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Morning news brief

STEVE INSKEEP, HOST:

Florida Governor Ron DeSantis put out a video showing him about to go on stage.

MICHEL MARTIN, HOST:

Tonight, he's expected to join a conversation on Twitter with its owner, the billionaire Elon Musk.

(SOUNDBITE OF ARCHIVED RECORDING)

ELON MUSK: We'll be interviewing Ron DeSantis, and he has quite an announcement to make.

MARTIN: Assuming DeSantis goes through with his presidential bid, which he's been teasing for some time, he officially joins several declared Republican candidates, including a certain former president.

INSKEEP: NPR political correspondent Kelsey Snell is following this.

Kelsey, good morning.

KELSEY SNELL, BYLINE: Good morning.

INSKEEP: Why announce on Twitter?

SNELL: Well, there are some symbolic benefits. And, you know, there's the possibility that he could go viral because he will be already on Twitter.

INSKEEP: OK.

SNELL: You know, on the symbolic side, he is doing this event with Elon Musk. And this will be a live Twitter Spaces event at 6 p.m. Eastern. Musk has said in - that the interview will be live. There will be live questions. And he's kind of talked about this as an unedited streamed event. And while Musk himself is kind of a controversial figure in the broader public, he is quite popular with Republicans. They - you know, voters in the Republican Party say that they like this kind of bombastic rightward shift at Twitter. And while Musk hasn't exactly endorsed Twitter, you know, being in this moment on this Twitter Spaces event with Musk kind of gives that glow of an endorsement without actually hearing those words. You know, it also kind of sticks it to former President Trump, who used Twitter both as a candidate and as president to really drive the national agenda. But Trump hasn't really been using Twitter since he was banned, and he's been using his less popular site Truth Social. So this is - you know, a lot of benefits for DeSantis here.

INSKEEP: I guess some benefits for Musk as well. It drives some traffic to Twitter, where...

SNELL: Sure.

INSKEEP: ...Musk is trying to pay his enormous debts. But where does the Republican field stand as DeSantis joins?

SNELL: Well, it is getting more crowded. You know, he isn't even the only person to jump into the race this week. We saw Tim Scott, the senator from South Carolina, get into the race. DeSantis is really kind of the one who is most clearly attacking former President Trump, kind of at war with him. And, you know, Trump is really still the front-runner. Some polls have him leading DeSantis by more than 30 points, and he's already spending big money on fighting with DeSantis. Nikki Haley, the former governor of South Carolina, is also in the race, and she's probably the other most seriously watched candidate who is actually running. We are still waiting, though, on former Vice President Mike Pence, and we're expecting that he will jump into the race maybe in early June.

INSKEEP: Kelsey, we're talking here about names, different personalities, different backgrounds. But let's bring up, if I can, substance - how you would govern, what you would do with the country if you're president. Are any of the candidates offering any particular specific alternative to the way that Donald Trump ran the country?

SNELL: Well, not exactly, because they don't often talk about Trump directly really at all. We do hear from Nikki Haley and Tim Scott about their religious beliefs. Haley, in particular, has focused a lot on her opposition to abortion. Now, Mike Pence, who, as I said, isn't actually in the race yet, has really focused on, you know, particularly following the Constitution, which is a clear jab at Trump. And he talks about a traditional conservative approach, his principles, these ideas that were common before Trump significantly changed the focus of the party. DeSantis, you know, is different in that he has a very controversial record. He's in a battle with Disney. He signed a six-week abortion ban. So it's a little bit of a - we'll see what happens as they get more into a fight with Trump.

INSKEEP: Kelsey, thanks for your insights. It's always a pleasure talking with you.

SNELL: Thanks so much for having me.

INSKEEP: That's NPR political correspondent Kelsey Snell.

(SOUNDBITE OF MUSIC)

INSKEEP: Could U.S. relations with China improve?

MARTIN: A few signs suggest the two countries are making an effort. China's new ambassador arrived in the U.S. yesterday. Xie Feng talked of resuming discussions that have stalled.

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XIE FENG: We hope that the United States will work together with China to increase dialogue, to manage differences, and also to expand our cooperation so that our relationship will be back to the right track.

MARTIN: China's trade minister will also be here this week, and President Biden talks of a thaw.

INSKEEP: NPR China affairs correspondent John Ruwitch is following all this from his base in Shanghai.

Hey there, John.

JOHN RUWITCH, BYLINE: Hey, Steve.

INSKEEP: How different are discussions than they have been the last few months?

RUWITCH: Hey. Well, at least there are some now, right? I mean, at the high levels, it seems like there's more contact and perhaps even more restraint in the rhetoric. So we've got the ambassador now in Washington. China's cabinet minister's coming. You know, earlier this month, National Security Adviser Jake Sullivan had an over or around eight-hour conversation with Wang Yi, who's China's top foreign policy official. They were in Vienna. And a source told me that meeting was really important because it kind of reset expectations for more normal dialogue going forward. You know, also, China's foreign ministers had a meeting with the U.S. ambassador in China this month. That hasn't been happening a whole lot. They talked about the need to stabilize the relationship.

INSKEEP: I guess President Biden the other day summed up why there had not been a lot of talk in the last couple of months. He referred to, quote, "that silly balloon."

RUWITCH: Exactly. You know, Secretary of State Blinken canceled a visit to China after that. Beijing cut dialogue across a range of issues. You know, now they're starting to talk. And not only that - you know, intentionally or not, the findings from the FBI investigation into that balloon, which are likely to be an irritant in the relationship, have not been made public yet. And the Biden administration hasn't yet implemented a set of long-awaited curbs on American investment in China. Maybe that's deliberate, too.

INSKEEP: I'm really interested in the FBI findings not being made public. That's a thing you can do and that the U.S. government in other situations in the past has done - just keep things kind of quiet if there's awkward information that doesn't seem to be in the national interest...

RUWITCH: Yes.

INSKEEP: ...To release. But with that said, with all of these efforts to improve relations, what limits are there to what the two governments can realistically accomplish?

RUWITCH: Well, look, I mean, it's become clear that these two governments have fundamental differences in how they see the world and how they think it should be run, you know? Beijing, for its part, says it's open to dialogue, open to more dialogue. But the messaging is that they're very wary of it. The foreign ministry the other day, you know, openly questioned the sincerity of the Biden administration. Trust between these two countries has really been decimated. Shi Yinhong is a senior international relations scholar at Renmin University in Beijing. He's not at all optimistic.

SHI YINHONG: (Non-English language spoken).

RUWITCH: You know, he says progress depends on whether or not there are positive outcomes from the talks, and it's hard to say at this point if there can be any positive outcomes. In fact, he says he sees very little to support the idea that things are about to turn a corner.

INSKEEP: Well, how do they build such trust as they can?

RUWITCH: Well, I asked Scott Kennedy about this. He's a China expert at the Center for Strategic and International Studies in Washington. He says these coming months should see a bunch of meetings like this leading up to an Asia-Pacific leaders meeting in San Francisco where Biden and Xi Jinping are going to meet. But he says, you know...

SCOTT KENNEDY: The path toward greater dialogue and stability is quite fragile. And if a specific meeting doesn't go well or some incident comes out of left field that no one is prepared for, the domestic politics of both countries and strategic leanings of both will pull them apart.

RUWITCH: So, yeah, they're starting to talk again. But where it takes the relationship is very unclear.

INSKEEP: NPR's John Ruwitch is in Shanghai.

John, thanks so much.

INSKEEP: You're welcome.

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INSKEEP: OK. The AAA rating on government debt is as good as it can be.

MARTIN: It shows that a country reliably pays its bills. And just like your personal credit score determines things like how much credit you can get and how much it will cost, that credit rating affects the interest rates a country pays to borrow. Two of three ratings agencies have given the U.S. a AAA rating up to now, though negotiations over the debt limit now endanger that.

INSKEEP: NPR's David Gura joins us now.

David, good morning.

DAVID GURA, BYLINE: Good morning, Steve.

INSKEEP: Thanks for being with us early. How much is at risk?

GURA: Well, you know, in large part what these ratings reflect is that the U.S. is in a really unique economic position. It's the world's largest economic engine, and the U.S. has always paid its bills on time to the companies and countries that have bought its bonds. But every time the U.S. goes through this - and this happens dozens of times since World War II - investors and policymakers have the chance to think twice, and so do ratings agencies. And one of them has taken action in the past. S&P Global did downgrade the U.S. to AA+ back in 2011. That was just a few days after another bruising battle over the debt ceiling. You know, what they do - S&P, Moody's, Fitch - is they dig through data. Analysts meet with government officials. And Kathy Jones, who's the chief fixed income strategist at Charles Schwab, told me their goal is to answer one key question.

KATHY JONES: What's the probability of default? Typically with the U.S., it's been nearly zero, but now it rises when we get into these fights over the debt ceiling.

INSKEEP: Well, given that the U.S. was downgraded by one agency the last time there was a serious conflict over this, is the U.S. at risk of losing the AAA ratings from the others?

GURA: Well, of course, if there's no deal and there is a default, we'd see downgrades. That's a given. But even if there isn't a default, these ratings agencies are going to ask themselves whether U.S. debt deserves to be AAA. You know, as we've said, one of these agencies doesn't think so. It's been 12 years, and S&P still has the U.S. a notch below AAA. The chair of S&P's sovereign rating committee back then was John Chambers. He's retired now, and I asked him what the rationale was for that downgrade. And Chambers told me there really were two reasons.

JOHN CHAMBERS: One was the political impasse and the fractiousness of policy setting, and the other was the fiscal trajectory.

GURA: In other words, it had to do with the size of the country's debt and deficit, and also how difficult it was then for policymakers to agree on anything, including what to do with the debt ceiling. So the more things change, the more they stay the same. And we could see Fitch and Moody's follow suit. And although they declined to talk with me on the record, Steve, they have indicated they are watching these talks very closely.

INSKEEP: How much would a downgrade matter to all of us?

GURA: Well, odds are we'd see a steep selloff in the markets. The day after that downgrade back in 2011, the S&P 500 sank by almost 7%. We'd probably see the dollar weaken, and U.S. government bonds would be seen as riskier. Now, because of that, investors would demand higher interest from the U.S. because of that additional risk, and that would make it more costly for the U.S. to raise money. Your credit card analogy is a good one. But Steve, ratings are just one part of how professional investors make decisions, and at the end of the day, firms do their own analysis. They look at those data and ratings from these agencies before they decide to buy bonds or to sell them. And I want to say, despite all this, the U.S. is still seen as a country that is safe and secure. And something else it has going for it is right now investors who are in the market for government debt really have limited options. They don't have a whole lot of alternatives.

INSKEEP: Not going to buy from Argentina, I suppose.

David, thanks so much.

GURA: Thanks, Steve.

INSKEEP: That's NPR's David Gura.

(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.

Michel Martin is the weekend host of All Things Considered, where she draws on her deep reporting and interviewing experience to dig in to the week's news. Outside the studio, she has also hosted "Michel Martin: Going There," an ambitious live event series in collaboration with Member Stations.
Steve Inskeep is a host of NPR's Morning Edition, as well as NPR's morning news podcast Up First.