What We're Watching: Finally, a trade deal

Trump gets his deal – House Speaker Nancy Pelosi announced yesterday that Democrats will back the USMCA, the US-Mexico-Canada trade agreement that will replace the North American Free Trade Agreement. Crucially, the bill will also have support from the nation's largest labor union. This is a major political victory for President Trump, who promised he would close this deal, but it's also good for Pelosi: it shows that the Democrats' House majority can still accomplish big things even as it impeaches the president. But with the speed of the Washington news cycle these days, we're watching to see if anyone is still talking about USMCA three days after it's signed.


The end of martial law in the southern Philippines – More than two years after imposing martial law in Mindanao – the Philippines' second largest island and home to more than 90 percent of the country's more than 5 million Muslims – President Rodrigo Duterte will now lift the restrictions by year-end. The measure was originally imposed in response to the seizure by Islamic State rebels of parts of the southern city of Marawim in 2017, but rights groups criticized it as evidence of Duterte's authoritarian instincts. The Philippines' government now says the clout of armed groups in the region has diminished, but the influence of ISIS in Southeast Asia more broadly has grown in recent months, with Mindanao itself hit by a number of deadly suicide bombings.

Anguish and election in the UK – Tomorrow, voters will decide whether Prime Minister Boris Johnson's Conservatives will get the parliamentary majority he needs in order to push through his Brexit plan. After three years of Brexit anguish, Johnson's "Get Brexit Done" platform appears to be resonating with working class and rural voters who see Brexit as a way to revive British industry and limit immigration. His chief rival, Labour leader Jeremy Corbyn, is trying to talk past Brexit – which many working class Labour voters now support – toward issues of social justice and economic inequality that can also attract urban and younger voters. The fiercely anti-Brexit Liberal Democrats, for their part, are just hoping to win enough seats to deny Johnson a majority. The latest polls show Johnson with a 10 point lead over Corbyn. Oddly, the latest electoral map appears to shows cartoon character Homer Simpson in a muumuu.

What We're Reading

How China pitched Italy rightwards The migrant crisis of 2015-2016 may have contributed to the recent explosion of rightwing parties across Europe but, at least in Italy, the fuse was lit decades ago when Chinese competitors began to hollow out the country's industrial heartlands. Though Chinese immigrants have contributed a lot to the economy since then, the far-right, anti-immigrant Lega party still has a large number of formerly left-wing, working class voters in these regions. A fascinating long read from the New York Times here.

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As the coronavirus pandemic has plunged much of the world economy into turmoil, you've probably heard a lot about what might happen to "supply chains," the vast networks of manufacturing and shipping that help create and deliver all those plastic toys, iPhones, cars, pills, pants, yogurt, and N95 face-masks you've been waiting on.

The future of global supply chains is an especially important question for China, the world's manufacturing powerhouse. Some countries and companies now worry about relying too much on any single supplier for consumer and medical goods, let alone one where the government hid the first evidence of what became a global pandemic and sometimes enforces trade and investment rules in seemingly arbitrary ways. The US-China trade war — and the vulnerabilities it reveals for manufacturers — certainly don't help.

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Ian Bremmer's Quick Take:

Got through the Fourth of July. Pretty rough one for 2020 here in the United States. Still in the thick of it as we see caseload exploding in the United States. But really, the virus is all about developing markets right now. Poor countries around the world very soon, with the exception of the US and the UK, all of the top 10 countries around the world in terms of coronavirus caseload will be poorer countries. Let's keep in mind, these are countries that test a lot less, which means the actual numbers, in the United States the experts are saying probable likelihood of total cases is about 10x what we've actually seen in the US, in emerging markets and most of them, it's more like between 20 and 100. In other words, this is really where the virus now is.

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Many countries around the world — mostly democracies in the Americas, Asia, and Europe — have condemned China's recent move to implement a draconian new security law for Hong Kong that in effect ends the autonomy granted to the territory when it reverted from British control to Chinese rule in 1997. However, last week 52 countries expressed support for China's decision at the UN Human Rights Commission in Geneva. Most of these countries either owe China a lot of money or are relatively authoritarian regimes themselves — but not all of them. Here's a look at the China-debt exposure and freedom rankings of the countries that took Beijing's side on the new Hong Kong law.

0: The trial in the 2018 killing of Saudi journalist Jamal Khashoggi opened in a Turkish court on Friday, but 0 of the 20 Saudi agents accused of the gruesome murder were actually in the courtroom. Saudi Arabia says its own closed-door trial over the slaying was sufficient, and has so far refused to extradite the suspects to Turkey, where Khashoggi was killed.

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