Chian faces an outbreak of trade disputes [View in browser](
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Welcome to Balance of Power, bringing you the latest in global politics. If you havenât yet, sign up [here](. China has no easy way out of its trade war with the US, which is likely to escalate whether Joe Biden or Donald Trump wins the presidency. Its next-best option is to limit the conflict to a single front. And thatâs getting harder, as skirmishes break out all over. The latest involves the European Union, which this week [imposed new tariffs]( on Chinese electric vehicles, following in American footsteps. Bidenâs 100% tariff essentially shuts the door to Chinese EVs â you donât see them on US streets. Not so in Europe. Industry experts reckon their EVs can be competitive even after the new taxes, and Chinese auto companies are opening plants in places like Hungary and Spain, where theyâll be able to produce and sell tariff-free. So if US trade actions are met with resignation in Beijing, the EUâs are more likely to spur horse-trading. It may have already started: Germany, whose auto giants export plenty of cars to China and are vulnerable to retaliation, is [working to scrap or water down]( the tariffs. That plays into a wider Chinese hope, that Europe can somehow be peeled away from the US, at least on trade and investment. Beijing has another set of trade troubles brewing with its friends in the so-called Global South. The issue there isnât the high-tech industries of the future but old-school stuff like steel. China has too much steel, because local builders donât need it after the housing market crashed. So the metal gets shipped abroad on the cheap, triggering protests from countries like Brazil, Turkey and Saudi Arabia. A weak domestic economy is partly to blame: Chinese companies wouldnât be so focused on selling abroad if people at home were keener to buy. For President Xi Jinping, thatâs a challenge even tougher than haggling over tariffs with Brussels. â [Ben Holland]( BYD vehicles waiting for shipment in Shenzhen on May 13. Source: VCGGetty Images Global Must Reads Group of Seven leaders will pledge to tighten enforcement of their price cap on Russian oil, choke the Kremlinâs [future energy projects]( and curb Moscowâs revenues from metals at their meeting in Italy, according to a statement seen by Bloomberg. The focus of much of the summit has been on Vladimir Putinâs war against Ukraine, with the group agreeing a $50 billion loan syndicate plan to use profits generated by frozen Russian assets to aid Kyiv. G-7 leaders attend a skydiving demonstration yesterday. Photographer: Mandel Ngan/Getty Images South African political parties that support a broad alliance to form the next administration have agreed to [keep Cyril Ramaphosa as president](. The African National Congress, the Democratic Alliance and other parties that back the government of national unity decided that the parliamentary speaker will be an ANC candidate while the DA would choose the deputy speaker, sources say. North Korea has sent Russia thousands of shipping containers that could hold nearly 5 million artillery shells of the type [used in the bombing campaign]( in Ukraine, and Putin will probably seek more during his upcoming visit to Pyongyang, South Korean Defense Minister Shin Wonsik said in an interview. In return, Russia has sent North Korea technology to help in its plans to deploy an array of spy satellites as well as conventional arms such as tanks and aircraft. Brazilian President Luiz Inacio Lula da Silva stopped off in Switzerland yesterday en route to the G-7, but he wonât be returning there for this weekendâs Ukraine summit. His absence is a reminder that for all the Western backing given to Kyiv to stop the Russian invasion, itâs [struggled to attract support]( from the Global South, which retains ties to Russia and to China. Nicolas Maduro is pulling out the stops to portray a softer image to young Venezuelans as he bids for reelection next month. A three-hour variety show, a singing competition and an animated series are among the tools his campaign is using to [transform his image]( from one of the worldâs most notorious despots into a charming and likable person. Hungarian Prime Minister Viktor Orban promised retaliation after a [stinging EU ruling]( on asylum policy, potentially clouding the countryâs upcoming presidency of the bloc. Reform UK leader Nigel Farage declared his party âthe opposition to Labourâ after an opinion poll showed it [had overtaken the Conservatives]( for the first time, the latest evidence suggesting Prime Minister Rishi Sunak is heading for a heavy election defeat in the July 4 election. A top Senate Democrat is reviewing limits put on US [weapons sales to Saudi Arabia](, as the Biden administration pursues a security agreement with the kingdom and seeks to ease the Israel-Hamas conflict. Washington Dispatch Now that Biden has nominated Christy Goldsmith Romero to be the [leader of the Federal Deposit Insurance Corp.](, lawmakers of both parties underscored the urgency of reforming one of the most important US financial regulators, which has been tarnished by scandal. Last monthâs report by the law firm detailing a toxic work culture at the FDIC â including allegations of harassment and discrimination â generated much unwanted attention, and Martin Gruenberg, the current chair, announced he would step down once his successor had been confirmed by the Senate. Sherrod Brown, a Democrat and the chair of the Senate Banking Committee, praised Goldsmith Romero as someone who âis not afraid to do whatâs rightâ and urged his colleagues âto move quickly to bring new leadership to the FDIC at this challenging time.â One thing to watch today: The University of Michiganâs preliminary consumer-sentiment index for June is expected to show an improvement even as inflation continues to sour the mood among many households. [Sign up for the Washington Edition newsletter]( for more from the US capital and watch Balance of Power at 1 and 5 p.m. ET weekdays on Bloomberg Television. Chart of the Day The Greens, Socialists, Communists and far-left France Unbowed party yesterday announced they would contest legislative elections [as a single group](, with polls showing it could place second to Marine Le Penâs far-right National Rally. Finance Minister Bruno Le Maire warned that the left-wing coalition coming to power in France would lead to widespread unemployment and the countryâs exit from the EU. And Finally The Artificial Intelligence revolution is coming for smallholder farmers, who produce a third of the worldâs food. One of the first examples is in the Malawian village of Ndodo, where growers gather in the shade of an acacia tree as [a voice over a smartphone]( tells them how to get rid of a weevil destroying their sweet-potato crops. The app theyâre using is called Ulangizi in the Chichewa language, which translates as âadvice.â Itâs piloted by a Chicago-based nonprofit organization, works on WhatsApp and uses data from ChatGPT and the Malawian governmentâs agricultural manual. Gerald Action, a sweet potato and root farmer, with his son watering plants. Photographer: Chris de Bode/CGIAR/Panos/Redux Pop quiz (no cheating!) In which European country may a 28-year-old fond of selfies become the next prime minister if his party wins a legislative majority next month? Send your answers to balancepower@bloomberg.net. More from Bloomberg - Check out our [Bloomberg Investigates]( film series about untold stories and unraveled mysteries
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