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Unlock the White House Watch newsletter for freeYour guide to what the 2024 US election means for Washington and the worldWhen Joe Biden departs the White House and Donald Trump re-enters, America’s trading partners fear the US will distort commerce with high import tariffs, treat World Trade Organization rules with open contempt and use threats of trade restrictions to force them to follow the US lead.“No change there” would be an exaggeration, but not a grotesque one.The standard view is that recent years have seen the decay of a US-led postwar order in which world trade was governed by a rules-based legal and political framework. The decline, the story goes, rapidly accelerated under the first Trump administration and only slightly recovered under Joe Biden.In reality, that’s too positive about the state of grace before the Trumpian fall. You can make a pretty good case that, adapting Mahatma Gandhi’s observation about western civilisation, the thing about a multilateralist trading order anchored by Washington is that it would have been a very good idea.Before the creation of the WTO itself in 1995, the rules were embedded in a treaty, the General Agreement on Tariffs and Trade, essentially run by a small cold war club of allied rich countries. Dispute settlement wasn’t binding. The US was dominant. It was a club of equals in the way Nato is. The US started losing patience with true multilateralism as soon as it was tried, disapproving of the Appellate Body (AB) of the WTO dispute settlement system for its expansive interpretations of the rules. The US was also often reluctant to comply with rulings, a scofflaw as well as a sheriff. It spent a decade ducking a landmark ruling in Brazil’s favour against US cotton subsidies before simply paying off the Brazilians rather than reforming its trade-distorting payouts.The US moved away from multilateralism under George W Bush towards creating a preferential system, launching the Trans-Pacific Partnership in the Asia-Pacific region, a project later pursued by Barack Obama’s administration. But even before Trump withdrew the US from TPP, Congress had blocked it and Hillary Clinton disowned it in her 2016 presidential election campaign. Now the fun really starts. Enter the Trump administration with WTO-sceptic Robert Lighthizer, whose own nomination to join the AB had been rejected, as trade representative. The Trump administration hobbled the WTO dispute settlement by refusing to reappoint judges to the AB.When Biden was elected, his administration talked a good multilateralist game but other member governments increasingly regarded it as being in bad faith. True, it did participate in WTO talks on various subjects, but they created nothing of substance.Yet the Biden White House continued to stymie the AB, forcing other governments to use an ersatz workaround version, and treated WTO rules with broad indifference. The rationale changed but the effect was similar. Trump ignored WTO rules for purely protectionist reasons, Biden because they stood in the way of the subsidies and tariffs of his expansive green industrial interventions.In his second term, Trump might well simply continue to treat the WTO with malign neglect rather than actively trying to destroy it. There’s an early test with the coming reappointment of WTO director-general Ngozi Okonjo-Iweala, whose selection Lighthizer initially blocked the first time round. In reality the main danger from Trump will come from his threatened unilateral tariffs, not just the direct distortions to world trade but what other governments will do to avoid them. The evasive manoeuvres during Trump’s first term were already legally dicey: quotas on steel imports from Japan, a proposed bilateral deal on industrial goods violating the EU’s own rules.If Trump decides other countries have to join the US in whacking big unilateral tariffs on China or face reprisals, the collateral damage could be much more serious. It’s not just the US ignoring international law but dragging trading partners along with it. Again, this would not entirely be a novelty. The Biden administration attempted (though failed) to bully the EU into putting almost certainly WTO-illegal steel tariffs on imports from China. It also successfully leaned on Canada to impose 100 per cent tariffs on electric vehicles from China and consider a ban on Chinese software in connected cars. But under Trump II the pressure is likely to be an order of magnitude greater, and governments will have to decide how far they will follow rules-based principles at the cost of Trump’s wrath.There are a few positive things they can do to bolster the system. The EU and Mercosur, the South American trading bloc, for example, could finalise a long-awaited trade deal in the coming weeks. That would be a useful signal that the rules-based flame continues to flicker in the Trumpian darkness. Otherwise, as ever, they will be relying on their companies to keep production networks going despite official impediments.The reality is that the multilateral system has been sufficiently weakened by US disapproval over the decades that it’s not promising much resistance even before Trump starts his work. Mutterings of disquiet from Washington right from the creation of the WTO have gradually become deep rumbles of discontent that have shaken the institution’s foundations. Even if Trump does not dispatch a wrecking ball, the edifice of multilateralism has progressively crumbled away.alan.beattie@ft.com More

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China has prepared powerful countermeasures to retaliate against US companies if president-elect Donald Trump reignites a smouldering trade war between the world’s two biggest economies, according to Beijing advisers and international risk analysts.Chinese leader Xi Jinping’s government was caught off-guard by Trump’s 2016 election victory and the subsequent imposition of higher tariffs, tighter controls over investments and sanctions on Chinese companies.But while China’s fragile economic outlook has since made it more vulnerable to US pressure, Beijing has introduced sweeping new laws over the past eight years that allow it to blacklist foreign companies, impose its own sanctions and cut American access to crucial supply chains. “This is a two-way process. China will of course try to engage with President Trump in whatever way, try to negotiate,” said Wang Dong, executive director of Peking University’s Institute for Global Cooperation and Understanding. “But if, as happened in 2018, nothing can be achieved through talks and we have to fight, we will resolutely defend China’s rights and interests.” President Joe Biden maintained most of his predecessor’s measures against China, but Trump has already signalled an even tougher stance by appointing China hawks to important roles.China now has at its disposal an “anti-foreign sanctions law” that allows it to counter measures taken by other countries and an “unreliable entity list” for foreign companies that it deems to have undermined its national interests. An expanded export control law means Beijing can also weaponise its global dominance of the supply of dozens of resources such as rare earths and lithium that are crucial to modern technologies.Some content could not load. Check your internet connection or browser settings.Andrew Gilholm, head of China analysis at consultancy Control Risks, said many underestimated the damage Beijing could inflict on US interests.Gilholm pointed to “warning shots” fired in recent months. These included sanctions imposed on Skydio, the biggest US drone maker and a supplier to Ukraine’s military, that ban Chinese groups from providing the company with critical components. Beijing has also threatened to include PVH, whose brands include Calvin Klein and Tommy Hilfiger, on its “unreliables list”, a move that could cut the clothing company’s access to the huge Chinese market. “This is the tip of the iceberg,” Gilholm said, adding: “I keep telling our clients: ‘You think you’ve priced-in geopolitical risk and US-China trade warfare, but you haven’t, because China hasn’t seriously retaliated yet’.”China is also racing to make its technology and resource supply chains more resistant to disruption from US sanctions while expanding trade with countries less aligned to Washington.From Beijing’s perspective, while relations with the US were more stable towards the end of Biden’s presidency, the outgoing administration’s policies had largely continued in the same vein as in Trump’s first term. “Everyone was already expecting the worst, so there won’t be any surprises. Everybody is ready,” said Wang Chong, a foreign policy expert at Zhejiang International Studies University.Some content could not load. Check your internet connection or browser settings.Still, China cannot lightly dismiss Trump’s campaign-trail threat to impose blanket tariffs of more than 60 per cent on all Chinese imports, given slowing economic growth, weak confidence among consumers and businesses and historically high youth unemployment.Gong Jiong, professor at Beijing’s University of International Business and Economics, said that in the event of negotiations, he expected China to be open to more direct investment in US manufacturing or to moving more manufacturing to countries Washington found acceptable.China has been struggling to boost the economy amid doubts about its ability to hit this year’s official growth target of around 5 per cent, one of its lowest targets in decades.A former US trade official, who asked not to be named because of involvement in active US-China disputes, said Beijing had been surgical in using the “arrows” in its quiver, wary of further eroding weak international investment sentiment.“That constraint is still there and that internal tension in China still exists, but if there are 60 per cent tariffs or real hawkish intent by the Trump administration, then that could change,” the former official said.Trump, flanked by then-US trade representative Robert Lighthizer, imposed new tariffs on Chinese imports in 2018 More

WASHINGTON (Reuters) – President-elect Donald Trump’s Republican Party will control both houses of Congress when he takes office in January, Edison Research projected on Wednesday, enabling him to push an agenda of slashing taxes and shrinking the federal government.Republicans will have at least the 218 votes needed to control the 435-seat House of Representatives, Edison projected, with nine races yet to be called. They have had already secured a U.S. Senate majority of at least 52-48 with one race uncalled after the Nov. 5 election. During his first presidential term in 2017-2021, Trump’s biggest achievement was sweeping tax cuts that are due to expire next year. That legislation and Democratic President Joe Biden’s signature $1 trillion infrastructure law both came during periods when their parties controlled both chambers of Congress.By contrast, during the past two years of divided government, Biden has had little success in passing legislation and Congress has struggled to perform its most basic function of providing the money needed to keep the government open.The thin Republican House majority has been fractious, tossing out its first speaker, Kevin McCarthy, and routinely bucking his successor Speaker Mike Johnson. Trump’s grip on the party and particularly its raucous hardliners has been far firmer – as evidenced by his success earlier this year killing a bipartisan deal that would have sharply stepped up border security.His power will also be backed by a Supreme Court with a 6-3 conservative majority that includes three justices he appointed.More immediately, the Republicans’ victory is certain to influence the House’s post-election “lame duck” session. The current Congress faces end-of-year deadlines for funding the government to avoid shutdowns at Christmas and extending Washington’s borrowing authority to avoid an historic debt default.One possible scenario is passing temporary patches to give the incoming Trump administration a say on these two controversial items when it assumes power from the Biden administration on Jan. 20. The new Congress convenes on Jan. 3. More

A finance ministry statement outlining the measures followed pledges by the finance minister to issue relevant tax policies to support the healthy development of the property market in the near term.The ministry will expand the eligibility for the 1% deed tax to include apartments up to 140 square metres, up from the previous 90 square metres, according to the statement, effective from Dec. 1.The minimum pre-collection rate for land value-added tax will be reduced by 0.5 percentage points, the statement said. Residents are exempt from VAT when they sell their homes after two years of purchase and beyond. The rule also applies to four first-tier cities — Beijing, Shanghai, Shenzhen and Guangzhou.The property market is grappling with a prolonged downturn since 2021 and remains a major drag on the world’s second-largest economy.Authorities rolled out a raft of property easing measures at the end of September, including a cut in the minimum down payment ratio to 15% for all housing categories and relaxation in home purchase restrictions.”Stimulus measures announced since late September will likely narrow the decline in national contracted sales value over the next 12-18 months. The effect of a high base in H1 2023 will also fade in 2025,” said Moody’s (NYSE:MCO) Ratings in a research note this week.”Homebuyer sentiment continues to be impaired by a slowdown in economic and income growth and lingering concerns about project incompletion. It is uncertain whether the contracted sales decline can be halted,” said Moody’s Ratings. More

Speaking at the ASIC Annual Forum in Sydney, Bullock said uncertainty over the U.S. economic outlook would keep the bank cautious. She flagged the risk of potentially inflationary policies under Donald Trump. Bullock’s comments furthered bets that Australian interest rates will not rise any further, following similar messaging by the RBA during its recent meetings. “We’re not as restrictive as others (central banks), even as they are lowering their interest rates. We think we’re restrictive enough, and we’re going to stay restrictive enough until we think we’ve definitely got that downward trajectory in demand,” Bullock said.The RBA kept its benchmark cash rate unchanged at 4.35% last week,marking a year since the central bank last raised rates. While the RBA said inflation had cooled in line with its expectations, price pressures still remained high, and interest rates would need to remain steady until it was more confident that inflation risks had abated.The RBA also signaled that it was not ruling anything in or out with regards to future policy decisions. Analysts at ANZ and Westpac said that the RBA was likely to begin cutting rates by the first quarter of 2025, although any upside risks in inflation were likely to delay the cut.Australian consumer price index inflation eased in the September quarter, but core inflation still remained above the RBA’s 2% to 3% target range. More

Shares of the computer networking equipment maker were down 1.4% in extended trading after the company forecast annual revenue broadly in line with estimates.Companies have been ramping up investments in AI technologies which require heavy computing power, creating a spike in demand for data centers, which use Cisco (NASDAQ:CSCO)’s products such as ethernet switches and routers.However, the California-based company has been trying to reduce reliance on its massive networking equipment business, which has suffered in recent years from supply chain issues and a post-pandemic slowdown in demand.The company had announced two rounds of layoffs this year in a bid to cut costs, as it shifts focus to cybersecurity, cloud systems and AI-driven products.Cisco completed its $28 billion acquisition of Splunk (NASDAQ:SPLK) in March, which aims to boost its software business amid an AI boom while also helping to offset a post-pandemic slowdown in demand by enhancing its cybersecurity capabilities.The company expects second-quarter revenue to be between $13.75 billion and $13.95 billion, which was above analysts’ average estimate of $13.73 billion, according to LSEG-compiled data.It forecast quarterly adjusted profit per share of 89 cents to 91 cents, compared with estimates of 87 cents.The company’s revenue fell 6% to $13.84 billion in the first quarter ended Oct. 26, beating estimates of $13.77 billion. Adjusted profit per share of 91 cents also beat estimates of 87 cents.Cisco now expects annual revenue to be between $55.3 billion and $56.3 billion, compared with its earlier forecast of between $55.0 billion to $56.2 billion. Analysts were expecting $55.89 billion.It raised its annual adjusted profit forecast range to $3.60 to $3.66, from $3.52 to $3.58. More