FirstFT: Donald Trump proclaims US-Indonesia commerce deal

Good morning and welcome again to FirstFT Asia. In in the present day’s e-newsletter:

• The US-Indonesia commerce deal

• How BYD caught up with Tesla

• Taiwan’s Han Kuang navy drills

Donald Trump has mentioned the US has reached a commerce take care of Indonesia that may outcome within the south-east Asian nation paying a 19 per cent tariff on its exports to the US and shopping for American vitality and Boeing jets.

Deal particulars: In a social media publish, Trump wrote that Indonesia had dedicated to purchasing $15bn value of vitality exports and $4.5bn of agricultural items from the US. It might additionally purchase “50 Boeing Jets, many of them 777’s”. He additionally informed reporters Indonesia was “known for . . . very high-quality copper, which we will be using” — 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 acquired letters from the US president threatening tariffs (Trump had threatened to impose a 32 per cent levy on Indonesia). However he mentioned yesterday he thought the newest association — below which the US can pay zero tariffs on exports to Indonesia — was “a good deal for both parties”. Listed here are extra particulars.

• US-China commerce information: Commerce secretary Howard Lutnick mentioned Washington’s reversal of restrictions on gross sales of chips to China adopted latest commerce negotiations with Beijing over uncommon earths.

• US-EU: Brussels plans to impose tariffs on Boeing plane, automobiles and bourbon as a part of a proposal for additional retaliation towards €72bn of annual US imports if commerce talks with Washington fail.

• Opinion: As Trump returns to tariffs, Martin Wolf asks, what’s to be accomplished about this insanity?

Right here’s what else we’re conserving tabs on in the present day:

• Financial coverage: Indonesia’s central financial institution proclaims its rate of interest determination.

• China: The four-day Worldwide Provide Chain Expo begins in Beijing, with AI chipmaker Nvidia collaborating for the primary time.

• Outcomes: Tech Mahindra, ASML, Goldman Sachs and Morgan Stanley report earnings.

5 extra prime tales

1. China’s economic system expanded 5.2 per cent 12 months on 12 months within the second quarter because the world’s largest exporter shrugged off the affect of Trump’s commerce warfare. The speed, which beat analysts’ expectations, reveals how China has been capable of maintain progress on observe by way of exports and funding even because it struggles with weak demand at residence.

2. The UK authorities arrange a secret multibillion-pound scheme to relocate 1000’s of Afghans to Britain after an information leak put them susceptible to reprisals from the Taliban — and gagged the media with a super-injunction. The names, contact info and different private particulars of about 25,000 Afghans had been unintentionally 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 or not he may strike Moscow if the US offered long-range weapons, in line with individuals briefed on the discussions.

4. Yields on 10-year Japanese authorities bonds hit their highest stage because the 2008 monetary disaster as markets start to cost within the threat of populist marketing campaign pledges and political uncertainty forward of an election. “The market sold off on the expectation the [ruling Liberal Democratic party] is going to lose its majority in the upper house,” mentioned Wei Li, head of multi-asset funding at BNP Paribas in China. Learn the total story.

5. Jamie Dimon has warned that the independence of the US Federal Reserve is “critical” because the Trump administration will increase its stress 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 mentioned the “formal process” to pick out Powell’s successor had begun.

• Wall Road outcomes: JPMorgan Chase and Citigroup struck an upbeat tone on the power of American customers, underscoring how the US economic system has remained resilient regardless of Trump’s tariffs.

The Massive 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. Up to now three years, the Chinese language auto group has narrowed the expertise hole between the 2 carmakers, together with in autonomous driving. Learn what’s powering BYD’s headway within the EV market.

​​We’re additionally studying . . . 

• Taiwan defence: Taiwan’s navy has taken the annual Han Kuang workouts to civilians’ doorsteps this 12 months, as a part of efforts to higher put together for a Chinese language assault.

• ‘Epstein files’: For years Trump insisted on a deep-state plot that solely he may expose. Now he says there’s nothing to indicate, writes Edward Luce.

• Uncommon earths: A small mining firm gained Pentagon backing as Trump sought to counter China and take a brand new method to nationwide defence.

Chart of the day

Chinese language ecommerce giants JD.com and Alibaba have ignited a battle for the nation’s fast-growing immediate retail market, luring buyers with big reductions in a push to seize market share from rival Meituan.

Take a break from the information

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