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Given gilt yields are rising, the pound is falling and, all things considered, markets look pretty hairy back in the UK, it’s quite likely Rachel Reeves’s trip to China gets overshadowed by noises off.

There’s a chance the dominant narrative is not about China itself, but about why she didn’t cancel the trip.

But make no mistake: this visit is a big deal. A very big deal – potentially one of the single most interesting moments in recent British economic policy.

Why? Because the UK is doing something very interesting and quite counterintuitive here. It is taking a gamble. For even as nearly every other country in the developed world cuts ties and imposes tariffs on China, this new Labour government is doing the opposite – trying to get closer to the world’s second-biggest economy.

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How much do we trade with China?

The chancellor‘s three-day visit to Beijing and Shanghai marks the first time a UK finance minister has travelled to China since Philip Hammond‘s 2017 trip, which in turn followed a very grand mission from George Osborne in 2015.

Back then, the UK was attempting to double down on its economic relationship with China. It was encouraging Chinese companies to invest in this country, helping to build our next generation of nuclear power plants and our telephone infrastructure.

But since then the relationship has soured. Huawei has been banned from providing that telecoms infrastructure and China is no longer building our next power plants. There has been no “economic and financial dialogue” – the name for these missions – since 2019, when Chinese officials came to the UK. And the story has been much the same elsewhere in the developed world.

More on China

In the intervening period, G7 nations, led by the US, have imposed various tariffs on Chinese goods, sparking a slow-burn trade war between East and West. The latest of these tariffs were on Chinese electric vehicles. The US and Canada imposed 100% tariffs, while the EU and a swathe of other nations, from India to Turkey, introduced their own, slightly lower tariffs.

But (save for Japan, whose consumers tend not to buy many Chinese cars anyway) there is one developed nation which has, so far at least, stood alone, refusing to impose these extra tariffs on China: the UK.

The UK sticks out then – diplomatically (especially as the new US president comes into office, threatening even higher and wider tariffs on China) and economically. Right now no other developed market in the world looks as attractive to Chinese car companies as the UK does. Chinese producers, able thanks to expertise and a host of subsidies to produce cars far cheaper than those made domestically, have targeted the UK as an incredibly attractive prospect in the coming years.

And while the European strategy is to impose tariffs designed to taper down if Chinese car companies commit to building factories in the EU, there is less incentive, as far as anyone can make out, for Chinese firms to do likewise in the UK. The upshot is that domestic producers, who have already seen China leapfrog every other nation save for Germany, will struggle even more in the coming year to contend with cheap Chinese imports.

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Why is Rachel Reeves flying to China?

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Whether this is a price the chancellor is willing to pay for greater access to the Chinese market is unclear. Certainly, while the UK imports more than twice as many goods from China as it sends there, the country is an attractive market for British financial services firms. Indeed, there are a host of bank executives travelling out with the chancellor for the dialogue. They are hoping to boost British exports of financial services in the coming years.

Still – many questions remain unanswered:

• Is the chancellor getting closer to China with half an eye on future trade negotiations with the US?

• Is she ready to reverse on this relationship if it helps procure a deal with Donald Trump?

• Is she comfortable with the impending influx of cheap Chinese electric vehicles in the coming months and years?

• Is she prepared for the potential impact on the domestic car industry, which is already struggling in the face of a host of other challenges?

• Is that a price worth paying for more financial access to China?

• What, in short, is the grand strategy here?

These are all important questions. Unfortunately, unlike in 2015 or 2017, the Treasury has decided not to bring any press with it. So our opportunities to find answers are far more limited than usual. Given the significance of this economic moment, and of this trip itself, that is desperately disappointing.

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Russia ‘making concessions’ and Ukraine ‘happy’ with peace deal talks, says Trump

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Russia 'making concessions' and Ukraine 'happy' with peace deal talks, says Trump

Donald Trump has claimed Russia is “making concessions” in talks to end the Ukraine war – and that Kyiv is “happy” with how talks are progressing.

Speaking to reporters on Air Force One as he flew out to his Florida estate for Thanksgiving, Mr Trump said “we’re making progress” on a deal and said he would be willing to meet with both Vladimir Putin and Volodymyr Zelenskyy once they are close to an agreement.

He also said his previously announced deadline of Thursday, which is Thanksgiving, was no longer in place – and that the White House’s initial 28-point peace plan, which sparked such concern in Kyiv, “was just a map”.

U.S. President Donald Trump looks on aboard Air Force One during travel to Palm Beach, Florida, from Joint Base Andrews, Maryland, U.S., Nov
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U.S. President Donald Trump looks on aboard Air Force One during travel to Palm Beach, Florida, from Joint Base Andrews, Maryland, U.S., Nov

Asked if Ukraine had been asked to hand over too much territory, Mr Trump suggested that “over the next couple of months [that] might be gotten by Russia anyway”.

Moscow’s concessions are a promise to stop fighting, “and they don’t take any more land”, he said.

“The deadline for me is when it’s over,” he added. “And I think everybody’s tired of fighting at this moment.”

Read more: A plan with Russian fingerprints all over it

Before boarding the plane, Mr Trump claimed only a few “points of disagreement” remain between the two sides.

Mr Trump’s negotiator Steve Witkoff will be meeting with Mr Putin in Moscow next week, the president said, while American army secretary Daniel Driscoll is due to travel to Kyiv for talks this week.

The chief of Ukraine’s presidential staff, Andriy Yermak, wrote: “Ukraine has never been and will never be an obstacle to peace. We are grateful to the US for all its support.

“The meeting between the presidents will be thoroughly and promptly prepared on our part.”

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‘Ukraine still needs defence support,’ says Zelenskyy

Zelenskyy warns against ‘behind our back’ deal

Yesterday, a virtual “coalition of the willing” meeting that featured Ukraine’s allies took place, which was attended by US secretary of state Marco Rubio.

In a speech, Mr Zelenskyy told attendees: “We firmly believe security decisions about Ukraine must include Ukraine, security decisions about Europe must include Europe.

“Because when something is decided behind the back of a country or its people, there is always a high risk it simply won’t work.”

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What is Russia saying about the latest peace talks?

A joint statement from coalition leaders Sir Keir Starmer, Emmanuel Macron, and Friedrich Merz said they had agreed with Mr Rubio “to accelerate joint work” with the US on the planning of security guarantees for Ukraine.

But a Ukrainian diplomat has warned major sticking points remain in the peace deal being thrashed out – primarily the prospect of territorial concessions.

A warning from the Kremlin

Meanwhile, Moscow has stressed that it will not allow any agreement to stray too far from its own objectives.

Russia’s foreign minister Sergei Lavrov warned any amended peace plan must reflect the understanding reached between Mr Trump and Mr Putin over the summer.

“If the spirit and letter of Anchorage is erased in terms of the key understandings we have established then, of course, it will be a fundamentally different situation,” he said, referring to the two leaders’ meeting in Alaska.

Read more:
Zelenskyy races to beat Trump’s peace plan deadline

In full: Europe’s 28-point counterproposal

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Standing ovation for Zelenskyy

As negotiations continue, so have Russian attacks, with Kyiv hit by a barrage of missiles and hundreds of drones early yesterday morning.

Seven people were killed with power and heating systems disrupted, as residents sheltered underground.

Meanwhile, three people died and homes were damaged after Ukraine launched an attack on southern Russia.

‘A critical juncture’

French President Emmanuel Macron has said peace efforts are gathering momentum, but “are clearly at a critical juncture”.

And during the annual White House turkey pardon ahead of Thanksgiving, Mr Trump told reporters: “I think we’re getting close to a deal. We’ll find out.

“I thought that would have been an easier one, but I think we’re making progress.”

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Trump’s peace plan had Russian fingerprints all over it – and now we know why

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Trump's peace plan had Russian fingerprints all over it - and now we know why

In this story, there’s no substitute for hard news.

To learn of US envoy Steve Witkoff and his Russian interactions is to understand the handbrake turn towards Moscow.

If there was much surprise and confusion about the origins of a peace proposal that had Russian fingerprints all over it, there is less now.

The Bloomberg report of Witkoff’s recent involvement distills eye-watering detail of his contact with Yuri Ushakov, Vladimir Putin’s senior adviser on foreign policy.

Among the revelations, it tells of the American advising the Russian on dealing with Trump.

In a phone call last month, Witkoff told Ushakov that Zelenskyy was coming to visit the White House, and suggested Putin speak to Trump beforehand.

Witkoff reportedly said: “The president will give me a lot of space and discretion to get to the deal.”

He spoke of Trump’s 20-point Gaza peace plan and suggested that “maybe we do the same thing with you”.

Read more:
Who actually wrote Trump’s peace plan?

Steve Witkoff: Real estate mogul turned envoy

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What is Russia saying about the latest peace talks?

A good impression of a useful idiot

Subsequently, Witkoff drafted the controversial peace proposal with his Russian counterparts, and the US pressured Ukraine to accept it.

The report paints an unflattering picture of Trump’s envoy doing a good impression of a useful idiot.

There must be serious questions surrounding his engagement with the Russians and serious concerns around consequences that are potentially catastrophic.

Moscow’s threat to Ukraine and to the security infrastructure of Western Europe is strengthened on his handshake.

He’ll press the flesh in Russia once more – Donald Trump is sending Witkoff back to Moscow for further talks aimed at bridging the Ukraine-Russia impasse.

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Trump: I think we are getting very close to Ukraine deal

Scandal isn’t what it used to be

Putin has given the Americans little to no encouragement around their reworked plan and Kyiv will shudder at what Trump’s “Mr Fixit” might fix next.

They will despair of his continued involvement at any level and what it says about Trump’s perspective and where his loyalties lie.

In any other job, Witkoff might have been sacked for being irredeemably compromised.

At any other time, this would have been viewed, universally, as a major scandal.

But under Donald Trump, scandal isn’t what it used to be.

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‘Ukraine still needs defence support,’ says Zelenskyy

The president and his point man continue to consort with Vladimir Putin.

On the evidence of Steve Witkoff’s interaction, the power dynamic leans less Trump than we might have thought.

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Venezuela: Maduro brandishes sword and vows to defy any US attempt to overthrow his government

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Venezuela: Maduro brandishes sword and vows to defy any US attempt to overthrow his government

Venezuelan President Nicolas Maduro has vowed to defy any US attempt to overthrow his government – telling crowds that “failure is not an option”.

The 63-year-old brandished a sword as he addressed supporters during a march in Caracas, against a backdrop of growing tensions with Donald Trump’s administration.

Dressed in camouflage fatigues, Mr Maduro said: “We must be ready to defend every inch of this blessed land from imperialist threat or aggression, no matter where it comes from.”

Maduro was swamped by supporters. Pic: Reuters
Image:
Maduro was swamped by supporters. Pic: Reuters

Since September, US military forces have been conducting a series of strikes against vessels suspected of drug trafficking in international waters, killing at least 80 people.

Washington has claimed that several of these boats had departed from Venezuela, with Mr Maduro describing the deployment as an assault on the nation’s sovereignty.

‘Stop this madness’

Yesterday, Cuba also accused the US of seeking a violent overthrow of Mr Maduro’s government – and called its military presence in the region “exaggerated and aggressive”.

The country’s foreign minister, Bruno Rodriguez, said ousting Venezuela’s leader would be extremely dangerous and irresponsible, not to mention a violation of international law.

He added: “We appeal to the people of the United States to stop this madness. The US government could cause an incalculable number of deaths and create a scenario of violence and instability in the hemisphere that would be unimaginable.”

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Is US about to go to war with Venezuela?

Reports suggest the US is planning to launch a new phase of Venezuela-related operations in the coming days.

Critics have questioned the legality of America’s campaign and argue it amounts to extrajudicial killings, with a recent poll suggesting just 29% of voters support this policy.

Officials within Maduro’s government have claimed that Washington’s actions are being driven by economic motives.

Venezuelan minister Delcy Rodriguez said: “They want Venezuela’s oil and gas reserves. For nothing, without paying. They want Venezuela’s gold.

“They want Venezuela’s diamonds, iron, bauxite. They want Venezuela’s natural resources.”

Venezuela's president has remained defiant. Pic: AP
Image:
Venezuela’s president has remained defiant. Pic: AP

Donald Trump, like his predecessor Joe Biden, does not recognise Mr Maduro as the country’s leader.

He is currently on his third term after being declared the winner of last year’s presidential election, despite evidence that the opposition defeated him by a two-to-one margin.

Mr Maduro and senior officials have been repeatedly accused of human rights violations against real and perceived government opponents.

Earlier this week, the US designated Venezuela’s Cartel de los Soles – Cartel of the Suns in English – as a foreign terrorist organisation for importing illegal drugs to the States.

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Venezuelan president dances to speech remix

The Trump administration has claimed that Maduro is part of this group, but Venezuelan officials have described its mere existence as a “ridiculous fabrication”.

Speaking to reporters on Air Force One as he travelled to Florida for Thanksgiving, the president suggested he might be planning to talk to Mr Maduro.

“If we can save lives, if we can do things the easy way, that’s fine,” the US president said. “And if we have to do it the hard way, then that’s fine too.”

Read more world news:
Russia ‘making concessions’, Trump says
Four more arrests over Louvre heist
Brazil’s Bolsonaro begins 27-year jail term

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US strikes alleged drug boat

Carlos Diaz Rosillo, a former US deputy assistant secretary of defence during the first Trump administration, does not believe America will go to war with Venezuela.

He told The World With Dominic Waghorn: “What I do see is a strategy of maximum pressure on the regime. I do think if there’s any change, that change has to come from within the military.”

Dr Rosillo said the official position of the US government is not regime change, but Mr Trump would like to see that happen in Venezuela.

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