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Daily News Brief

July 1, 2025

Welcome to CFR’s Daily News Brief. Today we’re covering the dollar’s slide amid trade uncertainty, as well as...

  • A U.S. move to lift sanctions on Syria
  • The suspension of Thailand’s prime minister
  • A study on the fallout of U.S. foreign aid cuts
 
 

Top of the Agenda

The dollar saw its worst first half of the year since 1973 amid uncertainty about U.S. trade and fiscal policy. Since January, the dollar’s value declined more than 10 percent compared to other major currencies. It maintains a position of dominance in the world economy, but analysts say the slide reflects concerns over issues including U.S. tariff hikes and the national debt—both of which are on display in Washington this week. The Senate worked overnight last night to try to pass a tax and spending bill that the Congressional Budget Office estimates would add almost $3.3 trillion to U.S. deficits over a decade, while the White House is holding tariff talks.

 

The latest on trade talks. Countries are trying to reach deals ahead of U.S. tariff increases scheduled for July 9. So far, only China and the United Kingdom have reached bilateral trade agreements.

 

  • Indian negotiators extended a visit to Washington in recent days in an effort to bridge disagreements on sectors such as agriculture, unnamed Indian officials told multiple news outlets. 
  • As Japan’s top trade negotiator returned from the United States yesterday, President Donald Trump criticized Tokyo’s negotiating stance regarding rice on social media and said he was considering “sending them a letter” stating U.S. policy; in an interview televised Sunday, Trump said his planned letter to Japan would denote “the end of the trade deal.” 


The big picture. U.S. stock markets have recovered their losses from earlier in the year and the dollar remains the largest asset held in the world’s central bank reserves. However, analysts say that the Trump administration’s economic policies are leading businesspeople to diversify their positions by holding more alternative currencies, as well as gold. 

 
 

“Even as the U.S. dollar’s perch at the apex of the international monetary system looks increasingly fragile, the lack of viable alternatives should keep it from tumbling off that perch—for now. As has long been the case, this resilience is less a product of American exceptionalism than of fundamental economic, political, and institutional weaknesses in the rest of the world.”

—Cornell University’s Eswar Prasad, Foreign Affairs

 

The Trump Administration’s Economic Policy Perspective

Deputy Secretary of the Treasury Michael Faulkender at a Council on Foreign Relations meeting

Kaveh Sardari

Maintaining the dollar’s role as the world’s reserve currency enables other U.S. policies such as monitoring illicit finance and levying sanctions, Deputy Secretary of the Treasury Michael Faulkender said at this CFR meeting.

 
 

Across the Globe

Syria sanctions removed. Trump signed an executive order yesterday terminating many sanctions on Syria. It also directed agencies to review the country’s listing as a state sponsor of terrorism and the terrorist designation on the rebel group that ousted former leader Bashar al-Assad. Trump met with Syria’s interim president—also the former leader of the rebel group—Ahmed al-Sharaa in Saudi Arabia six weeks ago.  

 

EU-Ukraine trade deal. The European Union (EU) and Ukraine reached a preliminary deal to replace a special duty-free agreement implemented after Russia’s invasion of Ukraine. That arrangement supported Ukrainian agriculture sales but prompted farmer protests in member countries including Poland. The new deal returns to a quota system for more sensitive Ukrainian products such as sugar and maize. Ukraine pledged to open its markets and align with EU farm production standards. 

 

Thai PM suspended. Thailand’s Constitutional Court voted 7–2 to suspend Prime Minister Paetongtarn Shinawatra following a petition from lawmakers that accused her of breaching ethical standards over a leaked phone call. During the call, she criticized a Thai military commander while discussing a border dispute with former Cambodian leader Hun Sen. Paetongtarn apologized and said she had been trying to “maintain our sovereignty.”

 

Plan to tax air travel. Countries including Barbados, France, Kenya, and Spain yesterday said they intend to tax premium-class flights and private jets to fund work to address climate change. The announcement opened a UN summit on how to pay for global economic development that last convened a decade ago. As many countries are cutting back on official bilateral development aid, some advocate for taxing polluting industries directly as an alternative.

 

Study on USAID cuts. A global team of researchers has estimated that Trump administration cuts to the U.S. Agency for International Development (USAID) could cause more than 14 million deaths around the world by 2030. Secretary of State Marco Rubio in the past said many of the agency’s operations did not serve U.S. “core national interests.” The State Department did not immediately comment to multiple news outlets about the study.

 

Probe into MS-13. A deal to send migrants to El Salvador could have undercut ongoing U.S. efforts to dismantle the gang MS-13, according to a New York Times report. Salvadoran President Nayib Bukele sent Washington a list of detained MS-13 leaders he wanted sent back to El Salvador as part of the deal. U.S. prosecutors are now trying to drop charges against an MS-13 leader, citing “foreign policy considerations.” The White House pushed back on “any suggestion” that Trump “isn't successfully eradicating terrorist criminal gangs.” The U.S. attorney's office that brought cases against MS-13 did not comment.

 

Lithuania-Philippines ties. The two countries agreed to step up defense cooperation, their defense ministers said in Manila yesterday. Lithuania’s defense minister cited the fact that both faced challenges from “shadow fleets by some big countries” in the South China Sea and Baltic Sea. Manila has sought to widen its defense relationships in response to China’s maritime territorial claims nearby.

 

Wildfires in Turkey. Wildfires have prompted more than fifty thousand people to evacuate their homes in Turkey as Europe experiences an unusually early summer heatwave. At least forty-six people were injured in the blazes, the country’s health minister said. Large areas of Western Europe are under heat conditions that normally only occur later in the summer, a director at the EU’s climate change service said.   

 
 

Congress Weighs U.S. Clean Energy Future

A view of the U.S. Capitol building after sunrise in Washington, D.C. on June 29, 2025

Elizabeth Frantz/Reuters

The reconciliation package currently under consideration in Congress seeks to undo many of the climate and energy initiatives and tax credit programs passed during the Joe Biden administration, CFR experts David M. Hart, Alice C. Hill, and Varun Sivaram write in this article.

 
 

What’s Next

  • Today, Rubio hosts a meeting with his Quad counterparts from Australia, India, and Japan in Washington.
  • Today, Vietnam launches a new administrative model that reduces the number of provinces in the country.
  • Tomorrow, Argentina begins hosting a summit of South American customs union Mercosur in Buenos Aires.
 
 

USAID’s Historic Role

Sudanese dockers unload bags of cereal from U.S. ships carrying humanitarian aid supplies provided by USAID, at Port Sudan on the Red Sea.

Ashraf Shazly/AFP/Getty Images

In recent decades, USAID took the lead in coordinating effective responses to a number of humanitarian emergencies and strengthened development efforts abroad, CFR’s Diana Roy writes in this article.

 
 

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