When waving a stick backfires

Balance of Power From FOLLOW US SUBSCRIBE   Trade and politics (especially geopolitics) have always gone hand in hand, though generally with the understanding that using trade as a weapon should be kept to a minimum. This past weekend shows us again how much that has changed. At the Munch Security Conference, U.S. Secretary of State Michael Pompeo had some relatively polite words in public to say about the transatlantic alliance, including the security umbrella provided by NATO. Behind the scenes, though, the waters are getting ever more muddied. Tensions are running high over Europe's refusal to accede to U.S. demands for a full ban on China's telecom giant Huawei in 5G networks. That's as Washington continues to warn of the potential for tariffs against Europe on key products like cars and wine. Defense Secretary Mark Esper has now thrown NATO further into the fray. Speaking in Munich, he warned that unless Europe better appreciates the threat from China "it could compromise what is the most successful military alliance in history." Any rift in NATO may have a major impact on security not just in Europe but also in the Middle East and North Africa. Witness the recent assertiveness of Turkey and Russia. Even so, you can expect Europe to keep pushing back as the U.S. continues to throw politics and trade into the same mixing bowl. America under Donald Trump is perhaps finding out that waving a big stick against longstanding friends without any carrot can backfire. — Rosalind Mathieson Pompeo speaks during the Munich Security Conference on Feb. 15. Photographer: Michaela Handrek-Rehle/Bloomberg Global Headlines Contagion threat | More than 3,000 travelers on two coronavirus-stricken Carnival cruise ships are returning home, fanning out to more than 40 countries, fueling fears of further contagion. The startling number of cases on the Diamond Princess, which accounts for the biggest cluster outside of China, and the newly detected case from the Westerdam raise concerns about the effectiveness of containing the virus on cruise ships. China is considering delaying its most high-profile annual political meeting for the first time in decades. Health authorities in Taiwan are scouring travel histories, phone records and security footage to map out everyone who came into contact with a taxi driver who became its first confirmed virus death. Drawing criticism | Rival Democrats battling for the Nevada caucuses later this week have seized on Michael Bloomberg's Republican past and comments about policing, women and race to argue he has no place in the crowded presidential primary field. Also facing more scrutiny: Amy Klobuchar, who finished third in New Hampshire. (Bloomberg is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.) Joe Biden, meanwhile, brushed off weak showings in the first two 2020 Democratic nominating contests and vowed to be the party's presumptive front-runner by the end of March. Trade sparring | The chief U.K. Brexit negotiator, David Frost, is due to set out Britain's goals for talks over its future relationship with the European Union in a speech in Brussels today as the two sides prepare to reach an agreement before the end of the year. The U.K. wants a deal similar to those the EU agreed to with other countries, while French Foreign Minister Jean-Yves Le Drian yesterday pointed to "serious issues," including fishing. Bleak prospects | Top government officials meeting in Munich made little progress in securing an end to the Libyan civil war, with a senior United Nations official calling an agreed-to arms embargo on the oil-rich North African nation "a joke." It was part of an effort to end a 10-month conflict between Fayez al-Sarraj, Libya's UN-backed prime minister, and his rival General Khalifa Haftar. A joint military committee aiming to lock in a permanent cease-fire will start work tomorrow in Geneva. Escalating tensions | Turkey is sending a delegation of military, intelligence and diplomatic officials to Moscow today to seek a way out of the crisis in northwestern Syria that's straining ties between Ankara and Moscow. Turkey is trying to end an offensive by Russian-backed Syrian forces on the country's last rebel stronghold of Idlib, while Russia accuses Turkey of failing to abide by agreements to ease hostilities by deploying its forces to the area. What to Watch Democratic presidential candidates debate Wednesday in Las Vegas ahead of the Feb. 22 Nevada caucuses. Longtime Republican operative Roger Stone is scheduled to be sentenced Thursday for witness tampering and lying to Congress, a case that has sparked a crisis at the Justice Department. Group of 20 finance ministers meet in Saudi Arabia Feb 22-23 where the economic cost of the coronavirus is likely to take center stage. Pompeo began a three-nation visit to Africa yesterday that includes stops in Senegal, Angola and Ethiopia. Iran's parliamentary elections on Friday are expected to mark the beginning of the end of President Hassan Rouhani's brand of moderate policies, with hard-liners and ultra-conservatives tipped to win a majority. President Emmanuel Macron's party chose his health minister to run for mayor of Paris next month after the release of sex videos led its initial pick to withdraw — the latest setback for the French leader. Thanks to all who responded to our pop quiz Friday and congratulations to reader Jack Silvers, who was the first to correctly name Rafael Correa of Ecuador as the former Latin American president who went on trial last week on charges of campaign finance fraud and accepting bribes. Tell us how we're doing or what we're missing at balancepower@bloomberg.net. And finally ... We've had "Howdy Modi." Now it's "Namaste Trump." That's how the western Indian city of Ahmedabad is advertising the event where the U.S. president and India's Prime Minister Narendra Modi are expected to share the stage at a cricket stadium on Feb. 24. It follows Modi's trip to the U.S. in September where he walked hand-in-hand with Trump at a rock concert-like event at a Houston football arena. The Hindi "Namaste" means "hello" in English. Modi hugs Trump at the White House on June 26, 2017. Photographer: Andrew Harrer/Bloomberg   You received this message because you are subscribed to the Bloomberg Politics newsletter Balance of Power. You can tell your friends to sign up here.   Unsubscribe | Bloomberg.com | Contact Us Bloomberg L.P. 731 Lexington, New York, NY, 10022