Trump's China U-Turn Emboldens Democrats

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Donald Trump may have just saved one of China's most strategically important technology companies from the brink of ruin. The question is what did he get for it and at what cost.

With his tweet yesterday urging relief for beleaguered telecommunications equipment maker ZTE Corp., the U.S. president appeared to surrender his most valuable hostage in a tense trade standoff with China. Trump said the company — forced to halt operations after the Commerce Department banned U.S. firms from supplying it — needed “a way to get back into business fast.”

The move eases trade tensions before Chinese President Xi Jinping's top economic adviser arrives in Washington for talks tomorrow — Chinese regulators today reportedly restarted a suspended review of Qualcomm Inc.’s application to acquire NXP Semiconductors.

But it exposed Trump and fellow Republicans to accusations that they’re placing Chinese workers ahead of American jobs. That’s potentially damaging for a president who's demanding that China cut support for high-tech industries and slash its trade surplus by at least $200 billion.

The Senate's top Democrat, Charles Schumer, who’s helping lead his party's efforts to win congressional majorities in November, tweeted: “How about helping some American companies first?”

Global Headlines

Establishing terms | The U.S. is ready to allow investments in North Korea once it has complete, verifiable, and irreversible proof of denuclearization, two of Trump’s top national security officials said yesterday. The comments from Secretary of State Mike Pompeo and National Security Adviser John Bolton help lay out what will be on the table during a historic June 12 summit between Trump and Kim Jong Un in Singapore.

Diplomatic missions | The U.S. embassy in Jerusalem will be inaugurated today, a contentious foreign policy move that fulfills one of Trump’s campaign promises. The opening, which is fueling protests in Gaza this morning, comes a week after the president's withdrawal from the Iran nuclear accord, a decision that's prompted an urgent search by European powers to salvage the deal.

Fresh terror in Indonesia | A wave of deadly bombings in Indonesia is piling pressure on lawmakers to pass an anti-terrorism bill that has been languishing in parliament since 2016. The country’s facing its worst terrorism threats in a decade with a wave of Islamic State fighters returning home. That’s lent new urgency to giving police enhanced powers to prevent future attacks, such as arresting those who attempt to travel overseas to join terrorist groups.

Populist promises | The Five Star Movement and the League are finalizing a program for governing Italy that could blow a hole in the heavily indebted nation’s finances. In a plan that may go to President Sergio Mattarella today, Five Star gets its election pledge of “citizen’s income” for poorer families while the League delivers its 15 percent flat tax rate. The total bill could be as much as $120 billion, Corriere della Sera newspaper estimated.

Bye-bye outsiders | Brazil’s presidential race is quickly thinning out and will ironically leave only seasoned politicians in a contest marked by deep-seated, anti-establishment sentiment. The number of candidates could drop to 10, about half the initial figure, by the time parties hold their conventions in July. But while there may be fewer contenders, the remaining centrists have yet to prove that they can rally markets and voters alike.

What to Watch

  • Tune in to Bloomberg Television tomorrow (9 a.m. in Istanbul) for our exclusive conversation with Turkish President Recep Tayyip Erdogan as campaigning gets underway for the June 24 election.
  • Andrew Mayeda and Jenny Leonard explain why the Trump administration is under pressure to achieve a breakthrough this week in North American Free Trade Agreement talks. 

And finally...Malaysian Prime Minister Mahathir Mohamad’s surprise election win — 15 years after he stepped down — has thrust the 92-year-old back onto the world stage. Mahathir spent his first tenure mingling with Ronald Reagan, Margaret Thatcher, Nelson Mandela and other world leaders — and he wasn’t afraid of ruffling feathers. Here we take a look back at some of the more memorable moments.

 

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