The End of One-Party Rule in Washington

(Bloomberg) -- Twelve years after she shattered the marble ceiling by becoming the first woman speaker of the U.S. House, Nancy Pelosi is poised to be re-elected to the post, setting up an era of confrontation with President Donald Trump.

Democrats officially claim control of the chamber today, cementing an end to two years of one-party rule in Washington.

The Californian will take the gavel amid a standoff with Trump over his demand to fund a border wall with Mexico that spiraled into a partial government shutdown now in its 13th day, with no resolution in sight.

As the country’s highest-ranking elected Democrat, Pelosi, 78, will lead an emboldened and diverse caucus, with a net gain of 40 seats and new members ranging from rising progressive stars to moderates who captured traditionally conservative districts, Anna Edgerton writes.

She quelled a rebellion by some in her party seeking new leadership, in part through a pledge to limit herself to no more than two terms.

Trump appealed to Pelosi’s deal-making skills in a New Year’s Day tweet about the border wall, a structure Pelosi has called “immoral” and ineffective.

“Let’s make a deal?” he said.

The coming days and weeks will test their ability to do just that.

Global Headlines

Bad Apple | The collateral damage from Trump’s trade war with China (in a cease-fire until March) now includes one of America’s most recognizable brands. Apple lowered its first-quarter revenue outlook yesterday after a larger-than-expected slowdown in demand from China and fewer iPhone upgrades. Amid growing concern about slowing job growth, the developments help paint an increasingly worrisome economic picture heading into Trump’s 2020 re-election bid.

Europe’s resilience | With Brexit imminent, Italian populists attacking Brussels and nationalism spreading in the east, doom-mongers are once again highlighting the mortal threats to the European project. But as Alan Crawford reports, the pessimists have consistently underestimated the commitment of European Union leaders to hold their union together.

Greek risks | After emerging from its steepest economic crisis in living memory, Greece still has a mountain to climb in 2019 if it’s to make a sustained return to bond markets. While external conditions will play a role, three domestic factors — the risk of fiscal derailment, struggling banks, and a potential political deadlock after parliamentary elections — could stop the country’s recovery in its tracks in the first year since it exited its bailout.

Soaring growth | Trump’s anti-immigrant rhetoric is driving young talent to Canada. There are now 570,000 international students in Canada, a 60 percent jump from three years ago. The surge is helping power the biggest increase in international immigration in more than a century — the country took in 425,000 people in the last year, boosting population growth to a three-decade high.

Economic overhaul | Brazil’s new economy minister outlined a sweeping program aimed at unleashing corporate potential and freeing future generations from debt. Paulo Guedes said the government will prioritize slashing pension spending, selling state assets and simplifying the tax system, driving the country’s stocks and currency higher on investor optimism over President Jair Bolsonaro’s pro-market platform.

What to watch

• Senate Republicans are signaling they want swift action on Trump’s attorney general pick, William Barr, scheduling a two-day hearing this month on his nomination.

And finally ... China has landed a lunar probe on the far side of the moon — the world’s first spacecraft to reach the surface that always faces away from Earth. Boosting an already ambitious space program, the feat of the Chang’e-4 lunar probe is part of Beijing’s plan to become one of the world’s top three aerospace powers by 2030.

--With assistance from Ben Sills.

To contact the editor responsible for this story: Michael Winfrey at mwinfrey@bloomberg.net, Ruth Pollard

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