Souvenirs stand on display for sale at a shop near the New York Stock Exchange. (Photographer: Michael Nagle/Bloomberg)

Trump Goads Europe Into Awkward China Embrace: Balance of Power

(Bloomberg) --

As President Donald Trump tightens the screws on traditional allies with trade tariffs, Europe finds itself in a quandary: how far to turn away from the U.S. and look east to the world’s rising power, China.

It’s a dilemma that many former politicians in Europe have resolved by opting to work with Beijing. From prime ministers to European commissioners, decision makers are banking on China’s growing global reach once they're out of office, even in the face of widespread reservations over its intentions.

Germany and France are leading moves at European Union level to bolster defenses against China’s acquisitions of cutting-edge technology and critical infrastructure. European officials are weighing the economic benefits of working more closely with China given the risks of flirting with a communist government that pays little heed to the bloc’s liberal principles.

Aware of the doubts, President Xi Jinping’s government is reaching out to the EU with pledges to protect the multilateral world order and improve access to its vast domestic market. Premier Li Keqiang will lead the charm offensive in a trip to Europe starting this weekend.

Whether Trump’s provocations are making Europe any more receptive should become clearer at an EU-China summit in Beijing this month.

Global Headlines

Trump's warning | Next week's NATO summit is shaping up to be a testy affair, with several European nations and Canada confirming they've received warning letters from Trump. He wrote that U.S. support for the alliance could wane if they don't boost defense spending to the agreed target of 2 percent of GDP. But as some countries pointed out, the U.S. president is getting ahead of himself: the GDP commitment is meant for 2024.

Merkel's balancing act | After averting a blowup over migration in her party bloc, Angela Merkel is working to get her Social Democratic coalition partner on board. It's the latest political balancing act by a chancellor who's been in power for almost 13 years and faces an increasingly hostile global environment. A deal would allow Merkel to head to the NATO summit with one less domestic headache.

Najib on trial | Malaysia’s former leader Najib Razak has pleaded not guilty to charges of corruption and criminal breach of trust in connection with a multibillion-dollar scandal surrounding state fund 1MDB. Najib appeared in the High Court today, where he was released on bail and ordered to surrender his passports. It's all part of Prime Minister Mahathir Mohamad's bid to recoup $4.5 billion potentially siphoned from 1MDB.

Strange but true | Theresa May and Jeremy Corbyn have more in common than meets the eye on Brexit. Ideological opposites, the leaders of the U.K.'s two biggest parties are both battling deep divisions in their ranks on how to separate from the European Union. They've also softened their stances out of political necessity and become masters of the art of fudge. Regardless of who is in power, the ultimate outcome could be very similar.

Meddling conclusion | The Senate Intelligence Committee strongly backed the finding by U.S. intelligence agencies that Russian President Vladimir Putin established a program to interfere in the 2016 presidential election — with the ultimate goal of helping Trump win. The panel forcefully rejected a campaign led by House Republicans and the president, who have contended that anti-Trump bias tainted the Russia inquiry from the start.

And finally ... Jordan's Crown Prince Al Hussein has been receiving a lot of attention lately. He showed off Jordan's treasures to fellow Sandhurst alumni Prince William last week and marked his 24th birthday by practicing combat drills with another academy graduate, his dad, King Abdullah II. They provided cover for each other, fired live rounds and left the scene with a smile. "I see so much of His Majesty in you, including your shared love for the military,” the prince's mom said in a birthday tribute on Facebook.

 

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