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As America’s largest trading partners race toward deals, they are increasingly worried about being hit with future tariffs on their critical industries.Governments around the globe are racing to negotiate trade deals with the United States in order to forestall President Trump’s punishing tariffs, which could kick in on July 9. But the discussions have been slowed because Mr. Trump has threatened to impose more tariffs even if those deals are in place.Mr. Trump announced what he refers to as “reciprocal tariffs” on April 8, saying they were in response to other countries’ unfair trading practices. But he agreed to pause those levies for 90 days to give countries time to reach trade deals with the United States. Some administration officials recently suggested that the deadline could be extended, but Mr. Trump has signaled that he is ready to slap tariffs on countries he views as uncooperative. “We have countries that are negotiating in good faith, but they should be aware that if we can’t get across the line because they are being recalcitrant, then we could spring back to the April 2 levels,” Treasury Secretary Scott Bessent said in an interview with Bloomberg Television on Monday.India, Vietnam, Japan, the European Union, Malaysia and other governments have been working toward deals that could smooth relations with the United States and avoid double-digit tariffs. But the Trump administration has been moving forward with plans to impose another set of tariffs on certain industries that it views as essential to national security, a threat that has foreign leaders worried that there could be more pain ahead.These tariffs are dependent on the outcomes of trade investigations into lumber and timber, copper and critical minerals by the Commerce Department, which are expected to be completed soon and submitted to the White House, according to people familiar with the matter. A determination that imports pose a national security threat would allow the president to issue tariffs on those products in the coming weeks. Investigations on pharmaceuticals, semiconductors and electronic devices are also proceeding and could be finished in time for tariffs as early as next month, the people said.Mr. Bessent added that tariffs on imports of items such as lumber were being imposed on a different track from the reciprocal tariffs that were announced in April and are not part of the current round of trade negotiations.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

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 to FirstFT Asia. In today’s newsletter:When will Congress pass Trump’s tax bill?US shoppers ditch Temu and SheinChina’s “choke points”A 150-year passion for JaponismeDonald Trump’s “big, beautiful bill” is inching closer to passage ahead of the US president’s self-imposed July 4 deadline. Here’s what you need to know.Current situation: Senate Republicans charged ahead with their efforts to pass the bill with a final vote expected to take place late on Monday or early on Tuesday in the US. Democrats have accused Republicans of trying to rush the bill through “in the dead of night” and have sought to delay it, forcing a reading of the 940-page bill on the Senate floor and amendments to the text.What’s at stake: The bill would fund an extension of the sweeping tax cuts introduced in Trump’s first term by slashing spending on healthcare and social welfare programmes. It would also increase spending on the military and border security. But Democrats and some Republicans say the planned spending cuts will cut access to Medicaid services for the poor.Some content could not load. Check your internet connection or browser settings.Will the bill get passed? Republicans can only afford to lose three votes to secure a simple majority, with Democrats unified in their opposition. Two Republican senators have already said they will vote against the legislation, and several others have expressed reservations about the bill’s size and scope. Myles McCormick and Alex Rogers go deeper into the hurdles it will have to overcome and a potential timeline for passage. Plus, here’s more coverage:Green power winners and losers: Trump’s spending plan created a division of haves and have-nots in the future of US clean energy. Martha Muir breaks down the details.Opinion from Lex: Private equity’s “carried interest” loophole is the one that got away. But this isn’t the first time that’s happened, writes John Foley. And here’s what else I’m keeping tabs on today:Economic data: Japan releases its June Tankan survey, which will provide key insights into business sentiment and economic conditions in the country.Mayoral deadline: New York City will announce the final winner of New York’s Democratic mayoral primary, expected to be democratic socialist Zohran Mamdani.Results: Tata Motors reports June sales.Five more top stories1. The US dollar suffered its worst first half of the year since 1973, prompting global investors to rethink their exposure to the world’s dominant currency. Trump’s trade policies and rising debt levels sparked a decline of more than 10 per cent in the first half of 2025. As one strategist puts it, “The dollar has become the whipping boy of Trump 2.0’s erratic policies”. Will it continue to decline?2. Temu and Shein have seen their once rapid US user growth plunge after Trump closed a tax loophole for the online retailers. Both companies had escaped import duties by sending Chinese-made goods directly to consumers’ homes as individual packages. Despite cheap prices and a social media advertising blitz, the retailers are now shifting their focus to Europe.3. China’s export controls are spilling over into products beyond rare earths and magnets, threatening broader supply chain disruptions and undermining US claims that a new trade deal had resolved delays to shipments. Edward White has more details from Shanghai.4. South Korea is lifting a 14-year ban on so-called “kimchi bonds” while retail investors rush to invest in overseas stocks and dollar-backed stablecoins. The policy change is the government’s latest move to deregulate the country’s foreign exchange market and boost foreign currency inflows after its forex reserves fell in May to their lowest level in five years. Here’s how the main issuers of “kimchi bonds” are expected to respond.5. Trump’s administration ruled that Harvard University is in “violent violation” of civil rights law and must “immediately” reform or lose all federal funding. It’s the latest escalation between the elite university and the US president, even though comments by Trump earlier this month suggested that a settlement could be close.The Big ReadChinese leader Xi Jinping last month visited a factory floor to issue a rallying cry for industrial self-sufficiency More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Keeping inflation in check will become harder as trade tensions and other “structural shifts” make the world more volatile, the European Central Bank has warned, as it vowed it would fight high price growth with “forceful or persistent” actions. European rate-setters have tweaked their strategy to emphasise the risk of sudden but persistent increases in inflation, after they were caught out by a jump in price rises in 2021-22 partly due to the war in Ukraine. The previous strategy focused on the then-relevant risk of deflation.“Structural shifts such as geopolitical and economic fragmentation and increasing use of artificial intelligence make the inflation environment more uncertain,” the ECB warned in a monetary policy strategy statement on Monday. “Supply shocks are becoming more frequent,” Lagarde said in a speech on Monday night at the start of the ECB’s annual international conference in Sintra, Portugal.The ECB is keeping the medium-term 2 per cent inflation target that was introduced four years ago, stressing that it will fight “large, sustained deviations of inflation from target in either direction”. It vowed to apply a “forceful or persistent” response to do so, adding that it was bracing to fight “larger target deviations in both directions” in future. ECB president Christine Lagarde told reporters on Monday that while the new environment gave citizens “many reasons to worry . . . one thing that they do not need to worry about is our commitment to price stability”.The central bank has drastically changed its monetary policy since 2022. It first rushed to end its bond-buying programme and then raised interest rates from minus 0.5 per cent to a record high of 4 per cent within 14 months. Otherwise, inflation expectations would have got out of control in 2022 and 2023 with a probability of more than 30 per cent, Lagarde said in Sintra, pointing to ECB research.It then halved borrowing costs to 2 per cent since June last year as inflation moderated. Investors are betting on one more quarter-point rate cut by the end of the year, according to Reuters data. Inflation has slowed from a peak of almost 11 per cent in late 2022 and fell below its medium-term 2 per cent target last month. Interest rates would remain as the preferred policy method, but the ECB would keep the controversial bond-buying tools it introduced during the years of ultra-low inflation and negative interest rates and which dramatically inflated its balance sheet, it said. The document is the first review of its policy since 2021, with Lagarde saying the next review was planned for 2030.The central bank said it would keep the options to buy assets and to provide cheap, longer-running funding to banks — either to safeguard “the smooth functioning of monetary policy transmission” or when interest rates “are close to the lower bound”.“Our strategy assessment has been an exercise in evolution, not revolution,” Lagarde said, adding that “many of its conclusions are already reflected in our current policy conduct”.Société Générale economist Anatoli Annenkov wrote in a note to clients that while the new ECB strategy was “commendably transparent”, it “cannot prevent mistakes in identifying temporary or sustained deviations from target”. More

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This article is an on-site version of our Trade Secrets newsletter. Premium subscribers can sign up here to get the newsletter delivered every Monday. Standard subscribers can upgrade to Premium here, or explore all FT newslettersAfter two weeks in which this newsletter didn’t kick off with Donald Trump, I get sucked in like a rowing boat being inexorably pulled into a frothing whirlpool. Trump abruptly announced he was stopping talks with Canada late last week over the country’s digital services tax, which caused Ottawa rapidly to rescind it. A deal with the EU may, or may not, be imminent. At any rate, the administration increasingly seems to accept that the alleged July 9 “deadline” to agree farcical “deals” to forestall its bogus “reciprocal tariffs” — note every noun of Trump’s trade policy requires derisive quote marks and a sardonic adjective — is not a deadline at all. At least I’m managing to keep Trump (at least explicitly) out of today’s main pieces, which are about the EU coming out with some odd stuff on what it wants to do about global trade governance and the froideur between Brussels and Beijing. Charted Waters, where we look at the data behind world trade, is on stock prices.Get in touch. Email me at [email protected] der Leyen goes out on a limbThe considered Trade Secrets view of Ursula von der Leyen’s European Commission and of the president herself, assuming I’m required to have one, is that she’s been generally quite sensible, if not spectacular, on trade. Occasionally, though, she gets a rush of blood to the head, and promises something inadvisable and/or impractical. One example was her first meeting with Trump back in 2020, in which she promised a quick-fire deal “in a few weeks” on trade, energy and technology. That occasioned some raised eyebrows, if not spitting of coffee, in the Charlemagne building occupied by the trade directorate in Brussels.Predictably it came to nothing. Nor, almost certainly, will her quixotic claim last week that the EU was working on reforming or even replacing the World Trade Organization. German chancellor (and fellow Christian Democrat) Friedrich Merz went further, explicitly wondering if the EU could work with trading partners to create something that, and I quote, “institutionally replaces what we actually already envisioned with the WTO, namely a dispute settlement mechanism through an institution like the one the WTO was supposed to be”.I’m going to go out on a limb (in my view, a relatively short and sturdy one) here and say this is unhelpful freelancing that isn’t going to happen. Here’s why.The vehicle of change von der Leyen and others have mentioned is co-operation between the EU and the Asia-Pacific CPTPP pact, about which there has been a whole lot of chatter in recent months. This chatter has got ahead of reality, as people inside the CPTPP have noted to me. I’m told that all that’s practical between the EU and CPTPP at the moment is a restatement of the principle of adherence to WTO rules, especially since no one really wants to break cover and enrage Trump.Apart from obvious big differences in approach on certain issues (food safety, data transfer), the CPTPP and the EU are legal behemoths with their own rule books and dispute settlement systems, practised and honed in the EU’s case and barely tested in the CPTPP’s. Even if you somehow got them substantially docked with each other, you’d have a governance structure excluding certainly India and very probably China. (That is, unless China acceded to the CPTPP in the meantime, which various CPTPP members are chary of and which would certainly liven up negotiations with the EU.) Global trade governance without the US, China and India isn’t quite Hamlet without the prince, but it’s certainly Waiting for Godot without three out of Estragon, Vladimir, Pozzo and Lucky — and with a similar, indefinitely postponed resolution.More fundamentally, an attempt to complement or supersede the WTO will founder on the same problem the WTO itself has. If big trading powers don’t want to make rules in vital areas and adhere to them, it doesn’t matter what structure you create. If India refuses point-blank to discuss environmental issues in the WTO, it’s not going to join a new gang to do so. (Admittedly, it wouldn’t be able to block plurilateral deals being adopted as it does inside the WTO. But it would be a tricky thing to create legally binding plurilaterals outside it.)If China wants to use its leverage over rare earths supply unilaterally, it won’t accede to a multilateral framework to constrain it. China loves the WTO, but largely because it enables it to strike multilateralist poses without actually having its state-capitalist system constrained very much by the rules.Proposing some fundamental reforms, or indeed a new WTO, means we’re back with our familiar old pal, “technocratic solutions to political problems”. It’s a discourse which has occupied thousands of hours of earnest seminar discussions and millions of words of think pieces and op-eds over the decades, but not really got anywhere. Anyway, in one minor way the WTO system got a boost last week when the UK decided to drop its slightly tedious performative reluctance and join the Multi-Party Interim Appeal Arbitration Arrangement (MPIA), the workaround WTO appellate body set up after the US paralysed the real one. Well done Britain. Nice to see you made it.The froideur between Brussels and BeijingMeanwhile, back in the world of realpolitik, another of von der Leyen’s interventions earlier this month was to be pretty cross with China. She’s an instinctive Atlanticist and China-sceptic, and so Beijing’s recent behaviour has given her a chance to give at least the second of those tendencies free rein. Nearly three months after China announced it was restricting rare earths exports — and these constraints are a lot more binding than previous ones — it’s increasingly hard to argue that the EU has been accidentally caught up in the blast, rather than being a secondary target along with the primary mark, the US.Yes, China prioritised suppliers to Volkswagen for those precious licences, but it has also subjected European and US companies alike to extraordinarily invasive demands for information. The country is trying to portray itself as constructive and multilateralist, but that’s convincing no one in Brussels. This recent piece from the South China Morning Post details how China’s charm offensive in the EU failed to work.If Beijing is trying to peel the EU off from alliance with the US, it’s not doing a good job of it. If it’s true the US and China are trying to corral countries into their geoeconomic herd, they’re both doing so mainly with sticks rather than carrots. At this rate, the EU-China summit in July is likely to be quite a tense affair. The EU has started to deploy its new range of weaponry against China — the international procurement instrument and the foreign subsidies regulation — and it’s always on the alert for a good opportunity to use the anti-coercion instrument (ACI), which really would be a big deal.Again: we are not in a new bipolar cold war. Instead it’s a pattern of shifting and divided allegiances, with the big powers frequently prioritising immediate self-interest rather than the careful construction of alliances. It’s going to be an interminably bumpy ride.Charted watersWho knows what’s driving financial markets these days? (Do they think there won’t be big new tariffs? Do they think the economy will do OK regardless?) Anyway, the big funk in US equities relative to European stocks is now all but over.Trade linksThe world’s leading economies have agreed a deal to spare the US’s largest companies from paying more corporate tax overseas, throwing into doubt the status of the biggest global tax deal in over a century.Last week, I wrote about how the US was choosing to lose the race for technological advantage in renewables and other green goods. As if to underline the point, the US Senate is not just slashing credits for wind and solar power, but actually imposing new taxes on future projects. Elon Musk, in his new role howling in the wilderness, is against.The FT reports on the Asian companies trying to avoid Trump’s tariffs, and on how the tariffs and cuts in aid are hurting the world’s poorest economies. The UK has negotiated partial exemptions from Trump’s tariffs for its car industry. But Lotus, one of its iconic manufacturers, is still packing up and going, shutting its eastern England plant apparently to relocate to the US.This is not explicitly to do with trade, but I liked this piece by neoconservative Bill Kristol on how the American public is standing up to Trump but elites are not. It is notable how little public pushback there has been from companies and business associations to the US president’s trade policy.Trade Secrets is edited by Harvey NriapiaRecommended newsletters for youChris Giles on Central Banks — Vital news and views on what central banks are thinking, inflation, interest rates and money. Sign up hereFT Swamp Notes — Expert insight on the intersection of money and power in US politics. Sign up here More

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 the working week. Here’s what we’re covering today:Trump budget bill faces crunch Senate voteCanada scraps tech taxHedge funds’ push into private creditAnd the start of WimbledonThe Senate will begin voting on amendments to Donald Trump’s landmark tax and spending bill later today. Here’s what you need to know after a fraught weekend of debating over the “big beautiful bill”.A recap: The debate almost did not happen. The Senate only narrowly agreed to start deliberations on Saturday following interventions by the president and vice-president JD Vance. Democrats demanded the 940-page bill be read out in full on the Senate floor and Thom Tillis, the Republican senator from North Carolina, said he would not seek re-election next year after voting against opening the debate, drawing a furious response from Trump who threatened him with a primary challenge. The non-partisan Congressional Budget Office, meanwhile, yesterday published its latest estimate of the bill’s cost to the national debt — $3.2tn over the next decade, taking it beyond the post-second world war high. The figure is disputed by Republicans. Why it matters: The bill would fund an extension of the sweeping tax cuts introduced in Trump’s first term by slashing spending on healthcare and social welfare programmes. It would also increase spending on the military and border security. But Democrats and some Republicans say the planned spending cuts will cut access to Medicaid services for the poor. The bill narrowly passed a vote in the House of Representatives last month after days of wrangling and now faces a potentially marathon voting session in the Senate. Once the Senate passes the bill it must go back to the House for final approval before being sent to the White House for the president’s signature. Trump has said he wants the bill passed by Friday, a public holiday in America. You can read more on the weekend’s events here.And here’s what else we’re keeping tabs on today:Markets: US stocks are expected to open in positive territory, following a record high close on Friday. The S&P 500 has risen 27 per cent since hitting a 15-month intraday low on April 7, several days after the president announced his “reciprocal tariff” plans.Interest rates: Federal Reserve Bank of Atlanta president Raphael Bostic speaks on the economic outlook and monetary policy and Federal Reserve Bank of Chicago president Austan Goolsbee participates in a moderated question-and-answer session before the Aspen Ideas Festival. Five more top stories1. Canada has scrapped a digital services tax that targeted US technology companies, in an effort to smooth trade negotiations with its neighbour after Trump described the levy as a “direct and blatant” attack. The decision to abandon the 3 per cent charge came hours before the levy was due to come into effect. Q&A: Canada correspondent Ilya Gridneff will be answering readers’ questions on the US-Canada relationship in a future edition of FirstFT Americas. Please send them to [email protected] or hit reply if you are reading this newsletter in your inbox.2. Donald Trump says he has found a “group of very wealthy people” to buy TikTok’s US operations as part of efforts to separate its ownership from China. “I’ll tell you in about two weeks . . . It’s a group of very wealthy people,” he said on Fox News yesterday. Here’s more on who the buyers may be.Nvidia: Insiders have sold more than $1bn of the company’s stock over the past 12 months. Jensen Huang’s net worth is now $138bn, according to Forbes.3. Big hedge funds are pushing into private credit as they seek to establish themselves as diversified financial institutions, with Millennium Management, Point72 and Third Point all aiming to launch new funds and strategies. Read the full story.4. Wall Street’s comeback has dramatically narrowed the gap with European stocks. The outperformance of American stocks is confounding bets that the president’s trade policies will spark a lasting rotation into other markets, particularly Europe. “The European problem has always been earnings, earnings, earnings,” said one fund manager.5. China’s export controls are spilling over into products beyond rare earths and magnets, threatening broader supply chain disruptions and undermining US claims that a new trade deal had resolved delays to shipments. Edward White has more details from Shanghai.More on rare earths: European industrial groups are turning to France as they attempt to cut dependence on China for the critical minerals.Chinese economy: Beijing has not been able to overcome dozens of “choke points” that are the essential building blocks of modern manufacturing.News in-depth© FT montage/Getty/Satellite image/ 2025 Maxar TechnologiesAs enemies closed in, a secret nuclear programme was built deep underground, shielded from American eyes. At least one rudimentary nuclear device was hastily built. This was Israel in 1967, when it faced an existential threat. But the story is not so different for Iran today, which has to confront the same question: to create a measure of final deterrence by sprinting to a nuclear weapon, or step back from the brink? We’re also reading . . . Trump shock? The real surprise is that, despite his policies and Middle East turmoil, US stocks are still rising, writes Ruchir Sharma.Financial repression: An economic policy war fuelled by state activism in shaping capital flows has begun, writes Martin Sandbu.Boomerang bankers: The phenomenon of those who walk away from the industry only to return is more common than you might think, writes Craig Coben.Business books round-up: Young workers getting to the top, managing crises, and advice on leading holistically — here’s the pick of this month’s business books.Chart of the day Some content could not load. Check your internet connection or browser settings.Europe’s tourist hotspots are braced for a record number of visitors this summer as holidaymakers spurn the US and the Middle East. Analysts say that, while European holidaymakers are partly responsible for the increase in visitor numbers to the continent’s top destinations, the main reason is the strong post-pandemic bounceback in visitors from the US.Take a break from the newsToday marks the start of Wimbledon, the only Grand Slam tennis tournament to be played on grass. FT Globetrotter has produced this guide to the men and women competing for two of tennis’s top trophies and a familiar feature that will be absent this year.Spanish wunderkind Carlos Alcaraz begins the defence of his title on Centre Court today More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.UK household disposable income fell at its fastest rate in two years in the first quarter, potentially knocking one of Labour’s key economic targets off course.Real household disposable income per head — the inflation-adjusted amount of income available for a household after taxes and subsidies — decreased 1 per cent in the first three months of the year, the steepest drop since the first quarter of 2023, according to figures from the Office for National Statistics published on Monday.The decline compared with a 1.8 per cent expansion in the fourth quarter, the ONS said.Last year, Prime Minister Sir Keir Starmer said the government would target household disposable income as a “milestone” for rating the success of his economic policies.The squeeze on incomes comes as economic growth is expected to slow from the first quarter’s 0.7 per cent pace amid still-high inflation, the impact of US President Donald Trump’s tariffs and a weakening jobs market.Starmer is also facing political blowback over U-turns on winter fuel payments and welfare, which have left chancellor Rachel Reeves with a £4.25bn hole in her budget.Matt Swannell, chief economic adviser to the EY Item Club, said that with earnings growth slowing and inflation set to rise, growth in real income “looks set to slow across the rest of this year”. However, he noted that with households saving a little less, “there is space for consumption to be cushioned from this slowdown”.The ONS confirmed on Monday that in the first quarter the UK economy grew at the fastest rate since the same period in 2024.However, the detailed figures showed that rising wages were offset by an increase in taxes and a jump in inflation.The proportion of disposable income that households save — the household saving ratio — decreased to 10.9 per cent in the first three months, down from 12 per cent in the previous three-month period, marking the first decline in two years.Liz McKeown, ONS director of economic statistics, said: “The saving ratio fell for the first time in two years this quarter, as rising costs for items such as fuel, rent and restaurant meals contributed to higher spending.”She pointed out that the ratio remained “relatively strong”, as it compares with an average of 5.5 per cent in the three years to 2019. Sandra Horsfield, economist at Investec, said: “There would seem to be scope for further declines in future as lower interest rates, over time, encourage households to save less. This can act as a support to economic activity.”The composition of growth in the UK has left the economy “looking a bit healthier”, according to Ruth Gregory, deputy chief economist at consultancy Capital Economics, as the expansion was less dependent on business investment and net trade, and more on household consumption.Nevertheless, growth in the first three months was propelled by business activity being brought forward ahead of US tariffs, and by a one-off leap in spending on aircraft. “These sources of growth won’t be sustained,” Gregory said.Separate monthly figures published earlier in June showed that the economy contracted by 0.3 per cent between March and April. Economists polled by Reuters forecast economic growth to slow to only 0.1 per cent in the second quarter. Weakening real income growth, tightened fiscal policy and high global trade market volatility weigh on the UK economic outlook, said Swannell.“After the strong start to 2025, the UK looks set for another year of weak growth, with headwinds continuing to intensify,” he said. A Treasury spokesperson said: “The UK saw the fastest economic growth in the G7 in the opening quarter of this year. Since July, real wages have grown more than they did in the entire decade after 2010 and living standards are up 1.2 per cent, compared to the 0.4 per cent rise seen over the whole 2019-2024 parliament. This is beating OBR forecasts.”   More