1️⃣ America’s next top (economic) diplomat | 2️⃣ A chess duel in Singapore | 3️⃣ Chart of the day |
Hi Intriguer. When you’re a diplomat, you don’t just roll into your new town, log onto your computer, and start work. Well okay you kinda do. In fact, now I think of it, that’s exactly what you do. But there’s sometimes a bit of pomp to herald your arrival, like a shindig, and possibly even a hootenanny.
The idea is to meet a bunch of your key contacts in an informal setting. Arguably the worst thing about it is hearing from all your local contacts how much they absolutely loved your predecessor. Omg she was so funny, or he had perfect Spanish, and was so smart, haha? Just awful. Hot career tip: I managed to avoid this on all three of my postings by not having a predecessor (they were all new positions).
Why am I telling you this? Three reasons. First, for the lols. Second, because today’s briefing leads with an update on Trump’s newest cabinet pick (Scott Bessent at treasury). But third, you know who else just announced a new cabinet pick? We did!
We’re thrilled that Danny Miller is now Intrigue’s head of sales, on a mission to help keep Intrigue free. He joins us after many years driving sales at WSJ and beyond. If you’d like to advertise with us and/or partner on an event or webinar, just drop the wonderful Danny a line over at [email protected].
P.S. - Congratulations to Sam N. and Anna Maria who won our audience survey giveaway!
P.P.S - We’ll take a quick break this Thursday and Friday for Thanksgiving, but will be back in your inbox from Monday.
Ceasefire between Israel and Hezbollah appears imminent.
Israel’s cabinet is due to meet today (Tuesday) to discuss a proposed ceasefire with Hezbollah, despite hostilities continuing through the night. The proposal includes an initial 60-day truce, the withdrawal of Israeli forces from Lebanon, and the removal of Hezbollah forces and weapons from south of the Litani River (around 30km from the border). The Lebanese army would then replace Hezbollah forces in the area, while the US would lead a five-country committee to monitor the ceasefire.
Trump pledges tariffs from day one.
The president-elect has promised to use his first day in office to impose 25% tariffs on all products coming from Mexico and Canada, and an additional 10% levy on goods from China. He says the tariffs will remain until these countries clamp down on the flow of fentanyl (and undocumented migrants) crossing the US border. Beijing has already hit back, stating the “idea of China knowingly allowing fentanyl precursors to flow into the United States runs completely counter to facts and reality”. More on this below, but there’s likely a negotiating tactic at play behind Trump’s announcement.
US prosecutors drop cases against Trump.
Special counsel Jack Smith has announced he’ll drop both the election interference case and the classified documents case against Donald Trump now that he has become president-elect. The Department of Justice has a long-standing policy of not indicting or prosecuting a sitting president.
Romanian prime minister nudged out of runoff vote.
We already noted yesterday’s surprise electoral lead by obscure NATO critic Călin Georgescu, and now there’s another surprise around who'll enter next month’s runoff in second place: centre-right, pro-Ukraine reformist Elena Lasconi ended up with a 0.02% lead over the polling favourite (and current prime minister) who swiftly resigned. This means Romanians have eliminated the two largest parties in the first round.
Nepali prime minister to visit China before India, breaking with tradition.
KP Sharma Oli has announced he’ll travel to China next week as his first foreign visit since taking office in July, breaking with a tradition that’s long seen leaders head to India first. Nepal-India ties have frayed this year over a long-running border dispute.
In Focus: Global Plastics Treaty (Sponsored)
1,500 march outside of BEXCO, Busan, South Korea ahead of the final round of negotiations for a Global Plastics Treaty
We have five days to go on the most ambitious treaty you’ve never heard of – the Global Plastics Treaty.
The Global Plastics Treaty ambition is to fundamentally reshape how we create, use and dispose of one of the most ubiquitous and harmful materials on the planet – plastic.
The last round of negotiations are happening right now, in Busan, South Korea. Delegates have the once in a lifetime chance to put people and planet above plastic and profits.
Original photo credit: Stefani Reynolds (we obvs added the sweet globes).
When Donald Trump tapped Wall Street veteran Scott Bessent as his next treasury secretary on Friday, investors had a full weekend to speculate: how would the market react to news of America’s next top (economic) diplomat?
💿*Record scratch*💿
Yep, we said diplomat. Sure, Marco Rubio is set to take the helm at Foggy Bottom where he’ll headline forums, shake hands, and pose for those obligatory foreign ministry photos. But the US treasury secretary also plays a critical role in US diplomacy these days. Why? Because money talks. Just look at…
Steven Mnuchin, who was treasury secretary under Trump 1.0, and manoeuvred his Office of Foreign Assets Control (OFAC) to implement sanctions against Iran, North Korea, and Venezuela, while shaping tariffs on Chinese goods.
Or Biden’s own Janet Yellen, who’s helped drive the G7 price cap on Russian oil and has visited China as many times as the secretary of state, while endearing herself (via culinary choices) to hundreds of millions of China’s netizens.
And let’s not forget Obama’s Timothy Geithner, who not only worked with the G20 to stabilise markets, but (back as a mid-ranked treasury official) apparently kinda coined the G20 itself over a phone call with his German counterpart.
Oh, and if you really want a good throwback, Alexander Hamilton famously deployed tariffs on British goods (apparently there’s a musical about this?)
So how did markets react to Bessent as treasury secretary under Trump 2.0?
Come Monday morning, they were relieved. Why? First, he’s a known and respected quantity in international investor circles, after years working for famed billionaire philanthropist and Democratic Party megadonor, George Soros.
But second, he’s also been a relatively moderate voice for Trump’s ideas, and you can see that in the way his announcement soon spurred a rally in currencies around the world.
Why? Take tariffs — Bessent agrees with Trump that they’re a “useful tool”, but he’s been more nuanced on how and when to use them, arguing they should be “layered in” gradually, and even that the “tariff gun will always be loaded and on the table but rarely discharged.” So currencies rallied on hopes Trump 2.0 won’t be so disruptive after all.
But then… what about Trump’s announcement just hours ago that he’ll slap Canada, Mexico and China with extra tariffs? Bessent hasn’t commented specifically, but he’s previously described similar Trump threats as merely a “maximalist negotiating position.”
So what else can we infer about Bessent’s approach to the world?
First, he is (like much of Trump’s new cabinet) a China hawk, describing Beijing as despotic, a military threat, and as milking decades of US conciliation to build vast economic imbalances that have left the US more vulnerable both at home (a hollowed-out industrial base) and abroad (more dependent on China for all kinds of key inputs).
But second, he’s argued that, even though pushing China to rebalance at home could take a decade or more (eg, more household consumption, less currency manipulation), that wouldn’t be enough to re-balance the broader international economy (the US has continued to hit record trade deficits notwithstanding years of tariffs).
So what does Bessent propose? At home, he’s pitching a stronger US, via a ‘3-3-3’ policy:
Trim US deficits back to 3% of GDP (to stabilise US finances)
Use business-friendly moves to lift US growth to 3% (and stabilise finances), and
Add 3 million daily barrels to US oil output (to help the two 3s above).
And abroad, Bessent has talked about more closely linking all the tools of US power (the US military, market, and dollar) to project a more activist US to the world, all to fix (rather than abandon) the way the world trades.
Or to put it another way, he’s described it all as a strategy of “escalate to de-escalate”.
INTRIGUE’S TAKE
If this all seems kind of a big deal, that’s because… it is. Back in June, Bessent told an audience that we’re all headed towards “some kind of a grand global economic reordering” whether we like it or not. So he wants the US to shape what comes next.
And yes, while he’s forecasting (and promising) some pretty big shifts in the way the US approaches the world, he’s also promising that this re-ordering will still be orderly: “adjustments are needed, but they must be carefully calibrated and deliberately paced.”
We once heard a diplomat describe that kind of thinking as radical incrementalism. But you could also argue it’s relatively bipartisan: the last two administrations (Biden and Trump 1.0) were also reacting to a shared sense that some of America’s assumptions around China specifically (and globalisation broadly) were ill-founded.
So then, the big question is how much of all this Bessent can really pull off. And a bipartisan report has estimated Trump’s plans could expand (rather than stabilise) US debt, which is just one way Bessent’s ‘3-3-3’ strategy might soon hit turbulence.
Also worth noting:
Bessent has said Trump will appoint a new Federal Reserve chair when Jerome Powell’s term ends in 2026, though Trump wouldn’t interfere in the Fed’s independence.
Bessent’s rival for the treasury job (fellow Wall St billionaire Howard Lutnick) got tapped to serve as commerce secretary instead.
🇨🇳 China: London police have come out against China’s proposal to establish a huge new embassy near the Tower of London, arguing the building would be a target for protests. Local authorities already rejected plans for the 57,599 sq m (620,000 sq ft) compound once, but Prime Minister Starmer agreed to re-consider the project during a meeting with Chinese President Xi Jinping.
🇮🇹 Italy: Italy’s second-largest bank (UniCredit) has submitted a surprise $11B offer to acquire local rival Banco BPM, saying it’ll now take precedence over any further move to buy German bank Commerzbank. The Italian government seems peeved by the sudden change in plans, and says it’ll review the proposed takeover.
🇲🇲 Myanmar: Reuters is reporting that thousands of Rohingya refugees have left the world’s largest refugee settlement (in southern Bangladesh) to take up arms in neighbouring Myanmar’s civil war. As many as a million ethnic Rohingya fled to Bangladesh in 2016 as a result of a campaign of ethnic cleansing by Myanmar’s military.
🇭🇹 Haiti: The country’s transitional council has summoned the local French ambassador after President Macron was heard referring to the ruling council as “total morons” for firing the last interim leader Garry Conille. Needless to say, Haiti (a former French colony liberated after a slave uprising) has a tricky relationship with Paris.
🇮🇷 Iran: Tehran’s foreign ministry has confirmed Iran is set to hold meetings with the UK, France, and Germany later this week, just days after the regime threatened to ramp up its production of nuclear fuel. Iran says the talks will “discuss bilateral, regional, and international issues.”
🇧🇷 Brazilians searched ‘Outlook’ after the Microsoft product reported major outages on Monday (did they try turning it off and back on?).
🇮🇪 Irish folks googled ‘chess’ as the FIDE World Championship kicked off in Singapore, featuring (for the first time in 138 years) both contestants from Asia: it’s the reigning champ 🇨🇳 Ding Liren vs the challenger 🇮🇳 Dommaraju Gukesh.
And speaking of 🇸🇬 Singapore, local film buffs there looked up ‘George Clooney’ after Wolfs director Jon Watts ruled out a sequel for the Clooney x Pitt hit amid a row with Apple.
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Credits: Bloomberg
Notice anything funny about the chart above? Not “Jerry Seinfeld haha” funny, but more “what’s that smell” funny.
That’s right, last month China imported more oil from Malaysia than Malaysia actually produces. In fact, China imported more than triple Malaysia’s total output.
What’s with that? Sanctions evasion. Oil from Iran, Venezuela and Russia gets schlepped to Southeast Asia and elsewhere via a fleet of shadow tankers. Once there, it’s shifted onto legit tankers and relabelled (if not re-blended) as non-sanctioned Malaysian oil.
What do you think Bessent's first task should be?(assuming he's confirmed) |
Yesterday’s poll: What do you think this latest Cop climate outcome means?
🟩🟩🟩🟩🟩🟩 🤷 Nothing, it's all talk (81%)
🟨⬜️⬜️⬜️⬜️⬜️ 👌 They salvaged a deal we can build on (16%)
⬜️⬜️⬜️⬜️⬜️⬜️ ✍️ Other (write in!) (3%)
Your two cents:
🤷 S.C: “Nobody is going to do anything that doesn't financially benefit themselves. If you want real change, you've got to find ways for everybody involved to profit off it somehow.“
✍️ J.M.W: “For years I have thought COPs were fairly useless at leading to real, meaningful action. But then I also think: What situation would we be in without any COPs (and without any substitute for them)? Probably even further behind in adapting to a low-emission world than we are now.”
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