A M.A.D. moment

[Bloomberg]( Follow Us //link.mail.bloombergbusiness.com/click/20998519.85506/aHR0cHM6Ly90d2l0dGVyLmNvbS9icG9saXRpY3M/582c8673566a94262a8b49bdB90d22ff0 [Get the newsletter]( At its core, the fight between the U.S. and China is largely economic — both in cause and effect. U.S. [objections to China]( come somewhat from a place of fear at how pervasively China has become a juggernaut, using its trade and financial power for political ends, even as it keeps sections of its [own economy closed]( to outside players. Beijing meanwhile chafes at efforts by the U.S. and others to box it in, to counter the expansion of its companies overseas. It rebuts the narrative that Chinese businesses operate as a tool of the state and act in predatory ways, stealing the intellectual property of others. The jostling for economic supremacy is colliding with two other things to create the perfect storm for a superpower showdown: the need for Xi Jinping and Donald Trump to shore up their leadership by banging the nationalist drum, and the [economic hole]( the coronavirus has put in growth. The risk is the [tit-for-tat](, which has extended to forced closures of diplomatic missions (China today ordered the [U.S. consulate in Chengdu]( shut), tips further into the trade space. For now a [fragile first-phase]( trade deal is holding. Xi and Trump both recognize the prospect of Mutually Assured (Economic) Destruction. Their presidencies depend on their ability to get their economies off shaky ground: Xi to avoid social unrest and [disquiet at top levels]( of the Communist Party, and Trump to win again in November. It’s a dangerous time, though, to be balancing nationalism and economics. Because the repercussions are truly global. — [Rosalind Mathieson]( Trump and Xi in Beijing in 2017. Photographer: Nicolas Asfouri/AFP [Click here]( for Bloomberg’s most compelling political images from the past week and tell us how we’re doing or what we’re missing at balancepower@bloomberg.net. Global Headlines [Convention nixed]( | Trump is seeking to revive his campaign by canceling the multi-day convention for the Republican Party to nominate him for a second term, as Florida, the planned host state, posted record coronavirus deaths. He’d been under pressure to do so as criticism of his handling of the pandemic mounts. - Trump’s former lawyer and fixer Michael Cohen [was ordered]( freed from prison to home confinement as a judge ruled he’d abruptly returned to jail in retaliation for a planned book criticizing his ex-boss. [Ideological shift]( | Under a leader who returned to power as the coronavirus engulfed Europe, the homeland of Melania Trump is taking a nationalist shift. Prime Minister Janez Jansa — a Marxist-turned right-wing anti-immigrant, a two-time convict and a former dissident journalist — has led Slovenia into the camp of European Union skeptics that laud Donald Trump’s brand of polarizing politics, [Jan Bratanic]( and [Jasmina Kuzmanovic]( report. [Pension payouts]( | Chilean President Sebastian Pinera will today sign into law a controversial but popular bill allowing early pension withdrawals amid the pandemic, after bitterly opposing the proposal through its debate in congress. The private pension system is one of the most contentious legacies of the dictatorship of Augusto Pinochet and was a key driver of last year’s anti-government protests as pensions often fall below the minimum wage. [Grand opening]( | After a gap of nearly a century, Istanbul’s iconic Hagia Sophia is today echoing with the sound of Islamic prayer, with President Recep Tayyip Erdogan among the faithful in the first service since it was converted from a museum back into a mosque. The move — calculated to boost Erdogan's popularity at home and in the Muslim world — drew much international criticism. Still, his supporters are pleased, with hundreds of men sleeping and praying outside overnight. Istanbul’s Hagia Sophia. Photographer: Enes Yildirim/Anadolu Agency/Getty Images [Political facade]( | Morocco’s leadership is using Covid-19 to complete a reversal of democratic reforms that made the country a standout in a turbulent region. As [Souhail Karam]( explains, the deep state has taken back control and parliament is being sidelined. But with the North African nation heading for its first recession under King Mohammed VI, the resilience of his 21-year reign will face an unprecedented test. What to Watch: - India slapped [trade curbs]( on some neighbors in a move likely aimed at keeping Chinese businesses out after a border conflict and as economic ties worsen between the two nations. - Tropical vacation spots across the Caribbean are welcoming back international tourists, but they’re giving U.S. citizens the [cold shoulder]( amid fears they might spread the coronavirus. - Senate Majority Leader Mitch McConnell [has been forced]( to delay until at least Monday the release of Republicans’ next major economic relief bill. Pop quiz, readers (no cheating!). In which country is corpse stealing by family members emerging as a challenge to efforts to slow Covid-19? Send your answers to balancepower@bloomberg.net. [And finally]( ... Zhang Yiming is a little-known Chinese entrepreneur who built TikTok into one of the most promising franchises on the internet. Now the combative 37-year-old is under pressure from Trump administration threats to ban his app. He’s tried building up TikTok’s operations in the U.S, reassuring regulators that user data won’t be shared outside America, and signaled he’ll create 10,000 jobs. It hasn’t been enough. Signage at the TikTok Creator's Lab 2019 event in Tokyo last year. Trump has the power to cripple the business. He could, for example, add TikTok to the U.S. entity list, which would compel American companies such as Apple and Google to drop the service from their app stores. Photographer: Shiho Fukada/Bloomberg   Like Balance of Power? | [Get unlimited access to Bloomberg.com](, where you'll find trusted, data-based journalism in 120 countries around the world and expert analysis from exclusive daily newsletters.  You received this message because you are subscribed to Bloomberg's Balance of Power newsletter. 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