Limits of US Influence

Welcome to Balance of Power, bringing you the latest in global politics. If you haven’t yet, sign up here.Turmoil in the Middle East has rea [View in browser]( [Bloomberg]( Welcome to Balance of Power, bringing you the latest in global politics. If you haven’t yet, sign up [here](. Turmoil in the Middle East has reached [another tipping point]( as Israeli forces prepare to move through southern Gaza toward the Egyptian border. US President Joe Biden’s calls for Israel [to shield Palestinian civilians]( after an assault he described as “over the top” have stoked frictions with Prime Minister Benjamin Netanyahu. Netanyahu says Israeli forces must advance into the city of Rafah to eliminate Hamas, the Iran-backed group behind the Oct. 7 attack in which 1,200 people were killed and 250 abducted. Without that, [Israel will never be safe again](, officials and a growing number of Israelis say. Rafah is where more than 1 million Palestinians have sought refuge. It’s a city dotted with tents and makeshift homes in densely populated clusters in what the United Nations has called a “[pressure cooker of despair](.” Israel’s campaign has killed more than 28,000 people in Gaza so far, according to the Hamas-run health ministry. Elsewhere, groups backed by Iran have carried out a record number of attacks on US and allied military assets and targeted shipping routes through the Red Sea. They’ve vowed to press on as long as the conflict in Gaza rages. Talks are continuing mediated by the US, Egypt and Qatar to secure a cease-fire with Hamas, considered a terrorist organization by the US and the European Union. But progress is fragile. However unlikely, the US could use this moment to push for a lasting peace deal with the establishment of an independent Palestinian state — anathema to Netanyahu and an increasingly difficult aim the longer the destruction of Gaza continues. Yet four months since Biden embraced Netanyahu in Tel Aviv and urged a nation in mourning to temper its military response, Washington doesn’t seem to have the leverage. — [Sylvia Westall]( Smoke billows following Israeli bombardments over Rafah yesterday. Photographer: Said Khatib/AFP/Getty Images Global Must Reads Ukraine dispatched reinforcements to the embattled eastern city of Avdiivka, a first [major test]( for the new army chief Oleksandr Syrskyi. Ukraine’s military said it [destroyed a Russian warship]( off the coast of Crimea, the latest in a string of operations targeting Kremlin vessels in the Black Sea, while in the US, Biden [assailed Donald Trump]( for “shameful” comments threatening to encourage Russia to invade NATO allies. Indonesian Defense Minister Prabowo Subianto is poised to win enough votes in today’s presidential election to lead Southeast Asia’s largest economy after two failed bids, [according to unofficial counts]( from multiple independent pollsters. The 72-year-old ex-general secured nearly 60% support in counts by private pollsters following the world’s biggest single-day polls. Prabowo casts his ballot at a polling station in West Java today. Photographer: Dimas Ardian/Bloomberg Sales of Japanese chip-making equipment to China are surging, helping Beijing to build out its tech supply chain despite US efforts to thwart its progress. China has [ramped up its purchases]( of legacy chip technology in the 16 months since Washington and its allies began to curb exports of advanced semiconductors and equipment, a boon for Japanese suppliers such as Tokyo Electron. Pakistan moved a step closer to a new government when former premier Shehbaz Sharif was [named as the next prime minister candidate](, a breakthrough after no political party achieved an outright majority in last week’s elections. Bilawal Bhutto Zardari dropped out of the race, saying his party would support the Pakistan Muslim League-N’s choice, but it will not join the cabinet. Indian Prime Minister Narendra Modi has agreed with the United Arab Emirates to continue work on a [major trade corridor]( through the Middle East to Europe. The push to boost trade and counter China’s influence comes despite the widening regional conflict stemming from the war between Israel and Hamas. Ghanaian President Nana Akufo-Addo named Mohammed Amin Adam as the nation’s new finance minister [in an overhaul of his cabinet]( as the government seeks to finalize a deal to restructure its debt. Turkey wants reassurances from Dutch Prime Minister Mark Rutte that he [won’t have a bias]( toward the alliance’s EU members before it approves his bid to be the next head of NATO. Democrat Tom Suozzi won the race to succeed ousted New York Representative George Santos, according to the Associated Press, [narrowing the GOP’s razor-thin majority]( in the House of Representatives. Washington Dispatch Secretary of State Antony Blinken leaves today for Europe, where he will take part in the Munich Security Conference and plans to “reaffirm the United States’ enduring support for the people of Ukraine.” Vice President Kamala Harris will lead the American delegation to the annual gathering in the Bavarian capital and plans to deliver an address on foreign policy. Both Harris and Blinken will try to reassure allies of the American commitment to Ukraine — nearly two years after Russia’s full-scale invasion began and just days after the US Senate approved $60 billion in new assistance. Yet that legislation, which includes aid for Israel and Taiwan, has a very uncertain fate in the House. Speaker Mike Johnson could face rebellion from ultraconservatives if he moves forward without much tougher immigration policies that go beyond what Democrats will tolerate. Johnson, who last night [presided over a narrow vote]( to impeach Homeland Security Secretary Alejandro Mayorkas, dismissed the Senate bill even before it was passed. One person to watch today: Treasury Secretary Janet Yellen will travel to Detroit to promote Biden’s Investing in America agenda. [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 The economies in the east of the EU will be looking to domestic consumers for a lifeline this year as Germany’s weakness is [delaying a recovery](. Poland, the largest economy, is expected to slip back into contraction, while Romania is likely to fare best thanks to inflows of EU funds. And Finally Russia is relying on thousands of workers from neighboring countries to undertake the sprawling multi-billion-dollar reconstruction in the occupied territories of Ukraine. [As this investigation shows](, job-seekers from former Soviet states have at times wound up digging trenches and fighting on the battlefield. In the process, they risk running afoul of laws in their homelands that could land them in prison. A Russian soldier guards the site of a new apartment building in occupied Mariupol. 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