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Critical elements of US President Joe Biden’s Indo-Pacific economic strategy have been derailed by opposition from influential congressional Democrats, including Ohio senator Sherrod Brown, who worry that a new trade deal would affect their election prospects.
The news comes just as Biden prepares to meet Chinese President Xi Jinping in San Francisco. The US hoped that the trade deal would have signalled to Beijing that the US and its partners could co-operate to counter China’s economic ascension on the global stage.
Washington intended to conclude a crucial part of its Indo-Pacific Economic Framework trade pillar at the Asia-Pacific Economic Cooperation forum this week. Some allies, including Japan, hoped that it would move the US towards joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
The IPEF did not provide US partners with much to be enthusiastic about, partly because it did not offer any US market access, but it was seen as being better than nothing.
“We just handed China a double victory,” said one former US official. “American politics is dysfunctional, and America has no economic agenda for Asia.”
US trade representative Katherine Tai informed her counterparts about the decision over the past two days, according to one American official. Follow the latest on the Biden-Xi meeting here.
Here’s what else I’m keeping tabs on today:
Rupert Murdoch: The News Corp chair will step down following today’s annual shareholders’ meeting, becoming chair emeritus. His son Lachlan will inherit the company and potentially costly legal baggage.
Economic data: The US releases its October retail figures after stronger than expected data for September sent two-year Treasury yields to 17-year highs.
Results: Target and Palo Alto Networks report.
Five more top stories
1. War funding: The US House has voted to avert a costly government shutdown but the deal left billions of dollars of funding for Ukraine and Israel in limbo. The House voted 336-95 on Tuesday evening in support of a plan from Republican Speaker Mike Johnson to keep government spending at current levels into 2024.
2. Israeli forces have entered al-Shifa hospital in Gaza to conduct what the country’s military has described as a “precise and targeted operation” against Hamas. It comes days after they surrounded the besieged strip’s largest medical complex, where tens of thousands of people were sheltering from Israel’s bombardment of the coastal enclave.
3. US inflation fell more than expected to 3.2 per cent in October, causing Treasury yields to fall sharply and US and European equities to rise. The soft inflationary data, which marks the first decline in four months, has strengthened investors’ hopes that interest rates have peaked.
4. Exclusive: Denmark will be tasked with inspecting and potentially blocking tankers of Russian oil under new EU plans, as the west rushes to enforce a price cap the Kremlin has avoided. Danish authorities would target tankers transiting the Danish straits without western insurance, people with knowledge of talks told the Financial Times. Read more on EU efforts to enforce the price cap.
5. The main US federal government pension fund is to exclude China- and Hong Kong-listed stocks on the recommendation of its investment consultant, Aon, which cited the rising tensions between the world’s two largest economies. The $771bn Federal Retirement Thrift Investment Board said it would change the benchmark index followed by its international fund.
The Big Read
Is Indonesia finally set to become an economic superpower? Four years after President Joko Widodo ratified his $32bn dream to move the capital from Jakarta to Nusantara, an equatorial outpost on Borneo, the effort has been criticised as an expensive vanity project. In an interview with the Financial Times, Widodo argues it is a chance to transform the country’s economic geography.
We’re also reading and listening to . . .
Love the FirstFT quiz? Tune in to the final round of Biz Quiz on Saturday November 18 (7.15am GMT) to test your knowledge of the global news cycle. The second annual buzz-in competition features questions derived exclusively from FT content.
Chart of the day
UK inflation slowed to 4.6 per cent in October, its lowest pace since 2021, as energy prices retreated, allowing Prime Minister Rishi Sunak to declare he has met his pledge to halve the rate of price rises by the end of the year. The slowdown mirrors easing inflation in other big economies and adds to evidence that central banks’ tightening cycle is over.
The FT’s Energy Source newsletter is back with a new look. Premium subscribers can sign up here for the latest news and analysis on the energy industry.
Take a break from the news
Film critic Danny Leigh has his say on Napoleon, Ridley Scott’s epic of military genius staring Joaquin Phoenix.
Additional contributions from Grace Ramos, Gordon Smith and George Russell
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Source: Economy - ft.com
