What we’re watching: March 19 to March 25, 2018

♦The fallout from the dismissal of Rex Tillerson as US Secretary of State and his replacement – to be confirmed by the US Senate — by CIA director and former Kansas Congressman Mike Pompeo. Tillerson’s term at State does not appear to have been a happy one, plagued by public and private policy disagreements with the President and plans for departmental reform which were long in the gestation and compromised by numerous vacancies in top level positions. Pompeo has also not always seen eye-to-eye with Trump on issues, but in contrast to Tillerson has become one of the President’s most trusted confidants.
♦ After what seem to have been endless months of negotiation, Britain and the European Union appear to have settled on “draft guidelines on the framework for a future relationship”. If that sounds a bit tenuous, it is; but it’s the only way all the dimensions of something as consequential as Brexit can be worked through. The guidelines are expected to be confirmed at an EU summit meeting March 22-23.
♦ The US administration is expected to announce a series of measures against China this week intended to establish more reciprocity in their bilateral commercial relations. The measures will likely include tariffs on China’s high tech sector and restrictions on Chinese investment in the United States. By one estimate, the cost to the US of Chinese counterfeit goods, pirated software, and theft of trade secrets could be as high as $600 billion. The Chinese have vowed to retaliate, but their scope for action is limited as they are currently running an enormous annual goods trade surplus of $375 billion.

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