World gets ready for Trump 2.0.

The world prepares for a second Trump presidency [View in browser]( [Bloomberg]( Welcome to Balance of Power, bringing you the latest in global politics. If you haven’t yet, sign up [here](. This time no one was surprised. It took 30 minutes to call victory for Donald Trump in Iowa, leaving his Republican rivals out in the Arctic cold gripping the midwest. He’s already on the lips of the Davos jet set, and Christine Lagarde was that rare central banker wading into politics to declare Trump 2.0 would be a global threat. But if you’re in government and facing the real prospect of having [to deal with a second Trump presidency](, you just have to be practical. Estonian Prime Minister Kaja Kallas made sure to reach out to Trump’s entourage in Washington. German Foreign Minister Annalena Baerbock did a major detour to visit the heart of Trump land to try and understand the US mood before November’s elections. WATCH: Trump spoke to supporters after he cruised to victory in the Iowa caucuses. Source: Bloomberg Officials from Europe to Asia, Africa and Latin America are clear-headed about the risks with a repeat of Trump: expect more of the same with even fewer safety guards. Maybe he’ll pull the US out of NATO or hang Ukraine out to dry given his oft-expressed admiration for Russian President Vladimir Putin. There will be more trade tensions with China, but perhaps surprisingly, few in Beijing expect the relationship with the US to change given the protectionist slant of Joe Biden’s administration. India and Saudi Arabia welcome the transactional mindset that Trump brings to the table. They’re also allergic to the finger-wagging they get on things like climate change and human rights from the US and the West. There’ll be none of that with Trump. The biggest political takeaway? Expect nothing back. Even if he likes to play golf with you, he may turn on you on a dime. It’s all about hedging your bets, something the titans of finance gathered at the Swiss ski resort know all too well. — [Flavia Krause-Jackson]( Putin and Trump at the G-20 summit in Osaka in June 2019. Photographer: Brendan Smialowski/AFP/Getty Images Global Must Reads Iran said it destroyed what it called the “espionage headquarters” of Israel’s Mossad intelligence service in Iraqi Kurdistan yesterday, its [first direct strike on Israeli interests]( since the start of the war in Gaza. Another attack targeted ISIS in northern Iraq and Syria in what Tehran described as retaliation for a bombing this month that killed almost 100 people near the burial site of General Qassem Soleimani. Despite warnings from Western navies to stay away from the southern Red Sea to avoid attacks by Houthi militants, large numbers of ships are [continuing to navigate the crucial trade route](. The advice came after the US and the UK bombed targets in Yemen to try to quell assaults on commercial vessels, prompting concern about reprisals. Ships idling outside the Gulf of Aden yesterday. As the World Economic Forum gets under way in Davos, global leaders have a lot to worry about: from the possible spread of the Israel-Hamas war and the deadlock in Russia’s invasion of Ukraine to a wobbly Chinese economy and the threat of hyperinflation. Read our [pessimist’s guide]( to the things that could go wrong this year. China’s state-owned banks are tightening curbs on funding to Russian clients after the US authorized secondary sanctions on overseas financial firms that aid Moscow’s war effort in Ukraine. Lenders will [sever ties]( with sanctioned clients and stop providing financial services to the Russian military industry, sources say. North Korean Leader Kim Jong Un says he wants to remove the concept of “peaceful reunification” with South Korea from his country’s constitution. His decision to abolish agencies to manage ties between the two nations [sets the stage for fresh tensions]( on the heavily militarized peninsula. Beijing reminded Singapore of its “one-China” position on Taiwan in a [rare show of public disapproval]( after the city-state congratulated Vice President Lai Ching-te and his ruling party for its election win. The US Supreme Court’s biggest opportunity yet in its drive to curb federal regulators comes as the justices weigh a [major legal shift]( that would crimp agency power over workplace conditions, drug safety and issues such as climate change and cryptocurrency. Venezuela raised its monthly minimum wage by the equivalent of more than 40% as protests by [disgruntled public workers]( spread ahead of presidential elections this year. Washington Dispatch The civil trial in the writer E. Jean Carroll’s defamation lawsuit against Trump begins today in Manhattan federal court, a week before the New Hampshire primary. Carroll has accused Trump of raping her in a dressing room of a New York department store in the 1990s and later defaming her by saying she lied. A judge has already held Trump liable for defamation, meaning that the jury will only set damages. Carroll is seeking at least $12 million in compensation, plus unspecified punitive damages. She went public with her allegations in 2019. Trump issued a statement from the White House calling her a liar and saying she wasn’t his “type.” Last year, Carroll won a separate sexual-abuse lawsuit against the former president and he was ordered to pay her $5 million in damages. In another case in another Manhattan courtroom last week, [Trump lashed out]( at the conclusion of a civil fraud trial brought against him by New York Attorney General Letitia James, calling it “a fraud on me.” State Supreme Court Justice Arthur Engoron cut him off. One thing to watch today: The US Senate is to begin procedural votes on a stopgap spending bill that, if approved as is likely, would avert a government shutdown by the end of the week. [Sign up for the Washington Edition newsletter]( for more from the US capital and watch Balance of Power at 5pm ET weekdays on Bloomberg Television. Chart of the Day While it’s been comfortably ahead in the polls for months, the UK’s Labour Party must score an unprecedented 12.7 percentage point swing from the governing Conservatives [if it’s to secure power]( in a general election expected later this year, new research shows. That’s bigger than the 10.2-point shift secured by former leader Tony Blair in 1997 and more than double the change achieved in any other election since 1945. And Finally Almost half of global chief executives said their business models [won’t be viable within a decade]( due to the pace of technological advances such as Artificial Intelligence and climate pressures, a PricewaterhouseCoopers survey of 4,702 company leaders showed. To keep up with the soaring demand for AI, countries need better infrastructure and clean energy. A tree destroyed by wildfire in the village of Dikella, Greece, on Aug. 22. Photographer: Konstantinos Tsakalidis/Bloomberg Thanks to the 50 people who answered our quiz and congratulations to Vincent McDwyer for being the first to name South Korea as the nation whose parliament passed a bill to do away with the consumption of dog meat through a rare unanimous vote. 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