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Good morning and welcome again to FirstFT Asia. In right this moment’s e-newsletter:
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The US-Indonesia commerce deal
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How BYD caught up with Tesla
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Taiwan’s Han Kuang army drills
Donald Trump has stated the US has reached a commerce cope with Indonesia that can end result within the south-east Asian nation paying a 19 per cent tariff on its exports to the US and shopping for American power and Boeing jets.
Deal particulars: In a social media publish, Trump wrote that Indonesia had dedicated to purchasing $15bn value of power exports and $4.5bn of agricultural items from the US. It will additionally purchase “50 Boeing Jets, a lot of them 777’s”. He additionally instructed reporters Indonesia was “identified for . . . very high-quality copper, which we might be utilizing” — a remark that comes after he imposed a 50 per cent levy on the metallic final week.
Why it issues: The preliminary deal is the primary with the greater than 20 buying and selling companions who final week obtained letters from the US president threatening tariffs (Trump had threatened to impose a 32 per cent levy on Indonesia). However he stated yesterday he thought the most recent association — underneath which the US pays zero tariffs on exports to Indonesia — was “a very good deal for each events”. Here are more details.
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US-China commerce information: Commerce secretary Howard Lutnick stated Washington’s reversal of restrictions on gross sales of chips to China adopted current commerce negotiations with Beijing over uncommon earths.
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US-EU: Brussels plans to impose tariffs on Boeing aircraft, cars and bourbon as a part of a proposal for additional retaliation in opposition to €72bn of annual US imports if commerce talks with Washington fail.
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Opinion: As Trump returns to tariffs, Martin Wolf asks, what is to be done about this insanity?
Right here’s what else we’re retaining tabs on right this moment:
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Financial coverage: Indonesia’s central financial institution pronounces its rate of interest resolution.
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China: The four-day Worldwide Provide Chain Expo begins in Beijing, with AI chipmaker Nvidia participating for the primary time.
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Outcomes: Tech Mahindra, ASML, Goldman Sachs and Morgan Stanley report earnings.
5 extra prime tales
1. China’s financial system expanded 5.2 per cent yr on yr within the second quarter because the world’s greatest exporter shrugged off the impression of Trump’s commerce struggle. The speed, which beat analysts’ expectations, reveals how China has been in a position to preserve progress on monitor by exports and funding even as it struggles with weak demand at home.
2. The UK authorities arrange a secret multibillion-pound scheme to relocate 1000’s of Afghans to Britain after a knowledge leak put them susceptible to reprisals from the Taliban — and gagged the media with a super-injunction. The names, contact data and different private particulars of about 25,000 Afghans had been accidentally disclosed by a British soldier in emails in February 2022.
3. Donald Trump has privately inspired Ukraine to step up deep strikes on Russian territory, even asking Volodymyr Zelenskyy whether he could strike Moscow if the US offered long-range weapons, in accordance with folks briefed on the discussions.
4. Yields on 10-year Japanese authorities bonds hit their highest degree because the 2008 monetary disaster as markets start to cost within the danger of populist marketing campaign pledges and political uncertainty forward of an election. “The market bought off on the expectation the [ruling Liberal Democratic party] goes to lose its majority within the higher home,” stated Wei Li, head of multi-asset funding at BNP Paribas in China. Read the full story.
5. Jamie Dimon has warned that the independence of the US Federal Reserve is “important” because the Trump administration will increase its strain on Jay Powell, the central financial institution’s chair, to chop rates of interest. The JPMorgan chief’s feedback got here as Treasury secretary Scott Bessent stated the “formal process” to select Powell’s successor had begun.
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Wall Avenue outcomes: JPMorgan Chase and Citigroup struck an upbeat tone on the power of American shoppers, underscoring how the US financial system has remained resilient regardless of Trump’s tariffs.
The Huge Learn
China’s BYD is catching up with Tesla and is poised to overhaul its US rival in electrical automobile gross sales for the primary time. Prior to now three years, the Chinese language auto group has narrowed the know-how hole between the 2 carmakers, together with in autonomous driving. Learn what’s powering BYD’s headway in the EV market.
We’re additionally studying . . .
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Taiwan defence: Taiwan’s army has taken the annual Han Kuang workout routines to civilians’ doorsteps this yr, as a part of efforts to raised put together for a Chinese language assault.
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‘Epstein recordsdata’: For years Trump insisted on a deep-state plot that solely he may expose. Now he says there is nothing to show, writes Edward Luce.
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Uncommon earths: A small mining firm received Pentagon backing as Trump sought to counter China and take a brand new method to national defence.
Chart of the day
Chinese language ecommerce giants JD.com and Alibaba have ignited a battle for the nation’s fast-growing instantaneous retail market, luring shoppers with huge discounts in a push to seize market share from rival Meituan.
Take a break from the information
Maxed out on matcha lattes? Hojicha, a new Japanese green tea trend, is coming to a café close to you.
