Even Trump’s Mega-Stimulus May Not Be Enough

(Bloomberg) --

Not long ago, Donald Trump was talking about $2 billion in U.S. funds to blunt the impact of the coronavirus outbreak.

But when Treasury Secretary Steven Mnuchin presented the president with a $850 billion plan Monday night, Trump suggested he bump it up to a trillion: If you want to go big, go big, he remarked, according to an exclusive report from our Washington bureau.

That’s how Mnuchin came to assemble the $1.2 trillion stimulus package — including direct payments to Americans — that the White House is now advocating. Mnuchin started selling the plan yesterday to Senate Republicans, warning that without it the U.S. could face a 20% unemployment rate.

It represents a rapid U-turn for a president who only recently minimized the coronavirus, saying the seasonal flu kills many more Americans and “life & the economy go on.” The rapid spread of the virus has forced a rethink for a leader who has staked his re-election bid on a strong economy and markets. Discussion about a U.S. recession now focuses on when, not if.

If it lasts, the fallout could hand a big advantage to Trump’s opponent come November. Joe Biden is the all-but-certain Democratic nominee after decisive victories last night in primaries in Florida, Illinois and Arizona.

As Trump and his team shift their virus-response efforts into high gear, the question is whether that change is too late.

Global Headlines

The virus cost | The U.S. and Canadian governments are set to announce they’ll halt non-essential travel, while U.K. premier Boris Johnson described his administration as a “wartime government” in detailing a massive economic aid package. Europe shut its borders to non-EU citizens, while Australia told citizens not to travel abroad.

• A Chinese vaccine has been approved for human testing as cases hit more than 193,093 worldwide.
• Angela Merkel signaled she may be open to joint EU debt issuance to mitigate the virus impact, an apparent softening of German opposition that could transform the finances of the 27-nation bloc.
• Indonesia banned exports of masks, sanitizers and some medical equipment to shore up domestic supplies.

Snarled courts | The virus is impacting legal processes around the world. U.K. courts won’t start criminal trials that are scheduled to last longer than three days. The U.S. Supreme Court indefinitely postponed its March argument session. Israel’s Justice Ministry delayed Prime Minister Benjamin Netanyahu’s graft trial by two months. And asylum seekers in French custody set to be sent to Italy are stuck in detention as virus lockdowns override EU rules requiring them to be sent back.

Tit-for-tat | China took the unprecedented step of expelling more than a dozen U.S. journalists, escalating a battle with the Trump administration. Beijing said U.S. reporters at the New York Times, Wall Street Journal and Washington Post must hand in their media cards within 10 days, calling it a response to U.S. caps on Chinese media imposed early this month.

• Iain Marlow explains how China has also dealt a blow to Hong Kong’s autonomy that could curb media freedom in the city.

Power-played | Vladimir Putin caught even many Kremlin insiders off guard with last week’s surprise gambit that allows him to stay on as president until 2036. Some feel deceived given Putin just in January unveiled constitutional changes that seemed to respect term limits, Evgenia Pismennaya, Henry Meyer and Ilya Arkhipov report. The amendments were a “grand deception” intended to minimize potential opposition, says one person close to Putin.

Secret lobbying | A Los Angeles businessman who raised funds for U.S. presidents and members of congress was also a secret lobbyist for foreign governments, including Saudi Arabia and Turkey, prosecutors said in a court filing yesterday. The prosecution of Imaad Shah Zuberi comes as the Justice Department intensifies its focus on foreign influence peddling amid growing concern that U.S. foreign policy has been swayed at times by hidden forces.

What to Watch

• Brazilian President Jair Bolsonaro asked Congress to declare a state of public calamity over the coronavirus that would let his government miss this year’s fiscal target.
• Merkel is scheduled to give a nationally televised address this evening about the coronavirus effort.

Tell us how we’re doing or what we’re missing at balancepower@bloomberg.net.

And finally ... An unintended casualty of virus-related limits on travel could be global food production. The restrictions may spark shortages of migrant labor for everything from fruit and vegetable harvests in the U.S. and Australia to meat processing in Canada. “It will be devastating to growers and ultimately to the supply chain and consumers,” says the United Fresh Produce Association’s Robert Guenther. “They won’t have the food.”

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