Good morning. The US Senate foreign relations committee is poised to vote on a bill that would finance weapons exports to Taiwan for the first time and significantly alter relations with Taipei amid rising pressure from China.
The Taiwan Policy Act, which will come up for a vote on Wednesday, would provide Taiwan with $4.5bn in weapons and security assistance over the next four years. It would also create a $2bn loan facility to help Taipei buy arms and make Taiwan eligible for a war reserve arms stockpile mechanism.
The bill would also punish China if it took military action against Taiwan by requiring the White House to impose sanctions on large Chinese financial institutions over “escalating hostile actions in or against Taiwan”.
Coming on the heels of China’s large-scale military exercises in response to House Speaker Nancy Pelosi’s trip to Taipei last month, the bill has sparked debate in the US about how to support Taiwan. Backers of the bill say the US must do more to help the country, while some worry that certain provisions will antagonise China while doing very little to secure Taiwan.
US struggles to mobilise its East Asian ‘Chip 4’ alliance Internal tensions and concerns over China undermine proposed grouping with South Korea, Japan and Taiwan
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Five more stories in the news
1. Ukraine faces ‘tough fight’ even as Russian forces retreat, says US A senior military official said on Monday that Russian forces “had largely ceded their gains” around Ukraine’s second-largest city and “withdrawn to the north and the east”, adding that “many of these forces have moved over the border into Russia”.
2. Amazon’s compliance with new laws ‘a work in progress’, says EU top official The retailer recently pledged to make several changes to how it handles data on its third-party sellers as part of a proposed agreement 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 advertising spending Since the start of August, the McConnell-led Pac Senate Leadership Fund has spent $25.5mn in ads, nearly $20mn of which has been disbursed 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, has spent just $7.5mn.
4. Permitting reforms for US infrastructure lay bare energy tensions A US push to speed up environmental reviews for electric lines, gas pipelines and other energy infrastructure is running into resistance in Congress, with some lawmakers wary of enabling fossil fuel production even if legislation also supports a cleaner power grid.
5. Global inflation pushes millions of Africans back into poverty While Russia’s invasion of Ukraine has driven a surge in the price of essentials such as food, fuel and fertiliser across the globe, the human cost has been especially high in more vulnerable African economies such as Malawi, where inflation is running at 25 per cent.
The day ahead
Twitter shareholder vote Elon Musk sent a third letter to the social media company last week attempting to call off his $44bn takeover. Today, Twitter shareholders will vote on whether to approve the deal.
Economic data The US consumer price index for August is forecast 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 labour market data. Opec publishes its monthly market report.
Queen Elizabeth II London is bracing itself 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 are due to 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 we’re reading
Debt monsters in the downturn As central banks raise rates to tame inflation, debt-laden companies are facing the uncomfortable prospect of servicing higher interest bills with crimped cash flows. Which groups are flashing warning signals? The Financial Times has compiled a list of companies with debt trading more than 10 percentage points above government bonds.
Why Wall Street is still betting 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 returns. But in an era of rising interest rates and a stalled economy, the nascent asset class is facing its first real test.
‘Quiet quitting’ is worse than nonsense According to Gallup, about half of Americans are “quiet quitters”: people who are “not going above and beyond at work and just meeting their job description”. HR specialists have been quick to advise on how to fix this problem. But Sarah O’Connor argues that it’s 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 treated with caution Want to get ahead in life? In the rich world, there are three supposedly foolproof steps: graduate from secondary school, get a full-time job and get married before you have children. Stephen Bush writes that American libertarians have fallen for this idea that is an excuse for cutting welfare spending.
Is this wellness’s golden gun? The Theragun massage device, which promises to relax and tone facial muscles, apparently met with enthusiastic approval from footballer Cristiano Ronaldo, who inked 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 these to your reading list
As epic levels of flood, heat and fire strike countries across 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.