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    Trump victory seen as blow to climate action ahead of UN summit

    Standard DigitalStandard & FT Weekend Printwasnow $29 per 3 monthsThe new FT Digital Edition: today’s FT, cover to cover on any device. This subscription does not include access to ft.com or the FT App.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print editionWeekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisGlobal news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts10 monthly gift articles to shareGlobal news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print editionEverything in PrintWeekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisPlusEverything in Premium DigitalEverything in Standard DigitalGlobal news & analysisExpert opinionSpecial featuresFirstFT newsletterVideos & PodcastsFT App on Android & iOSFT Edit app10 gift articles per monthExclusive FT analysisPremium newslettersFT Digital Edition10 additional gift articles per monthMake and share highlightsFT WorkspaceMarkets data widgetSubscription ManagerWorkflow integrationsOccasional readers go freeVolume discountFT Weekend Print deliveryPlusEverything in Standard DigitalFT Weekend Print deliveryPlusEverything in Premium Digital More

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    China will work with US, government says, but more rivalry expected under Trump

    BEIJING (Reuters) – China will work with the U.S. on the basis of mutual respect, it said on Wednesday as Donald Trump closed in on victory in the presidential election, but strategists said Beijing was bracing for bitter superpower rivalry over trade, technology and security issues.”Our policy towards the U.S. is consistent,” foreign ministry spokesperson Mao Ning told a regular press conference in Beijing, when asked how Trump returning to the Oval Office would affect U.S.-China relations. “We will continue to view and handle China-U.S. relations in accordance with the principles of mutual respect, peaceful co-existence and win-win cooperation,” she added.Chinese strategists however said they expected more fiery rhetoric and potentially crippling tariffs from Trump, although some said his isolationist foreign policy could give Beijing a vacuum to expand its global influence.”Beijing anticipated a close race in the U.S. election. Although Trump’s victory is not China’s preferred outcome and raises concerns, it is not entirely unexpected,” said Tong Zhao, senior fellow at the Carnegie Endowment for International Peace. “The Chinese leadership will likely strive to maintain an appearance of a cordial personal relationship with Trump, while intensifying efforts to project China’s power and strength.”Da Wei, director of the Center for International Security and Strategy at Tsinghua University in Beijing, said Trump’s victory “may pose a relatively large challenge to Sino-U.S. relations” based on his campaign policy proposals and actions in his previous term.”Due to Trump’s high unpredictability, I think it is difficult for China to say that there is a fully formed plan to do “x” when Trump comes to power. It also depends on what policies the Trump administration implements.”TRUMP TARIFF THREATTrump has proposed tariffs on Chinese imports in excess of 60% and ending China’s most-favoured-nation trading status, and analysts say the prospect of a trade war has rattled China’s leadership.China sells goods worth more than $400 billion annually to the U.S. and hundreds of billions more in components for products Americans buy from elsewhere.”Beijing is particularly wary of a potential revival of the trade war under Trump, especially as China currently faces significant internal economic challenges,” said Zhao. “China also expects Trump to accelerate the decoupling of technologies and supply chains, a move that could threaten China’s economic growth and indirectly impact its social and political stability.”In response, China is likely to intensify its push for greater technological and economic self-sufficiency, while feeling more pressure to bolster economic ties with countries like Russia, he added.”Going forward, Beijing would likely be drawing up a list of clear bargains and interest tradeoffs that it could float with Washington, in hope that it can focus on its much needed domestic economic concerns whilst Trump’s attention is occupied elsewhere,” said Brian Wong, assistant professor at the University of Hong Kong who studies grand strategy. GLOBAL POWER VACUUMChina is likely to shore up ties with the Global South, Europe and Northeast Asian countries in the event of a Trump win, given his “transactional, isolationist, anti-globalist and anti-multilateral foreign policy”, said Wong.Chinese President Xi Jinping and Indian Prime Minister Narendra Modi reached a rare rapprochement last month, while Beijing has tentatively reached out to the new Japanese administration this autumn following years of strained relations.”China expects the second Trump administration to further disengage from international agreements and commitments, creating opportunities for China to expand its influence in emerging power vacuums,” Zhao added.Trump has unnerved democratically governed Taiwan by saying it should pay Washington for its defence and that it had taken U.S. semiconductor business. “The Biden administration applied high-pressure tactics to China on Taiwan, with U.S. troops stationed in Taiwan and even giving weapons to Taiwan … in a huge break with the former Trump administration’s Taiwan policy,” said Shen Dingli, an international relations scholar in Shanghai. Washington last month approved a US$2 billion arms sale to Taiwan.”Trump is not too likely to give Taiwan the same support in future.” (This story has been corrected to change the time element in paragraph 1) More

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    Trump victory, divided Congress would be mild positive for US equities: UBS

    A UBS equity strategist said he expects that such an outcome would maintain a moderately favorable environment for stocks, supported by a lighter regulatory load across sectors like real estate, energy, and financials.A divided Congress could prevent sweeping policy changes, leading to a steady market environment. UBS’s credit team suggests that much of the market has already priced in this scenario, with high-yield spreads near 270 basis points and investment-grade spreads around 80 basis points.They also project the 10-year Treasury yield could rise to about 4.4% in this scenario.However, UBS warns that a clean Republican sweep—though considered unlikely—could also create some volatility. Under this outcome, Golub estimates a slightly lower S&P 500 target of 6,375, while credit spreads could tighten as yields edge higher.Additionally, UBS’s FX team notes that a full Republican sweep might bolster the U.S. dollar more than a divided Congress would due to expected tax cuts and regulatory shifts.A Red Sweep would likely bring the corporate tax rate reduction from 21% to 15%, generating an estimated $598 billion benefit over ten years. UBS analysts suggest this could initially boost equities but caution against medium-term impacts, as 2026 is expected to bring a worse growth/inflation mix, driven in part by a possible 60% tariff on a significant portion of Chinese imports, which could trim U.S. GDP by up to 0.6%.Even under a divided Congress, UBS forecasts an additional $3.1 trillion in government debt over the next decade, posing long-term challenges for fiscal policy and potential upward pressure on bond yields. More

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    What Trump 2.0 would mean for trade, migrants, climate change and electric cars

    WASHINGTON (Reuters) -A Donald Trump presidential election victory would have huge implications for U.S. trade policy, climate change, the war in Ukraine, electric vehicles, Americans’ taxes and illegal immigration.While some of his proposals would require congressional approval, here is a summary of the policies he has said he would pursue in his second four-year term in office: MORE TARIFFSTrump has floated the idea of a 10% or more tariff on all goods imported into the U.S., a move he says would eliminate the trade deficit. But critics say it would lead to higher prices for American consumers and global economic instability.He has also said he should have the authority to set higher tariffs on countries that have put tariffs on U.S. imports. He has threatened to impose a 200% tariff on some imported cars, saying he is determined in particular to keep cars from Mexico from coming into the country. But he has also suggested that allies such as the European Union could see higher duties on their goods. Trump has targeted China in particular. He proposes phasing out Chinese imports of goods such as electronics, steel and pharmaceuticals over four years. He seeks to prohibit Chinese companies from owning U.S. real estate and infrastructure in the energy and tech sectors.Trump has said “tariff” is his favorite word and views them as revenue generators that would help fill government coffers. MASS DEPORTATIONSTrump has vowed to reinstate his first-term policies targeting illegal border crossings and to forge ahead with sweeping new restrictions.He has pledged to limit access to asylum at the U.S.-Mexico border and to embark on the biggest deportation effort in American history, which would likely trigger legal challenges and opposition from Democrats in Congress.He has said he will employ the National Guard, and, if necessary, federal troops, to achieve his objective, and he has not ruled out setting up internment camps to process people for deportation.Trump has said he would seek to end automatic citizenship for children born to immigrants, a move that would run against the long-running interpretation of the U.S. Constitution’s 14th Amendment. He has also suggested he would revoke protected legal status for some populations such as Haitians or Venezuelans.Trump says he will reinstitute the so-called “travel ban” that restricts entry into the United States of people from a list of largely Muslim-dominant countries, which sparked multiple legal battles during his first term.DRILLING AWAYTrump has vowed to increase U.S. production of fossil fuels by easing the permitting process for drilling on federal land and would encourage new natural gas pipelines. He has said he would reauthorize oil drilling in the Arctic National Wildlife Refuge in Alaska.Whether the oil industry follows through and raises production at a time when oil and gas prices are relatively low remains to be seen. He has said he will again pull the United States out of the Paris Climate Accords, a framework for reducing global greenhouse gas emissions, and would support increased nuclear energy production. He would also roll back Democratic President Joe Biden’s electric-vehicle mandates and other policies aimed at reducing auto emissions.He has argued that the U.S. needs to be able to boost energy production to be competitive in developing artificial intelligence systems, which consume large amounts of power.TAX RELIEFAlong with his trade and energy agendas, Trump has promised to slash federal regulations that he says limit job creation. He has pledged to keep in place a broad 2017 tax cut that he signed while in office, and his economic team has discussed a further round of individual and corporate tax cuts beyond those enacted in his first term.Trump has pledged to reduce the corporate tax rate from 21% to 15% for companies that make their products in the U.S. He  has said he would seek legislation to end the taxation of tips and overtime wages to aid waiters and other service workers. He has pledged not to tax or cut Social Security benefits.Trump also has said that as president he would pressure the Federal Reserve to lower interest rates – but would stop short of demanding it.Most, if not all, of his tax proposals would require congressional action. Budget analysts have warned that the bevy of tax cuts would balloon the federal debt.DOING AWAY WITH DIVERSITY PROGRAMSTrump has pledged to require U.S. colleges and universities to “defend American tradition and Western civilization” and to purge them of diversity programs. He said he would direct the Justice Department to pursue civil rights cases against schools that engage in racial discrimination.At K-12 schools, Trump would support programs allowing parents to use public funds for private or religious instruction.Trump also wants to abolish the federal Department of Education, and leave states in control of schooling.NO FEDERAL ABORTION BANTrump appointed three justices to the U.S. Supreme Court who were part of the majority that did away with Roe v. Wade’s constitutional protection for abortion. He likely would continue to appoint federal judges who would uphold abortion limits.At the same time, he has said a federal abortion ban is unnecessary and that the issue should be resolved at the state level. He has argued that a six-week ban favored by some Republicans is overly harsh and that any legislation should include exceptions for rape, incest and the health of the mother. Trump has suggested he would not seek to limit access to the abortion drug mifepristone after the U.S. Supreme Court rejected a challenge to the government’s approach to regulating it. He supports policies that advance in vitro fertilization (IVF), birth control and prenatal care.A PUSH TO END WARSTrump has been critical of U.S. support for Ukraine in its war with Russia, and has said he could end the war in 24 hours if elected – although he has not said how he would achieve this. He has suggested Ukraine may have to yield some of its territory if a peace deal is to be struck, an idea Ukraine has consistently rejected.Trump has also said that under his presidency the U.S. would fundamentally rethink “NATO’s purpose and NATO’s mission.”He has backed Israel in its fight against Hamas in Gaza but has urged it to wrap up its offensive. Trump can be expected to continue the Biden administration’s policy of arming Israel. At the same time, he is likely to push for historic normalization of relations between Israel and Saudi Arabia, an effort he made during his 2017-2021 presidency and which Biden has also pursued.Trump has said if he becomes president, he will “stop the suffering and destruction in Lebanon,” but has not said how he will achieve that.He has suggested building an “iron dome” – a massive missile-defense shield similar to Israel’s – over the entire continental United States.Trump has also floated sending armed forces into Mexico to battle drug cartels and using the U.S. Navy to form a blockade of that country to stop the smuggling of fentanyl and its precursors.INVESTIGATING ENEMIES, AIDING ALLIESTrump has pledged at times to use federal law enforcement agencies to investigate his political foes, including election officials, lawyers and party donors. Along that line, Trump has said he will consider appointing a special prosecutor to probe Biden, though he has not specified the grounds for such an investigation. And he has said he would consider firing a U.S. attorney who did not follow his directives – which would constitute a break with the longstanding U.S. policy of an independent federal law enforcement apparatus.Trump has said he will consider pardoning all of those who have been convicted of crimes in connection with the Jan. 6, 2021, attack on the U.S. Capitol.In addition to criminal investigations, he has suggested using the government’s regulatory powers to punish those he views as critics, such as television networks.PURGING THE FEDERAL BUREAUCRACYTrump would seek to decimate what he terms the “deep state” – career federal employees he says are clandestinely pursuing their own agendas – through an executive order that would reclassify thousands of workers to enable them to be fired. That would likely be challenged in court. He would set up an independent government efficiency panel headed by billionaire supporter Elon Musk to root out waste in the federal government. He has not detailed how the body would function. The government already has watchdogs such as the Office of Management and Budget, and investigators general at federal agencies.Trump would crack down on federal whistleblowers, who are typically shielded by law, and would institute an independent body to “monitor” U.S. intelligence agencies. More

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    Russian central bank sees Q4 GDP growth at 2-3% versus 3.2% in Q3

    Russia’s economy contracted in 2022 and growth now relies heavily on large-scale government spending on arms production as Moscow funds the conflict in Ukraine, while the central bank has warned that the economy is overheating.Russia’s central bank hiked its key interest rate by 200 basis points on Oct. 25 to 21%, the highest level since the early years of President Vladimir Putin’s rule, when Russia was recovering from the chaos that followed the collapse of the Soviet Union. More

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    South Korean trade minister sees firms investing more in US if Trump imposes tariffs

    SEOUL (Reuters) -South Korea’s trade minister said on Wednesday he saw domestic companies investing more in the United States if the next U.S. administration introduces higher tariffs. He made his comments just hours after Republican Donald Trump’s victory in the 2024 U.S. presidential election. “If tariffs get raised, the first alternative firms can consider will be raising direct investment and on-site production,” Trade Minister Cheong In-kyo said in an interview with Reuters. “There are ongoing investments already, and there is a possibility that investment could accelerate, followed by an increase in U.S.-bound exports by small and medium-sized parts manufacturers,” Cheong said.In recent years, South Korean companies have invested in the United States the most for production of automobiles, especially electric vehicles, Cheong said. Trump has floated the idea of imposing blanket tariffs of 10% to 20% on all U.S. imports, which a South Korean state-run think tank estimated last week would cause the trade-dependent economy to lose as much as $44.8 billion in exports. That would be a blow to major exporters, especially South Korean automakers which rely more on domestic production than Japanese rivals for its vehicles sold in the United States. Trump has also threatened to impose a 200% tariff on some imported cars, saying he is determined in particular to keep cars from Mexico from coming into the country, a move likely to hit multiple Asian automakers including Honda (NYSE:HMC) Motor, Nissan (OTC:NSANY) Motor and Hyundai Motor (OTC:HYMTF).South Korean companies’ investment in the U.S. amounted to $27 billion last year, about 44% of the overall investment by Korean firms overseas, trade data showed. That share is the highest since 1998, the Korea Trade Investment Association said in May.Cheong said the trade ministry has prepared ways to respond to several scenarios and it will consult with the next administration after channels for dialogue are set up.”Still, relations between South Korea and the United States will not be greatly affected even if the current situation remains unchanged,” Cheong said.”We can only respond to the new administration’s policy. Nevertheless, we will make efforts for trade to remain smooth, with not only the United States, but also China,” Cheong said.The Chinese market was “the most important”, he added.South Korea’s export growth weakened in October to a seven-month low, missing market expectations, after Asia’s fourth-largest economy barely grew in the third quarter on slowing exports. Last month, shipments to the United States grew 3.4%, the slowest pace since August 2023, while exports to China jumped 10.9% and hit a 25-month high in terms of value.Cheong said this year’s exports were still expected to exceed last year’s and vowed response measures to factors raising uncertainty over next year’s trade conditions, including political events. South Korea’s trade surplus with the United States hit a record $44.4 billion in 2023, bigger than with any other country, with exports of cars accounting for nearly 30% of total U.S.-bound shipments.Shares of South Korean automakers and battery firms, including Hyundai Motor and LG Energy Solution, dropped on Wednesday, with analysts attributing the declines to worries about potential tariffs. More

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    Explainer-Why China’s economy is more vulnerable to Trump tariffs this time

    HONG KONG (Reuters) – A threat by Donald Trump, who has been elected as the next U.S. president, to impose 60% tariffs on U.S. imports of Chinese goods poses major growth risks for the world’s second-largest economy.Not only are the tariff rates much higher than the 7.5%-25% levied on China during his first term, the economy is also in a much more vulnerable position.This is what is different:PROPERTY MARKET CRISISIn 2018, the property market was strong, driving about a quarter of China’s economic activity. That meant local government finances, heavily reliant on auctioning land for residential projects, were not questioned so forcefully.This helped China absorb the tariff shock. But since 2021, real estate has been in a severe downturn and local government revenues have plunged.Housing oversupply means this sector may never return to the driving seat of Chinese economic growth.DEBTThe property sector’s downturn has saddled local governments with unsustainable debt.While Beijing is lining up fiscal help for them to curb their liabilities, the burden is huge, limiting China’s ability to respond to any external growth shocks.The International Monetary Fund calculates total government sector debt at 147 trillion yuan ($20.7 trillion) at the end of 2023. Add household and corporate debt and that number surpasses 350 trillion yuan – roughly three times the size of the economy, according to the Bank for International Settlements.WEAK DOMESTIC DEMANDLow wages and pensions, high youth unemployment and a feeble social safety net leave China’s household spending below 40% of GDP, about 20 percentage points behind the global average. Boosting that requires either more debt or an overhaul of how national income is distributed, so that it benefits households at the expense of government and businesses.That could be achieved by changing how companies and households are taxed and how government spends the money, raising retirement, health and unemployment benefits and removing an internal passport system responsible for huge rural-urban inequalities, among other reforms.So far, however, authorities have focused on upgrading the export-reliant manufacturing sector instead, with remarkable success in electric vehicles, solar energy and batteries.But this also prompted tariffs in the United States, Europe, Turkey and elsewhere.China may be able to boost external sales in areas where its economy is extremely competitive, but has little control on external demand. DEFLATIONARY PRESSURESThe property crisis, the debt overhang and weak consumption have all fuelled deflationary pressures.China’s policy of redirecting resources from the property market to the manufacturing sector, rather than consumers, has fuelled what Western governments describe as industrial overcapacity. This has led to factory gate deflation.Producer price inflation was 4.6% in July 2018 when Trump’s first tariffs came into effect. In September 2024 this stood at minus 2.8%. Consumer price inflation has ground to a paltry 0.4% from 2.1% over that period.Deflation, which hurts consumption, businesses and growth, could get much worse if tariffs shrink external demand, exacerbating industrial overcapacity.LIMITED ROOM FOR CURRENCY DEPRECIATIONThe yuan ended 2019 roughly 10% weaker against the dollar than in early 2018, when Washington flagged the tariffs plan and 4% weaker in trade-weighted terms against all currencies. The U.S. curbs increased the effective tariff rate on all Chinese exports by 2.4 percentage points, according to Capital Economics analysts, which means that the yuan’s depreciation more than offset the tariff impact.This time, the yuan might have to fall 18% against the dollar to fully offset 60% U.S. tariffs, implying a rate of 8.5 per dollar, the analysts calculated – levels unseen since the 1990s Asian financial crisis.Worried about capital outflows, authorities tried to prevent the yuan from weakening past 7.3 earlier this year. A full adjustment looks unlikely.OTHER FACTORSDuring the COVID-19 pandemic, Washington unleashed trillions of dollars in stimulus, including cash handouts to consumers, some of which was spent on goods made in China.    Also, after Russia’s invasion of Ukraine, Moscow got shut out of many Western markets, pushing it to source more goods from China.These were unexpected opportunities for Beijing, and are unlikely to be repeated.    ($1 = 7.1047 Chinese yuan) (Graphics by Kripa Jayaram; Editing by Sam Holmes and Angus MacSwan) More

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    Dollar surges and US bond yields jump as Trump clinches victory

    Standard DigitalStandard & FT Weekend Printwasnow $29 per 3 monthsThe new FT Digital Edition: today’s FT, cover to cover on any device. This subscription does not include access to ft.com or the FT App.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print editionWeekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisGlobal news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts10 monthly gift articles to shareGlobal news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print editionEverything in PrintWeekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisPlusEverything in Premium DigitalEverything in Standard DigitalGlobal news & analysisExpert opinionSpecial featuresFirstFT newsletterVideos & PodcastsFT App on Android & iOSFT Edit app10 gift articles per monthExclusive FT analysisPremium newslettersFT Digital Edition10 additional gift articles per monthMake and share highlightsFT WorkspaceMarkets data widgetSubscription ManagerWorkflow integrationsOccasional readers go freeVolume discountFT Weekend Print deliveryPlusEverything in Standard DigitalFT Weekend Print deliveryPlusEverything in Premium Digital More