The US and China strike a deal

Nearly two years after the Trump administration launched its trade war against China, President Trump and Chinese Vice-Premier Liu He will sign a deal in Washington on Wednesday. The full details are still murky, but here is what the so-called "phase one" deal between the world's two biggest economies is expected to include:

China will commit to buy billions of dollars of US oil, cars, aircraft, agricultural products and other goods over the next few years. It will also pledge to better protect US companies' intellectual property and technology secrets.

The US will halt the next scheduled round of tariffs on Chinese imports and reduce some other levies it imposed in September by half. It has already removed China from a list of "currency manipulators" this week ahead of the signing ceremony, a goodwill gesture important to Beijing.

The two countries may also agree to begin talks about a bigger "phase two" deal later this year, but completion of that deal is unlikely until after the 2020 US election, if ever. China's leaders won't make big concession to a president who may be out of office within a year. They may never offer changes that demand fundamental shifts in China's economic model.

Yet, this week's agreement will give Trump an election-year deal he can sell as a boon for US farmers and factory workers. Xi Jinping will get some welcome relief from US tariffs at a time when China's economy is slowing and he faces political setbacks elsewhere.

Here's what won't change:

The US will keep in place most of the tariffs it has levied on more than $360 billion of Chinese imports since March 2018 (and reserve the right to reimpose other levies if China doesn't abide by the deal). China will keep billions of dollars of retaliatory tariffs on US goods.

China will continue other policies that the US does not like. It will continue to subsidize its domestic technology companies and pursue ambitious state-driven industrial policies that Beijing hopes will transform China into a global technology and advanced manufacturing power.

The US will keep Chinese tech giant Huawei on a Commerce Department blacklist and continue to try to limit the flow of advanced US technology to a country that it considers a strategic adversary.

Bottom line: These lingering pressures, along with inevitable disagreements between the US and China about how the deal should be implemented and enforced, will create further friction between the two countries, complicating efforts to fully resolve this complex trade and technology dispute.

Amid the current need to continually focus on the COVID-19 crisis, it is understandably hard to address other important issues. But, on March 31st, Washington Governor Jay Inslee signed landmark facial recognition legislation that the state legislature passed on March 12, less than three weeks, but seemingly an era, ago. Nonetheless, it's worth taking a moment to reflect on the importance of this step. This legislation represents a significant breakthrough – the first time a state or nation has passed a new law devoted exclusively to putting guardrails in place for the use of facial recognition technology.

For more on Washington's privacy legislation, visit Microsoft On The Issues.

Read our roundup of COVID-19 themes and stories from around the globe.

Europe skirts US sanctions to help Iran: While the US insists on tightening the sanctions noose around COVID-stricken Iran, European countries are now sending medical equipment. To do so, they are using for the first time a system called INSTEX, a back-channel financial mechanism created a year ago that allows Europe to maintain trade ties with Iran despite US sanctions. Recall that in 2018 the US pulled out of the multilateral Iran nuclear agreement and reimposed crippling sanctions – the Europeans stayed in the deal and have tried to salvage it. To date, Iran has suffered more than 3,000 deaths from COVID-19, one of the highest tolls in the world. Some say that Iran's failure to contain the contagion has been complicated further by US sanctions, which have thwarted the Islamic Republic's ability to fund medical imports. Tehran has urged the US to ease sanctions to no avail, but Ayatollah Khamenei has also, citing some wild conspiracy theories about the coronavirus' origin, refused medical aid from Washington.

More Show less

Laid-off hospitality workers tell their stories in their own words.

Ian Bremmer breaks down the massive economic toll the COVID-19 pandemic is taking on the hospitality and service industries in America and around the globe. In the U.S. alone, millions could face unemployment as businesses struggle to stay afloat.

Over the past decade or so, the European Union has weathered the global financial crisis, a migrant crisis, and the rise of populist nationalism. Sure, it's taken its fair share of bumps and bruises along the way, but the idea of a largely borderless Europe united by common democratic values has survived more or less intact.

Then came the coronavirus. The global pandemic, in which Europe is now one of the two main epicentres, is a still-spiralling nightmare that could make those previous crises look benign by comparison. Here are a few different ways that COVID-19 is severely testing the 27-member bloc:

The economic crisis: Lockdowns intended to stop the virus' spread have brought economic activity to a screeching halt, and national governments are going to need to spend a lot of money to offset the impact. But some EU members can borrow those funds more easily than others. Huge debt loads and deficits in southern European countries like Italy and Spain, which have been hardest hit by the outbreak so far, make it costlier for them to borrow than more fiscally conservative Germany and other northern member states. In the aftermath of the global financial crisis, this imbalance nearly led the bloc's common currency, the Euro, to unravel.

More Show less