questions of whether critical intermediaries had a good grip on the financial situation of their borrowers.

At FBG, Jefferies bankers were just weeks ago marketing a new $6bn loan deal and reassuring investors that the group held nearly $1bn on its balance sheet as recently as March.

That doesn’t look so good now that FBG is negotiating emergency rescue financing from lenders.

Meanwhile, Tricolor counted JPMorgan Chase among its biggest lenders. Together with Ohio-based Fifth Third, America’s biggest bank is now exposed to combined losses that could reach into the hundreds of millions of dollars.

“JPMorgan is one of the most sophisticated lenders in the entire world,” said one Tricolor investor, who’s since sold their position.

“How the hell could they have missed this?”

FT : Activist investor moves to rustle up takeover interest in Upper Crust owner

Activist investor moves to rustle up takeover interest in Upper Crust owner
Irenic Capital is promoting SSP Group to private equity firms after amassing a stake in struggling food-to-go operator

Irenic Capital Management, an activist hedge fund run by an Elliott Management alumnus, is trying to drum up interest in a take-private deal for Upper Crust owner SSP Group after boosting its stake in the food-to-go operator. 

The New York-based hedge fund is encouraging private equity groups to launch takeover bids for the London-listed company. The fund has shared materials about the merits of a leveraged buyout with investment bankers and private capital firms in recent weeks, according to a pitch deck seen by the Financial Times.

Irenic argued that SSP could be valued at a 50 per cent premium to its market value in a take-private deal, the deck said. The hedge fund points to SSP’s predictable revenues, its capacity to grow in US airports and ability to generate capital through the sale of non-core assets, including its stake in a listed Indian joint venture. 

Travel Food Services, the Indian venture in which SSP is a controlling shareholder, is valued at 177bn rupees (£1.48bn), compared with SSP’s market value of £1.25bn.

SSP operates food outlets in railway stations and airports, including Upper Crust, Caffè Ritazza and franchised outposts of M&S Simply Food and Burger King. 

Irenic’s approach at SSP has apparent similarities with an activist campaign it launched in 2023 at Wagamama owner The Restaurant Group, which swiftly resulted in a £506mn sale to private equity group Apollo Management. 

The firm was co-founded in 2021 by Adam Katz, a former portfolio manager at Elliott Management, the world’s biggest activist hedge fund, and Andy Dodge.

It is possible that none of the private equity groups being pitched by Irenic will decide to make a bid. Irenic declined to comment. SSP said: “We welcome the feedback and views of all our investors. We are entirely focused on delivering progress against our clear strategic priorities in order to deliver sustainable growth and returns for all of SSP’s stakeholders.”

Irenic now owns roughly 3 per cent of SSP’s stock, up from 2 per cent when the Financial Times first revealed its stake in May, according to people familiar with the situation.


SSP has struggled to recover after the Covid-19 pandemic because of the slow rebound in UK rail travel. Irenic has been pushing the company to boost its profit margins, the people said. 

Patrick Coveney, SSP chief executive, told shareholders on an earnings call in May that its post-Covid recovery “wasn’t yet delivering the margins, the returns and the cash flows that we — or you — rightly expect”.

SSP’s operating margin was 2.7 per cent in the six months to March, down from 5 per cent in the same period in 2019.

FT : How Ukraine could close its $23bn funding gap

How Ukraine could close its $23bn funding gap

Go fund me
Ukrainian finance minister Sergii Marchenko is in Brussels today to discuss his country’s funding needs, as Russia’s relentless war puts it in dire need of weapons and funds, writes Paola Tamma.

Context: Ukraine, the European Commission and the IMF are in talks on how to close Ukraine’s growing funding gap, in light of the US ceasing its military and financial support for Kyiv, while European countries face ever tighter budgets.

According to three people familiar with the discussions, Ukraine will need about $23bn next year, in addition to ongoing support programmes. Marchenko will meet EU economy commissioner Valdis Dombrovskis today to discuss ways to close that hole, as well as needs for 2027 and beyond.

“We are right now working on all the modalities, on timings, on volumes. For volumes, it will be important for us also to see the IMF assessment on the finance needs for Ukraine,” Dombrovskis said last weekend.

The IMF did not reply to a request for comment.

Ukraine has requested a new IMF loan, as the current $15.5bn programme expires in 2027.

Meanwhile, the commission is working on a “reparations loan” which would take the cash resulting from frozen Russian central bank assets that matured — currently about €170bn — swap it for EU bonds and loan it to Ukraine.

That would leave Russia’s claim to the assets untouched, thus eschewing the legal and financial risks linked to confiscation, Brussels argues.

“One of the elements of the proposal is to separate the claim from cash balances that have accumulated and provide [a] reparations loan to Ukraine,” Dombrovskis said, but added that the EU would have to give guarantees “for potential liability on Russian sovereign assets”.

While this plan could help Ukraine bridge the gap, a lot of questions still need to be answered. The guarantees would have to be provided by EU countries, which would potentially be on the hook for repaying billions to Russia, something many find unpalatable.

Another issue is that the sanctions immobilising Russia’s state assets need to be rolled over twice a year, with a unanimous decision from EU countries each time. Officials are looking at ways to work around that, but it’s legally difficult, some of them say.

>>> US After Hours Summary: KBH +0.2% ticks higher on earnings; IMRX +39% sharpl

After Hours Summary: KBH +0.2% ticks higher on earnings; IMRX +39% sharply higher on phase 2a trail results; WS -3% and FUL -2.1% lower on earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: SCS +0.6%, KBH +0.2%,

Companies trading higher in after hours in reaction to news: IMRX +39% (results from phase 2a trial of Atebimetinib + mGnP; also public offering and concurrent private placement), QURE +3.7% ($200 mln public offering of common shares), CGNT +3% (lands $20M+ 1-year deal with tier-1 EMEA security agency), PSEC +2.3% (disclosure of CEO insider purchase), SMR +2.3% (tri-party agreement with US DoE and CFPP LLC), SMA +1.9% (to combine with Argus Professional Storage Management), IVR +1.7% (names new Chair), TTAN +1.7% (new product expansions), RJF +1.3% (reports August operating data), DGNX +1% (update on acquisition strategy), C +0.8% (to sell 25% Banamex stake), AMT +0.5% (and AT&T Mexico agree on legal dispute over tower rents), DOV +0.5% (launches new Series 4-zone circuit board preheaters), SNPS +0.4% (collaboration with TSM), KKR +0.4% (monetization activity update for Q3), CDNS +0.2% (partners with TSM), VRNA +0.2% (shareholders approve acquisition by Merck), NI +0.2% (wins Indiana regulator approval for NIPSCO GenCo declination petition),

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: SFIX -4.6%, WS -3%, FUL -2.1%,

Companies trading lower in after hours in reaction to news: RIG -10.9% (100 mln share public offering), VOR -4.9% (stock offering by selling shareholders), MIR -3.8% (public offering of common stock; also convertible notes offering), KALV -0.5% (convertible senior notes offering), DLTR -0.4% (new 1 mln sq ft distribution center), DD -0.3% (sets date for spin-off of Electronics business),

FT : Plans for high-speed rail line in northern England suffer fresh delay

Plans for high-speed rail line in northern England suffer fresh delay
Proposals for link between Liverpool and Manchester held up by discussions involving the Treasury

Plans for a new high-speed rail line in northern England have been delayed again, with Sir Keir Starmer no longer expected to outline the project at Labour’s annual conference next week.

Northern leaders had been hoping to hear government confirmation of proposals for a rail link between Liverpool and Manchester either in the run-up to the conference or in the prime minister’s keynote speech on Tuesday.

But people familiar with the matter said that discussions with the Treasury were holding up an announcement.

“I’d always been led to believe an announcement was coming around conference,” said one well-placed rail industry figure, adding that others had been led to believe the same. 

The latest delay comes after an announcement about the northern rail line was slated for inclusion in the government’s spending review in June, but did not subsequently materialise.

Labour promised in its 2024 general election manifesto to upgrade northern rail links, but since then has not explained what that means, or how much it would cost. 

In the spending review, chancellor Rachel Reeves promised to back what she termed “Northern Powerhouse Rail”, but she did not outline details of any financial commitment or set out the scope of the project.

Northern leaders have been lobbying for improvements to rail connectivity in their areas, and a new line between Liverpool and Manchester is supported by Andy Burnham, Labour mayor of Greater Manchester, and Steve Rotheram, his counterpart representing Liverpool city region.

Part of the plans would involve expensive tunnelling between Manchester city centre and Manchester airport, which originally formed part of the northern leg of the High Speed 2 rail line. That portion of HS2 was cancelled in 2023 by the then Tory premier Rishi Sunak.

Many of those backing the Liverpool-Manchester rail link hope such tunnelling would allow for the revival of some version of HS2’s northern leg in the future.

However, several people briefed on the situation said that, while the link had long been supported by the Department for Transport, the Treasury had continually sought more time. 

“We want to scope out the work and make sure everything is nailed down,” said one Labour official.

Other officials said Reeves might decide to hold back an announcement on Northern Powerhouse Rail until close to her Budget on November 26.

“The whole Budget is about growth and infrastructure is a big part of that,” said one. 

Louise Haigh, a former Labour transport secretary and MP for Sheffield Heeley, said news of further delays to Northern Powerhouse Rail was “incredibly disappointing”.

“The north was promised time and again, including by this government, that our desperately poor connectivity would be improved,” she added.

The latest delay will also disappoint Burnham and Rotheram, who have proposed a Liverpool-Manchester rail link and argue it is essential for economic growth in the North-west. Their scheme would cost at least £12bn.

With Starmer coming under intense pressure following Angela Rayner’s resignation as deputy prime minister and the sacking of Lord Peter Mandelson as US ambassador, Burnham has been at the centre of speculation about a possible bid for the Labour leadership.

The Greater Manchester mayor is weighing up whether to attempt a return to Westminster ahead of any potential leadership challenge, and is due to speak alongside Rotheram at Labour’s conference.

A government insider said it remained “fully committed” to Northern Powerhouse Rail, adding that it was “determined to learn from the mistakes” of Conservative rail plans that had unravelled or been cancelled. 

“That’s why we’re taking our time to get this right. We will set out our plans in the coming weeks,” they added.