| Trump’s economic team is discussing slowly ramping up tariffs, rather than an aggressive approach, to help boost US negotiating leverage and avoid a spike in inflation, sources say. Canada’s ambassador in Washington warned that the incoming president’s plans will lead to “tit-for-tat” retaliation.  The US levies duties on Canadian softwood lumber. Photographer: James MacDonald/Bloomberg UK Chancellor of the Exchequer Rachel Reeves will speak in Parliament today for the first time since concern over Britain’s debt pile and economic outlook roiled financial markets, one of several potential flash points for the Labour leadership this week. Her statement about a recent trip to China allows opposition lawmakers to quiz her on a sharp rise in gilt yields that risks leaving her in breach of her own fiscal rules. Ukraine’s European allies have become cautiously optimistic that Trump won’t force Kyiv into premature negotiations with Russia. This follows a series of private talks with members of Trump’s team in which the transatlantic partners have made the case for continued support for Ukraine, sources say.  A Ukranian power plant damaged by Russian missile attacks on Nov 28. Photographer: Olga Ivashchenko/Bloomberg Spain wants non-European Union residents to pay as much as 100% tax for home purchases to tackle a domestic housing crisis, a move that could affect buyers from the UK and Latin America in particular. Spain’s extensive Mediterranean coastline is a popular destination for foreigners seeking a holiday residence, leading to higher real-estate prices at a time of housing shortages. Mexican President Claudia Sheinbaum announced a plan to reduce imports from China in a bid to support local industry and align the country with the US and Canada as trade partners. Mexico will offer incentives for nearshoring, including tax deductions, and develop plans for individual sectors for how to increase the local content of goods.  Tractor trailers wait in line on the US-Mexico border in Juarez on Dec. 20. Photographer: David Peinado/Bloomberg Greenland’s prime minister said he will seek a closer relationship with the US, highlighting the Arctic island’s push for independence amid renewed interest from Trump. Germany is giving its armed forces the ability to shoot down unidentified drones suspected of spying on military bases, industrial facilities and other critical infrastructure, sources say. South Korea started and then adjourned a trial today to decide if President Yoon Suk Yeol will be permanently removed from office over his botched martial law declaration. Lebanon named diplomat Nawaf Salam, a former United Nations envoy and current head of the International Court of Justice, as its prime minister with the task of forming a new government. Sign up for the Washington Edition newsletter for news from the US capital and watch Balance of Power at 1 and 5 p.m. ET weekdays on Bloomberg Television. | 
