Trump Threatens 200% Tariff on French Wine Over Peace Plan

China has unveiled a significant financial support package designed to stimulate investment and consumption, headlined by a 500 billion-yuan ($72 billion) loan guarantee facility aimed at private companies.

The Ministry of Finance announced on Tuesday that the two-year program is intended to help qualified private businesses secure financing for expansion activities, including equipment purchases, raw material acquisition, and technology upgrades.

Unpacking the New Financial Incentives

To further encourage borrowing and investment, the government will also provide an annual interest subsidy of 1.5 percentage points. This subsidy applies to loans taken by small- and medium-sized enterprises (SMEs) for two years.

The support covers loans used for fixed-asset investments or for participation in projects backed by policy bank financing tools. According to a separate statement, each borrower can receive subsidies on loans up to a maximum of 50 million yuan.

Addressing a Two-Speed Economic Recovery

These measures follow the release of official data showing China's economy grew in a divided pattern last year. While robust exports supported industrial production and helped the country meet its official growth target of around 5%, domestic demand told a different story. Consumption was sluggish, and investment experienced an unprecedented slump.

In response, top leaders have designated the expansion of domestic demand as the primary economic goal for 2026. The new stimulus appears more aggressive than what many analysts had anticipated. Previously, the consensus was that authorities would opt for a more measured approach, given the resilience of exports, existing debt constraints, and concerns about excess capacity in certain sectors.

Broader Support for Consumers and Innovation

Beyond the main loan guarantee program, the Ministry of Finance announced several other supportive measures:

• Consumer Loan Discounts: A policy offering loan discounts to consumers will be extended through the end of this year.

• Corporate Upgrades: Support for companies upgrading their equipment will be expanded to also cover borrowing for technological innovation.

• Service Sector: The ceiling for interest subsidies available to services firms is being raised.

U.S. President Donald Trump has renewed his push for American ownership of Greenland, announcing he will discuss the matter with officials at the World Economic Forum (WEF) in Davos, Switzerland. The move signals an escalation in his long-standing interest in the Danish territory.

Trump is scheduled to attend the WEF on Wednesday, marking his first in-person appearance at the conference since his previous term. He had also called for the U.S. to take control of Greenland during a remote speech to the forum last year.

Davos Meeting to Focus on National Security

Following what he described as a "good telephone call" with NATO Secretary General Mark Rutte, Trump confirmed that a meeting between "various parties" on the topic of Greenland would take place in Davos.

In a social media post, the president framed the acquisition as a strategic necessity, stating, "Greenland is imperative for National and World Security. There can be no going back." This rhetoric reinforces the administration's view of the territory's geopolitical importance.

Tariffs Threatened to Force a Deal

Trump has dramatically increased pressure by threatening tariffs on eight European nations until a deal for Greenland is reached. This marks his most direct action yet to compel negotiations.

The proposed plan involves levying a 10% tariff on the unnamed countries starting in early February. According to the president, these duties will rise to 25% if an agreement for U.S. ownership is not finalized by July.

In a recent NBC News interview, Trump declined to clarify whether the U.S. military would be deployed to secure Greenland, a question that has gained urgency following a U.S. incursion in Venezuela earlier this year.

European Rejection and Market Instability

European leaders have uniformly rejected Trump's demands and are reportedly preparing retaliatory measures should the U.S. proceed with tariffs.

The renewed geopolitical uncertainty has already impacted global financial markets. Trump's comments triggered a broad market decline this week as investors reacted to the heightened tensions. The U.S. dollar also weakened amid growing caution toward American assets.

China is exploring the creation of a national merger and acquisition (M&A) fund as part of a strategic push to dominate next-generation technologies from artificial intelligence to robotics. The potential fund signals Beijing's increasing focus on creating a comprehensive support system for its high-tech industries.

NDRC Signals New Push for Tech Dominance

The plan was announced by Wang Changlin, vice chairman of the National Development and Reform Commission (NDRC), at a press conference. "We will explore establishing a national-level merger and acquisition fund," he stated.

According to Wang, the initiative aims to strengthen government investment planning to foster innovation and accelerate the growth of "new productive forces"—a term Beijing uses for emerging and high-tech sectors.

This move follows the recent launch of a 100 billion yuan (RM58 billion) national venture capital fund, underscoring the urgency of China's tech ambitions. The country is already a leader in drone manufacturing and a serious contender in AI with homegrown firms like DeepSeek, supported by a massive expansion of data centers.

An Exit Strategy for Early Tech Investors

The proposed M&A fund is expected to fill a critical gap in the investment lifecycle for technology companies. According to Yin Ming, vice president at the Shanghai-based Baptized Capital, the fund would help create a more complete ecosystem for investors.

"The new fund will seek to encourage more M&A deals for technology firms with a certain scale," Yin explained. This would make it "easier for early backers including the state venture funds to exit at an appropriate time."

By providing a clear exit path, the fund could also reduce the perceived risk for early-stage investors, making it easier for them to commit capital to promising startups.

Navigating US Rivalry and Domestic Hurdles

While Chinese officials highlight the long-term perspective of state-backed capital, some scholars have raised concerns. They warn that the government's lower tolerance for risk could impede the growth of high-tech firms and argue for a greater role for the private sector.

This strategic push comes as China's tech rivalry with the United States intensifies, particularly in critical areas like semiconductors. At the same time, tighter fiscal conditions, including rising debt and weaker government revenue, are forcing Beijing to be more disciplined with its investments.

Despite these challenges, the NDRC's Wang expressed confidence, addressing the US strategy of using technology as leverage. "Practice has proven that 'strangleholds' can't hold back progress," he said, referencing sectors targeted by trade restrictions. "China possesses a powerful innovative spirit and immense potential for innovation."

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Source: Reuters

Federal Reserve Chairman Jerome Powell is set to attend a U.S. Supreme Court hearing concerning the case against Federal Reserve Board member Lisa Cook, according to sources familiar with the matter.

Powell's planned appearance in the courtroom on Wednesday is a rare and significant display of support from a sitting central bank governor, signaling a major development in the ongoing friction between the White House and the Federal Reserve.

A Direct Challenge to Presidential Pressure

The Supreme Court is currently reviewing whether President Donald Trump has the authority to remove Cook from his position on the Fed's seven-member board of governors. Trump's effort to oust a board member is viewed as an unprecedented move in modern history.

By attending the hearing personally, Powell is taking a much more visible stance than he has previously. This follows reports that the Trump administration sent notices to the Fed and threatened a criminal investigation into Powell himself. Appointed by Trump in 2018, Powell appears to be shifting from a cautious approach to a more direct confrontation with the administration.

The Core of the Dispute: Interest Rates

The conflict intensified after Powell released a video message on January 11, describing the administration's actions as "pretexts" to pressure the Federal Reserve into making deep cuts to its policy interest rates.

While the Fed implemented three rate cuts late last year, bringing the rate to around 3.6 percent, President Trump has publicly argued that rates should be lowered to 1 percent. This view is not shared by the majority of economists.

The Case Against Lisa Cook

The administration's formal case against Cook centers on accusations of mortgage fraud. However, Cook has denied these allegations, and no formal charges have been filed against him.

Cook initiated a lawsuit to protect his position on the board. On October 1, the Supreme Court issued a temporary ruling that allows him to remain in his role while the legal case proceeds.

What's at Stake for the Federal Reserve

Analysts note that if President Trump succeeds in removing Cook, he would be able to appoint a replacement of his choosing. Such a move could give Trump's appointees a majority on the Federal Reserve's board of governors.

This outcome would significantly increase the administration's influence over the central bank's critical decisions on interest rate policy and banking regulations, potentially compromising its long-held independence.

A major trade agreement between Malaysia and the United States remains on hold, nearly three months after it was signed, Prime Minister Datuk Seri Anwar Ibrahim confirmed in Parliament on Tuesday.

Anwar explained that Malaysia is seeking further clarification and adjustments to several clauses before the Agreement on Reciprocal Trade (ART) can officially come into force.

Why the Agreement Is on Hold

According to the Prime Minister, discussions between the United States Trade Representative (USTR) and Malaysia's Minister of Investment, Trade and Industry are ongoing. While verbal assurances have been received on certain points, the Malaysian government insists these commitments must be put in writing.

"We believe it would be better for these assurances to be put in writing before we finalise the agreement," Anwar stated during Minister's Question Time. He was responding to a query from Ahmad Tarmizi Sulaiman (PN–Sik) about the status of the deal's ratification.

Anwar also noted that any proposed changes to the ART will be discussed by the Cabinet. He confirmed there is currently no fixed schedule for completing the formal notifications required to activate the pact.

Background of the US-Malaysia Trade Pact

The ART was originally signed on October 26 of last year during an official visit by US President Donald Trump, on the sidelines of the 47th Asean Summit in Kuala Lumpur.

The agreement was designed as a strategic tool to lower US tariffs on Malaysian products, with rates on some goods set to decrease from 25% to 19%. It also aimed to address non-tariff barriers faced by US exporters in Malaysia.

However, the deal has faced criticism. Former prime minister Tun Dr Mahathir Mohamad warned that the agreement could risk Malaysia's economic sovereignty by forcing the country to align with Washington's trade and investment regulations.

Legal Safeguards and Activation Rules

Malaysia’s Attorney General's Chambers (AGC) previously addressed concerns about the agreement on November 3. The AGC clarified several key points regarding Malaysia's rights under the deal:

• Right to Terminate: Citing Article 7.5, the AGC affirmed that Malaysia can terminate the ART at any time with a written notice, without needing US consent.

• Sovereignty Protections: The agreement contains explicit protections intended to safeguard Malaysia's sovereignty and national interests.

• Activation Process: According to Article 7.2, the ART will only take effect 60 days after both countries have formally notified each other that their respective domestic legal procedures are complete.

Navigating Geopolitical Tensions with Iran

In a separate matter, the Prime Minister commented on Malaysia's strategy for managing international relations, particularly in light of an announcement by US President Donald Trump to impose a 25% tariff on countries conducting business with Iran.

Anwar stated that Malaysia will continue to act with prudence. He revealed that he has personally engaged with Iranian leadership twice and that several Malaysian ministers have also visited the country.

While emphasizing that Malaysia cannot afford actions that might harm its national interests, he reaffirmed the country's diplomatic stance.

"As far as relations with Iran are concerned, we will continue to maintain ties and defend Iran's rights and sovereignty," Anwar said. "That is also a principle we uphold."