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Another Country May Return to Haunt Trump

Rosalind Mathieson
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Another Country May Return to Haunt Trump

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Donald Trump has had a lot going on. Impeachment at home, a re-election campaign picking up speed, trade tensions with China, military tensions with Iran, plus bubbling issues in Syria, Libya and Afghanistan.

So it’s not surprising that, after an end-year bout of mutual mud-slinging, North Korea seems to have slipped down the White House’s priority list. Years of talks, including two summits, haven’t shown much progress curtailing Pyongyang’s nuclear ambitions.

That doesn’t mean North Korea can’t make trouble for the U.S. president as he moves into high gear for the election. Kim Jong Un’s regime might be secretive and isolated, but it doesn’t like being ignored. Above all, Kim wants international recognition of North Korea as a nuclear state and a seat at the table with the bigger players.

North Korea has a long history of doing dramatic things to force countries to interact with it or to give it economic concessions.

There are signs it has quietly restarted some mothballed nuclear operations. It has refrained from testing very long-range missiles (that, in theory, could hit the U.S.), but that doesn’t mean it won’t if it really wants Trump’s attention.

There are other clues Pyongyang is ready to shake things up. It has reportedly replaced its foreign minister — who’d been in the role since 2016 — with Ri Son Gwon, a former army officer. That could suggest a harder line ahead.

Global Headlines

Trump’s week | Anticipation is building in Washington ahead of the Senate’s first impeachment trial in 20 years, even as Democrats and Republicans continue to squabble about aspects of the proceedings. Trump, meanwhile, is heading back to Davos, poised to hail his economic record as vindication of an “America First” agenda to the world’s elite while lawmakers back home weigh his fate.

Hands off | Here’s a dynamic to watch for as global elites gather in the Swiss alps at the World Economic Forum this week: Governments are gearing up for a more active role in steering economies through the big challenges of the coming decade, from global warming and inequality to the great-power race for a technological edge. “We’re past peak laissez-faire in many ways,” said Adair Turner, former head of the U.K.’s bank regulator and a Davos regular.

Sign up here to receive the Davos Diary, a daily newsletter that will run through Jan. 24. Click here for more on U.K. Prime Minister Boris Johnson’s decision to skip Davos.

Libya impasse | Libya’s eastern military commander, Khalifa Haftar, is a difficult man to deal with, as world leaders found yesterday when they failed to persuade him to sign a peace deal to end a five-year civil war. He’s shut half of the North African nation’s oil production less than a week after he walked out of talks in Moscow aimed at reaching a durable cease-fire. While the warring parties agreed to set up a committee to negotiate a halt to fighting, progress appears to be fleeting.

Gray Lady | The New York Times endorsed both Elizabeth Warren and Amy Klobuchar for the Democratic presidential nomination, saying, “May the best woman win.” Editorial board members said they were impressed by Warren’s emphasis on policy and said Klobuchar, who has struggled to gain traction in polls, “could unite the party and perhaps the nation.”

Trump, meanwhile, championed a pair of trade victories at a farm convention yesterday in Austin, Texas.

Tehran’s de-linking | Iran’s six-year drive to integrate with the global economy appears to be coming to an end in the face of biting U.S. sanctions. As Marc Champion reports, Supreme Leader Ali Khamenei accused Europe of joining Washington in trying to “bring Iran to its knees.” Iran threatened today to withdraw from its last remaining commitments to the 2015 deal that limited its nuclear program in exchange for the lifting of international sanctions.

What to Watch This Week

If the past three years of Brexit have been difficult, the next 11 months threaten to be even more so. Click here for more on the battle lines between the U.K. and the European Union. Hong Kong’s government pushed back on a key demand of protesters as a downtown rally turned violent, showing there’s no end in sight for the unrest that began last June. Venezuelan opposition leader Juan Guaido started an international tour that includes a meeting with U.S. Secretary of State Michael Pompeo and a trip to Davos. Japanese Prime Minister Shinzo Abe opened a new session of parliament today with a fresh call to revise the U.S.-imposed postwar constitution, a career-long bid that still faces huge obstacles. South Africa’s government said it’s working on solutions for the national airline after failing to pay $138 million in funding by yesterday’s deadline.

Thanks to all who responded to our pop quiz Friday and congratulations to reader Hitesh Thakkar, who was the first to correctly answer that newly minted Russian Prime Minister Mikhail Mishustin’s previous job was head of the Federal Tax Service. Tell us how we’re doing or what we’re missing at balancepower@bloomberg.net.

And finally ... A pneumonia outbreak in central China has widened, with more than 200 people now diagnosed with the new SARS-like virus. Health experts say there’s evidence the illness is spreading from person to person. With the Lunar New Year just days away — a holiday season when Chinese citizens rack up 3 billion trips across the country to reunite with family — the mystery virus’s spread is likely to intensify.

 

To contact the author of this story: Rosalind Mathieson in London at rmathieson3@bloomberg.net

To contact the editor responsible for this story: Kathleen Hunter at khunter9@bloomberg.net, Karl Maier

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