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Today’s agenda: German worker shortage; Labour’s year in power; the battle to save Tesla; and less recreational reading among children
Good morning and welcome back. Donald Trump has secured a political victory after the House of Representatives gave final approval to his flagship tax and spending legislation.
What happened? The 218-to-214 vote came hours after Trump quashed a rebellion among Republican lawmakers who threatened to hold up the bill, which he plans to sign into law at 5pm today (local time), meeting his self-imposed deadline. In a symbolic act of defiance, Democratic minority leader Hakeem Jeffries spoke against what he called the “ugly” legislation for a record eight hours and 44 minutes, attacking the “devastating consequences” of “this reckless Republican budget”.
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 US debt over the long term, raising worries among economists.
What does this mean? The president’s legislative win caps off a period of aggressive policymaking that has enabled the US president to consolidate his power and influence. In the past month, Trump has stepped up his immigration crackdown and ordered the military to the streets of Los Angeles, launched strikes on Iran and had Nato allies bow to US demands for big jumps in defence spending. He also scored a key victory at the US Supreme Court, which issued a ruling limiting federal judges’ power to block administration policies.
Read more about Trump’s “big, beautiful bill”, which sets the political battle lines ahead of next year’s midterm elections.
Here’s what else we’re keeping tabs on today and over the weekend:
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Economic data: The EU releases May housing market and producer price inflation figures, while Germany reports on May industrial orders.
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US: Markets are closed today as July 4 celebrations kick off yearlong events marking the 250th anniversary of America’s Declaration of Independence.
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Moldova: President Maia Sandu holds Chișinău’s first summit with EU leaders António Costa and Ursula von der Leyen to discuss the country’s membership bid.
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Brazil: The Brics summit begins tomorrow in Rio de Janeiro and will continue until July 7.
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Opec+: The cartel’s eight member states hold their monthly online meeting on Sunday to decide on August production levels.
How well did you keep up with the news this week? Take our quiz.
Five more top stories
1. The EU’s independent watchdog has warned von der Leyen against rushing through deregulation without the proper safeguards, intensifying pressure on the European Commission president ahead of a no-confidence vote. European Ombudsman Teresa Anjinho said that the commission risked eroding trust by pushing through its simplification drive without consulting civil society.
2. International mediators have moved closer to securing a two-month ceasefire in Gaza, ahead of a meeting next week between Trump and Israeli Prime Minister Benjamin Netanyahu. “Serious negotiations” to end the war — a long-held Hamas demand — would be initiated on the first day of a truce, according to the draft. Those talks would address issues such as postwar governance and security arrangements for the enclave as well as the release of remaining Israeli hostages.
3. German business has warned that the army’s growing need for new recruits would deepen a worker shortage. Company representatives said they backed efforts to bolster the military to support Nato’s deterrence against Russia, but raised concerns about government plans for the voluntary conscription of 5,000 18-year-olds each year.
4. Exclusive: Hitachi Energy has warned that power spikes from artificial intelligence training are threatening to destabilise global supply, and called for rules to alert utilities to the wild fluctuations in data centre demand. Andreas Schierenbeck, chief executive of the world’s biggest transformer maker, said “volatility on top of volatility” was making it challenging to keep the lights on. Read the full interview.
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AI and work: As the technology becomes ever more capable, the question is not just which jobs are safe, but whether we’ll like the new ones that will emerge, writes Tim Harford.
5. Fundraising from initial public offerings in London has tumbled to its lowest level in at least 30 years, in a sign of the waning attractiveness of the UK’s equity markets for companies and investors. The five listings in the first six months of the year raised only £160mn, confounding hopes that 2025 could mark a revival in listings activity.
How can Africa balance growth with the shift to cleaner energy? Register for free to join policymakers, experts and leaders in an online discussion on July 9.
News in-depth
US tariff receipts surged to $24.2bn in May, but the data highlights the potential for the aggressive tariff increases to distort global trade flows. Here’s our analysis visualising the impact of Trump’s trade war.
We’re also reading and listening to . . .
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Tesla: Having “finally woken up”, Elon Musk battles to save the carmaker as Trump’s tax bill risks costing the company billions in profit from sales of emissions credits.
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Unhedged 🎧: The dollar is having its worst year since 1973, which was a really bad year. Katie Martin and Ian Smith discuss the glow-down of the currency.
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Big Read: Fewer children are reading for pleasure. Can the trend be reversed?
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Megacities: What the far right feels about metropoles isn’t physical fear, says Simon Kuper, it’s discomfort.
Chart of the day
One year on from their election victory, the UK’s Labour party searches for direction. This week’s indelible image of Sir Keir Starmer failing to back his distraught chancellor fully was a metaphor for a prime minister accused of being disconnected from his own MPs and from voters. Read more on how Starmer fumbled his first year in power.
Take a break from the news
Postcard from Iceland: for one day of the year, fishermen are the stars as communities across the country celebrate Sjómannadagurinn — Fishermen’s Day — and visitors are welcome to join the party.
