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Good morning and welcome back to FirstFT Asia. On today’s agenda:
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US and Vietnam strike a trade deal
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The Dalai Lama defies Beijing
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Is 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 to 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 stories
1. 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. UK government bonds and the pound fell sharply after Sir Keir Starmer declined to back a tearful Rachel Reeves in the House of Commons following Labour’s dramatic gutting of its welfare bill. One Reeves ally said the market reaction was a “clear indication” that gilt investors saw the chancellor as a bulwark against excessive government borrowing.
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
Trump 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 news
The 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.
