Deal with Japan

Good morning. Donald Trump gets his deal with Japan. The AI boom is driving a surge in electricity demand. And tariffs are changing how China views investment in Europe. Listen to the day's top stories.

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Donald Trump and Japan reached a trade deal that'll impose 15% tariffs on imports to the US, including cars, while also creating a $550 billion fund to make investments in America. Trump had previously threatened the country with a 25% tariff.

Trump Says He's Reached Trade Deal With Japan

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Other American allies are having varying success in their trade negotiations. The Philippines secured a tariff reduction to 19% from 20% after President Ferdinand Marcos Jr. met with Trump. Canada tempered expectations on its own near-term agreement. And economists at Goldman Sachs said they believe the US baseline tariff rate will rise to 15%.

Also on Trump's mind: Federal Reserve Chairman Jerome Powell—who the president told Republican lawmakers is "only going to be there a short while"—and the housing market. Trump said he's considering a proposal to end capital gains taxes on home sales.

The National Nuclear Security Administration is a semiautonomous arm of the Energy Department (pictured). Photographer: Andrew Harrer/Bloomberg

More on the Microsoft hack: The US agency responsible for maintaining and designing the nation's cache of nuclear weapons was among those breached, a person familiar said. No sensitive or classified information is known to have been compromised in the attack that Microsoft has blamed on Chinese state-sponsored actors.

Another warning for the government (and SpaceX investors)—Elon Musk may not be done with politics just yet. That's according to paperwork sent to potential SpaceX investors laying out "risk factors" when discussing a potential tender offer that would value that rocket and satellite maker at about $400 billion.

Deep Dive: AI's Electricity Demand

The AI boom is driving the biggest surge in electricity demand in decades, leading to soaring utility bills and disagreement over which power resources are best equipped to satisfy those needs.

Those served by the largest US power grid will spend a record $16.1 billion to ensure electricity supplies. And data centers are to blame.
While the power industry is coalescing around new plants as a way to alleviate potential shortfalls—and make money—such efforts would also risk adding to consumer costs at a politically sensitive time.

The Big Take

Tariffs are changing how China views investment in Europe, and some EU leaders are keen to welcome Beijing's money and influence. Where Chinese entities once focused on buying European infrastructure like ports and power grids, they're now building their own factories with the help of local state subsidies.

Big Take Podcast

Former Defense Sec. Robert Gates Is Worried

Opinion

Jamie Dimon's success as CEO is creating headaches for JPMorgan, Paul J. Davies writes. Its immediate problem is an extremely high stock valuation and billions of dollars of excess capital–both of which threaten its returns if mishandled.

More Opinions

Marc Rubinstein

Substack Plays With the Giants. Can It Be Valued Like One?

Gearoid Reidy

'Mr. Japan' Bends the Knee — and Falls on His Sword

Before You Go

Doha. Photographer: Christopher Pike/Bloomberg

Qatar confirmed it'll bid for the 2036 summer Olympics in an effort to become the first Middle Eastern nation to host one of the world's biggest sporting events. It'll probably be competitive, with Istanbul, the Indian city of Ahmedabad, Nusantara in Indonesia, and Chile's capital Santiago all bidding, too.

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