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Good morning and welcome to FirstFT Asia. In today’s newsletter:
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When will Congress pass Trump’s tax bill?
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US shoppers ditch Temu and Shein
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China’s “choke points”
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A 150-year passion for Japonisme
Donald 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.
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 would 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:
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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.
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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 we’re keeping tabs on today:
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Economic data: Japan releases its June Tankan survey, which will provide key insights into business sentiment and economic conditions in the country.
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Mayoral deadline: New York City will announce the final winner of New York’s Democratic mayoral primary, expected to be democratic socialist Zohran Mamdani.
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Results: Tata Motors reports June sales.
Five more top stories
1. 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 Read
Despite China rise’s to the world’s second-biggest economy and one of two true military superpowers, the nation has not been able to overcome dozens of industrial “choke points”. From a western standpoint, the vulnerabilities are holding back Beijing’s quest for independence and leave it susceptible to US pressure in an era of trade wars and export controls.
We’re also reading . . .
Chart of the day
Hong Kong’s bull market is leaving China behind, in a sign that a lacklustre economic recovery and trade tensions with the US have weighed on investor sentiment in the mainland. The mainland stock market, which features a greater number of companies in traditional sectors such as heavy industry, property and energy, has sputtered while the Hang Seng index grew 20 per cent in the first six months of the year.
Take a break from the news
A London department store was founded 150 years ago on a passion for Japonisme. Now, it’s on full display. Liberty is known as a place for the “artistic shopper,” as Oscar Wilde once put it, but more specifically its textiles stand out. Read more from HTSI on the store’s new archival exhibition, which will make an appearance this summer at Osaka’s World Expo 2025.
