Trump’s ‘big, beautiful bill’ passes the House of Representatives

Good morning, happy Friday and welcome back to FirstFT Asia. In today’s newsletter:

• Trump’s landmark bill passes the House

• China criticises US-Vietnam trade deal

• Pakistan’s strategy to woo the US president

Donald Trump has secured a political victory after the House of Representatives gave final approval to his flagship tax and spending legislation.

What’s happening? With the bill’s passage, Trump plans to sign it into law at 5pm today (local time), according to White House press secretary Karoline Leavitt. The 218 to 214 vote by the House yesterday came after Democratic minority leader Hakeem Jeffries spoke against what he called the “ugly” legislation for a record eight hours and 44 minutes, in a symbolic act of defiance.

What’s in the bill? The legislation extends vast tax cuts from Trump’s first administration, paid for in part by steep cuts to Medicaid, the public health insurance scheme for low-income and disabled Americans, and other social welfare programmes. The bill will also roll back Biden-era tax credits for clean energy, while scaling up investment in the military and funds for Trump’s crackdown on immigration. It has been projected to add more than $3tn to the US debt over the long term, raising worries among economists.

Read more about Trump’s “big, beautiful bill”, which has already set the political battle lines ahead of next year’s midterm elections.

• More US news: The US economy surpassed expectations to add 147,000 jobs in June, leading investors to scale back their bets on interest rate cuts.

• Interview: Abbe Lowell, the star lawyer who defended Jared Kushner and Hunter Biden, has warned that Trump is pushing US democracy to a breaking point.

Here’s what else we’re keeping tabs on today and over the weekend:

• Economic data: The Philippines publishes June inflation figures and Singapore reports May retail sales. On Sunday, Vietnam releases a batch of data, including June inflation and second-quarter GDP.

• India-Argentina relations: Indian Prime Minister Narendra Modi meets Argentine President Javier Milei in Buenos Aires.

• Brics annual summit: A two-day gathering of the group of developing countries begins Sunday in Rio de Janeiro, Brazil, with India’s Modi and Chinese Premier Li Qiang among the leaders in attendance.

• Birthday: The Dalai Lama turns 90 on Sunday. The Tibetan Buddhist leader recently asserted “sole authority” over a succession process contested by China.

How well did you keep up with the news this week? Take our quiz.

Five more top stories

1. China has hit out at the US-Vietnam trade deal, amid concerns in Beijing that Trump is using his “liberation day” tariff negotiations with third countries to curb its export machine. The US president’s focus on punishing “trans-shipping” of goods — widely believed to be aimed at Chinese re-exports to the US — has drawn Beijing’s ire.

• US-China trade: The three largest developers of chip design software have said the US has removed recent restrictions on sales in China.

• More trade news: South Korea’s president has expressed pessimism at agreeing a deal with the US before Washington’s self-imposed deadline next week.

2. China’s central bank has asked European financial institutions for advice on dealing with the effects of low interest rates. The move suggests the People’s Bank of China is concerned about a multiyear deflationary environment, which would threaten bank profits and financial stability — similar to what many European countries experienced last decade.

3. The $33bn privatisation of a major Toyota supplier has been called out as a “study in opacity” by an investment industry group. The Hong Kong-based Asian Corporate Governance Association released a searing attack yesterday of Japan’s biggest management buyout, saying it would “serve as a referendum on the credibility of Japan’s corporate governance revolution”.

4. Trump and Volodymyr Zelenskyy will discuss the abrupt halt in some key US weapons deliveries to Kyiv in a call on Friday or the coming days, the Ukrainian president said yesterday. Ukraine summoned a senior US diplomat on Wednesday after it was caught off guard by the Pentagon’s decision to stop delivering several advanced weapons systems.

5. Fast-fashion retailer Shein has been fined €40mn by French regulators, a record penalty, for misleading consumers on price reductions and environmental commitments. Here’s what the 11-month investigation into the China-founded retailer found.

News in-depth

Cash-strapped Pakistan is hoping to get on Donald Trump’s good side and stave off hefty trade tariffs. Its strategy? Pitching itself as a bitcoin mining hub, a source of rare earths and offering its support for a Nobel Peace prize for the US president. Humza Jilani has more on Islamabad’s effort to woo the White House.

We’re also reading . . . 

• Japan’s great unsticking: The end of the zero-interest era is unleashing competition in the banking sector and changes in saver and investor behaviour, writes Leo Lewis.

• Artificial intelligence: Tim Harford’s latest column asks — as AI becomes ever more capable, is any job secure?

• UK Labour: It feels as if we are already mourning a lost government, writes Robert Shrimsley, and these are unlikely to be the last tears shed.

Chart of the day 

US tariff revenues surged almost fourfold from a year earlier to a record $24.2bn in May, the first full month in which Trump’s 10 per cent global tariff was in effect.

Take a break from the news

Don’t miss HTSI’s guide to Bali, where “everything feels like a ritual”, as told by Ronald Akili, the founder of beach club Desa Potato Head.