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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: US and Vietnam strike a trade dealThe Dalai Lama defies BeijingIs Trump’s “big, beautiful bill” a political curse?Donald Trump said the US had struck a trade agreement with Vietnam in a deal that would lower Washington’s “reciprocal tariff” on exports from the Asian country to 20 per cent. Here’s what you need to know.The deal: The new tariff level represents a more than halving of the 46 per cent levy Trump initially imposed on Vietnam during his “liberation day” tariff blitz on April 2. But it is higher than the 10 per cent rate it was lowered to as trade talks took place. The US will also charge Vietnam a 40 per cent tariff on “trans-shipping” as Washington seeks to crack down on businesses sending products made in China through other countries to avoid high levies on Chinese goods.Go deeper: Vietnam’s exports to the US have risen in recent years as manufacturers have moved production out of China to avoid US tariffs, with the south-east Asian country hosting the likes of Apple, Samsung and Nike. Trans-shipment had become a critical issue in Hanoi’s negotiations with Washington, as the Trump administration accused Vietnam of being a conduit for Chinese exporters. Read more about the deal, which makes Hanoi one of the few capitals to reach a trade agreement with Washington in the past three months. Here’s what else we’re keeping tabs on today:Five more top stories1. The Dalai Lama has said that the Tibetan Buddhist community he leads has the “sole authority” to recognise his future incarnation, asserting control over a succession process contested by China. The spiritual leader, who will turn 90 on Sunday, said he expected the role he occupies to continue after his death. 2. Sir Keir Starmer has said Rachel Reeves will be chancellor for “a very long time to come” as the prime minister moved to stem speculation over her future. UK government bonds and the pound fell sharply yesterday afternoon after Starmer declined to back a tearful Reeves in the House of Commons following Labour’s dramatic gutting of its welfare bill.3. Goldman Sachs stood to lose just $300mn in an economic shock under the Federal Reserve’s stress test scenario this year, vastly less than the $18bn forecast a year earlier — and a big reason for the bank’s outsized shareholder payouts. Here’s how the Wall Street bank won the Fed’s stress test.4. A jury has acquitted rapper-entrepreneur Sean “Diddy” Combs of sex trafficking and racketeering, but convicted him of prostitution-related charges, in a widely watched New York federal court case. The case of Combs, a Grammy award-winning artist, is among the most high-profile reckonings with sexual misconduct in the music business. Read the full story.5. Shares of New World Development, the heavily indebted Hong Kong property group, jumped yesterday as investors welcomed the end of its refinancing talks with banks and the resignation of the founder’s grandson from his remaining board roles. New World has been hit by a market downturn following a period of debt-fuelled expansion.News in-depth© FT montage; Reuters/Getty ImagesTrump has narrowly passed his “big, beautiful bill” through the US Senate. But the legislation still faces hurdles, including the House, where several of his fellow Republicans have threatened to vote against it. But even if the president is able to get them in line, he faces a big task in defending the legislation before an American public that already seems to be souring on it. We’re also reading . . . Chart of the day Drinking has become more prevalent among Gen Z as baby boomers cut back their alcohol consumption, according to an extensive study by market research company IWSR. The findings call into question the assumption that Gen Z has turned its back on drinking en masse.Take a break from the newsThe recent heatwaves in Europe and the US have made travelling to the office unbearable at times. Becky Malinsky, a New York-based personal stylist, gives advice on how to dress for work in hot weather.Fashion influencer Laura Schulte in short-sleeve top, loose-fit trousers and flip flops in Copenhagen last August More

Unlock the White House Watch newsletter for freeYour guide to what Trump’s second term means for Washington, business and the worldDonald Trump said the US had struck a trade agreement with Vietnam in a deal that would lower Washington’s “reciprocal tariff” on exports from the Asian country to 20 per cent.The new tariff level represents a more than halving of the 46 per cent levy Trump initially imposed on Vietnam during his “liberation day” tariff blitz on April 2, but is higher than the 10 per cent rate it was lowered to for 90 days as trade talks took place.The deal makes Hanoi one of the few capitals to reach a trade agreement with Washington in the past three months. But the steepness of the tariffs remaining in place could unnerve countries still hoping to secure significant relief from the levies announced in April, which triggered a financial market sell-off at the time and upended global trade.Describing the deal as “something that they have never done”, Trump said in a Truth Social post on Wednesday detailing the agreement that Vietnam would give the US “TOTAL ACCESS” to its market and that “we will be able to sell our product into Vietnam at ZERO Tariff”.The US will also charge Vietnam a 40 per cent tariff on “trans-shipping” as Washington seeks to crack down on businesses sending products made in China through other countries to avoid high levies on Chinese goods.Vietnam’s official state media reported that Vietnam’s Communist party chief To Lam held a phone call with Trump on Tuesday and the two sides reached a consensus on a “fair and balanced reciprocal trade agreement framework”.During the call, Trump “affirmed that the US will significantly reduce reciprocal tariffs on many Vietnamese exports”, state media reported, without referring to any specific tariff rates.“The 20 per cent baseline tariff for Vietnamese imports is higher than expected, undoubtedly causing angst among other trading partners trying to finalise deals,” said Wendy Cutler, a former US trade official who now serves as vice-president at the Asia Society Policy Institute.Hanoi, though, had a “strong interest” in reaching a deal with Washington, given almost 30 per cent of Vietnam’s exports are destined for the US, Cutler said.The south-east Asian country’s exports to the US have risen in recent years as manufacturers have moved production out of China to avoid US tariffs, with Vietnam hosting the likes of Apple, Samsung and Nike. In 2024, the US exported $13.1bn in goods to Vietnam, according to US government figures, but imported $136.6bn over the same period.The Trump administration has accused Vietnam of being a conduit for Chinese exporters trying to avoid punitively high US tariffs on Beijing. The practice, known as trans-shipment, had become a critical issue in Hanoi’s negotiations with Washington.Many companies assemble components manufactured in China in other countries. including Vietnam and its south-east Asian peers, or add enough value to the products to legally change their place of origin. However, some merely relabel their products without any added value, a practice that is illegal but difficult to trace.Markets broadly took the announcement in their stride. The dollar was down less than 0.1 per cent, extending a recent slide, while the S&P 500 climbed steadily through the day to finish at a record high.Shares of several companies with significant manufacturing operations in Vietnam rose. On Wall Street, Nike climbed 4.1 per cent and toymakers Mattel and Hasbro each gained 1.6 per cent, while Adidas rose 1 per cent in Frankfurt.The lower levies may offer some relief for Vietnam, but it is unclear how the two-tier tariff system announced by Trump would work. It is also unclear how Hanoi can trace trans-shipment and what percentage of its exports would be hit with the higher 40 per cent rate.Alicia García-Herrero, chief Asia-Pacific economist at French investment bank Natixis, said the 20 per cent flat tariff was “not too bad” for Vietnam so long as US tariffs on China remained relatively higher.“The question is whether there is any fine print — for example, Vietnam imposing tariffs on products and inputs imported from China which are vital to its manufacturing economy,” she said. The deal with Vietnam comes a day after Trump threatened to increase levies on Japan, casting doubt that Washington would reach a deal with Tokyo. Additional reporting by Peter Foster in London More

While the impact from the DOGE layoffs has been fairly muted so far in relation to total job growth, recent trends show that’s about to change.
Applications from workers at federal agencies have soared by 150%, a trend that has been particularly acute at knowledge-work jobs such as data analytics, marketing and software development.
The BLS releases the June nonfarm payrolls count Thursday. Economists surveyed by Dow Jones expect to see growth of just 115,000.

A hiring sign is displayed in a Dominos Pizza window on June 25, 2025 in Austin, Texas.
Brandon Bell | Getty Images

For federal government workers who worked at agencies tied to this year’s job cuts, an apparent slowdown in the labor market is happening at the worst possible time.
A gradual pullback in hiring and job openings has come at the same time that hundreds of thousands of federal workers are out looking for employment, the casualty of layoffs recommended by Elon Musk’s Department of Government Efficiency.

Although economists almost universally downplay it, one straw in the wind may have come Wednesday, when payrolls processor ADP said private sector hiring in June unexpectedly contracted by 33,000 jobs, far lower than economists’ estimate of 100,000.
And while the impact from the DOGE layoffs has been fairly muted so far in relation to total job growth, recent trends show that’s about to change, according to data from the Indeed Hiring Lab.
Weak white collar demand
“There are still a lot of questions about how that’s all going to trickle into the labor market. A lot of people are out there looking for work from the federal government,” Indeed senior economist Cory Stahle said. “The big question is whether or not they’re going to be able to find them given the weaker demand for the higher education, white-collar jobs now.”
From January through April of this year, the number of job openings fell by 5% while the hiring rate has hovered around levels last seen in 2014, according to Bureau of Labor Statistics data.
At the same time, Indeed said it has seen applications from workers at federal agencies soar by 150%, a trend that has been particularly acute at knowledge-work jobs such as data analytics, marketing and software development. While May provided some hope, with applications dipping by 4%, there are still signs that the DOGE efforts are having an impact on the broader labor picture.

“Demand coming from employers has really pulled back a lot more for these white-collar jobs than it has for many of other kind of in-person skilled labor roles,” Stahle said. “So that’s a real big challenge for anybody entering the labor market right now.”
Slowdown in payrolls
The DOGE factor is a significant consideration as policymakers look for cracks in what had been a strong, and virtually uninterrupted, expansion in the labor market since the Covid pandemic.
An update on conditions comes Thursday when the BLS releases the June nonfarm payrolls count. Economists surveyed by Dow Jones expect to see growth of just 115,000, which, if accurate, would mean that every month in the first half of the year produced fewer than 150,000 new jobs. Outside of the pandemic year in 2020, it’s the slowest start to a year since the financial crisis.

The unemployment rate is expected to edge higher to 4.3%.
The efforts this year by DOGE to pare the federal workforce have resulted in more than 280,000 positions cut, according to Challenger, Gray & Christmas.
To be sure, it’s difficult to gauge what the exact impact on the headline jobs numbers will be, given that many of the displaced workers have found other employment and some of the initial layoffs have been reversed. Also, job openings at the federal level are virtually unchanged this year, though that doesn’t necessarily mean the vacancies will be filled.
However, Stahle said the efforts by the Trump administration to reduce head count are not the only obstacles facing job seekers.
He also noted that tech jobs are harder to come by as the Federal Reserve keeps its interest rate benchmark elevated, even in the face of persistent calls from President Donald Trump to ease monetary policy.
Higher rates discourage debt-dependent tech companies from borrowing and thus expanding, keeping hiring in check, Stahle said.
“A lot of the tech startups and other companies rely on borrowing to grow and hire, and if the cost of borrowing goes up, it can naturally restrict things,” Stahle said. “They went on a hiring spree [after the Covid pandemic].They brought in a lot of people and haven’t necessarily needed to hire as a result.” More

The president said he had agreed to initial trade terms with Vietnam, the second country to strike a limited deal after Mr. Trump threatened steep tariffs.President Trump said on Wednesday that the United States had reached a trade deal with Vietnam, one that would roll back some of the punishing tariffs he had issued on Vietnamese products in return for that nation’s agreeing to open its market to American goods.The preliminary deal will also indirectly affect China, an important trading partner of Vietnam.“It will be a Great Deal of Cooperation between our two Countries,” Mr. Trump wrote in a post on Truth Social announcing the deal.According to Mr. Trump, the deal imposes a 20 percent tariff on all imports from Vietnam and a 40 percent tariff on any “transshipping.”That provision is aimed at addressing Trump administration criticisms that countries like Vietnam have become a channel for Chinese manufacturers to bypass U.S. tariffs and funnel goods into the United States.Which products would fall under the higher tariff rate is unclear. It could refer to goods imported to the United States from Vietnam that actually originated in China. But it could also apply to Vietnamese products that use a certain amount of Chinese parts. The deal could include a lower tariff on goods that are made in Vietnam with fewer Chinese parts and materials, and a higher tariff rate for Vietnamese goods that contain many Chinese components.Howard Lutnick, the commerce secretary, wrote on X that “if another country sells their content through products exported by Vietnam to us — they’ll get hit with a 40 percent tariff.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

Private sector hiring unexpectedly contracted in June, payrolls processing firm ADP said Wednesday.
It’s a potential sign that the economy may not be as sturdy as investors believe.

People visit booths set up by the City of Sunrise and their police department at the Mega JobNewsUSA South Florida Job Fair at the Amerant Bank Arena on April 30, 2025 in Sunrise, Florida.
Joe Raedle | Getty Images

Private sector hiring unexpectedly contracted in June, payrolls processing firm ADP said Wednesday, in a possible sign that the economy may not be as sturdy as investors believe as they bid the S&P 500 back up to record territory to end the month.
Private payrolls lost 33,000 jobs in June, the ADP report showed, the first decrease since March 2023. Economists polled by Dow Jones forecast an increase of 100,000 for the month. The May job growth figure was revised even lower to just 29,000 jobs added from 37,000.

“Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month,” Nela Richardson, ADP’s chief economist, said in a press release published Wednesday morning.
To be sure, the ADP report has a spotty track record on predicting the subsequent government jobs report, which investors tend to weigh more heavily. May’s soft ADP data ended up differing significantly from the monthly jobs report figures that came later in the week.
This week, the government’s nonfarm payrolls report will be out on Thursday with economists expecting a healthy 110,000 increase for June, per Dow Jones estimates. Economists are expecting the unemployment rate to tick higher to 4.3% from 4.2%. Some economists could revise down their jobs reports estimates following ADP’s data.
Weekly jobless claims data is also due Thursday, with economists penciling in 240,000. This string of labor stats comes during a shortened trading week, with the market closing early on Thursday and remaining dark on Friday in honor of the July 4 holiday.

Service roles hit hardest

The bulk of job losses came in service roles tied to professional and business services and health and education, according to the ADP. Professional/business services notched a decline of 56,000, while health/education saw a net loss of 52,000.

Financial activity roles also contributed to this month’s decline with a drop of 14,000 on balance.
But the contraction was capped by payroll expansions in goods-producing roles across industries such as manufacturing and mining. All together, goods-producing positions grew by 32,000 in the month, while payrolls for service roles overall fell by 66,000.
The Midwest and Western U.S. saw the strongest contractions in June, declining by 24,000 and 20,000, respectively. Meanwhile, the Northeast shed 3,000 roles. The Southern U.S. was the sole region tracked by the ADP to see payrolls expand on net in the month, recording an increase of 13,000 positions.
The smallest firms tended to see more job losses this month than their larger counterparts. In fact, businesses with more than 500 employees saw the biggest payroll growth in the month with an increase of 30,000, per the ADP. By comparison, businesses with fewer than 20 employees accounted for 29,000 lost roles on net.
Annual income growth decreased modestly from May for both job stayers and hoppers. The rate of pay increase for those staying in their jobs ticked down to 4.4% from 4.5%, while those getting new roles slid to 6.8% from 7%.
The S&P 500 is up more than 4% for the year, posting a stunning comeback in the second quarter after worries about President Donald Trump’s tariff fights nearly sent the benchmark into a bear market.

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Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.When the US imposed a 25 per cent tariff on imported Japanese cars, the expectation had been higher sticker prices for US consumers and falling sales. The assumption was that the added costs to exporters would inevitably be passed down the line. Yet, months into the policy, the outcome has proven far less dramatic.Japanese automakers’ US sales have shown surprising resilience. Toyota, for example, hit a global sales record in May, with North America sales up more than a tenth. Part of that is thanks to their local US production. Behind the stable sales figures, export data tells a more troubling story. In May, the number of vehicles shipped to the US declined by just 3.9 per cent, according to official data. When export value is divided by the number of units sold, the average price per vehicle drops to about ¥3.5mn, or $24,000, roughly a fifth less than the previous year. By total value, Japan’s vehicle exports to the US fell by nearly a quarter. If the cost of the tariffs had been passed on to consumers by raising prices, export volumes would probably have declined. But export value would have held steady, reflecting the higher per unit cost. Instead, both volume and value have fallen. That suggests carmakers are absorbing a large chunk of the tariff burden themselves. This may be an effective short-term strategy. The US remains the most lucrative market for Japanese automakers. Even modest price increases risk undermining market share, as the companies face aggressive competition from American and South Korean rivals. For companies such as Toyota, Honda and Nissan, keeping prices stable could protect their long-term positioning in the country.But trade negotiations have dragged on, with last week marking the seventh round of talks and little sign of resolution. If, as trade data suggests, companies are indeed absorbing the bulk of the tariff burden, their margins will be coming under growing pressure. That will squeeze even financially resilient groups such as Toyota, which has consistently reported operating margins above 10 per cent since 2023.In choosing not to raise prices to fully offset tariffs, carmakers have delayed disruption, while gambling that politicians will come to an agreement before profit runs dry. But as Japan’s chief trade negotiator Ryosei Akazawa has noted, some local automaker executives now estimate losses of up to $1mn per hour under the current tariff structure.Japan will need to act before losses reach the point where exports are no longer viable. That could mean buying more US energy or agricultural goods, or making market access concessions in areas such as food safety and pharmaceuticals. Discipline from its carmakers has bought time, but their resilience will soon be put to the [email protected] More

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