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The renewed expansion in manufacturing activity was supported by increasing new orders

A private gauge of China’s manufacturing activity jumped back into expansionary territory in August, rising to a five-month high, though questions linger over whether the rebound can be sustained.

The RatingDog China general manufacturing purchasing managers index rose to 50.5 last month from 49.5 in July, according to data released Monday by S&P Global. A reading above 50 suggests an expansion in activity, while a reading below that level suggests contraction.

The renewed expansion in China’s manufacturing activity in August was supported by increasing new orders, underpinned by improving domestic demand and successful promotional efforts, according to surveyed panelists. Manufacturers were the most upbeat since March on hopes that economic conditions will improve and that their expansion plans will help to drive sales over the next year, according to RatingDog and S&P Global.

But manufacturers remained cautious in hiring, opting instead to cut staff for a fifth straight month in August despite greater capacity pressures and rising business confidence, they noted.

The rebound in Chinese manufacturing activity remains patchy, said RatingDog founder Yao Yu.

“The durability of the improvement depends on whether exports truly stabilize and whether domestic demand can pick up pace,” said Yao.

The pace of decline in new export orders has eased, Yao noted. “That’s encouraging, yet we shouldn’t get carried away, because external demand looks partly pulled forward while domestic demand stays soft, so the upside to output may be limited unless domestic demand firms up,” he said.

“The latest upturn resembled a breath of relief rather than a sustained rally,” said Yao.

Monday’s reading compares with a competing official gauge released Sunday, which showed deterioration in factory activity last month. The official manufacturing PMI for August came in at 49.4, compared with the prior month’s 49.3.

The RatingDog survey, compiled by S&P Global, focuses more on China’s smaller private companies and has often diverged from the official gauge.

Looking ahead, Capital Economics’ Zichun Huang said in a Monday note that she expects slower fiscal spending to continue to weigh on infrastructure activity. “The government’s efforts to tackle overcapacity could dampen manufacturing output by curtailing excess production,” Huang added.

In the latest sign of stress in the Chinese economy, transactions of new home sales from China’s 100 biggest property companies stood at 207 billion yuan, equivalent to $29.03 billion, in August, according to data provider China Real Estate Information Corp. That marked a 17.6% drop from a year earlier and the sixth straight month of decline.

Meet the duo hoping to take a Milanese tailor to international success

Money will fund pioneering UK trial that uses artificial intelligence to map the immune system

Oracle billionaire Larry Ellison’s institute of technology is funding a first-of-its-kind project to use artificial intelligence for research into vaccines that will protect against the world’s most dangerous pathogens, in one of the largest grants that Oxford university has ever received.

The Ellison Institute of Technology is giving £118mn to fund the Oxford Vaccine Group’s five-year project led by Professor Sir Andrew Pollard, who ran the trials of the Oxford/AstraZeneca Covid-19 vaccine. 

The group, part of Oxford university’s paediatrics department, will use the funding for “human challenge” trials — where participants are deliberately infected under controlled conditions — to improve our understanding of how the immune system responds to bacteria that antibiotics sometimes fail to treat. 

Pollard said the grant was a “unique investment in UK universities”, which need commercial enterprises such as biotechnology companies to back their science.

“This is a great example of the recognition by the others, by the Institute, of the type of work that you can do in British universities that we need to encourage for the future of the sector,” he told the Financial Times.

The funding will bolster the UK’s pioneering work in vaccine research to help tackle antimicrobial resistance that scientists forecast will cause 39mn deaths globally in the next 25 years.

The Ellison Institute of Technology is due to fully open its £1bn-plus Oxford campus in 2027. The facility will directly employ thousands of scientists in 30,000 square metres of research laboratories and computing capacity enabled by Ellison’s technology company Oracle. It was first established in late 2023.

It aims to work on “commercially sustainable solutions” to some of the world’s biggest challenges, including in health, clean energy and food security, and will eventually plan to spin off companies.

Daniela Ferreira, a professor who is jointly leading the project with Pollard, said the EIT grant was essential to being able to conduct the studies at an unprecedented scale, recruiting more people than ever to the trials.

EIT’s experts in AI will work alongside the UK’s world-leading specialists in human challenge trials. 

“It’s almost like a 20-year programme in four or five [years] because we can massively accelerate the whole programme by [combining] the expertise together with EIT and Oxford,” she said.  

The project will tackle pathogens such as E. coli, Streptococcus pneumoniae, and Staphylococcus aureus, which scientists have tried and failed for decades to make vaccines to protect against. 

Pollard said only about one in 20 vaccine research projects are successful, even though vaccine candidates often look promising in animal studies, because there are big differences between how the immune systems of mice and humans operate. 

The trials will collect large amounts of data on how human bodies respond as they are exposed to the pathogens, including blood samples and tissue from the lymph nodes, a key part of the immune system.

By using AI to process this data, the scientists hope they will understand more about the best tactics participants’ immune systems employ when battling the bacteria. Those insights will help with selecting the right part of the bacterium to mimic in a vaccine. 

Investors are shying away from vaccine research, after the US appointed Robert F Kennedy, a vaccine sceptic, to oversee health policy. Earlier this month, Kennedy cancelled a £500mn grant for research into vaccines using messengerRNA, a technology used in the bestselling Covid-19 shots. 

Pollard said there was “huge concern” that the “dialogue” in the US was threatening vaccines that protect millions of children’s lives. “One of the greatest tools ever is being undermined by poor science and misinformation,” he added.

Digital tokens perceived as safe assets come with hidden risks for retail investors, says Professor Jean Tirole

Jean Tirole, a Nobel Prize-winning economist, has warned about “insufficient supervision” of stablecoins and the possibility that governments will be forced into multibillion-dollar bailouts should the tokens unravel in a future financial crisis.

In an interview with the Financial Times, the winner of the 2014 Nobel Prize in economics said he was “very, very worried” about supervision of stablecoins and the possibility of a run by depositors if doubts materialised over the underlying reserve assets to which the digital tokens were pegged.

Stablecoins such as those issued by Tether and Circle — which are pegged to real-world assets — are expected to gain further popularity after the US government passed a law in July that paves the way for banks to launch their own digital assets linked to the US dollar and backed by securities such as US government bonds.  

Global use of stablecoins has already risen to around $280bn as US President Donald Trump pushes to establish them as a pillar of mainstream finance.

While they could be regarded by retail users as “a perfectly safe deposit”, stablecoins could become a source of losses and trigger calls for costly government-led bailouts, Tirole, a professor at the Toulouse School of Economics, said.

He warned that the practice of backing stablecoins with US government bonds could become unpopular because of the underlying assets’ relatively low yields, citing previous instances when the returns of Treasury debt were “negative for a number of years” and payouts after inflation were even lower.

Stablecoin issuers could therefore be lured into the “temptation” to invest in different assets that “carry higher returns and are riskier”, he said.

Higher risks increased the odds of a scenario in which a stablecoin’s reserve asset lost value, triggering a run on the asset, he argued in an interview on the sidelines of a meeting of Nobel laureates in Lindau, Germany, last week.

In such a scenario, “the price of the stablecoins might [also] go down,” as they lost their peg to a sovereign currency, warned Tirole.

“If it is held by retail or institutional depositors who thought it was a perfectly safe deposit, then the government will be under a lot of pressure to rescue the depositors so they don’t lose their money,” he said, adding that over the past decades, only a few uninsured depositors of traditional banks ever faced losses.

Such risks could be managed if global supervisors had “sufficient manpower” and were “incentivised to be very careful”. However, Tirole warned this was a “big if”, in particular because “some key members of the [US] administration . . . have a personal financial interest in [cryptocurrency]. And beyond the personal interest, there’s ideology.”

Trump and members of his family have backed several crypto businesses, including one that issues a stablecoin called USD1.

Tirole’s warning comes a month after the European Central Bank cautioned that the rise of US dollar-backed stablecoins threatened to undermine its control over monetary policy.

The Bank for International Settlements said earlier this year that such tokens “perform badly” on requirements for being widely used as money.

French business warns of recession risk as political turmoil deepens

Fiscal discord alarms company chiefs as PM’s confidence-vote gamble rattles markets

Business leaders in France say the country’s latest bout of political chaos threatens serious economic consequences, lamenting the lack of certainty and of political consensus about how to repair the public finances.

The French government is predicted to fall for the third time in just over a year on September 8, when Prime Minister François Bayrou will face a confidence vote on his plan to tackle the widening deficit.

He called the vote himself last week. However, his move appears to have backfired as opposition parties announced their intention to vote him down. The leader of the centre-left Socialists, Olivier Faure, declared on Friday that his party was ready to govern. “We are done with [threats of] Bayrou or the apocalypse,” said Faure.

Patrick Martin, head of the Medef business lobby, warned of a real “recession risk” in France, adding that the country was already “in a very precarious situation”.

“Order books are drying up, tariffs are [weighing on sentiment] and we’re once again adding a French hazard,” he told journalists at a business conference. “This undeniably poses a new risk to growth.”

The political crisis also spooked financial markets, sending France’s benchmark 10-year borrowing costs above 3.5 per cent last week, close to a post-Eurozone debt crisis high.

Alexandre Bompard, chief executive of food retailer Carrefour, echoed Martin’s concerns. “Only consumption is driving French growth right now,” he said. “Uncertainty is the worst for the consumer . . . The more uncertainty there is, the greater the risk of a strong impact.”

Executives reacted with a mix of exasperation and resignation to the latest turmoil, with many criticising politicians for their failure to tackle the country’s growing debt burden and a deficit that is expected to hit 5.4 per cent of GDP this year. 

A senior executive at a Cac 40 company said that while there was an “economic consensus” on the need to address the problems, there remained no “political consensus” on how to do so.

“When there’s uncertainty, people tend to dodge the issue and question their plans,” he said, noting that clients had held back on projects since last year’s snap elections.

“We’ve had instability in government for 18 months,” said Guillaume Borie, head of AXA France, a financial services company. “Business leaders need clarity to be able to plan the necessary investments.”

Bayrou took over in December after Michel Barnier’s government was brought down by a previous no confidence motion. He called the September 8 vote as a way to bolster his mandate and push through a €44bn package of tax rises and spending cuts, in a bid to reduce the deficit in next year’s budget.

But Alexandre Saubot, head of the France Industrie lobby, said the prime minister’s gamble had made already “nightmarish” budget negotiations even worse. “It was a mess before — it’s even more of a mess now,” he said.

Catherine MacGregor, chief executive of energy group Engie, said: “[Businesses need] stability and consistency. I’m sometimes astonished to see the extent to which our elected officials don’t understand how much of a competitive advantage that can represent.”

The upheaval — which could leave President Emmanuel Macron seeking his fifth prime minister since he won a second term in 2022 — comes against a weakening economic backdrop for France and rising pressures from US tariffs.

French real gross domestic output has been falling since the election last year, and output was already expected to drop to 0.6 per cent in 2025, from 1.1 per cent in 2024, according to data from Insee. Unemployment has also risen since the start of 2023.

Meanwhile, the difference between interest rates on the country’s 10-year government bonds and the German equivalent — a measure of market worry about debt — is close to its highest level since 2012.

Bruno Cavalier, chief economist at ODDO BHF, said France risked “lower growth and a larger budget deficit” next year after Bayrou’s decision to call a no-confidence vote.

He is also concerned Macron could be pushed into yet another legislative election as support for a fresh vote gains favour in opinion polls, deepening the political crisis and its knock on effects for the economy.

With the country’s political future and budget negotiations in the balance, the fear among many business leaders is that the uncertainty drags on, or that parliament turns to further tax increases to try to plug the deficit. 

“If we add to our burden, growth will be severely affected. Let us grow, invest, innovate, train, hire and export. This is how we will contribute to the recovery,” said Martin at Medef. 

Amir Reza-Tofighi, head of the small and medium business lobby CPME, added: “In the short term, political instability plunges CEOs into a fog: how can they invest, recruit or innovate when they do not know what tomorrow will look like?”

US chipmaking curbs hit Samsung and SK Hynix

Shares fall after Washington revokes waivers that allowed South Korean companies to send equipment to China without licence

Shares in South Korea’s top chipmakers fell on Monday after Washington revoked waivers that had allowed them to send US manufacturing equipment to their facilities in China without a licence.

SK Hynix shares declined almost 5 per cent, while Samsung Electronics shares shed more than 2 per cent after the US government said it was removing the companies’ “validated end user” status.

Former president Joe Biden had allowed the world’s two largest producers of memory chips to send US chipmaking tools to their Chinese plants without having to apply for a licence for each transfer, amid concerns that hobbling the South Korean companies’ operations would benefit Chinese rivals.

The commerce department on Friday said it had closed the “Biden-era loophole” and that companies would now need to obtain licences to export US equipment to chip factories, known as “fabs”, in China.

The department added that it “intends to grant export license applications to allow former VEU participants to operate their existing fabs in China” but “does not intend to grant licenses to expand capacity or upgrade technology at fabs in China”.

The operations affected include Samsung’s plant in the city of Xi’an, which accounts for about 30 per cent of its Nand flash memory production, according to analysts at Bernstein.

SK Hynix’s plant in the city of Wuxi accounts for 35 per cent of its total Dram output, while its facility in Dalian — recently acquired from ailing US chip giant Intel — accounts for 37 per cent of Nand production.

CW Chung, joint head of Asia-Pacific equity research at Nomura, said Samsung and SK Hynix “had continued to upgrade their Chinese facilities, hoping that the US waiver would be kept in place”.

While the “short-term impact on their production in China is limited” from the waiver revocation, the South Korean chipmakers “will have to think hard now whether to continue their operations there”, said Chung.

Kim Yang-paeng, a researcher at the Korea Institute for Industrial Economics and Trade, said preventing the companies from upgrading their Chinese plants would increase the technological gap between the less sophisticated “legacy” chips they produce in China and the advanced memory chips they produce in South Korea.

But the “strong demand for legacy memory chips” will allow them to maintain profitability at their Chinese operations for the time being, said Kim.

Stacy Rasgon, a senior analyst at Bernstein, said US authorities were likely to continue granting licences to South Korean companies to maintain their Chinese fabs’ existing capabilities because “suddenly removing them from the global market would create shortages and price surges”.

South Korean chipmakers operating in China are also coming under intensifying pressure from Chinese rival CXMT, which increased its share of the $90bn global Dram memory market from close to zero in 2020 to 5 per cent last year, according to Shenzhen-based consultancy Qianzhan, and is aggressively expanding production.

SK Hynix said it would “maintain close communication with both the South Korean and US governments and take necessary measures to minimise the impact on our business”. Samsung declined to comment.

Ohio-based First Brands Group has appointed Deloitte to review its invoice factoring

Jefferies is among the private credit investors that have amassed exposure linked to a US automotive parts supplier that has come under scrutiny for its use of off-balance sheet financing techniques.

Chicago-based UBS O’Connor and a hedge fund owned by Jefferies have provided invoice financing to First Brands Group, which last month shelved a $6bn loan deal after investors expressed concerns about its financial disclosures, according to people familiar with the matter.

Ohio-based FBG, a privately held company owned by little-known businessman Patrick James, has appointed Deloitte to carry out a “quality of earnings” review in a bid to assuage these concerns, according to people familiar with the matter.

The review is partly focused on the use by FBG, which sells parts such as windscreen wipers and fuel pumps, of factoring — a financing technique that allows companies to sell outstanding customer invoices to banks or investors in return for upfront cash.

Private credit firms have amassed trillions of dollars in assets and become the lender of choice for mid-size, highly leveraged companies, filling in a crucial gap in financing left by banks after the financial crisis. However, the funding terms and health of the businesses they lend to are largely kept out of the public domain.

The firms have in recent years pushed deeper into asset-backed lending, such as invoice finance, to meet demand from yield-hungry investors. 

As well as factoring, FBG has also made use of supply-chain finance, according to rating agency reports. This financing technique, sometimes called “reverse factoring”, allows a company’s lenders to pay its suppliers upfront and then collect the money from the company later.

These financing techniques are generally not included in a company’s debt figures and are sometimes treated as “off balance sheet”. Fitch said in a ratings report last month that the agency “includes off-balance sheet factoring and a portion of FBG’s outstanding supply-chain financing” when making its own “debt calculations”.

FBG has also attracted scrutiny from investors for its frenetic pace of debt-funded acquisitions and the dearth of public information around James. 

FBG, which is not required to publish its accounts, carries junk-level credit ratings from the three major agencies: S&P, Moody’s and Fitch.

While rating agencies have not publicly disclosed the amount of factoring the auto parts supplier has outstanding, several invoice finance specialists said there could be billions of dollars in financing facilities outstanding linked to FBG’s suppliers and customers, leaving investors exposed to the risk of losses if the invoices are not paid. 

S&P said in May: “FBG’s factoring has increased significantly over the past couple of years.” The rating agency added it had “received additional disclosure” on its use of these facilities “exceeding” previous adjustments S&P had made to account for factoring.

UBS O’Connor, which the Swiss group has agreed to sell to Cantor Fitzgerald, and Jefferies’ trade finance focused fund Point Bonita Capital have exposure to debt linked to FBG’s invoices, according to two people familiar with the matter. They said London-based private credit firm Pemberton and Katsumi Global, a Michigan-based invoice finance group, also had exposure. 

Katsumi is owned by a joint venture between Japanese financial institutions Mitsui & Co and Norinchukin Bank.

The size of the investors’ exposure could not be established.

Jefferies’ investment banking division was also in charge of marketing the delayed $6bn loan deal last month. 

The auto parts sector has come under pressure due to US President Donald Trump’s tariff policies.

FBG has grown rapidly through a run of deals spearheaded by James, with Moody’s writing earlier this year that FBG “has an aggressive financial policy of pursuing fully debt financed acquisitions”.

James, who owns FBG through his holding company Crowne Group, was born in Kuala Lumpur, Malaysia and moved to the US to attend college in Ohio, according to a notice announcing a board appointment.

Several credit investors who considered participating in the now-delayed $6bn loan deal said the lack of public information on James and his business record had also prompted concerns.

James and other companies linked to him were sued over a decade ago by two lenders that alleged he had committed fraud. 

Fortress Investment Group alleged in a 2011 lawsuit that several seemingly independent companies owned by James did not “have separate books and records”, while accusing the businessman of creating a “web of companies” to transfer out funds “in an attempt to defraud” creditors.

Pennsylvania’s Tristate Capital Bank sued James and his companies in 2009, accusing them of making “misrepresentations and omissions relating to the accounts receivable and inventory”, which gave the lender “a false understanding of those companies’ financial strength”.

James denied these allegations of fraud in the two cases, which were both ultimately dismissed after settlements were reached.

FBG has previously offered yields of more than 10 per cent on financing linked to its invoices, according to three invoice finance specialists. They added that these interest rates were high given that the group’s customers — which include automotive retailers — are often investment-grade rated.

While this form of financing is typically short-term in nature, some of FBG’s factoring programmes have “very extended terms”, according to S&P.

FBG has told investors it intends to relaunch its loan deal after Deloitte has completed its review. BDO has also audited its prior financial statements, according to people familiar with the matter.

Moody’s announced last month that the delay to the refinancing deal was “credit negative” for FBG, noting it had “almost $5bn” in first-ranking debt set to mature in March 2027. FBG held $972mn of “unrestricted cash” as of March, according to Fitch.

UBS O’Connor, Jefferies and Pemberton declined to comment. FBG, Katsumi, Deloitte and BDO did not respond to requests for comment.

The billionaire’s lawsuit against the tech giant shows the iPhone still holds sway in AI’s future

For all of the talk in Silicon Valley about how screwed Apple AAPL -0.18%decrease; red down pointing triangle is in the AI race, the iPhone maker got a glowing endorsement of its staying power this past week from an unlikely source: Elon Musk.

The billionaire’s artificial-intelligence company and his social-media platform sued the iPhone maker, claiming it was violating antitrust laws by giving preferential treatment to its own AI partner (and Musk enemy), OpenAI and ChatGPT.

“This makes it hard for competitors of ChatGPT’s generative AI chatbot and super apps powered by generative AI chatbots to scale and innovate,” said the lawsuit, filed by Musk’s xAI and X in a Texas federal court.

That is at odds with a prevailing view in Silicon Valley. Meta Platforms chief Mark Zuckerberg and others believe that advanced AI will usher in a new computing paradigm that basically relegates the iPhone to something akin to a Computer History Museum exhibit. They see it as a rare generational opening to unseat Apple’s hold as the gateway to the digital world.

A one-sided cold war has been brewing between Musk and Apple chief Tim Cook ever since the Tesla and SpaceX CEO acquired Twitter in late 2022. Musk quickly realized how powerful App Store rules are for companies like his.

If Musk thought the paperwork to launch Starship was frustrating, he had obviously never waded through Apple’s app-review process.

Opponents of Apple’s control of the App Economy watched with glee as Musk lashed out at Apple and Cook personally. They quietly hoped Elon’s megaphone and megabucks might help their cause in fighting the tech giant.

His entry into the antitrust battle against Apple held the promise of fueling new excitement in legislation that was then stalled before Congress. Republican Sen. Marsha Blackburn of Tennessee, in particular, seemed eager to make hay of his interest.

But Cook quickly dispatched Musk, essentially patting him on the head with a VIP tour of Apple Park and apparent promises of continuing to advertise on his struggling social-media platform. Soon enough, Musk raced off to the next shiny objects, such as messing with Sam Altman’s AI ambitions.

Frankly, it’s hard to tell these days how much fire is in Musk’s belly to fight Apple’s perceived injustices. Or if Apple is receiving the incoming attacks simply because of the animosity Musk has for Altman.

The two billionaires teamed up almost a decade ago to create OpenAI. Eventually, Musk left in a huff over their differing visions for the future. OpenAI’s sudden and, perhaps, unexpected success has turned the company into Musk’s own personal “Rosebud” obsession. He since founded xAI as a rival to OpenAI, and merged it with Twitter, now known as X.

His companies’ lawsuit against Apple and OpenAI this past week came just days after a federal judge in the San Francisco area rejected Musk’s efforts to dismiss OpenAI’s claims that he is trying to harass the startup.

“OpenAI puts Musk on notice that it alleges the media campaign ‘significantly threaten[ed] or harm[ed] competition,’ was either untrue or misleading and deceiving to an actual customer, and was designed to—and ultimately did—disrupt a business relationship leading to economic harm,” Judge Yvonne Gonzalez Rogers wrote. “At this stage, the allegations are sufficient.”

A trial is scheduled for March.

It’s hard not to see Musk’s continued legal campaigns against Altman as anything but a sign of how far behind his own efforts to develop AI are—despite all of his bravado.

In the Apple-OpenAI case, his side essentially admits as much. The Musk lawsuit notes that his AI chatbot, Grok, has gained little market share “despite accolades about its superior features,” while OpenAI has quickly become the dominant player.

The arguments against Apple draw similarities to an antitrust case brought last year by the Justice Department. That case includes allegations that Apple has taken steps to suppress so-called superapps from taking hold. This was supposedly done out of fear that such third-party offerings make it easier for iPhone users to switch to rival smartphones, diminishing the value of the Apple ecosystem.

Musk has said his broader vision for X is to remake it as a superapp, similar to China’s powerful WeChat, where users conduct much of their digital lives.

In the latest lawsuit, Musk’s team argues that AI supercharges those superapp efforts. Essentially, Musk’s claim is that the Apple-OpenAI partnership hinders rivals from gathering important user data from iPhone customers.

This hurts AI development, which in turn prevents superapps from effectively rising up to threaten the iPhone’s supremacy. “This is a tale of two monopolists joining forces to ensure their continued dominance in a world rapidly driven by the most powerful technology humanity has ever created: artificial intelligence,” the lawsuit said.

Apple hasn’t yet officially responded to Musk’s lawsuit, although it has previously said its App Store is “designed to be fair and bias free.” It is defending itself against the government’s antitrust case and said the government lacks evidence of wrongdoing and “fundamentally misunderstands” its business.

“DOJ says Apple stifles the success of ‘super apps,’ despite the fact that Apple’s rules allow and support such apps, and indeed a multitude of ‘super apps’ exist on the App Store today,” Apple said in a July court filing.

Even if Apple agrees with OpenAI that Musk’s claims are without merit, his escalation comes with new risks for the iPhone maker outside the courtroom—political risks.

The idea of legislation targeting Apple has returned to Congress. Blackburn, the Republican senator, has joined with her Democratic colleagues to reintroduce the Open App Markets Act.

She told me in a statement that Musk’s claims about Apple’s AI interference are why Congress needs to act. “Big Tech should not be allowed to play kingmaker in the mobile app economy,” she said. “This kind of control allows companies to use their app stores to favor certain businesses and partnerships while stifling competition, limiting innovation, and ultimately hurting the consumer.”

For Musk, the friend of his enemy has become his enemy.

Proposal comes as president also pushes for congressional redistricting and restrictions on mail-in balloting

President Trump pledged to sign an executive order mandating that voters be required to present identification before casting ballots, widening his push to alter voting requirements head of next year’s midterm elections.

“Voter ID must be part of every single vote. NO EXCEPTIONS!” he wrote on Truth Social, adding that he wanted states to use paper ballots and that exceptions would only be given to sick people or those serving in the military.

Trump has regularly attacked the election process since losing the 2020 election, blaming his defeat, without evidence, on mail-in ballots and voter fraud. On Aug. 18, he promised to lead a campaign to get rid of mail-in ballots and said states must do what the federal government and president tell them. At the time, he promised an executive order to help bring honesty to next year’s midterm elections.

If he seeks to change voting requirements, he would likely be challenged in court because elections are administered by states. The Constitution gives Congress the power to change those rules.

In June, a federal judge blocked most of Trump’s March executive order that required proof-of-citizenship documentation for those registering to vote using federal forms and tapped government agencies to crack down on ineligible voters. Most people register to vote through their states.

The order threatened to pull the small amount of money earmarked by Congress for elections from states that fail to comply.

The judge ruled that the order went beyond Trump’s authority.

Trump has asked the Department of Government Efficiency, created by Tesla Chief Executive Elon Musk, to identify inaccuracies in voter-registration data.

The president is also pushing for Republicans to redraw congressional maps in states such as Texas ahead of congressional midterm elections next year. Republicans currently hold a slim 219 to 212 majority in the House.

In calling for reform, Republicans have repeatedly cited misleading or false claims that large numbers of noncitizens have voted in recent elections. Many studies have found no evidence of large-scale voting by ineligible immigrants. It is illegal for noncitizens to vote in federal elections, and states have measures in place to verify that voters casting ballots are eligible.

Thirty-six states have laws requesting or requiring voters to show some form of identification at the polls, according to the National Conference of State Legislatures. In Congress, lawmakers have introduced a bill to require voters to show identification to vote.

Critics of such laws say they could block U.S. citizens who have changed their names or not updated identification documents from voting. They could also challenge states that don’t have the resources to overhaul their procedures and manage databases with sensitive information.