Global
Trump extends invitation to China's Xi Jinping for inauguration ceremony
President-elect Donald Trump invited Chinese President Xi Jinping and other foreign leaders to his inauguration next month, though experts doubt Xi will attend.
Our Take: Trump's invitation to Xi reflects the president-elect's tendency to mix unorthodox diplomacy with strategic posturing. Experts describe the move as diplomatic theater, unlikely to result in Xi's attendance but aimed at projecting an image of openness and engagement. Yet, as US-China relations remain fraught over trade and strategic tensions, this gesture demonstrates Trump's balancing act between symbolic overtures and contentious policy priorities.
Read More: Associated Press, Reuters [paywall], Politico
Europe
Romania and Hungary join the Schengen Zone
EU interior ministers agreed to admit Romania and Bulgaria into the Schengen free-travel zone, following a year-long delay and 17 years after the countries joined the EU.
Our Take: Romania and Hungary had partially joined the Schengen in March, but now will the full "Schengen Land" agreement on January 1. The agreement came after a decision earlier this week by Austria to drop its veto against the countries' accession. Austria had argued that neither country was doing enough to handle the steep rise of migrants entering Europe through the Western Balkan route, but dropped its opposition on the condition that the countries take joint efforts to stem irregular immigration. Both countries plan to continue checks on trucks and comply with longstanding temporary bloc-wide border controls.
Middle East
Hamas softens on ceasefire demands
Hamas yielded to two of Israel's key demands for a cease-fire deal: allowing Israeli forces to remain in Gaza temporarily, and releasing some hostages under a ceasefire pact.
Our Take: Hamas had long resisted both demands. Allowing Israeli forces to stay on, even temporarily, was seen as a slippery slope by military leaders, and they were reluctant to give up hostages – their chief and, soon, maybe only bargaining chip – for a ceasefire that could be temporary. Their softening on these two fronts makes a ceasefire much more likely. Hamas, increasingly exhausted and depleted by over a year of conflict, may be hoping to get a better deal from the outgoing Biden White House, knowing President-elect Trump to be a staunch supporter of Israel, or bowing to Trump's warnings that there will be "hell to pay" if hostages are not returned prior to his inauguration.
Read More: Wall Street Journal [paywall], Washington Post [paywall], Atlantic Council
Americas
18 countries launch regional security alliance against organized crime
The Inter-American Development Bank announced the formation of a regional security alliance against crime that brings together 18 countries and several financial institutions.
Our Take: In remarks upon the group's launch, the chief of the IDB cited the high cost of organized crime: a regional average of 3.4 percent of GDP, amounting to nearly 80 percent of public budgets for education and double social assistance. The IDB will provide $1 billion for financing projects aligned with the initiative, and mobilize other public and private sources. The level or existence of direct security cooperation is yet to be announced, and notable absences from the regional bloc include the US, Mexico and Colombia.
Read More: Reuters, Inter-American Development Bank, Development Aid
Africa
Ethiopia and Somalia agree to resolve longstanding dispute over Somaliland port
Ethiopia and Somalia agreed to end their dispute over Ethiopia's port plans in Somaliland after talks in Turkey, with Turkish President Erdoğan praising the deal for ensuring Ethiopia's access to the sea and mutual respect for sovereignty.
Our Take: The final agreement, known as the Ankara Declaration, represents a significant breakthrough in Ethiopia-Somalia relations, addressing longstanding tensions over Ethiopia's quest for maritime access. While Ethiopia secured assurances of sea access, Somalia gained recognition of its territorial unity, satisfying both parties' primary demands. Experts view this resolution as a strategic win for Turkey, which has bolstered its influence in the Horn of Africa by mediating this agreement. However, uncertainties remain, particularly regarding Somaliland's response and the practical implementation of the agreed commercial arrangements.
Read More: BBC, Reuters [paywall], Middle East Eye
Trade and Compliance
Biden increases tariffs on Chinese clean energy imports
The Biden administration announced it will double tariffs on Chinese solar panel components, including wafers and polysilicon, to 50 percent starting in January, up from the current 25 percent.
Our Take: The tariff increase, coming toward the end of Biden's presidency, continues the administration's commitment to bolstering domestic clean energy manufacturing while countering alleged forced labor practices in China. With Trump set to take office in January, the move may serve as a final effort by the outgoing administration to solidify its trade and climate policy priorities. However, the heightened tariffs risk disrupting global solar supply chains in the short term, potentially raising costs for clean energy projects as US manufacturing works to scale up.
Read More: The Hill, Financial Times [paywall]
Disruptive Technology
Malaysia establishes national AI office for policy and regulation development
Malaysia inaugurated a national artificial intelligence office to develop policies and address regulations, aiming to become a regional AI hub.
Our Take: The establishment of Malaysia's AI Office represents the country's ambition to position itself as a leader in the Southeast Asian digital economy. By centralizing AI policy and regulation, Malaysia aims to attract continued investments from global tech giants, which have already pledged billions in AI and data center projects. However, public skepticism over AI-related privacy risks and the country's history of cyberattacks present substantial challenges to widespread adoption. This initiative will be closely watched as a potential model for balancing innovation with public trust in emerging markets.
Read More:Reuters [paywall], South China Morning Post [paywall]
Energy Transition
Renewable power deals down this year
A new PwC report found that the value of power and utilities deals in the US fell 36 percent last year amid political uncertainty ahead of the US election.
Our Take: Renewable power deals led the drop, as investors grew wary of an executive heel-turn on renewable policies in the case of a Trump election. The value of traditional power generation deals, however, saw an increase in 2024, likely betting that the Trump Administration would be friendlier to the oil and gas sector than Biden has been (Trump's energy secretary has already made friendly remarks about the industry). Both trends are likely to continue as the Trump Administration takes power.
Read More: Reuters, New York Times [paywall]
ESG
California delays enforcement of corporate emissions reporting
The California Air Resources Board said it would not enforce the state's landmark emissions disclosure law for the first year, provided companies are making efforts.
Our Take: Per a 2023 law, starting in 2026, companies in California with over $1 billion in revenue would have to report Scope 1 and Scope 2 emissions, including certain metrics like electricity use at headquarters and the amount of gas company cars use. The statement represents a one-year reprieve for what many companies fear will be an onerous law, and CARB has said it will accept incomplete reports on a case-by-case basis to give companies further time to develop data collection processes. Industry groups applauded the decision, while sponsors of the bill in California's legislature slammed the move.
Read More: Wall Street Journal [paywall]
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