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Good morning. The US Senate Foreign Relations Committee is poised to vote on a bill that would fund arms exports to Taiwan for the first time and significantly alter relations with Taipei amid mounting pressure from China.
The Taiwan Policy Act, which will come up for a vote on Wednesday, would provide Taiwan with $4.5 billion in arms and security assistance over the next four years. It would also create a $2 billion loan facility to help Taipei buy weapons and make Taiwan eligible for a war reserve weapons stockpile mechanism.
The bill would also punish China if it takes military action against Taiwan by requiring the White House to impose sanctions on major Chinese financial institutions over “escalating hostile actions in or against Taiwan.”
Coming on the heels of China’s large-scale military exercises following House Speaker Nancy Pelosi’s trip to Taipei last month, the bill sparked debate in the US over how to support Taiwan. Supporters of the bill say the US should do more to help the country, while some worry that certain provisions will antagonize China while doing very little to secure Taiwan.
US struggles to mobilize its East Asian ‘Chip 4’ alliance Internal tensions and concerns about China undermine proposed grouping with South Korea, Japan and Taiwan
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Five more stories in the news
1. Ukraine faces ‘uphill battle’ even as Russian forces withdraw, US says A senior military official said on Monday that Russian forces had “largely relinquished their gains” around Ukraine’s second-largest city and “withdrawn to the north and east”, adding that “many of these forces have crossed the border into Russia moved”.
2. Amazon’s compliance with new laws ‘a work in progress’, says top EU official The retailer recently pledged to make several changes to how it handles data about its third-party sellers as part of a proposed deal with the European Commission that would end two competition investigations opened in 2019 and 2020.
3. Senate Minority Leader Mitch McConnell’s super Pac takes control of Republican ad spending Since the start of August, the McConnell-led Pac Senate Leadership Fund has spent $25.5mn on advertising, of which almost $20mn has been paid out since August 31, according to Federal Election Commission filings reviewed by the FT. By contrast, the National Republican Senatorial Committee, which typically leads efforts to get Republicans elected to the Senate, spent just $7.5 million.
4. Allowing US infrastructure reforms exposes energy tensions A US effort to speed up environmental reviews for power lines, gas pipelines and other energy infrastructure is facing resistance in Congress, with some lawmakers wary of enabling fossil fuel production even as legislation also supports a cleaner power grid.
5. Global inflation is pushing millions of Africans back into poverty While Russia’s invasion of Ukraine has caused a rise in the price of essentials such as food, fuel and fertilizer around the world, the human cost has been particularly high in more vulnerable African economies such as Malawi, where inflation is running at 25 percent.
The day ahead
Twitter shareholder vote Last week, Elon Musk sent a third letter to the social media company in which he tried to stop his $44 billion takeover. Today, Twitter shareholders will vote on whether to approve the deal.
Economic data The US consumer price index for August is expected to show a second consecutive monthly decline in the annual inflation rate. Germany has a CPI for the same month and the September ZEW economic sentiment survey, while the UK releases labor market data. Opul publishes its monthly market report.
Queen Elizabeth II London is bracing for the arrival of millions of mourners for the Queen ahead of her state funeral on Monday. Her coffin will be flown from Scotland to the capital today. Many foreign leaders will attend the funeral on September 19 at Westminster Abbey, including US President Joe Biden, European Commission President Ursula von der Leyen and Australian Prime Minister Anthony Albanese.
What else are we reading?
Debt monsters in the downturn As central banks raise rates to tame inflation, debt-laden companies face the uncomfortable prospect of servicing higher interest bills with shrinking cash flow. Which groups are flashing warning signals? The Financial Times compiled a list of companies with debt trading more than 10 percentage points above government bonds.
Why Wall Street Still Bets on the Music Industry Investors have poured billions of dollars into buying music rights in recent years, turning pop songs into a new source of revenue. But in an era of rising interest rates and a stalled economy, the nascent asset class faces its first real test.
‘Shut up’ is worse than nonsense According to Gallup, about half of Americans are “quiet keepers”: people who “do not go above and beyond at work and just fulfill their job description”. HR specialists were quick to offer advice on how to solve this problem. But Sarah O’Connor argues that this is not a problem at all – staff who turn up to do exactly what is asked of them are still working.
The ‘success sequence’ for life should be handled with caution Do you want to get ahead in life? In the rich world, there are three so-called infallible steps: graduate from high school, get a full-time job, and get married before having children. Stephen Bush writes that American libertarians have fallen for this idea which is an excuse to cut welfare spending.
Is this wellness’s golden gun? The Theragun massager, which promises to relax and strengthen facial muscles, appears to have received enthusiastic approval from soccer player Cristiano Ronaldo, who signed a sponsorship deal with Therabody in 2021 and has long been a champion of the brand. Therabody is determined to own the sports recovery market. Can it hit the perfect pressure point?
Add it to your reading list
As epic levels of floods, heat and fires hit countries around the world, can 21st century capitalism deliver the changes needed to prevent further environmental carnage? Pilita Clark outlines a new crop of environmental books that address that question.
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