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Good morning and welcome back to FirstFT, your early morning business briefing. Here’s what we’re covering today:
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Republicans’ proposed tax bill
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The US microcap ‘boom’
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Trump’s Middle East doctrine
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And New York’s best running clubs
Republicans have outlined far-reaching plans to gut government support for clean energy as part of a series of legislative proposals to fund sweeping tax cuts promised by US President Donald Trump. Here are the details.
What’s in the draft legislation? Congressional lawmakers on the powerful House of Representatives’ ways and means committee, which is responsible for writing tax law, released draft legislation yesterday. It includes proposals to end renewable energy subsidies and scrap tax breaks for electric vehicle purchases, offering the first glimpse of how Republicans plan to reshape the US tax code. The bill would scrap a $7,500 tax credit for buyers of EVs after 2026 and a $4,000 credit for second-hand EVs from the end of this year. It would also wind down tax credits for most renewable energy investment and production by 2031. The bill would also raise the cap on the amount of local levies that taxpayers could deduct from their federal tax bill, from $10,000 to $30,000.
What comes next? The draft bill, the heart of the omnibus “Big Beautiful Bill” that Trump hopes to jam through Congress, will face scrutiny by the members of the ways and means committee later today before being debated by the wider House. The legislation’s assault on green energy tax credits is aimed at unpicking former president Joe Biden’s flagship climate legislation, the Inflation Reduction Act, and has drawn the ire of Democrats.
Here’s what else we’re keeping tabs on today:
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Trump in Saudi Arabia: The US president has arrived in Riyadh on the first leg of his Middle East visit, with high expectations of securing a raft of multibillion-dollar deals. He said his travel plans could change to allow him to join Russia-Ukraine peace talks in Istanbul on Thursday “if I think things could happen”.
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Economic data: US inflation data is released today. The consumer price index is expected to have edged higher last month.
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Companies: Sportswear companies On Holding and Under Armour report results, as does Brazilian digital lender Nubank. Boeing announces orders and deliveries for April.
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France: The 78th Cannes film festival begins today and will run until May 24.
Donald Trump’s return to the White House has triggered heightened tensions with China, raising big questions for global business, markets and the rest of the world. Join us on May 28 for insights into the most consequential geopolitical rivalry of our time. Register now and put questions to our panel.
Five more top stories
1. Xi Jinping has pledged support for Panama and offered greater co-operation with Latin American countries at a summit of 33 Latin American and Caribbean leaders. The Chinese president also announced measures to deepen ties with the region, including visa-free travel and a $10bn development credit line, as Beijing courts countries Washington has traditionally considered to be in its backyard.
2. Nissan has more than doubled the number of job cuts it is planning to 20,000, while Honda has estimated that a $3bn blow from US tariffs will cut its annual profits by more than half, as leading Japanese carmakers struggle with restructuring and fallout from the trade war. “The impact of tariff policies is huge,” said Honda chief executive Toshihiro Mibe, adding that its modelling represented a worst-case scenario.
3. The volatile market for small US initial public offerings is “booming” thanks to a surge of Chinese listings on New York’s Nasdaq as companies race to beat a rule change that blocks the smallest deals. George Steer has more on the surge of microcap IPOs.
4. Brussels is preparing to use capital controls and tariffs against Russia in case Hungary blocks an extension of the EU’s economic sanctions imposed on Moscow in response to its war in Ukraine. The European Commission has told national capitals that a large portion of the sanctions could be moved on to a different legal basis.
5. Companies have abandoned almost half the projects in a $5bn Texas programme to fund gas power plant construction and prevent more electricity blackouts, as they struggle with ballooning expenses and supply chain delays. Here are the groups walking away from the state-backed scheme.
News in-depth
Donald Trump won last year’s election on a pledge to rid America of radical leftists. Now he is adopting some of their policies. Yesterday’s executive order to slash US drug prices is the latest example of the president borrowing ideas from the populist left, much to the discomfort of many in his own party. James Politi looks at the president’s adoption of a Sanders-style approach in some areas of economic policy.
We’re also reading, listening to and watching . . .
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Trump’s Middle East doctrine: Israel has been cut out of dealmaking with Iran and Saudi Arabia as the US pursues its own objectives in the region, writes Kim Ghattas.
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🎥 Steve Bannon: The architect of the America First movement told the FT that Trump “will serve a third term” in a wide-ranging interview with Edward Luce.
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🎧 Tech Tonic: In the final episode of our series, John Thornhill discusses with Sylvia Pfeifer, Ryan McMorrow and Demetri Sevastopulo on how defence tech is reshaping geopolitics.
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Europe’s capital markets: Hampered by a lack of competitiveness, the EU is making a new push to deepen the integration of its fragmented capital markets.
Chart of the day
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The agreement between the world’s two largest economies to reduce tariffs surprised many with its speed and the size of the cuts. But the foundations were laid at a previously unreported meeting between US Treasury secretary Scott Bessent and China’s finance minister Lan Fo’an in the basement of the IMF headquarters in Washington a few weeks ago. FT reporters tell the story of how the deal was struck.
Take a break from the news
New York’s running scene is world-renowned, and its neighbourhoods are dotted with hundreds of running groups for casual and competitive runners alike. FT reporter Patrick Temple-West explores the dozens of clubs open to running enthusiasts in the Big Apple.
