Economic Pain Builds Pressure for Trade Deal
(Bloomberg) -- The outlook for a U.S.-China trade deal suddenly appears much better, though not necessarily due to any breakthrough in talks that wrapped up today in Beijing.
Rather, both sides are getting serious as the trade war is starting to inflict real pain. Bloomberg exclusively reports that President Donald Trump wants an agreement to perk up the stock market, which has fallen about 8 percent since he struck a temporary truce with counterpart Xi Jinping on Dec. 1.
Xi has seen China’s growth prospects worsen at a time when he’s looking to reduce the country’s debt burden. The finance ministry is set to propose a wider 2019 fiscal deficit to support the economy, Bloomberg also reported.
Discussions in Beijing this week, which featured mid-level officials and were mostly technical in nature, weren’t expected to bring about a result. Chinese representatives said they went well, and the two sides are now particularly close on energy and agriculture.
Still, if they’re to reach a lasting accord by March 1, when threatened tariff increases are set to take effect, they’ll have to make some tough choices. The next few weeks will determine who wants a deal more: Trump or Xi.
More of same | Trump stopped short of declaring a national emergency during a prime-time Oval Office pronouncement on the border wall standoff at the center of the government shutdown, now into its 19th day. He instead used the presidency’s most powerful perch – traditionally reserved for times of war or calls for national unity – to rattle off familiar statistics, renew complaints about Democrats and reprise anecdotes of brutal crimes committed by people he said were in the country illegally.
- Cracks in Trump’s support from Republican lawmakers are beginning to emerge as the impact of the government shutdown spreads.
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Endgame nears | Theresa May’s Brexit deal returns to Parliament for five days of debate ahead of a planned vote on Jan. 15. Few expect it to be signed off, a point underlined late yesterday when lawmakers defeated the prime minister on part of her strategy for leaving the European Union. Politicians are already focused on what happens next; May is giving little away, telling Cabinet members she’d “move quickly” if her deal is voted down.
- Click here to read about Japan’s Brexit fears.
Name dispute | A Balkan state at the center of a struggle between Russia and the West is approaching its biggest hurdle to joining NATO and the EU. Lawmakers in the Republic of Macedonia started debate on a constitutional amendment to change the country’s name to “the Republic of North Macedonia.” Greece has blocked its neighbor’s membership bids over the title and has agreed to drop its veto once the change happens.
D.C. spinmeisters | Saudi Arabia and other countries with records of human rights abuses are spending millions to put their best faces forward in Washington, hiring lobbying firms whose rosters include former members of Congress, ex-government staffers, and longtime veterans of the influence industry. More than $25 million was spent in 2017-18 by entities with ties to China while the U.A.E dropped more than $29 million, according to data compiled by Bloomberg Government.
Secret children | The world’s biggest social-control experiment — China’s one-child policy — is winding down as the government grapples with how to reverse its legacy: a graying population with 30 million fewer women than men. Those who defied the directive have come forward to tell Bloomberg of derailed careers and forced adoptions as the veil is lifted on the much-criticized program.
What to Watch
- President Nicolas Maduro begins his second term tomorrow as the Venezuela's economy continues to crumble. The international community has vowed to further isolate the country following elections widely denounced as fraudulent, while the U.S. is set to announce a new round of sanctions.
- The surprise summit in Beijing between Xi and North Korean leader Kim Jong Un — a show of unity as both men negotiate with Trump — suggests talks over Pyongyang’s nuclear arsenal are gaining momentum.
And finally ... Australian Prime Minister Scott Morrison took his staffers to task in a late-night tweet yesterday — for editing out his footware in an official family portrait and replacing them with squeaky clean white sneakers. The (very badly) doctored image sparked mockery on social media and a hashtag called #shoegate. “If you must Photoshop, please focus on the hair (lack thereof), not the feet!” he wrote.
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