Aurelia Butler

This article is an on-site version of our FirstFT newsletter. Subscribers can sign up to our Asia, Europe/Africa or Americas edition to get the newsletter delivered every weekday morning. Explore all of our newsletters hereGood morning and welcome back to FirstFT Asia. On today’s agenda: Donald Trump has threatened to increase levies on Japan and cast doubt that the US would reach a deal with its Asian ally, as he escalated his trade rhetoric days before his pause on some steep tariffs is set to expire. What happened: Speaking to reporters yesterday, Trump said he would impose new levies on countries that failed to agree a trade deal by July 9, when the “reciprocal” tariffs unleashed in April are set to resume. He singled out Tokyo, saying: “We’ve dealt with Japan. I’m not sure we’re going to make a deal. I doubt it.”Rice stand-off: Trump’s comments came after trade talks between the US and Japan stalled amid a row over rice. The US president accused Tokyo of being “spoiled” and refusing to commit to buying more American rice or to allow US-manufactured cars into its market. Japan’s chief cabinet secretary Yoshimasa Hayashi said yesterday that Tokyo was “not thinking about doing anything that would sacrifice the farm sector”. Hayashi’s comments came as the latest round of trade negotiations in Washington ended without clear progress.Read more trade coverage below, as countries race to sign agreements with Washington by next week’s deadline.India: New Delhi is on track to seal an interim trade agreement with Washington as soon as this week to avert Trump’s “liberation day” tariffs.EU: European capitals are insisting the US reduces its tariffs on the EU immediately as part of any framework deal before the looming deadline on July 9.US narrows focus: Trump’s top trade officials are scaling back their ambitions for comprehensive reciprocal deals with foreign countries.Here’s what else we’re keeping tabs on today:Economic data: South Korea publishes June inflation figures. Singapore and Australia report PMI data for the month.China-EU relations: Chinese Foreign Minister Wang Yi meets European Council President António Costa in Brussels.Five more top stories1. Thailand’s constitutional court has suspended Prime Minister Paetongtarn Shinawatra following a leaked phone call with former Cambodian leader Hun Sen, in which she allegedly disparaged the powerful Thai military while discussing a border dispute. The political turmoil threatens a truce between the powerful Shinawatra family and Thailand’s conservative establishment. Read the full story.2. Trump’s landmark tax and spending legislation moved a step closer to becoming law yesterday after the US Senate ended days of haggling and narrowly passed the so-called big, beautiful bill. The bill’s passage through Congress’s upper chamber now leaves its fate in the hands of the House of Representatives, where it could still face considerable opposition.What’s in the bill?: The legislation would cut taxes by $4.5tn over 10 years while slashing welfare spending and clean energy subsidies.Opinion: Trump’s “big, beautiful bill” is an act of self-harm, writes Edward Luce.3. Taiwan’s dollar jumped more than 2 per cent in volatile trading yesterday, as the country’s massive life insurance and export sectors rushed to contain the fallout from a weak US currency. The New Taiwan dollar made its biggest single-day gain since a rapid appreciation at the start of May that exposed Taiwanese life insurers to huge losses on their US assets.4. Liquidators who are trying to recoup billions of dollars siphoned initially from Malaysia’s sovereign wealth fund are seeking more than $2.7bn from Standard Chartered, in a lawsuit filed against the UK-based bank over its alleged role in the scandal. The suit represents the latest attempt to recover money taken from 1MDB in a decade-long hunt that has involved several of the world’s largest banks.5. Jay Powell said a July interest rate cut was not “off the table” for the US Federal Reserve, in an apparent softening of his position that the central bank should wait until the autumn to start lowering borrowing costs. The Fed chair has been under relentless pressure from Trump to slash rates.Visual storyFrom Norway’s Arctic region to Poland’s border with Belarus, Nato allies are working together to predict what a Russian attack might look like — and how the alliance would respond to one. Explore how Nato nations are fortifying the eastern frontier in this visual story.We’re also reading and listening to . . . Chinese economy: Beijing could use this moment of stability to rally people around needed reforms that tackle deep structural issues, writes Eswar Prasad.Tech Tonic 🎧: Meta chief executive Mark Zuckerberg has undergone a transformation, both physical and political. But is this all an act?Ghosts of Brexit: Switzerland’s deal to keep access to the EU’s single market includes all the same thorny issues that have bedevilled the UK-EU relationship.Chart of the day The intense battle to poach top artificial intelligence researchers and engineers from rivals has spurred a rapid escalation in wages, as tech groups such as Meta and OpenAI race to gain the competitive edge. Top tech staff are being lured with far higher pay than computer engineers without AI experience, data shows.Some content could not load. Check your internet connection or browser settings.Take a break from the newsAs part of its Wimbledon special, FT Globetrotter sits down with the All England Lawn Tennis Club’s head gardener to find out what it takes to get the courts immaculately green.Displays often follow the Wimbledon palette of purple, green and white More

Unlock the White House Watch newsletter for freeYour guide to what Trump’s second term means for Washington, business and the worldDonald Trump has threatened to increase levies on Japan and cast doubt that the US would reach a deal with its Asian ally, as he escalated his trade rhetoric days before his pause on some steep tariffs is set to expire. Speaking to reporters on Tuesday, the US president said he would impose new levies on countries that failed to agree a trade deal by July 9, when the “reciprocal” tariffs unleashed in April are set to resume. He also singled out Tokyo, a crucial trading partner that had been among the first countries to seek a deal with Trump after he shocked global markets in April by launching a global trade war on “liberation day”.“We’ve dealt with Japan. I’m not sure we’re going to make a deal. I doubt it,” Trump said.Show video info“I’ll write them a letter to say ‘we thank you very much, and we know you can’t do the kind of things that we need, and therefore you pay a 30 per cent, 35 per cent’ or whatever the number is that we determined,” he said. “Because we also have a very big trade deficit.”The comments from the president suggested Trump remained willing to take a hard line on negotiations with trading partners, despite backing down on his higher global tariffs earlier this year in the face of deep market turmoil.The US imposed a tariff of 24 per cent on all imports from Japan on Trump’s so-called liberation day on April 2, before temporarily lowering it to 10 per cent for 90 days to allow talks to take place. The threat to increase tariffs on the world’s fourth-largest economy will heighten fears that Trump will reignite a global trade war if his officials fail to line up countries before his own deadline next week.US and Japanese trade officials have been locked in intense negotiations since earlier this year. Trump also told reporters on Air Force One on Tuesday that he was not considering extending next week’s deadline for any countries to allow talks to continue. The US president announced a 90-day pause to his reciprocal tariffs in April after his trade war triggered a bout of severe market turmoil and a steep sell-off of US bonds. Trump claimed at the time that he would sign 90 deals during the hiatus, although only the UK has struck a new trade agreement with the US. On Monday, the president suggested that some countries would be barred from trading altogether with the US. “But for the most part, we’re going to determine a number,” he added, referring to tariffs. Trump has accused Japan of being “spoiled” and refusing to commit to buying more American rice or to allow US-manufactured cars into its market. Japan already faces a 10 per cent tariff on most of its exports to the US, but Japanese cars and car parts are also subject to a 25 per cent border tax tariff. Steel and aluminium face a 50 per cent levy. Earlier on Tuesday, Japan’s chief cabinet secretary Yoshimasa Hayashi said the country would not sacrifice its farmers to secure tariff relief from the US.The yen strengthened 0.4 per cent against the US dollar to ¥143.42 on Tuesday while the Nikkei 225 stock index, which had closed before Trump announced his latest tariff threat, lost 1.2 per cent. US stocks ended the day lower, with the S&P 500 down 0.1 per cent. The two-year Treasury yield, which moves inversely to prices, rose 0.05 percentage points to 3.78 per cent.Additional reporting by George Steer in New York More

Unlock the White House Watch newsletter for freeYour guide to what Trump’s second term means for Washington, business and the worldIt was only a matter of time before Donald Trump’s war on what we used to know as the global economy spilled over from trade to other areas. Sure enough, while his trade war is set for a new phase next week — when the US president’s “liberation day” tariff schedule is supposed to come into effect — we have just witnessed the first skirmish on the second front, over taxes. In 2021, countries led by the G7 and the OECD reached a compromise on how to reform tax rules for international companies. A failure to update an old web of bilateral tax treaties aiming to avoid double taxation had led, too often, to a situation of double non-taxation, with loopholes too easily allowing corporations to pretend their profits were made in low- or zero-tax jurisdictions. The “base erosion and profit shifting” efforts eventually arrived — in no small part thanks to Trump’s first Treasury secretary Steven Mnuchin — at new rules by which countries may tax companies active in their jurisdictions if those companies are inadequately taxed elsewhere. But giving other countries taxing rights to US corporates’ profits was never going to go down well with the president. Insistence on tax sovereignty for America and opposition to extraterritoriality by others are a bipartisan matter in Washington. Given Trump’s pugilism, a conflict was bound to come to a head. The question is how other countries choose to respond.On Saturday, other G7 countries accepted a US demand for its companies to be exempted from two rules it sees as particularly unjustifiable. In return, Washington has arranged the removal of section 899 from the One Big Beautiful Bill Act. This section — which may have been inserted precisely to create leverage to force this outcome — would have imposed new US taxes on corporations from countries deemed to discriminate against American companies. The OECD has welcomed the agreement.Giving in to the US may not have been the wisest choice. After all, it has demonstrated that blackmail can work. At the same time, it is never clear with the Trump administration what commitments it will stand by. In this case, the US Treasury has reassured counterparts that it is committed to addressing any “substantial” profit-shifting risks within its domestic system, “side by side” with the international scheme others have signed up to in full. But it is unclear how this commitment will be followed up and enforced.The other G7 nations may, however, have reasoned that among many battles, this was not one to pick. That was certainly true of Canada, which surrendered quickly in another tax fight. It swiftly withdrew a digital services tax after Trump called off trade negotiations and threated higher tariffs on Canadian goods. DSTs will become flashpoints with European countries, too: the UK, France, Spain and Italy all have a version of it. The UK’s DST survived the first trade announcements with the US, but may still be in Washington’s crosshairs. The EU countries, shielded by the size of their big trade bloc, should find it easier to resist. As they seek a resolution to trade negotiations with Trump, they ought to resist any pressure to compromise on tax sovereignty for a quick deal.What is clear is that business does not benefit from these kinds of tussles. Instead of a hard-won compromise, some multinational corporations will now have to face a more complex dual system that ostensibly will levy just as much tax. The very fact that tax rules have turned into legitimate targets for economic coercion adds a layer of policy uncertainty. Whether it was Trump’s intention or not, the cost of doing business across borders has just gone up yet another notch. More

Stay informed with free updatesSimply sign up to the More

Stay informed with free updatesSimply sign up to the More

Stay informed with free updatesSimply sign up to the More

Unlock the White House Watch newsletter for freeYour guide to what Trump’s second term means for Washington, business and the worldEuropean capitals have hardened their position in trade talks with Donald Trump, insisting the US reduces its tariffs on the EU immediately as part of any framework deal before the looming deadline on July 9. Trade commissioner Maroš Šefčovič has been instructed to take a tougher line on a trip to Washington this week as Brussels tries to remove or at least substantially cut Trump’s levies in the long term.Washington has indicated to Brussels that the most likely first-stage agreement is a UK-style phased deal that leaves some tariffs in place while talks continue, according to EU officials. Ambassadors from EU member states on Monday asked for Šefčovič to insist that any such deal includes, from July 9, reductions in the current 10 per cent “reciprocal” tariff, according to four people briefed on the matter. They are also demanding reductions to higher sectoral levies. In the UK case, US tariffs on cars and steel continued for some weeks after the initial agreement to allow lower duty or duty-free quotas.The EU’s 27 members have struggled to display a united front during almost three months of talks. But European Commission president Ursula von der Leyen asked leaders at a summit on Thursday to endorse a tougher stance, according to the people.Trade commissioner Maroš Šefčovič said: ‘We are absolutely focusing on a positive outcome’ More

This is an on-site version of the White House Watch newsletter. You can read the previous edition here. Sign up for free here to get it on Tuesdays and Thursdays. Email us at [email protected] to White House Watch. I’m your host for today. We’ll be off on Thursday but back in your inbox next week. On today’s agenda: A ‘big, beautiful’ update The latest threat to Harvard Another looming deadline Donald Trump’s top legislative priority, passing his flagship tax and spending bill, is inching closer to reality — but some significant obstacles remain. Here’s the state of play at 9am in Washington: After a full day of debate, Republican senators have yet to get their version of the bill over the line. They’ll continue today to try to win over the remaining holdouts to pass the bill by a simple majority. Vice-president JD Vance has also arrived at the Capitol in case he needs to be the tiebreaking vote.Once they do that, it will then head back to the House of Representatives to be approved by the lower chamber, where things could get tricky.The House last month passed its own version of the legislation, but several lawmakers have sounded alarm bells about the Senate version of the bill — raising the possibility that it could stall again. House Speaker Mike Johnson is contending with a razor-thin majority and can afford to lose only a handful of votes.If the House disagrees with the Senate bill, it could amend it and send it back to the upper chamber — where it would need yet another vote. Or the two chambers could send members to a conference committee to strike a compromise. When both chambers agree on the text, it would go to Trump to be signed into law. Ultimately, it would fund an extension of the tax cuts introduced in Trump’s first term by slashing spending on healthcare and social welfare programmes.Elon Musk, Trump’s former ally who fell out with the president last month partially over the legislation, isn’t helping with the bill’s progress.In posts on X yesterday, Musk slammed the bill and threatened to launch a new political party to challenge incumbents if the legislation passes. Trump hit back with a threat to cancel government subsidies for Musk’s business empire. Not great news for Trump’s goal of getting this done before July 4 — but in reality not much will happen if Congress slips past the self-imposed deadline. The latest headlinesSome content could not load. Check your internet connection or browser settings.What we’re hearingAnother important date is looming before the Trump administration: July 9, when the steep tariffs that the president originally proposed in April were slated to take effect again, in the absence of country-specific trade deals. But Trump’s top trade officials are now scaling back their ambitions for comprehensive reciprocal deals with foreign countries, seeking narrower agreements to avert the looming reimposition of US tariffs [free to read].Four people familiar with the talks said US officials were seeking phased deals with the most engaged countries as they race to find agreements by July 9, when Trump has vowed to reimpose his harshest levies.The new approach marks a retreat from the White House’s promise to strike 90 trade deals during the 90-day pause in the sweeping “reciprocal” tariffs Trump announced on “liberation day”.But it also offers some countries a chance to strike modest agreements. The administration will seek “agreements in principle” on a small number of trade disputes ahead of the deadline, the people said. However, talks remain complex. The administration is also still considering imposing tariffs on critical sectors, people familiar with the matter said. The threat of new tariffs alongside openness to deals, underscores the difficulty negotiators have faced — especially since Trump, has used trade as a cudgel to secure concessions from other countries. People familiar with the talks say the poor visibility of possible new sectoral tariffs the US may impose at a later date are hindering talks.It is also unclear how Trump will set any new tariff rates on countries that do not agree a new deal before the July 9 deadline. The White House declined to comment. ViewpointsIn economic terms, Trump’s budget is classic bait and switch that could cause many Republicans to lose their seats in Congress, writes Edward Luce. European leaders seemed broadly content after the first Nato summit of Trump’s second term, but Gideon Rachman explains why the situation in Ukraine could cause any feel-good sentiments to soon disappear.Ruchir Sharma argues that the biggest Trump shock on US markets is actually that he has had so little impact.Trump said last week’s ruling in the birthright citizenship case is a “monumental victory” for his administration — he might be right, says Brooke Masters in our Swamp Notes newsletter. [Available for Premium subscribers]Recommended newsletters for youFT Exclusive — Be the first to see exclusive FT scoops, features, analysis and investigations. Sign up hereBreaking News — Be alerted to the latest stories as soon as they’re published. Sign up here More