What We’re Watching: “Big Beautiful” bill heads for the Senate, UK gives up Chagos Islands, Taiwan pivots to drones

House passes Trump’s tax agenda, but senators will now have their say

By a margin of just one vote, the US House early on Thursday passed a budget bill containing President Donald Trump’s tax agenda, which centers on making his 2017 tax cuts permanent. Some last-minute changes to the bill helped to get it over the line: House Republicans increased the SALT-cap to $40,000 and accelerated the introduction of work requirements for Medicaid. But can the GOP get the bill through the US Senate? Lawmakers in the upper chamber are already plotting changes to the legislation...

You can Chagos your own way: UK hands islands back to Mauritius, leases back base

More than two centuries after taking the Chagos Islands from France, the United Kingdom relinquished the Indian Ocean archipelago to Mauritius, but will continue to lease a US-UK military base there, on the island of Diego Garcia, for another 99 years. The UK says the deal, which creates a 24-mile buffer zone around the base, is meant to ensure its long-term security amid growing Chinese aggression in the area. US Secretary of State Marco Rubio welcomed the deal.

Taiwan adds new drone units as part of shifting military strategy

Ever wary of a potential Chinese invasion, Taiwan announced that it will introduce its first-ever drone units this year. The move is part of Taipei’s evolving strategy of effectively deterring Beijing rather than preparing for a direct fight. “Overall, the cross-strait military balance still tilts toward China’s favor, since China spends a lot more on defense,” says Eurasia Group regional expert Ava Shen. “So it’s more pragmatic for Taiwan to be a ‘porcupine,’ so to speak.”