Ukraine and US agree minerals deal

Good morning and welcome back to FirstFT Asia. In today’s newsletter:

• Ukraine agrees minerals deal with US

• How the state is propping up China’s housing market

• Singapore’s best — and worst — buildings

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Kyiv has agreed terms with Washington on a minerals deal that Ukrainian officials hope will improve relations with the Trump administration and pave the way for a long-term US security commitment.

Ukrainian officials say Kyiv is now ready to sign the agreement on jointly developing its mineral resources, including oil and gas, after the US dropped demands for a right to $500bn in potential revenue from exploiting the resources.

The original draft’s highly onerous terms — which President Donald Trump presented as a means of Ukraine repaying the US for military and financial aid since Russia’s 2022 full-scale invasion — provoked outrage in Kyiv and other European capitals. 

Although the text lacks explicit security guarantees, the officials argued that they had negotiated far more favourable terms and depicted the deal as a way of broadening the relationship with the US to shore up Ukraine’s prospects after three years of war.

“The minerals agreement is only part of the picture. We have heard multiple times from the US administration that it’s part of a bigger picture,” Olha Stefanishyna, Ukraine’s deputy prime minister and justice minister who has led the negotiations, told the FT yesterday.

A Ukrainian official with knowledge of the matter said that Zelenskyy was planning to travel to Washington on Friday to see Trump and formalise the deal. Here are more details on the agreement.

• More US news: Trump has ordered a probe into copper dumping in the US, laying the groundwork for imports of the metal to be hit with tariffs.

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

• Economic data: Hong Kong reports fourth-quarter GDP and Australia publishes CPI inflation figures for January.

• Hong Kong: Financial secretary Paul Chan unveils the city’s 2025 budget.

• Thailand rate decision: The Bank of Thailand is expected to hold interest rates steady at its monetary policy meeting. (Reuters)

• Nvidia results: The US chipmaking giant reports fourth-quarter earnings.

Five more top stories

1. Exclusive: A top White House official has proposed expelling Canada from the Five Eyes intelligence-sharing network as Donald Trump increases pressure on the country he has threatened to annex. Peter Navarro is pushing for the US to remove Canada from the Five Eyes — which also includes the UK, Australia and New Zealand — according to people familiar with his efforts inside the administration.

2. Taiwan’s coastguard said it caught a Chinese-owned freighter in the act of cutting a subsea communications cable off its western coast yesterday. The coastguard said that it had detained the ship, adding that while it was unclear whether the cable had been severed intentionally, “it cannot be excluded that this was an act of Chinese greyzone harassment”.

3. Huawei has significantly improved the amount of advanced artificial intelligence chips it can produce, despite US efforts to hamper the country’s ability to develop sensitive technologies. Here’s what the breakthrough means for China’s burgeoning AI industry.

• Chinese manufacturing: China has struggled to develop the most advanced machine tools essential to manufacturing, despite its huge strides in AI, renewable energy, semiconductors and electric vehicles.

4. Shares in Japan’s five largest trading houses surged as much as 9 per cent yesterday after Warren Buffett signalled Berkshire Hathaway was likely to increase its already substantial stakes in the companies at the heart of Japanese industry. Berkshire at the weekend revealed its intention to increase ownership and hold the stakes for “many decades”.

5. A fall in US bond yields is piling pressure on the dollar, as investors bet that slowing economic growth will push the Federal Reserve to keep cutting interest rates despite persistent inflation. The decline has been prompted by a worsened outlook for US growth, after a string of data showed weak consumer and business sentiment.

Visual investigation

As China’s government struggles to ease a property crisis, state-owned developers have been buying up land. Meanwhile, policymakers have unveiled a host of measures to prop up the housing market, including purchases of complete but unsold apartments that can eventually be used as social housing. But this FT visual investigation shows such government initiatives are leaving uncertain consequences for the economy.

We’re also reading . . .

Chart of the day

Chinese companies are fuelling almost one in three new investments in Vietnam, in a sign of how they have relocated operations abroad to avoid Donald Trump’s trade war with Beijing. But this shift is likely to increase Vietnam’s vulnerability to tariffs as Trump targets countries that have racked up big trade surpluses with the US.

Take a break from the news . . .

Singapore has become a kind of laboratory for extreme architecture, the success (or otherwise) of which filters out to the rest of the world. Here are city-state’s best — and worst — buildings, according to FT architecture critic Edwin Heathcote.