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Your guide to what Trump’s second term means for Washington, business and the world

“Daddy’s home,” proclaimed the White House, hailing Donald Trump’s return from last week’s Nato summit. That social media post was a reference — at once triumphant and mocking — to the title bestowed on Trump by Mark Rutte, the Nato secretary-general. Rutte might reason that demeaning himself is a small price to pay to keep the alliance together. And European leaders did seem broadly content, after the first Nato summit of Trump’s second term.

Fears of the US president walking out of the summit — or even the alliance itself — did not come to pass. All the European members of Nato have now committed to spending 5 per cent of GDP on defence — broadly defined.

One European leader lists three major achievements from the summit. First, Nato has refocused on its key mission — which is the deterrence of Russia. Second, the alliance is returning to cold war levels of defence spending, in response to Russia’s continuing military build-up. Third, as European defence spending rises, Nato will become a more balanced alliance between the US and Europe.

The fact that the Nato summit took place just after the US military strikes on Iran also changed the atmosphere. Trump arrived in a good mood — and his willingness to bomb Iran’s Fordow nuclear site allayed European fears that he will always shy away from the use of force. Trump also had a friendly meeting with Volodymyr Zelenskyy of Ukraine, repairing some of the damage that was done after the two leaders’ disastrous White House meeting in February.

But while things are going better for Ukraine diplomatically, the war itself seems to be going worse. Some Nato leaders fear that the situation on the frontline could deteriorate seriously by this autumn. That would be far more significant than any paper commitments made in last week’s Nato communiqué. Military assessments suggest that both the Russian and Ukrainian militaries are nearing the point of exhaustion. But while Russia can probably keep up the current level of operations for another year, Ukraine may reach a breaking point within six months — if it does not receive significant new military support.

Following the positive Zelenskyy-Trump meeting, there are hopes that Ukraine may receive fresh supplies from the US of Patriot missile-defence systems, as well as Himars artillery rockets. With Ukraine’s air defences stretched thin, the Patriots are badly needed. But, as ever, Trump was vague about providing new munitions — and could easily change his mind or forget.

There are also some shortfalls — in particular in Ukrainian troop numbers — that the country’s western allies cannot fix. Russia is now thought to have lost more than a million troops, killed or wounded, in the conflict. But Ukrainian losses have also been heavy and Russia’s population is about four times larger than Ukraine’s.

The increased intensity of Russian missile attacks on Kyiv and other Ukrainian cities is also damaging Ukrainian morale. Without a clear vision of victory — or at least of an end to the war — a sense of hopelessness risks descending over the country.

The change in mood inside the Ukrainian government is reflected in the urgency with which it is now privately calling for a ceasefire. A year or two ago, such calls would have been regarded as defeatism. Now they are made with increasing insistence in closed-door meetings between Ukrainian and western leaders.

But there is little belief among European policymakers that Russia is in any mood to agree a ceasefire. One well-placed official thinks that Russia’s central goal now is to capture Odesa — which Vladimir Putin regards as a historically Russian city. Without Odesa, Ukraine would lose access to its main port.

A group of former European leaders — including Carl Bildt of Sweden and Sanna Marin of Finland — visited Ukraine recently and picked up on the deteriorating mood. They wrote afterwards that “while Ukrainians will never stop resisting, without more military support, Ukraine can lose more territory. More cities might be captured.” Off the record, some western officials are even bleaker, warning of a risk of “catastrophic failure”, if the Ukrainian military is stretched to breaking point — and does not receive a significant increase in military and financial aid from its western allies.

Of course, wars are unpredictable and moods can shift. Some in the west argue that Ukraine can hold its own over the coming year. They claim that, despite enormous efforts and losses, Russia has only succeeded in capturing an additional 0.25 per cent of Ukrainian territory over the past year. The optimists argue that Ukrainians’ expertise in drone warfare has made it impossible for large groups of Russian troops to advance en masse. They also argue that — even if Russia breaks through Ukrainian lines — it lacks the mechanised divisions to capitalise on the achievement.

The received wisdom has been proved wrong many times before in this war. But if the growing pessimism among those following the Ukraine war closely is justified, then any feel-good sentiments generated by the Nato summit may soon disappear. Nato’s secretary-general is known for his upbeat nature and permanent smile. But even Rutte could struggle to keep smiling by the end of the year.

gideon.rachman@ft.com

The city-state’s central bank last month said digital token service providers (DTSPs) that served only overseas clients must have a license to continue operations past June 30—or close up shop.

The Monetary Authority of Singapore in a subsequent statement added that it has “set the bar high for licensing and will generally not issue a license” for such operations.

Singapore, a major Asian financial hub, has taken a hit to its reputation after several high-profile recent cases dented trust in the emerging crypto sector.

These included the collapse of cryptocurrency hedge fund Three Arrows Capital and Terraform Labs, which both filed for bankruptcy in 2022.

“The money laundering risks are higher in such business models and if their substantive regulated activity is outside of Singapore, the MAS is unable to effectively supervise such persons,” the central bank said, referring to firms serving solely foreign clients.

Analysts welcomed the move to tighten controls on crypto exchanges.

“With the new DTSP regime, MAS is reinforcing that financial integrity is a red line,” Chengyi Ong, head of Asia Pacific policy at crypto data group Chainalysis, told AFP.

“The goal is to insulate Singapore from the reputational risk that a crypto business based in Singapore, operating without sufficient oversight, is knowingly or unknowingly involved in illicit activity.”

Law firm Gibson, Dunn & Crutcher said in a comment on its website that the move will “allow Singapore to be fully compliant” with the requirements of the Financial Action Task Force, the France-based global money laundering and terrorist financing watchdog.

Three Arrows Capital filed for bankruptcy in 2022 when its fortunes suffered a sharp decline after a massive sell-off of assets it had bet on as prices nosedived in crypto markets.

Its Singaporean co-founder Su Zhu was arrested at Changi Airport while trying to leave the country and jailed for four months.

A court in the British Virgin Islands later ordered a $1.14 billion worldwide asset freeze on the company’s founders.

Singapore-based Terraform Labs also saw its cryptocurrencies crash dramatically in 2022, forcing it to file for bankruptcy protection in the United States.

The collapse of the firm’s TerraUSD and Luna wiped out around $40 billion in investments and caused wider losses in the global crypto market estimated at more than $400 billion.

South Korean Do Kwon, who co-founded Terraform in 2018, was arrested in 2023 in Montenegro and later extradited to the United States on fraud charges related to the crash.

He had been on the run after fleeing Singapore and South Korea.

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Your guide to what Trump’s second term means for Washington, business and the world

Republican lawmakers were struggling to find the votes to pass Donald Trump’s landmark tax and spending bill after only barely gathering enough support to begin the debate on the legislation in the Senate. 

Republican senators late on Saturday eked out the numbers to start debating what Trump has dubbed the “big, beautiful bill” after an afternoon of fraught negotiations. The vote of 51-49 began a critical procedural step towards passing the new measure.

But congressional wrangling continued on Sunday, with Democrats demanding that the 940-page bill be read out in full on the Senate floor. Senators are scheduled to start voting on amendments to the bill on Monday.

Passing the bill — which extends sweeping tax cuts introduced during Trump’s first term — has been a priority for the president since his return to office. He has piled pressure on senators to get the legislation over the line before the July 4 holiday.

In order to fund the tax cut extensions and increase spending on the military and border security, the bill slashes funds for healthcare and social welfare programmes. It also scraps taxes on tips and overtime.

“Tonight we saw a GREAT VICTORY in the Senate,” Trump said in a post on his platform Truth Social early on Sunday morning. “VERY PROUD OF THE REPUBLICAN PARTY TONIGHT.”

Independent forecasters have warned that the bill will add to the country’s already swollen debt levels, pushing them beyond the highs of the second world war. 

The non-partisan Congressional Budget Office on Sunday said that its current version will add more than $3.2tn to US national debt over 10 years.

The White House, which has insisted the legislation will ultimately shrink the debt, said: “Democrats and the media love to tout the CBO’s historically incorrect scoring.”

Chuck Schumer, Democratic Senate minority leader, told senators late on Saturday that Republicans were “scrambling to pass a radical bill, released to the public in the dead of night, praying the American people don’t realise what’s in it”. 

The cost of the bill and its planned cuts to Medicaid health services for the poor have worried even some Republicans.

Thom Tillis, the Republican senator from North Carolina, joined Democrats in voting against opening debate on the bill, warning the legislation “would result in tens of billions of dollars in lost funding for North Carolina, including our hospitals and rural communities”. 

Trump’s retaliation was swift, threatening Tillis with a primary challenge.

“I will be meeting with [challengers] over the coming weeks, looking for someone who will properly represent the Great People of North Carolina and, so importantly, the United States of America,” he said on Truth Social.

Tillis on Sunday announced he would not seek re-election and took a swipe at the country’s hyper-partisan politics.

“In Washington over the last few years, it’s become increasingly evident that leaders who are willing to embrace bipartisanship, compromise, and demonstrate independent thinking are becoming an endangered species,” Tillis said.  

His retirement throws into uncertainty what is set to be among the most competitive seats in the 2026 midterm elections. Wiley Nickel, a former Democratic House representative, has already launched his Senate bid for North Carolina, a critical swing state.

Billionaire Elon Musk also used the moment to resume his attacks on the bill for the first time since falling out with Trump over the issue.

“The latest Senate draft bill will destroy millions of jobs in America and cause immense strategic harm to our country!” Musk said in a post on X on Saturday.

“Utterly insane and destructive,” Musk added. “It gives handouts to industries of the past while severely damaging industries of the future.” 

If the measure is passed, the US House of Representatives, which passed its own version of the legislation last month, must then approve the amendments made in the Senate bill before it can be sent to the president’s desk for his signature.