Is This the End of the Netanyahu Era?

Here is today’s Foreign Policy brief: Israel’s inconclusive election could spell trouble for Netanyahu, China’s trade envoy arrives in Washington, and the U.S. Federal Reserve is expected to announce another interest rate cut.

We welcome your feedback at morningbrief@foreignpolicy.com.

Election results show no clear winner. With over 60 percent of ballots counted after Israel’s general election, results showed Prime Minister Benjamin Netanyahu’s Likud party and Benny Gantz’s Blue and White party winning approximately 33 seats each and their respective center-right and center-left blocs with 54-56 seats each, leaving both sides short of a majority.

Who calls the shots now? As predicted, Avigdor Lieberman, the leader of the secular Yisrael Beiteinu party will play kingmaker after winning an estimated 9 seats in the Knesset. His strong showing could put Netanyahu in a difficult position; it was Lieberman who blocked Netanyahu’s last attempt to form a government earlier this year, after refusing to serve alongside ultra-Orthodox parties—a move that precipitated yesterday’s rerun election.

What does defeat mean for Bibi’s future? President Reuven Rivlin will now decide which party leader will have the first shot at forming a government and Lieberman’s preference will likely influence his decision. Lieberman has made his desire for a national unity government clear. But the eventual makeup of such a government could remain unclear for weeks as difficult coalition negotiations begin. Speaking on Wednesday, Gantz said that it appeared that Netanyahu had been defeated, but that he would await official results. If Netanyahu does lose, he risks prosecution on corruption charges—and could even be pushed aside as Likud’s leader.

Is the U.S.-China trade war thawing? A Chinese trade delegation arrives in Washington today to prepare for the U.S.-China trade negotiations set for October over the countries’ ongoing trade dispute as it threatens to slow down the global economy. While China announced last week that it would lift tariffs on American soybeans and the United States has postponed another tariff increase, the two countries have made little progress on how to implement any deal.

China wants the United States to immediately lift tariffs when an agreement is reached, but Washington is not on board. “The biggest near-term risk for China is that its economic slowdown will outpace its capacity and the speed at which it is able to shift its economy onto a more sustainable footing,” Evan A. Feigenbaum, the vice president for studies at the Carnegie Endowment for International Peace, wrote in an email. The months-long dispute has caused enough disruption for goods, capital, and technology that the tensions could persist.

U.S. Fed to lower rates again. The U.S. Federal Reserve is expected to announce today that it will cut interest rates again, after lowering rates in July for the first time in a decade. The economic data has been mixed since that decision, and the central bank remains divided over whether to continue lowering rates amid a slowing economy. Investors are no longer betting on another rate cut before the end of the year.

Spain to hold a new election. After its parliament failed to reach a deal to form a government this week, Spain appears to be headed for its fourth election in four years on Nov. 10. Parliament will be dissolved next week, unless an unlikely last-minute deal is struck this week. Interim Prime Minister Pedro Sánchez announced Tuesday that he would not seek a parliamentary vote to back him after party consultations with Spain’s King Felipe VI.

Pentagon prepares report on Saudi oil attacks. The U.S. Department of Defense will release an evidence report within 48 hours on who was responsible for the attacks on Saudi oil infrastructure over the weekend, Bloomberg reports. The United States has alleged that Iran was behind the strikes, and a U.S. official told Reuters that U.S. intelligence suggests the attacks were launched from Iran’s southwest.

Taliban targets campaign rally. A Taliban suicide bombing killed 26 people waiting for a campaign rally for President Ashraf Ghani to begin on Tuesday in Afghanistan’s Parwan province. Ahead of the country’s October presidential election, Ghani has avoided traditional campaigning—using Skype instead to reach voters beyond the capital.

Get ready for the U.N. General Assembly. Join FP Editor in Chief Jonathan Tepperman and senior U.N. correspondent Colum Lynch for a subscriber-only conference call on Sept. 19 at 10 a.m. ET as they preview the week ahead. And sign up for U.N. Brief for daily updates and insights from Lynch and staff writer Robbie Gramer during the week of Sept. 23-27.

Ecuador’s massive data breach. Ecuador is investigating a data breach revealed this week in which the personal data of more than 20 million people—more than the country’s current population—was available online. The data includes social security numbers, family, contact information, and bank details. The breach resembles the widespread hacking of Bulgarians’ personal data in July. Ecuador’s government says it’s not clear whether anyone had accessed the data.

Italy’s shaky coalition. Just two weeks after Italy formed a new coalition government, Matteo Renzi—who served as prime minister from 2014 to 2016—has left the ruling Democratic Party (PD) to start his own centrist party. Renzi still supports the new government but could be positioning himself in case a new election is called.

No one wants to do Hong Kong’s PR. Hong Kong Chief Executive Carrie Lam said Tuesday that several international public relations firms had declined government requests to help boost the city’s image as pro-democracy protests continue. Hong Kong’s economy is suffering: Tourist arrivals to Hong Kong declined by 40 percent in August compared to 2018.

The next EU members? On Tuesday outgoing EU President Donald Tusk visited North Macedonia and Albania, as he encouraged current members of the bloc to vote next month for talks on EU accession for the two Balkan countries. “[T]here will be no stable and safe Europe without the integration of all the Balkans in the EU,” he said.

A controversial award for Narendra Modi. Earlier this month, the Bill and Melinda Gates Foundation gave an award to Indian Prime Minister Narendra Modi for his work on Clean India, his flagship sanitation project. The move has provoked controversy within the organization. To publicly praise Modi as he tightens his grip on India and cracks down on Kashmir is a mistake, Azad Essa argues in FP.

2019 Essay Contest—If you’ve been reading Foreign Policy and the U.S.-Russia Relations website for the Carnegie Corporation, you know that tensions between the United States and its Cold War foe are high and rising. We’ve presented a lot of ideas for how to change things for the better. Now it’s your turn. Compete for a $1,000 prize and publication on ForeignPolicy.com by submitting your essay today. Details here.

As voting began in Israel on Tuesday, Facebook blocked a chatbot—which holds automated conversations with other users—from the Likud party’s page for breaking election day rules against campaigning. The chatbot was allegedly used to publicize polling data. “They took a 100 kg hammer and brought it down on a fly,” Netanyahu said.

That’s it for today.

For more on these stories and many others, visit foreignpolicy.com, subscribe here, or sign up for our other newsletters. Send your tips, comments, questions, or corrections to morningbrief@foreignpolicy.com.