Trump’s ‘big, beautiful’ bill struggles to get US Senate approval

Good morning and welcome back to the working week. Here’s what we’re covering today:

• Trump budget bill faces crunch Senate vote

• Canada scraps tech tax

• Hedge funds’ push into private credit

• And the start of Wimbledon

---

The Senate will begin voting on amendments to Donald Trump’s landmark tax and spending bill later today. Here’s what you need to know after a fraught weekend of debating over the “big beautiful bill”.

A recap: The debate almost did not happen. The Senate only narrowly agreed to start deliberations on Saturday following interventions by the president and vice-president JD Vance. Democrats demanded the 940-page bill be read out in full on the Senate floor and Thom Tillis, the Republican senator from North Carolina, said he would not seek re-election next year after voting against opening the debate, drawing a furious response from Trump who threatened him with a primary challenge. The non-partisan Congressional Budget Office, meanwhile, yesterday published its latest estimate of the bill’s cost to the national debt — $3.2tn over the next decade, taking it beyond the post-second world war high. The figure is disputed by Republicans.

Why it matters: The bill would fund an extension of the sweeping tax cuts introduced in Trump’s first term by slashing spending on healthcare and social welfare programmes. It would also increase spending on the military and border security. But Democrats and some Republicans say the planned spending cuts will cut access to Medicaid services for the poor. The bill narrowly passed a vote in the House of Representatives last month after days of wrangling and now faces a potentially marathon voting session in the Senate. Once the Senate passes the bill it must go back to the House for final approval before being sent to the White House for the president’s signature. Trump has said he wants the bill passed by Friday, a public holiday in America. You can read more on the weekend’s events here.

And here’s what else we’re keeping tabs on today:

• Markets: US stocks are expected to open in positive territory, following a record high close on Friday. The S&P 500 has risen 27 per cent since hitting a 15-month intraday low on April 7, several days after the president announced his “reciprocal tariff” plans.

• Interest rates: Federal Reserve Bank of Atlanta president Raphael Bostic speaks on the economic outlook and monetary policy and Federal Reserve Bank of Chicago president Austan Goolsbee participates in a moderated question-and-answer session before the Aspen Ideas Festival.

Five more top stories

1. Canada has scrapped a digital services tax that targeted US technology companies, in an effort to smooth trade negotiations with its neighbour after Trump described the levy as a “direct and blatant” attack. The decision to abandon the 3 per cent charge came hours before the levy was due to come into effect.

• Q&A: Canada correspondent Ilya Gridneff will be answering readers’ questions on the US-Canada relationship in a future edition of FirstFT Americas. Please send them to firstft@ft.com or hit reply if you are reading this newsletter in your inbox.

2. Donald Trump says he has found a “group of very wealthy people” to buy TikTok’s US operations as part of efforts to separate its ownership from China. “I’ll tell you in about two weeks . . . It’s a group of very wealthy people,” he said on Fox News yesterday. Here’s more on who the buyers may be.

• Nvidia: Insiders have sold more than $1bn of the company’s stock over the past 12 months. Jensen Huang’s net worth is now $138bn, according to Forbes.

3. Big hedge funds are pushing into private credit as they seek to establish themselves as diversified financial institutions, with Millennium Management, Point72 and Third Point all aiming to launch new funds and strategies. Read the full story.

4. Wall Street’s comeback has dramatically narrowed the gap with European stocks. The outperformance of American stocks is confounding bets that the president’s trade policies will spark a lasting rotation into other markets, particularly Europe. “The European problem has always been earnings, earnings, earnings,” said one fund manager.

5. China’s export controls are spilling over into products beyond rare earths and magnets, threatening broader supply chain disruptions and undermining US claims that a new trade deal had resolved delays to shipments. Edward White has more details from Shanghai.

• More on rare earths: European industrial groups are turning to France as they attempt to cut dependence on China for the critical minerals.

• Chinese economy: Beijing has not been able to overcome dozens of “choke points” that are the essential building blocks of modern manufacturing.

News in-depth

As enemies closed in, a secret nuclear programme was built deep underground, shielded from American eyes. At least one rudimentary nuclear device was hastily built. This was Israel in 1967, when it faced an existential threat. But the story is not so different for Iran today, which has to confront the same question: to create a measure of final deterrence by sprinting to a nuclear weapon, or step back from the brink?

We’re also reading . . . 

• Trump shock? The real surprise is that, despite his policies and Middle East turmoil, US stocks are still rising, writes Ruchir Sharma.

• Financial repression: An economic policy war fuelled by state activism in shaping capital flows has begun, writes Martin Sandbu.

• Boomerang bankers: The phenomenon of those who walk away from the industry only to return is more common than you might think, writes Craig Coben.

• Business books round-up: Young workers getting to the top, managing crises, and advice on leading holistically — here’s the pick of this month’s business books.

Chart of the day 

Europe’s tourist hotspots are braced for a record number of visitors this summer as holidaymakers spurn the US and the Middle East. Analysts say that, while European holidaymakers are partly responsible for the increase in visitor numbers to the continent’s top destinations, the main reason is the strong post-pandemic bounceback in visitors from the US.

Take a break from the news

Today marks the start of Wimbledon, the only Grand Slam tennis tournament to be played on grass. FT Globetrotter has produced this guide to the men and women competing for two of tennis’s top trophies and a familiar feature that will be absent this year.