Listen to this article
Sign up to receive FirstFT by email here
An escalating civil war between incoming president Donald Trump and the US intelligence community is presenting America’s spies with their biggest crisis since the failures in the run-up to the Iraq war.
As well as lashing out at the US intelligence agencies, the president-elect helped wipe billions off the value of pharmaceutical companies, did little to minimise concerns over his potential conflicts of interest and executed a U-turn on Russian interference in the US election — he now agrees that Moscow was behind the hack.
He also sent the peso tumbling to an all-time low by predicting “big, big factories are going to be built in this country as opposed to another country”. Mr Peña Nieto also addressed the much discussed border wall, saying “Mexico, of course, will not pay”.
Capping the day off was the second session of Senate confirmation hearings, where secretary of state nominee Rex Tillerson set the stage for a diplomatic clash between Washington and Beijing by saying China should not be allowed to access islands it has built in the South China Sea. (FT, Atlantic, NYT)
In the news
Senate moves to repeal Obamacare Senate Republicans took their first major step toward repealing the Affordable Care Act on Thursday, approving a budget blueprint that would allow them to gut the healthcare law without the threat of a Democratic filibuster. The vote was 51 to 48. During the roll call, Democrats staged a highly unusual protest on the Senate floor to express their dismay and anger at the prospect that millions of Americans could lose health insurance coverage. (NYT)
US to raise trade complaint against China The Obama administration is expected to launch a formal complaint on Thursday against the Chinese government with the WTO over subsidies it says Beijing provides to the country’s vast aluminium industry. The move could heighten tensions between the US and China. Donald Trump, who assumes the presidency in a week’s time, repeated his view on Wednesday that the US trade imbalance with China was too large. (WSJ)
Forget passports, fight for ‘equivalence’ The City of London has retreated from demanding continued access to the single market in any post-Brexit deal with the EU, according to its principal lobbying group. TheCityUK is now pinning its hopes on building a deal around “equivalence”, a new legal concept embedded in some but not all EU financial regulation. (FT)
Doormat shaming India’s foreign minister has threatened to expel all foreign Amazon employees from the country after discovering that its Canadian arm is selling doormats bearing the Indian flag. The spat offers a glimpse of the tensions within the ruling Bharatiya Janata party between its nationalist roots and its more pro-business elements. (FT)
VW admits guilt and pays $4.3bn The carmaker will plead guilty to three felonies to settle a US investigation into the diesel emissions scandal that has engulfed the German company for the past 15 months. Here’s a look at how the scandal was exposed. (FT)
It’s a big day for
Cyprus Turkey’s prime minister is to join international diplomats at Cyprus peace talks in Geneva, amid signs of progress towards reuniting the divided island. UN sources said they had not expected Binali Yildirim to come, and it showed how importantly these talks were being viewed. (BBC)
Japan-Philippine relations Prime Minister Shinzo Abe is expected to meet Rodrigo Duterte as he tries to stop Manila’s political drift toward China. Mr Abe is expected to travel to Mr Duterte’s home city of Davao, on the southern island of Mindanao, as well as holding meetings in Manila. (ABS-CBN)
Food for thought
What Wall Street wants Bankers are bullish on their prospects under a Trump administration packed with their ranks, but Mr Trump’s populist rhetoric may make it difficult for him to prioritise relief for big banks. (FT)
Supercool discovery Researchers at the National Institute of Standards and Technology have discovered a way to use a laser to make a microscopic aluminium drum colder than ever before, defying the quantum limit for supercooling mechanical objects. Physicists say eliminating the distraction of an object’s thermal motion allows them to see the motion that results from quantum energy, which will help them build instruments to understand quantum mechanics at a macroscopic level. (WaPo)
A real climate science dispute Do not get caught up in the “connections to the actions of mankind” debate — this is what true climate change dispute looks like. The Atlantic Meridional Overturning Circulation helps keep tropical cyclones from becoming too intense. Scientists have recently begun to re-examine a scary question: will this crucial ocean current shut down? (Atlantic)
Weekend warriors Working out only on the weekends or otherwise compressing your total physical activity into one or two prolonged runs or a single vigorous basketball or soccer game each week could lessen your risks of dying prematurely almost as effectively as more frequent, shorter workouts spread throughout the week, according to a new study. (NYT)
Horror in the jungle Prisons are both hellholes and headquarters for Brazil’s most powerful criminal gangs. The country’s prison population of 622,000, the world’s fourth-largest, is crammed into jails built to hold 372,000 inmates. The riot at Compaj on January 2 which left more than 50 dead suggests that prison violence — and the behaviour of the gangs behind it — is entering a new phase. (Economist)
Eco-carmakers face China roadblock Carmakers operating in China are bracing for the possibility of a seismic shift in 2018, when the government plans to begin restricting production of environmentally friendly vehicles and introducing strict new rules on sales. The new regulations could shrink the number of producers of eco-friendly vehicles in the country from the current 120 or so to as few as about 20 starting in 2018. (NAR)
Video of the day
UK PM’s critics in denial on Brexit Janan Ganesh argues that critics of UK prime minister Theresa May are in denial when they say she is vacillating over Brexit. (FT)