Reshaping the world economy

US President Joe Biden’s industrial policy is set to reshape the world economy. [View in browser]( [Bloomberg]( While President Joe Biden embarks on a tour to promote the impact of his economic agenda on America, it’s already sending shockwaves across the globe. The suite of policies enacted so far amounts to a US industrial policy with massive state intervention in the economy — and is forcing governments from Europe to Asia to respond in kind. Key reading: - [Biden, Cabinet to Tout New Investments with Three-Week Blitz]( - [South Korea Passes Its ‘Chips Act’ Amid US-China Friction]( - [US and EU Near Critical Minerals Accord to Unlock US Subsidies]( - [US, Japan Strike Deal on Supply of Minerals for EV Batteries]( - [Competition From the US Is Forcing Europe to Up Its Green Game]( The Chips and Science Act puts about $50 billion into domestic semiconductor manufacturing. The Inflation Reduction Act brings nearly $400 billion in funding for clean technology. Management consultancy McKinsey & Company sees about $2 trillion in new federal spending being freed up over the next 10 years. The concern in foreign capitals is that businesses active in areas eligible for US funding will relocate to take advantage of the subsidies on offer. Swedish battery maker Northvolt is one among countless companies now weighing whether to build new facilities in Europe or the US. The European Union is floating a raft of subsidies in response. South Korea passed its own “K-Chips Act” today, while Canada allocated money in this week’s budget to weaken the gravitational pull south. The UK, denied the EU’s firepower, announced its answer today. Biden’s measures aim to bolster US jobs and investment, but they also target China by keeping America ahead in key technologies. In that respect, they act as an arm of foreign policy. Washington ally Japan has won an agreement for US tax breaks on critical minerals for electric vehicles. The EU is working on a similar deal. It’s already clear that the new US approach constitutes the core of a Biden 2024 reelection campaign, should he run. Equally evident is that the world economy is being reshaped as a result.— [Alan Crawford]( Biden in Durham, North Carolina, on Tuesday. Photographer: Cornell Watson/Bloomberg Click [here]( to listen to our Twitter Space on China, the US and the latest flashpoints in a strained relationship, and if you are enjoying this newsletter, sign up [here](. We would also greatly appreciate it if you would [fill out this brief survey]( to help us better understand how to deliver you the best information on global politics. Global Headlines China pitch | China is an “anchor for world peace” and an economic recovery is picking up pace as the government pursues stability, expands domestic demand, opens the economy and safeguards the financial sector, Premier Li Qiang said. His speech at the Boao Forum was part of a Beijing [charm offensive]( to court overseas business, even as a survey from the American Chamber of Commerce in China shows the country is no longer a top three investment priority for US firms. - Taiwanese President Tsai Ing-wen said global security hinges on the self-ruled island’s [fate](, her first remarks on a US trip that may escalate already fraught tensions between Washington and Beijing. - Biden wants to bring the world’s most sophisticated chipmakers to the US. Taiwan says he should eliminate the burden of [double taxation](, an arrangement the US has with dozens of countries. Reporter held | Russia’s Federal Security Service said today it [detained]( Wall Street Journal reporter Evan Gershkovich in Yekaterinburg on spying allegations. Gershkovich, a US citizen, “is suspected of espionage in the interests of the American government,” the FSB said in a statement. The Wall Street Journal said it is deeply concerned for his safety. - Russia still relies on Western insurers to cover [more than half]( of the tanker fleet that exports its oil, Bloomberg data shows. There are plenty of worries in London that other financial centers are [catching up](. New York now shares the top spot as the world’s leading hub, the UK capital city’s own report shows. The research found that other business and trading destinations such as Frankfurt and Paris also boosted their attractiveness at a faster pace. Aid questioned | Congressional Republicans said billions of dollars in US assistance for Ukraine risks being [misspent]( and could be better used for domestic priorities, a fresh sign of the party’s growing ambivalence about support for the war. The comments came at a hearing where the offices of inspector general for the State Department, USAID and the Pentagon told lawmakers there were no substantiated cases where US equipment or other support to Ukraine was diverted. - Turkey’s parliament will vote to approve Finland’s [membership]( in NATO today, lifting the last obstacle to its entry into the bloc. - Coming Soon: Understand power in Washington through the lens of business, government and the economy. [Sign up now]( for the new Bloomberg Washington Edition newsletter delivered weekdays. Best of Bloomberg Opinion - [Russia’s Oil Tanker Ghost Fleet Is a Time Bomb: James Stavridis]( - [Reporting the Gender Pay Gap Is Not Enough: Andreea Papuc]( - [A Dumpling May Be Taiwan’s Best Soft Power Weapon: Bobby Ghosh]( Going back | After three months of vacation in Florida, former President Jair Bolsonaro is returning to Brazil today to assume the role of opposition leader and challenge the leftist government of Luiz Inacio Lula da Silva. Allies expect Bolsonaro, who narrowly lost reelection last year, to [rally his base]( in congress and supporters across the country. But the homecoming carries risks for the 68-year-old, who is facing a wave of lawsuits and court investigations. Bolsonaro speaks during an event in Miami on Feb. 3. Photographer: Eva Marie Uzcategui/Bloomberg Explainers You Can Use - [The World’s Most Important Oil Price Is About to Change for Good]( - [Why Kenya Has Been Rocked by Opposition Protests]( - [The Triumph of UBS Is Also the Humbling of Swiss Banking]( Blackmail risk | Ugandan legislation that proposes [death sentences]( and life imprisonment for violating laws prohibiting homosexuality opens companies and workers in the East African nation to the risk of blackmail, [Loni Prinsloo]( and [Fred Ojambo]( write. The bill that will force companies to report gay people to authorities is “unacceptable” and may deter investment, a group of firms including JPMorgan, Meta Platforms and Deutsche Bank said in a letter to President Yoweri Museveni. Watch Bloomberg TV’s Balance of Power at 5pm to 6pm ET weekdays with Washington correspondents [Annmarie Hordern]( and [Joe Mathieu](. You can watch and listen on Bloomberg channels and online [here](. News to Note - Ajay Banga, the US pick to head the World Bank, appears almost certain to become the lender’s [next president]( after nominations closed yesterday with no country publicly proposing an alternative. - Ecuador’s Constitutional Court said it will allow the congressional [impeachment trial]( of President Guillermo Lasso to go ahead. - Australia passed a key piece of climate legislation targeting its [biggest polluters]( in a bid to meet a goal to drastically cut emissions by the end of this decade. - Mexico’s top security official [blamed]( private security and federal agents for the deaths of 39 migrants by failing to allow them to exit during a fire in an immigration facility. - The ruler of the United Arab Emirates [elevated]( his son to crown prince of Abu Dhabi, effectively positioning him as the next in line in the major OPEC oil exporter in a move that bypassed older and more experienced royals. And finally ... For scientists studying the health of a city and its inhabitants, the most powerful tool may just be the [honeybee](. When foraging, worker bees collect pollen and nectar, but also other tiny particles that cling to their fuzzy little bodies. The result is valuable information about an area’s microbiome — the unseen communities of microbes, fungi, viruses and bacteria that live inside and around us, playing key roles in the health of people and their environments. A honeybee. Photographer: Claudio Cavalensi/500px Prime/Getty Images Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Want to sponsor this newsletter? [Get in touch here](. You received this message because you are subscribed to Bloomberg's Bloomberg Politics newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. 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