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Good morning, I’m back to Firstft Asia. In today’s newsletter:
US Indonesia Trade Contract
How BYD caught up with Tesla
Taiwan’s Han Kuan military training
Donald Trump said the US will reach a trade deal with Indonesia, with Southeast Asian countries paying 19% tariffs on exports to the US and buying American energy and Boeing Jets.
Transaction Details: In a social media post, Trump wrote that Indonesia has pledged to buy $15 billion worth of energy exports and $4.5 billion in agricultural products from the United States. I also buy the “50 Boeing Jet, many of which are 777.” He also said that reporters Indonesia is “a very high quality copper we use, known for its very high quality copper.”
Why it matters: The reserve transaction is the first transaction with more than 20 trading partners who received a letter threatening tariffs from the US president last week (Trump threatened to impose 32% collection on Indonesia). However, he said yesterday that he thought the latest arrangement in which the US would pay zero tariffs on exports to Indonesia was “a significant deal for both parties.” Details are shown below.
US China Trade News: Commerce Secretary Howard Lutnick said Washington has reversed restrictions on selling chips to China, followed by recent trade negotiations with Beijing on rare earths.
US-EU: Brussels plans to impose tariffs on Boeing aircraft, cars and bourbon as part of a proposal for further retaliation against the US import of 72 billion euros if trade with Washington fails.
Opinion: When Trump returns to tariffs, does Martin Wolf ask what to do about this insanity?
Here is the other thing we keep tabs today:
Monetary Policy: Indonesia’s central bank announces interest rate decisions.
China: The four-day international supply chain expo begins in Beijing, with AI Chipmaker Nvidia taking part in the first time.
Results: Tech Mahindra, ASML, Goldman Sachs and Morgan Stanley report revenue.
Five more top stories
1. China’s economy grew 5.2% year-on-year in the second quarter. The rate that beats analysts’ expectations shows that China was able to maintain growth through exports and investment, even as it fought weak demand at home.
2. The UK government has set up a secret multi-billion pound scheme to relocate thousands of Afghans to the UK and over-confided the media after data leaks were at risk of retaliation from the Taliban. The names, contact information and other personal information of approximately 25,000 Afghans were incorrectly disclosed by British soldiers in February 2022.
3. Donald Trump has personally encouraged Ukraine to intensify deep attacks on Russian territory, and even asked Voldimi Zelensky whether the US could hit Moscow if it provided long-range weapons.
4. Since the 2008 financial crisis, the Japanese government’s 10-year bond yields have reached the highest level as markets begin to acquire prices for the risks of populist campaigns and the risks of political uncertainty ahead of elections. Wei Li, Head of Multi-Asset Investment at BNP Paribas, China, said: Please read the entire story.
5. Jamie Dimon warned that the independence of the US Federal Reserve is “important” as the Trump administration puts pressure on central bank chair Jay Powell to cut interest rates. The comments from JPMorgan’s chief came when Treasury Secretary Scott Bescent said a “formal process” had begun to select a successor to Powell.
Wall Street Results: JPMorgan Chase and Citigroup hit a bright tone on the strength of American consumers, highlighting how the US economy is resilient despite Trump’s tariffs.
Big reading
China’s BYD is catching up with Tesla, poised to surpass its US rivals for the first time in selling electric vehicles. Over the past three years, Chinese automotive groups have narrowed the technological gap between the two automakers, including autonomous driving. Read what’s driving BYD’s progress in the EV market.
We’re reading too. . .
Taiwan Defense: Taiwanese forces have taken the annual Han Kuan practice to the civilians’ gateway this year as part of their efforts to improve preparations for China’s attacks.
“The Epstein File”: For many years, Trump claimed a deep state plot that only he could reveal. Now he says there’s nothing to show, Edward Ruth writes.
Rare Earth: A small mining company has been supported by the Pentagon as Trump attempted to counter China and adopt a new approach to national defense.
The chart of the day
Chinese e-commerce giants JD.com and Alibaba have sparked the battle against the country’s burgeoning instant retail market, entice shoppers with big discounts to capture market share from rival Mate Anne.
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Take a break from the news
Have you achieved the best matcha latte? Hojicha, a new Japanese green tea trend, is coming to a cafe near you.
