Russia suspected of GPS interference on EU official's flight

0:03Good morning from the Financial Times. Today is Tuesday, September 2nd, and this is your FT News Briefing. A plane carrying the European Commission president is targeted by suspected Russian GPS jamming. Israeli banks face criticism for record wartime profits. And Chinese manufacturer Xiaomi is vying to compete with Tesla and Apple. I'm Josh Gabor-Doyan, and here's the news you need to start your day.

0:38Officials suspect Russia is behind GPS interference on a plane-carrying European Commission President Ursula von der Leyen. The plane, which was flying to Bulgaria, was forced to land using paper maps. GPS navigation services on the aircraft had been disabled, and these attacks seemed to be on the rise. My colleague Henry Foy was actually on the plane with von der Leyen. He's been accompanying her on a tour, and he joins me now down the line from an airbase in Romania. Hi, Henry. Hi, Josh. So tell me exactly what happened. What was it like to be on that plane? So President von der Leyen was on a seven-country, four-day tour of frontline states of the EU.

1:22These are states of the east of Europe, close to Russia. And the trip was designed to bring attention to the threat posed by Russia and the need for European governments to spend more on defense. We were flying from Warsaw to a city called Plovdiv in central Bulgaria on a chartered jet that the commission president had chartered for this purpose. And on the approach to Plovdiv, we lost altitude. We came down praying for landing. And then all of us on board realized that we were circling the airport. We had been for a while. We were way past the planned landing time. And it was only when we actually got on the ground that we were told the reason for the delay was because the GPS services weren't working.

2:00The pilot was not able to use the standard electronic navigational systems and had to land the plane manually using maps. Do we know if this plane in particular was targeted? How does it work? From what I understand from talking to officials who've been briefed on it, these are Bulgarian officials involved in the aviation management system in that country. They say that the GPS system around the area of the airport was disabled. Ours was the only flight in and out for a large amount of time. So it appears as if that particular flight was targeted with a more regional GPS spoofing or interference of some kind.

2:35Has this kind of thing happened before? This is really on the rise. a lot of European governments, particularly those close to Russia, have said that since February 2022, with the Russian invasion of Ukraine, these incidents have really been increasing. A lot of Baltic states, Estonia, Latvia, Lithuania, and Finland on the Baltic Sea in the north, have been complaining about regular use of GPS jamming or GPS interference, which is affecting commercial flights. And some governments have even said, look, if this continues at the rate, we're going to see major air crashes. There's a huge risk to the public.

3:09And of course, there's just disruption to normal daily life, people that use Google Maps or people that are trying to get around cities using transportation apps that require GPS. What is the European Commission? What are other EU officials saying about this? The Commission confirmed our reporting and confirmed that this was being treated as a suspected Russian interference operation. They've said that, frankly, this justifies the trip. It shows the constant daily, almost, efforts by Russia to destabilize frontline Eastern European and states, it makes clear how countries in the East can't treat this as business as usual.

3:42They need to invest in their defense and security and not just things we think about around military and tanks and troops, but civil infrastructure and cybersecurity and things that protect the infrastructure we take for granted every single day, such as GPS, airports, navigational systems. So the Bulgarian services are obviously investigating to find out exactly how this took place and exactly who was behind it. But indeed, we flew out of Bulgaria with no incident. And today I'm speaking to you from Romania, which is the final stop on von der Leyen's trip. We should say you did get a comment from the Kremlin spokesperson who basically told you your information is incorrect.

4:21But Henry, what was it like for you personally? I mean, you're on this plane, you're seeing this play out in real time. That must have been pretty shocking. I have to say that the security personnel on the plane were brilliant in essentially remaining very calm. The president herself remained very calm. It was a clear, nice afternoon, no heavy winds, no heavy visibility issues. And like I said, no other traffic in the air at the time. So the pilot in the end had a pretty straightforward process of landing once he'd got out his manual maps and rethought how he was going to do it. But it is quite unsettling.

4:54And it was unsettling for all of us on board to note that a foreign actor and as I said, suspected Russian interference knew that the president of the European Commission was on the plane. and did something that in some circumstances really could have endangered her safety. Henry Foy is the FT's Brussels Bureau Chief. Thanks, Henry. Thank you so much.

5:17Israel's largest banks are under pressure to provide financial relief to customers following criticism of their high profits during the war with Gaza. Now, Israel's central bank is asking them to give back some of the profits to consumers. The profitability of Israel's banking sector has become increasingly controversial since the start of the war in 2023, which has strained finances in many Israeli households and small businesses. Some lenders have promised to give back to consumers in the form of cash, mortgage rate cuts, and even bank shares. Meanwhile, the Israeli government is preparing for a major invasion of Gaza City, a move that's faced harsh criticism from families of the hostages.

5:57and the International Association of Genocide Scholars has said the war there meets the legal definition of genocide.

6:09China's largest smartphone maker is a company called Xiaomi and it's also managed to gain an impressive foothold in the electric vehicle market. Xiaomi's strategy has been to try and establish itself as a cutting-edge tech company and to shake off its reputation as the maker of cheap goods. The FT's Gloria Li joins me now from Hong Kong to talk about it. Hi, Gloria. Hi, Josh. Gloria, I didn't really realize how popular Xiaomi is in China. Can you tell me a little bit about the fanfare around the company? I think the company initially did attract a certain type of customers. Young tech savvy geeks, mostly males living in major Chinese cities.

6:50But as the years went by and as the company expanded its product lineup, to include everything from toothbrushes to rice cookers. I think now every person I know in real life has definitely bought at least one Xiaomi-branded product at some point in their lives. Tell me a little bit about how the company has evolved over the years. You mentioned it does a lot of different products. How was it able to sort of develop and branch out into these different markets? So Xiaomi started with smartphones, But it didn't have its own manufacturing facilities back then. It relied on this huge network of suppliers and sourced everything externally.

7:34It has been criticized of being just a merely assembly workshop without owning core technologies or core manufacturing capabilities. But Leijing, the founder, obviously wanted to change the company's image. And it started to invest in building out its in-house manufacturing facilities. And since then, the company has been making aggressive inroads into other areas. Its EV factory opened in 2024. Its second smartphone factory opened in the same year. And currently, the company is building a new air conditioner factory in the central city of Wuhan. What's the company's next move then? So the company has made a lot of investments into developing its own chipset.

8:27They call it the system on the chip. Basically, only four smartphone makers in the world have achieved such high level of vertical integration. Their Apple, Samsung, and Huawei and Xiaomi is the force to achieve that. The company really wants to transform from a simple assembler to a hard tech manufacturer. Okay, the company definitely sounds ambitious. What kind of roadblocks could it run into? The competitive landscape in China's smartphone markets, as well as EV market, is brutal. You can see all the Chinese smartphone manufacturers and the car manufacturers are using aggressive pricing practices.

9:13And Xiaomi has built its reputation as a budget value for money brand, and its chipsets could still stay vulnerable to potential U.S. sanctions. It relies on the whole chip ecosystems, which include some key technologies developed by the U.S. companies. If the U.S. government imposed a new or another level of sanctions, then Xiaomi's chip efforts could hit huge, huge obstacles. That is the other challenge. Gloria Lee is the FT's South China researcher. Thanks very much, Gloria. Thank you.

9:56The high-stakes trial of Brazil's former president and Trump ally Jair Bolsonaro is drawing to a close. The U.S. president has been on a pressure campaign to get the trial thrown out. He's already imposed 50 % sanctions on most Brazilian exports. and a source close to the Trump administration said the White House had an extra menu of tariffs prepared for Brazil if a guilty verdict comes down. Bolsonaro is on trial facing charges of plotting a coup against the country's current president, Luiz Ignacio Lula da Silva. This week, prosecutors are set to deliver their closing arguments. If he's found guilty, the ex-president could face decades in prison.

10:38You can read more on all of these stories for free when you click on the links in our show notes. This has been your daily FT News Briefing. Check back tomorrow for the latest business news.

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