G20, George HW Bush, France is Burning

G20 Truce?

It was quite the scene in Buenos Aires Saturday night. President Trump and a few trusted advisers sat on one side of an ornate table. Across from them sat Chinese President Xi Jinping, also flanked by his aides. And after everyone finished dessert and all Venmo requests were sent, the two sides agreed to a temporary cease-fire. The details: The U.S. will not hike tariffs on $200 billion of Chinese goods for 90 days (the current rate is 10%...the new rate would've been 25%). China will buy a "very substantial" amount of American industrial, energy, and agricultural products, per the White House. China will consider approving Qualcomm's $44 billion bid for NXP Semiconductors. That deal fell through in July after it didn't get the green light from Chinese regulators. Zoom out: The agreement isn't necessarily a major de-escalation of the trade war...but a pledge to not escalate further. That's good news in the short term and a W for both leaders, but the fundamental differences between the U.S. and China aren't going anywhere. Here's one example: The U.S. and China released their own independent versions of the deal. And let's just say not everything overlapped. Give us the hot takes already President Trump: "It's an incredible deal. It goes down, certainly, if it happens, it goes down as one of the largest deals ever made." Bloomberg: "For most of the past year, the U.S. and China have failed to make significant headway in resolving issues at the heart of an escalating trade war. Another 90 days is unlikely to change much." Evercore ISI political analyst Terry Haines: "This is a strongly market positive result for the short term, since over the past few days markets have been nursing hopes that a tariffs pause of this kind would happen." Save the date: March 1, 2019, when that 90-day period will expire. George H.W. Bush’s Economic Legacy

On Friday, George H.W. Bush—the 41st President of the U.S. and father of its 43rd—died at age 94. And although Bush was best known for international affairs and his idea of a "kinder, gentler" America, this is a business newsletter...so let's examine his economic playbook.

Bush, long considered a moderate Republican, pivoted to the economic right after getting the keys to the White House. And that started with taxes.

Does "Read my lips: no new taxes," ring any bells? Bush made the promise, but a struggling U.S. economy and ballooning federal deficit held him back from keeping it.

• In 1990, Bush approved measures to raise some taxes. That contributed to him losing his party's favor and, eventually, reelection.

Fast forward: Markets will close Wednesday for a National Day of Mourning.

And Bush's D.C. funeral could sidetrack congressional leaders' plans to greenlight a spending bill this week (in order to avoid a partial government shutdown when seven other spending bills expire next weekend), per the WSJ's sources. So? Look out for a short term patch instead.

INTERNATIONAL

The Yellow Vests Take to the Streets in Paris

In France this week, authorities are dealing with the fallout of the worst unrest the country's seen in a decade—a string of demonstrations dubbed the "Yellow Vest" protests. Saturday's riots in the capital city alone could cost Paris $1.7 million.

What's going on? It's (at least partly) about gas prices. Starting last month, French drivers began holding demonstrations across the country to push back against rising taxes on gas and diesel.

French President Emmanuel Macron announced those taxes earlier this year in a bid to slash the country's reliance on fossil fuels.

• The taxes will increase the price of fuel by about 30 cents/gallon to start.
• Gas already costs about $7.06/gallon in France.

Now, France is considering instituting a state of emergency...just in time for holiday tourists. Protests have damaged popular visitor meccas from the Arc de Triomphe to the Tuileries Garden.

Zoom out: What started as a protest against climbing gas prices has evolved into a full-fledged objection of Macron's economic reforms (which many claim disproportionately favor the rich).