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Good 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 stories
1. 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 story
From 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.
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Take a break from the news
As 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.
