In this morning's email we learn that, while we were sleeping, Donald Trump fired the first shots in a potential trade war that could see New Zealand stuck between the opposing sides.
1. Trump starts trade war
President Donald Trump announced overnight that the United States would impose tariffs of 25 percent on steel imports and 10 percent on aluminium imports from next week.
Trump has warned of the moves for over a year, but many had hoped he could be persuaded not to launch what would be the first shots in a tit-for-tat trade war that pits America against China and Europe.
China has already threatened to retaliate, as has Europe. New Zealand faces being stuck in the middle in any trade war, having signed free trade agreements with China, but not with Europe or America.
“We’ll be signing it next week. And you’ll have protection for a long time in a while,” the president said in a meeting overnight with steel and aluminium industry leaders.
“You’ll have to regrow your industries, that’s all I’m asking," he said.
Trump had initially planned to announce it earlier this week, but furious lobbying from Republican lobbyists and steel users such as the car industry had appeared to stave off the announcement.
2. Flying over to a mate's place
Prime Minister Jacinda Ardern flew over to Sydney last night for talks with Malcolm Turnbull about New Zealand's most important relationship, which has a few stresses and strains at the moment.
The way New Zealand citizens are treated in Australia and New Zealand's vocal stance on Manus Island are among the pressure points at the moment. But the longer running stresses are around New Zealand's relative lack of defence spending and our respective ties with China. Australia takes a tougher stance than us on many China issues and some over there fear we're too soft on President Xi Jingping, who is now China's leader for life.
Newsroom's Sam Sachdeva was on the RNZAF 757 with the Prime Minister and is reporting from Sydney on how the Trans-Tasman talks go. He'll also be following the official party on through the Pacific next week.
Sam has written an excellent preview of the trip, including pointing to this critical report of New Zealand's defence spending and China quietness by the Australian Strategic Policy Institute's Mark Thomson.
Thomson sums up the challenges thus: "In the coming years, both countries will have to tread a fine line between Mr Trump’s unpredictability and Mr Xi’s threats of economic punishment. The antipodean pair could either draw closer together or be pulled apart, and each will continue to calibrate its strategic distance from the US. It’s impossible to say where each will be in five or ten years, but, as the least committed of the pair, New Zealand is at greatest risk of becoming a Western ally with Chinese characteristics."
See Sam's full preview here on Newsroom Pro, where it was first published last night as Ardern was meeting Turnbull for dinner.
3. Responding to China in the Pacific
Foreign Affairs Minister Winston Peters is also in Australia and gave a detailed speech on New Zealand's Pacific strategy. China is the elephant in the Pacific room at the moment.
Peters warned New Zealand must not take its relationship with the region for granted as more countries compete for influence and create "strategic anxiety".
Sam reports Peters' address has served as a veiled warning of the threat posed by growing Chinese influence in the region, as he took a poke at the country's Belt and Road Initiative and said "need and temptation" was leading some Pacific countries to take greater risks.
Speaking to the Lowy Institute in Sydney, Peters said the Pacific was both "a region of opportunity and empowerment" and one "challenged by a dizzying array of social and environmental problems".
See Sam's full report on the speech. It was first published on Newsroom Pro last night.
Peters also said a few interesting things during the Question and Answer session after the speech, including this on China's Belt and Road Initiative, which New Zealand was keener on (under National) than Australia.
"I do regret the speed with which the former New Zealand Government signed up. They couldn't have known exactly what it all meant," he said.
"That said I do not feel we should be bound because the previous Government signed up to something. Let's face it we've all got belts and all got roads. Well Europe has, the United States has, Japan has. What is actually new here?"
4. RNZ+ and a spicy select committee
Newsroom's Thomas Coughlan was at the Economic Development, Science and Innovation select committee yesterday and found National MPs keen to air in public their long-held view that RNZ is biased against them.
RNZ's CEO Paul Thompson was also keen to downplay expectations that RNZ would use an expected $38 million of extra funding to launch the stand-alone TV station that Clare Curran has talked about in the past.
Thomas reports Thompson saw “a combination of more media platforms,” rather than a stand-alone television station and said changes would be evolutionary rather than 'big bang'
Although Thompson’s comments were consistent with Labour’s manifesto commitment to “transform” RNZ into a ‘multi-platform public broadcaster’, he faced questions from both MPs and media as to whether there had been a climbdown from the idea of RNZ+ as a standalone TV station.
Although Labour’s proposal for RNZ+ does not explicitly refer to it as a TV channel, current Mediaworks CEO Michael Anderson has urged the Government to “hit pause” on any such proposal, saying it would provide unfair taxpayer-funded competition to commercial broadcasters.
“It’s going to be a combination of more media platforms,” Thompson told the committee.
“The delivery of it will be partly television, but not a stand-alone TV station,” he said, “We have a channel already on freeview, it will have more on it but it won’t be a standalone free to air tv channel in the sense that we’re creating anything like the other broadcasters are doing,” he said.
Summarising later to journalists, he said the channel would represent an “evolution of what we’re doing at the moment rather than a big bang”.
See Thomas' report on Newsroom Pro, where it was published first last night.
5. An emotional and wry valedictory
Newsroom's Co-Editor Tim Murphy has been covering Bill English in one form or another for most of their careers, both as a reporter and editor.
Tim watched English's valedictory speech in Parliament last night and wrote this piece about a politician of substance who was knocked down and got back up again.
It was a speech that rambled as such valedictories do, at times humorous, functional in thanking those around him, fascinating when highlighting political influences that shaped the departee, and energised when seeking to leave a message for this government, his own party and those to follow.
Above all it was personal. Eye-brimming, water gulping emotion welled up several times as English spoke of his family and friends.
He recalled his training in 2002 for the Fight to Life charity boxing event to raise awareness of youth suicide. At the time he asked his, older, trainer in Titahi Bay why he was so keen to get into the ring and spar with him. "He said: 'Mate, it's cos you're a Tory and I want to hit you."
English said that fight training shaped him politically, in a way. "Because the composure that I learned under the tutelage of this hard-core Labour supporter about how to stay composed when you are taking the punches made all the difference to the capacity to lead my party through a very difficult period. [The 20.9 percent period]. That's just one of many examples of the way in which, I think, those of us in public life can be inspired unexpectedly."
It has always been clear there is depth to English. He was attracted to some of the more complex issues facing government and the country. He highlighted two in his farewell - Treaty settlements and his signature policy reform, Social Investment.
Working with the Iwi Leaders Forum on advancing Treaty of Waitangi partnership and settlements was an area singled out in the speech in a way that hints at a chapter some time in a future political memoir.
"It was intense and we developed, in what I think typifies New Zealand's flexible constitutional development, a practical and pragmatic solution to the idea of Treaty partnership, with out the courts an without too many academics.
"It was the most efficient, focused and accountable process I've been part of in government in the whole 27 years, and it gives me great optimism, actually, for New Zealand."
See Tim's full report on Newsroom here, and I'd recommend watching the valedictory in full here via Parliament's Youtube channel.
And here is my political obituary piece from the day he resigned for good measure.
Bill English was one of New Zealand's great politicians, albeit flawed in ways that prevented him from the Prime Ministerial success of John Key and Helen Clark in the post-MMP era.
6. Rod Oram's column on the circular economy
Rod Oram writes in this week's column about the Productivity Commission's looming draft report on how to move to a low emissions economy, particularly now it has more ambitious terms of reference under the new Government.
He sees it as the most important report on the New Zealand economy in many years, and will recommend myriad ways in which we can make our nation deeply sustainable in economic and environmental terms.
"While these are truly global challenges, each country will find the opportunities best for it. But even if we make the right choices, we'll fail if we only tweak our current systems. To succeed, we need to radically reinvent our business models, avidly adopt new technologies and enthusiastically improve our practices," Rod writes.
See Rod's full column here on Newsroom Pro, where it is published first. It will be published on the public Newsroom site on Sunday.
7. Briefly in the political economy...
Meaty treat - The economy continues to gallop along with growth in the 2-3 percent zone with the help of near-record-high migration, strong Auckland construction, buoyant consumer spending, solid jobs growth and a record high terms of trade. Statistics New Zealand reported yesterday that our terms of trade, which measure the purchasing power on global markets of our export receipts, rose to a fresh record all-time high in the December quarter. Record high export lamb and butter prices were cited in the 0.8 percent rise in the index. Lamb prices rose 12 percent and export meat prices rose 7.5 percent overall.
Consolidation? - Education Minister Chris Hipkins met representatives from 16 polytechnics yesterday in a meeting to address what they describe as a funding crisis after 5,000 fewer students enrolled last year. Many are also nervous about planned changes to work rights for international students that they fear could also hammer their revenues. Hipkins indicated some may have to close to reduce overheads, Jo Moir reported. Newsroom's Shane Cowlishaw previewed a looming funding crunch in this piece published on Newsroom Pro last year.
8. One fun thing...and weekend reads
The Australian's Foreign Affair's reporter Primrose Riordan was at Winston Peters' speech in Sydney last night and heard this in the Q&A
Winston Peters' advice to @realDonaldTrump : "I'd get off the tweet, just leave it alone...this is about the world's peace and security."
And just finally for the weekend, I'd recommend this piece from the New York Times on what may have been the biggest news of the year in our world this year: China's decision to make Xi Jingping leader for life.
China has banned Winnie the Pooh and the letter 'N' after announcing the end of term limits for President Xi. I'm not kidding. If you click on one link in today's email, make it this one.