Moved here from #12420 as a new and separate issue after diagnosis by  Mark Lawrence and Zack Ware. The following failures on new 3.5.0 all end with the same message about vcvarsall.bat (slightly different from 3.4 failures).

======================================================================
ERROR: test_get_outputs (distutils.tests.test_build_ext.BuildExtTestCase)
----------------------------------------------------------------------

======================================================================
ERROR: test_optional_extension (distutils.tests.test_build_ext.BuildExtTestCase)
----------------------------------------------------------------------

======================================================================
ERROR: test_get_outputs (distutils.tests.test_build_ext.ParallelBuildExtTestCase)
----------------------------------------------------------------------

======================================================================
ERROR: test_optional_extension (distutils.tests.test_build_ext.ParallelBuildExtTestCase)
----------------------------------------------------------------------

======================================================================
ERROR: test_compiler_options (distutils.tests.test_msvccompiler.msvccompilerTestCase)
----------------------------------------------------------------------

======================================================================
ERROR: test_vcruntime_copy (distutils.tests.test_msvccompiler.msvccompilerTestCase)
----------------------------------------------------------------------

======================================================================
ERROR: test_vcruntime_skip_copy (distutils.tests.test_msvccompiler.msvccompilerTestCase)
----------------------------------------------------------------------

======================================================================
FAIL: test_customize_compiler_before_get_config_vars (distutils.tests.test_sysconfig.SysconfigTestCase)
----------------------------------------------------------------------
Traceback (most recent call last):
  File "C:\Programs\Python 3.5\lib\distutils\tests\test_sysconfig.py", line 197, in test_customize_compiler_before_get_c
onfig_vars
    self.assertEqual(0, p.returncode, "Subprocess failed: " + outs)
AssertionError: 0 != 1 : Subprocess failed: Traceback (most recent call last):
  File "@test_5504_tmp", line 5, in <module>
    rc = config.try_compile('int x;')
  File "C:\Programs\Python 3.5\lib\distutils\command\config.py", line 227, in try_compile
    self._compile(body, headers, include_dirs, lang)
  File "C:\Programs\Python 3.5\lib\distutils\command\config.py", line 133, in _compile
    self.compiler.compile([src], include_dirs=include_dirs)
  File "C:\Programs\Python 3.5\lib\distutils\_msvccompiler.py", line 315, in compile
    self.initialize()
  File "C:\Programs\Python 3.5\lib\distutils\_msvccompiler.py", line 208, in initialize
    vc_env = _get_vc_env(plat_spec)
  File "C:\Programs\Python 3.5\lib\distutils\_msvccompiler.py", line 83, in _get_vc_env
    raise DistutilsPlatformError("Unable to find vcvarsall.bat")
distutils.errors.DistutilsPlatformError: Unable to find vcvarsall.bat


----------------------------------------------------------------------
Ran 234 tests in 1.108s

FAILED (failures=1, errors=7, skipped=28)
Warning -- threading._dangling was modified by test_distutils
Warning -- files was modified by test_distutils