Friday, May 31, 2019

The Possible Outline Of A Deal Between Xi And Trump In June

Will The Trade War Force A New Equilibrium?

  • Both parties agree to roll back all tariffs immediately. 
  • The US ends its harassment of Huawei, although it could choose to not use Huawei equipment for its 5G efforts. China lays to rest its rare earth minerals threats. 
  • China agrees to a set of structural reforms and agrees to a review of the progress every two years. 
  • China agrees to buy substantially more agricultural products from the US. 
  • China agrees to additional purchases to the tune of $30 billion. 
  • Both powers agree to call a meeting of the WTO for a new round of negotiations with all countries of the world participating. The US takes all its grievances to the WTO. The negotiations might last a few years. 
  • The two powers organize a gathering of the top 100 technology companies of the world for a Privacy And Security Summit along the lines of the Rio Summit in 1992 for the environment on the sidelines of the G20 Summit next year. The top 20 economies and the top 100 tech companies thrash out solutions. How much of it is about agreeing on common standards? How much of it is about lawmaking and law enforcement? How could the law enforcement agencies of the world cooperate? How much of it is technical? How much is beyond reach and awaiting further advances in technology? 
  • The T100 is a permanent forum meeting annually on the sidelines of G20. 

No President Is Above the Law First, a hostile foreign government attacked our 2016 election to help candidate Donald Trump get elected. Second, candidate Donald Trump welcomed that help. Third, when the federal government tried to investigate, now-President Donald Trump did everything he could to delay, distract, and otherwise obstruct that investigation....... That’s a crime. ..... He’s referring President Trump for impeachment, and it’s up to Congress to act.

Business groups are considering legal action against the White House over Mexico tariffs The powerful U.S. Chamber of Commerce is mulling its legal options in response to the duties...... While top business organizations have repeatedly slammed tariffs Trump levied on trading partners such as Mexico, Canada and China, a lawsuit would mark a major escalation in their opposition to White House trade policy....... The duties could damage key U.S. industries such as auto manufacturing, and crucial 2020 electoral states such as Arizona, Michigan and Texas could feel particularly sharp pain from the tariffs.

GOP lawmakers, business groups slam Trump's Mexico tariff threat
Making Sense of the New American Right
Trump and Bibi’s Bad Week
Trump's approval rating hits highest point in two years
Jeremy Siegel says Trump must cut a trade deal with China to protect the two pillars his re-election case: The strong stock market and economy “The market wants a solution,” says Siegel. “Don’t forget, the market didn’t really want this trade war.” .... Since Trump’s tariff-threat tweet on May 5, the S&P 500 has lost about $1.1 trillion in value. ....... stocks could drop 10% to 20% if the U.S. and China were to dig in during trade talks, he said, “The market is going to continue to react” if Trump wants to push China to be the end....... “You can pull victory out of defeat. No one is really going to look at the details,” the Wharton professor said, stressing that the president has a bully pulpit to cast any agreement with China as a victory even if it’s just so-so.

Beijing experts’ latest message as trade talks stall: The US needs China sentiment contrasts with that of Chinese state-run media, which is emphasizing China’s ability to stand up to the U.S. ...... as long as there is negotiation, then there will be results ..... Beijing would like to keep negotiating with the U.S. It could even be a years-long process that cycles through negotiation and fights ...... China has been removing ownership restrictions in some industries such as financial services and autos. This March, Beijing also rushed to pass a new foreign investment law that officially prohibits forced technology transfer and increases the protection of intellectual property rights. In June, the government is also set to release an expanded list of industries to which foreign businesses can have access. ...... Some have hoped the trade tensions would push Beijing toward important changes to the structure of its economy.

We asked the Democrats running for president how they would negotiate with China on trade. Here’s what they said “Donald Trump has shown he knows nothing about trade,” says Rep. Seth Moulton...... Five Democrats say any trade deal with China should address human rights issues. Among them: Sen. Bernie Sanders, who said he would target American firms that provide surveillance equipment. ...... “China is going to eat our lunch? Come on, man,” Biden told a crowd in Iowa earlier this month. ....... Sanders: It is in the interests of the United States to work to strengthen institutions like the WTO and the UN rather than trying to go it alone. American concerns about China’s technology practices are shared in Europe and across the Asia-Pacific. We can place far more pressure on China to change its policies if we work together with the broader international community and the other developed economies. International institutions also offer China a template for reforming its own internal intellectual property and industrial practices. ...... Sanders: Yes. Labor protections are very weak in China, and the rights of workers are an essential component of human rights. The Trump administration has proven itself indifferent to labor rights, and apparently would prefer that American workers are reduced to the position of Chinese workers, rather than that labor everywhere enjoy basic protections and strong standard of living. The Trump administration has also done nothing to pressure China over its abhorrent treatment of the Uighur and Tibetan peoples. Future trade negotiations should, for example, target American corporations that contribute surveillance technologies that enable China’s authoritarian practices............ Sanders: While China has adopted some better practices, it still has a long way to go. The Trump administration is correct to put pressure on China to reform its practices, and I hope that some good comes from current trade negotiations. The economic relationship between the United States and China has been the engine of global growth for the past 25 years, and we should acknowledge that in China it has lifted hundreds of millions of people out of poverty. In both China and the United States, however, the benefits of this growth have not been shared equally, and have accrued in a very disproportionate way to the very wealthiest. The problem is that the Trump administration is mainly interested in addressing some of the imbalances between America and China overall, when it also needs to address basic drivers of economic inequality. The future of this relationship requires both a degree of pressure on China, and reform of the economy inside the United States itself. ....... Sanders: The U.S. has a role to play in supporting bilateral and multilateral diplomacy between China and others in the region to deescalate and handle disputes. The best policy in both the near and long term is to strengthen international institutions, in this case the United Nations Convention of the Law of the Sea (UNCLOS). The United States should press China to abide by internationally agreed guidelines for managing maritime issues, in no small part by ratifying UNCLOS itself. ......

Elon Musk’s SpaceX is now worth more than Tesla Musk is the largest shareholder and CEO of both companies, with a 54% stake in SpaceX and more than 20% ownership of Tesla........ investors shouldn’t rule out the possibility that Musk could use his SpaceX stake to “collateralize” Tesla. “There’s a precedent for Elon Musk to think across his portfolio of companies”

Cramer: The US economy ‘could be on the verge of a significant slowdown’ executives are also weighing the odds of the Democratic Party winning the White House in 2020 ...... “yields don’t protect you anymore ... the stocks keep falling on fears of a worldwide tariff-related slowdown.”

Markets signal to US and China on the trade war: You have ‘blundered into a minefield’

The New York Fed’s gauge of recession probability over the next 12 months is now at 27.5%, the highest since the financial crisis.

..... “It’s like lighting a match. You think you know how to control it. That’s where the uncertainty comes in” ...... Whether it’s increased expectations for interest rate cuts, decreasing expectations for inflation or queasy bond and stock market investors who are more aggressively pricing in slower growth, the message is being sent to the U.S. and China that danger lurks. ..... the ecosystem around the economy and the trade headlines remains fragile.

China won when Trump blindsided Mexico with tariffs, says former Mexican ambassador to China
US manufacturing activity dives to more than 9-year low on trade war worries, survey shows
Grover Norquist urges Trump to get rid of trade tariffs, calling them taxes on US consumers
Major Wall Street banks jeer Trump’s Mexico tariffs: ‘Damaging at a number of levels’
‘Very dangerous’: Putin, Trump want to weaken the European Union, top official says
GOP lawmakers, business groups slam Trump's Mexico tariff threat

Making Sense of the New American Right The conservative intellectual movement has been and continues to be fractious, contentious, combustible, and less of a force than most assume....... The debate over Trump's character and fitness for office opened, or poured salt on, wounds that have not and will not heal. ...... The president did not win a majority, captured a smaller percentage of the popular vote than Mitt Romney, and took the Electoral College thanks to 77,000 votes spread over three states. It is also the case that to date President Trump has been most successful when he has adhered to the traditional Republican program of tax cuts, defense spending, and judicial appointments. ........ The rise of Donald Trump, Brexit, and nation-state populism throughout the world certainly suggest that something has changed in global politics. American conservatism ought to investigate, recognize, and assimilate the empirical reality before it. The trouble is that no one has concluded definitively what that reality is. ....... They believe the nation-state is the core unit of geopolitics and that national sovereignty and independence are more important than global flows of capital, labor, and commodities....... the conservative terrain has become so difficult to navigate that it's useful to have a map. ..... the people who remind us that America is not ruled from above but driven from below. ...... Social decline, he said, is related to the loss of manufacturing jobs. It happened in the inner cities. Now it's happening in the Rust Belt and in rural America. When jobs disappear and low-skilled male wages decline, family formation breaks down. ...... advocated a national industrial strategy ...... the frayed bonds that barely connect working-class Americans to each other ....... they are certain American foreign policy should be restrained, within constitutional bounds, and prioritize diplomacy over military force. ...... Economic freedom has brought about a global system of trade and finance that has outsourced jobs, shifted resources to the metropolitan coasts, and obscured its self-seeking under the veneer of social justice. Personal freedom has ended up in the mainstreaming of pornography, alcohol, drug, and gambling addiction, abortion, single-parent families, and the repression of orthodox religious practice and conscience. ..... the "strong gods" of familial, national, and religious authority. ...... turning away from the secular world and shielding, as best you can, spiritual life. ...... "to use these values [of civility and decency] to enforce our order and our orthodoxy, not pretend that they could ever be neutral." ...... Rather than asking the question, ‘What should conservatives/progressives do?' considerable advances can be made through certain purely practical considerations: ‘How can the integrity of the national political community be assured?' ‘How can commercial activity and technological development continue to be turned toward the common good, and toward our own strategic advantage?' ......... For decades now our politics and culture have been dominated by a particular philosophy of freedom. It is a philosophy of liberation from family and tradition; of escape from God and community; a philosophy of self-creation and unrestricted, unfettered free choice. ........ "celebrates the individual," Hawley went on. But "it leads to hierarchy. Though it preaches merit, it produces elitism. Though it proclaims liberty, it destroys the life that makes liberty possible. Replacing it and repairing the profound harm it has caused is one of the great challenges of our day."

Trump and Bibi’s Bad Week Even on Fox News, Mueller’s statement was greeted as a significant blow to the President, with the network’s chief political anchor, Bret Baier, telling viewers that Mueller had directly rebutted Trump’s claim of “no collusion, no obstruction.” ...... Washington and Jerusalem are facing twin crises, disputes over the reach of executive power in the face of scandal and investigation. .....

politics have become a crude reality show

.... “There are all kinds of things happening that, several years ago, could only be a figment of our imagination.” ..... We are living in a real-time seminar on democracy’s dysfunctions. ....... the context of the rise of authoritarian-minded right-wing populists across the Western world ...... It can all seem overwhelming—too many little crises to keep track of. ...... Whether or not there is anything to be done about it, the collapse of the liberal order is, in fact, happening. ........ the number of democratic countries in the world has fallen every year for the past dozen years. ...... E.U. parliamentary elections confirmed that the right-wing populism that fuelled Brexit and political discontent across the continent remains a potent force; populist parties received the largest share of the vote in four of Europe’s six largest countries. ...... Tumult is the new normal.

Trump’s Crazy Mexico Tariff Is Stoking a Meltdown on Wall Street In writing about Donald Trump, there is a daily temptation to say that this time he’s gone too far. ...... Trump’s move could derail congressional approval of a new trade deal with Canada and Mexico. ......

The only real constraints on Trump’s actions are the courts, the opinion polls, and the financial markets.

...... If the new tariffs do go into effect, they will raise the prices for consumers on a wide range of goods, which could produce a popular backlash. ...... eighty-two per cent of self-identified Republicans approve of Trump’s trade policies...... the President of Mexico, Andrés Manuel López Obrador, has already indicated that he won’t jump to attention. ..... (On Thursday, López Obrador sent Trump a letter in which he said, “Please, remember that I do not lack valor, that I am not a coward nor timorous but rather act according to principles.”) ...... Trump seems to believe that he can target anybody for his bullying ..... this latest Trump power play is so extreme and potentially self-destructive that, according to the Wall Street Journal, even his own hard-line trade adviser, Robert Lighthizer, opposed it. ....... On Wall Street, there is a lot of nervousness about where things are heading, and whether Tariff Man understands the risks that he is taking. Financial markets don’t usually go south gradually; they collapse suddenly, in a heap. ....... he’s going to have to blink on tariffs, because the market can’t live with this level of crazy.”

Trump's approval rating hits highest point in two years 48 percent approve of the job Trump is doing ..... “Every point of increase in this range of 45 to 50 improves the possibility of re-election.” ...... The president’s job approval rating is at 42.5 percent in the RealClearPolitics average. A recent Rasmussen Reports survey found Trump at 48 percent, but six other recent polls found him ranging between 38 percent and 44 percent.

Will The Trade War Force A New Equilibrium?

The pain from the trade war has only just started. And so the two sides might feel like there is some wiggle room, that they can afford to wait a little. But in a year things might look different. If the two sides stay at only increased tariffs for a year or so, that is one thing. But if there is escalation and the US tries to kill Huawei and China clamps down on its rare earth minerals exports, we will move into the territory of unintended consequences.

High tech is not made for self-sufficiency. Only when countries and companies come together can privacy and security issues be tackled. And even then it is hard. But countries going solo is simply not an option. In the field of tech and innovation, the more cross-pollination the better.

Since the US has similar beef with Europe, among others, you could see some realignment.

There is a great chance that a protracted trade war will lead to major domestic political complications for Donald Trump. The impeachment train is independent of the trade war train. The impeachment might or might not happen, but the investigations surely will.

That is not to say China's capacity for pain is substantially greater. A full-fledged trade war could lead to mass unrests. But there are numerous steps to that stage. The markets will jitter and react to every step in between and that will roil the political spheres.

If both sides decide to stay on this side of sanity and do engage in a trade tussle but not a full-blown trade war, then that could lead to a new equilibrium, both between the two powers, and also the powers of the world.

American exceptionalism has never been the same as white supremacist thinking. Every country is unique. In that way, America is also exceptional.

The march towards a new equilibrium is not going to be pain-free, but it need not be too disruptive. The primary hope is that the two powers cut a deal and spare the global economy unnecessary hiccups. The secondary hope is that they don't go too far in their tussle and stay on this side of sanity.

In The News (7)
In The News (6)
In The News (5)
Trump And Xi Should Cut A Deal In Japan
China In Latin America
In The News (4)
Mueller Drops A Bomb
In The News (3)
In The News (2)
In The News (1)
A Sanders-Warren Ticket
Donald Trump Is Messing Up A Good Thing
5G Challenges US Hegemony
India 2050: Amitabh Kant
Brexit, Aexit, And Trump
African Economic Union
Understanding China (2)
Trump's Prospects In 2020
Understanding China
Political Fallout For Xi
Made In China 2025
Trade War: The Spiral Down Scenario
Three Crises: China, Iran, DC Two Out Of Three: Kamala, Andrew, Pete
Modi 2.0 And The 5G Question
Trade War Commentaries
One Million Uighurs
The Mighty Dollar
India 2019: Looks Like A TsuNAMO
2020: The Year Of The Social Democrat
Andrew Yang: Universal Basic Income, Elizabeth Warren: Wealth Tax
Trade War: Intellectual Property
Trade War Endgame Scenarios: Look At Canada, And North Korea For Hints
The US And The Chinese Economies Are Super Well-Connected
Trade War Endgame Scenarios
US China Trade War: A Meeting Of The Hot And Cold Fronts

Trump’s trade wars have cost the stock market $5 trillion and counting: Deutsche Bank
Trump's threat of Mexico trade war sends markets lower
Trade War Starts Changing Manufacturers in Hard-to-Reverse Ways

The new front in Trump’s trade war could cost consumers at least $93 billion But the figures don’t take into account all the impact: That’s because in the critical auto industry, many parts crisscross borders multiple times....... “Production processes would have to be changed in substantial ways to reduce the impact of the tariffs, reducing productivity in a significant way,” said Carlos Capistran, Canada and Mexico economist at Bank of America Merrill Lynch. “This could eventually lead many firms that currently produce in Mexico to relocate to the U.S., significantly impacting growth in Mexico.”..... vehicles are the top U.S. imports from Mexico, worth $93 billion last year. They are followed by electrical machinery ($64 billion), machinery ($63 billion), mineral fuels ($16 billion) and medical instruments ($15 billion) ..... “The big question at the end of the day though is can we really fight two trade wars at the same time?”

Trade war could trigger a ‘global financial crisis,’ says ex-China central bank chief The former central bank chief also attributed recent weakness in the yuan to the market’s reaction to trade tensions, while noting that Beijing would not devalue the currency in response. He said that fundamentals, such as economic growth and foreign exchange reserves, support a stable yuan...... “It can be said, that the U.S. this time has at the wrong time, fought a wrong war, and chosen a wrong opponent” ...... it might be America’s greatest mistake since World War II, or even the country’s founding, all out of unwillingness to accept China as a rising power........ the trade tensions could last 30 years or more, especially since he expects the U.S. will keep on with its investigations — even if a deal is reached in the near term. ...... “I’m confident that time, reason and truth are on our side,” he said. “Our Chinese people will most certainly win, peace will most certainly win.”

John Negroponte: Trump’s new tariff on Mexico is ‘bad politically and bad economically’ “I think it’s both bad politically and bad economically and I don’t think it’s really going to help solve the immigration problem, either, which is what Mr. Trump said he’s trying to attack” ...... U.S. Senate Finance Committee Chairman Chuck Grassley, a Republican who represents Iowa, slammed the move. He called it a “misuse of presidential tariff authority.”

Shares of US automakers plunge because they have major production in Mexico The big three automakers each have billions of dollars at stake due both production and suppliers in Mexico.....Shares of General Motors, Fiat Chrysler and Ford dropped in trading Friday. ...... Fiat Chrysler dropped 4.9% while General Motors was down 4.5% and Ford skidded 3.1%...... tariffs on Mexico’s imports “threaten the jobs of tens of thousands of Americans here in the United States.” .... GM and Fiat Chrysler import 29% and 24%, respectively, of the total parts for its cars and trucks from Mexico. Ford has the second highest total imported vehicles from Mexico at 17% ...... the host of auto industry suppliers at risk to tariffs on Mexico, including Aptiv, Adient, Dana, Lear, Visteon, Goodyear Tire & Rubber and BorgWarner.

Trump’s trade war polls badly in key states like Pennsylvania, threatening his support for 2020
Surprise Mexican tariffs hurt China agreement chances: ‘How can you trust Trump to honor a deal?’

The US slipped to third place in a ranking of most competitive economies Singapore’s immigration laws, advanced technological infrastructure, availability of skilled labor and efficient ways to set up new businesses helped it advance to the top..... For the first time in nine years, Singapore surpassed the United States and Hong Kong to clinch the title of the world’s most competitive economy ...... With regard to the ongoing U.S.-China trade war, Bris said he “would call it a tantrum in the sense that it is hurting companies in the United States more than in any other country.”...... Indonesia, in particular, leapfrogged 11 places to become the 32nd most competitive economy in the world. Thailand also advanced five places to the 25th position.

France’s health-care system was ranked as the world’s best—Here’s how it compares with the US’ With the Democrats pushing for a government-funded model and President Donald Trump campaigning on repealing Obamacare without a clear alternative, Americans are considering what kind of health care system they may want.

Ray Dalio warns China restricting rare earth metals would be ‘major escalation’ of trade war
China is establishing an ‘unreliable entities’ list that will include companies and people “Foreign enterprises, organizations and individuals that do not comply with market rules, violate the spirit of contract, block or cut supplies to Chinese firms with non-commercial purposes, and seriously damage the legitimate rights and interests of Chinese enterprises, will be added to the list of unreliable entities”

Cramer: Trump no longer cares if his China policies hurt American businesses That tanked the shares of a group of chipmakers — Qualcomm, Skyworks Solutions, Broadcom, Micron, and Xilinx — as much as 7.3% ...... Walmart has warned that it will have to raise its prices if Trump goes through with his promises to slap another 25% tariff on $300 billion, on top of the existing $200 billion, worth of Chinese imports...... he’s more concerned about the strong American dollar’s negative impact on the chain’s international sales.

Stocks slump after US expands trade war to Mexico

As U.S.-China tensions escalate, the trade war has morphed into a deeper, harder conflict the conflict with China has widened beyond the original trade-based issues..... Officials on both sides of the Pacific have begun to portray the U.S.-China relationship in nationalistic and emotion-charged terms that suggest a much deeper conflict. ...... Recently, for example, a private group of American economists and trade experts with long-standing experience in China traveled to Beijing, expecting their usual technical give-and-take with Chinese government officials........ Instead, a member of the Chinese Politburo harangued them for almost an hour, describing the U.S.-China relationship as a “clash of civilizations” and boasting that China’s government-controlled system was far superior to the “Mediterranean culture” of the West, with its internal divisions and aggressive foreign policy..... Nothing short of a deal struck directly by the two leaders is likely to avert new rounds of punches and counter-punches over economic and financial ties ...... whether either leader is interested in a stand-down is unclear....... China.. will probably “hunker down and try to get by until either the second term of the Trump administration or the incoming new administration.” ..... the domestic politics, for now, seem to favor conflict, not compromise. ...... The political risk for Trump from potential Democratic opponents in 2020 isn’t from hitting China too hard, but treading too softly or coming away with a weak deal...... the best one might hope for is a temporary truce, and even that will be hard to come by if Trump keeps piling on the pressure. ..... Already one in five U.S. firms operating in China say they face increased inspections and slower customs clearances ........ Beijing also could spur boycotts of popular American products such as Apple iPhones or curtail tourism to the United States, which would be particularly painful for states such as California. And American universities already are fretting about a potential drop-off in full-tuition-paying Chinese students...... Boeing, the single biggest American exporter to China .. Sales to China last year accounted for more than 20% of the company’s commercial aircraft revenue. ...... the next escalation could come in mid-August. That’s when the Commerce Department's 90-day reprieve for Huawei runs out and the Chinese start to find out how long and well Huawei can manage without key Android software updates from Google, as well as crucial chips and other hardware from American suppliers. ..... the possibility of a limited trade deal by fall ..... they’ll need to reset the tone a little bit and try to manage a de-escalation” of the trade war

China Has Rare Earths Plan Ready to Go If Trade War Deepens

There are temples and shrines everywhere – honouring Gods and deities – but none more important than Brahma, the creator, Vishnu, the preserver and Shiva, the destroyer. It’s also the land of the Ramayana and the Mahabharata – echoes of which have reverberated across Southeast Asia. And on the Ganges plain, you can trace the life and death of the Buddha – a vital bond with Southeast Asia’s 150 million or so Buddhists........ India’s US$9.449 trillion economy (currently the third-largest in Purchasing Power Parity terms) and a 7.3 per cent GDP growth rate (the fastest among the G20 nations)..... with China becoming increasingly heavy-handed, Southeast Asia desperately needs India to play a larger role in our future – economics and business is just the beginning.

Thursday, May 30, 2019

In The News (7)

In The News (6)

This Is Not a Great-Power Competition Great-power competition describes a specific pattern of relations between states—the sort practiced by the great empires and nation-states from the seventeenth through the early twentieth centuries. China’s rise as an economic and political power and Russia’s increasing assertiveness on the world stage have understandably fueled analogies to that time. But the emerging era does not match the patterns of the past. Treating it as though it does risks misunderstanding both the character of today’s threats and the source of the United States’ competitive advantages. .............. Great powers from Napoleon’s France to Bismarck’s Prussia to Wilhelmine Germany to the revisionists of the 1930s threatened one another with invasion and war. Military strength was the ultimate arbiter of such contests. ........ Each of these three elements—a multipolar system, a general disregard for rule-based constraints on behavior, and dominantly political-military forms of rivalry—is present during periods of great-power competition. Yet none of them accurately describes world politics today. ....... Today’s world thus reflects a complex mixture of unipolar, bipolar, and multipolar elements that does not match the classic vision of a colliding set of roughly equivalent great powers. ........ when states compete today, they do so mediated by institutions, rules, and norms that differ starkly from the conditions during most periods of true great-power competition. Most major powers today are firmly established industrial democracies that want stability and prosperity and harbor no meaningful territorial ambitions. A dense network of organizations, treaties, informal processes, and many other constraints regulates their relations. The postwar order, although imperfect, has produced the most highly institutionalized and norm-bound international system in history. Critically, this order is not imposed on an unruly set of troublemakers—it reflects deeply embedded economic preferences for peace, stability, and prosperity. ........ Japan, for example, does not fear India. ...... The European Union does not fear Brazil, which does not fear Mexico....... Today’s versions of rivalry and competition almost always play out in the economic, political, cultural, and informational spheres—not on the battlefield. ...... The strategy of the United States’ leading rival—China—is therefore to advance its interests primarily through economic, geopolitical, and informational means. ...... To see the state of international relations today as a new great-power competition is not only inaccurate but dangerous. ....... The United States would do far better to continue leading the group of nations that holds the predominant share of global economic and military power, is bound together by a dense network of institutions, and remains committed to certain norms, such as those against military aggression and economic predation. To abandon this role would be to walk away from the greatest competitive advantage any great power has ever known.

Netanyahu 'weaker' as Israel heads for new election For the first time in Israel's history, it will hold two national votes in a single year....... No single party has ever won a majority of 61 out of 120 seats in the Israeli Knesset, or parliament, making coalition governments the norm.

Saudi Arabia gathers Arab leaders over attacks on oil assets

In The News (5)

Trump And Xi Should Cut A Deal In Japan

The two should pull back a little and cut a deal. Escalating the trade war will bring bad news all around.

A trade deal where the tariffs simply stay in place is no trade deal at all.

On the other hand, China should give credible assurances on some much-needed reforms. These are reforms that it would want to carry out anyways. Some of the state-run companies in China are capital sinkholes. Reform would only add to China's competitiveness.

The US buying or not buying 5G equipment from Huawei is a decision any customer can make. But to go after Huawei's supply chain puts companies like Apple at grave risk. 5G will give Global South the infrastructure that will transform countries. The US better not mess that up.

A trade deal would be one where both countries agreed to pull back on all tariffs, take their hands off high-tech supply chains, and China commits to some major structural reforms to its economy, to be subjected to review every two years or so.

I am for talks in general. I supported the idea of Donald Trump meeting Kim of North Korea. I support the idea of Trump meeting the Iranian leader. On the idea of holding talks, I agree with Trump. Leaders should talk to each other in person instead of posturing and signaling through media.

If China offers to buy just a few more bags of soybeans, there will be no deal. If the US insists the tariffs must stay in place to ensure China delivers on its promises, there will be no deal.

Investors grow anxious over Trump-Xi G20 meeting US President Donald Trump and Chinese President Xi Jinping have downplayed the chances of a breakthrough in talks ..... Bond yields have already plummeted, stock prices have fallen and the Vix index of market volatility has risen as hopes of a quick end to the dispute have been dashed. Investors are now using derivatives markets to position themselves for further turbulence at the two-day summit......The increased investor caution comes as 10-year US Treasury yields plunged to their lowest level in 20 months on Wednesday as fears over slowing global growth have intensified after trade talks between the US and China broke up in acrimony this month, leading to an escalation of tariffs....... That encounter is at most expected to result in a new truce, setting the stage for a further round of negotiations. Mr Trump this week said the US was “not ready” for a deal at this stage....... the increased trading activity around the meeting could come both from investors seeking protection from a sharp downturn in stock prices ..... The Vix index — sometimes called Wall Street’s fear gauge .... The Vix level implied by prices of options expiring between June 28 and the following Friday currently stands at 17.6, compared with just 14.4 for the week after and 14.7 earlier in the month
A Political Economist on How China Sees Trump’s Trade War Authoritarian regimes, because they’re not elected, can, in theory, impose a great deal of hardship on their population without suffering political repercussions. ....... Both leaders see themselves as uniquely capable of reviving greatness in their respective countries. For Trump it may be partly rhetoric and partly politics, but, I think for Xi Jinping, also partly politics—he needed to innovate a new ideology that was very different from his predecessors’ ideologies, so he picked national greatness. ....... clearly Xi Jinping would like China to continue on this trajectory of economic growth ..... of course, in the official media they’re beginning to try to portray this scenario where China is going to suffer economic hardship to fight this war with the U.S. I just don’t believe it. I think it’s propaganda. ........ China suffers from a deficit of true expertise about the U.S. ....... The problem faced by Xi is the same one that is faced by Trump, which is that they’re not economic experts. ...... If one is given great advantages in various commercial deals, it’s not difficult to get rich...... the concentration camps in Xinjiang really have inaugurated a new era for Chinese repression of its population. And, indeed, we have not seen such a large-scale mass internment since the Mao period, when Mao put millions of Chinese Communist Party members in labor camps and reëducation camps. This is targeted toward a particular ethnic group...... In Xinjiang, there were no active insurgencies; there were isolated terrorist incidents. I don’t know why the leadership approved such an unnecessary step..... there is some kind of information asymmetry. You have these interest groups within the government—high terrorism officials, officials in Xinjiang—who gain enormously from these very extreme measures, because it costs billions and billions of dollars to build up these camps. Somebody got these contracts.
Trump says he will meet China's Xi at G20 next month US president also says he'll meet Russia's Putin, but Kremlin says no such arrangements have been made so far...... "China hopes the US will get back to the right track of bilateral trade and economic consultations and meet with China halfway." ...... The prospect that the US and China were spiralling into a no-holds-barred dispute that could derail the global economy has rattled investors and led to a sharp selloff on equities markets in the past week.

China In Latin America

China in Latin America: partner or predator? Whether they're new colonisers or a vital source of cash and technology, the jury is out on Beijing's investment in the region – but one thing is certain, the US will not relinquish its control without a fight ...... the difference between the long-standing American influence and the growing Chinese role is not so black and white. ...... The Middle Kingdom may be seen as a 21st century coloniser, but it has also presented alternative investment options. ........ The grievances and wounds created by hundreds of years of Spanish and Portuguese rule are today still present in the collective psyche, despite formal foreign control ending more than a century ago. ...... The US then quickly became the hegemonic power, but its strategic control has been hard to sustain over the past two decades, partly because of China, whose growing economy has driven up demand for commodities. ........ Trade between China and Latin America has surged, from US$12 billion in 2000 to almost US$306 billion last year, and China has become a major investor. The value of its loans – mostly for energy and infrastructure projects – has surpassed financing from the World Bank and Inter-American Development Bank. ....... Panama and the Dominican Republic, have severed diplomatic ties with Taiwan ....... Ecuador, a country of more than 16 million which some say has been a laboratory for Sino-Latin American investment ........ Dams and hydroelectric power plants are being built by Chinese companies in the Amazon rainforest and Patagonia. Thousands of kilometres of rail track are being laid in Brazil, Peru and Venezuela. China and Argentina are negotiating over construction of a US$8 billion nuclear facility in the province of Buenos Aires. ....... “We have found most projects in Latin America have faced a local backlash because of environmental concerns about pollution and harm to residents and livelihoods,” Argentinian scholar Ariel Armony and Mexico-based researcher Enrique Dussel Peters wrote ....... questions whether the region’s role in Chinese empire building is “that different to being part of the ‘gringo’ empire” – referring to the US. ...... Chinese companies have made little effort to interact with their hosts. ...... “For Chinese companies, the community is not a valid interlocutor, only the government is. The difference is that gringo imperialism deals with civil society, the Chinese don’t … They don’t try to understand where they are,” Viola says. “And they consider that social peace is not their problem.” ....... these companies do not have high environmental standards and labour rights are not observed. “They follow a corrupt pattern … and the logic of ‘Chinese for Chinese’ prevails.” ...... “Wherever China invests, they make it very Chinese. They don’t consider the local culture. For example, they bring Chinese chefs to cook on their settlement. They separate or segregate the workers – like there’s a Chinese camp and local camp. I think China has a lot do in this regard.” ...... a lack of communication is a major issue. ..... “The investment fills a crucial gap in infrastructure needed for the region while establishing a new ally that will help further their economies and standing on the global stage” ....... “China is one of the few countries in the world that can do the whole package. They can finance you and build the project for you. Not many countries can do that. In that sense it’s good because they can reduce the costs, especially for emerging countries” ....... “If you go to the IMF [International Monetary Fund] or the World Bank, they have their conditions. They lend you a billion dollars and you still have to contract with their partners. China does the same, but there’s a huge difference,” Lee says. “They don’t have this conditionality problem – they don’t tell you: ‘Change your political economy to make it look more neoliberal or something that resembles the Washington consensus.’ In that sense, it’s a step forward, because there are no political conditions for those loans.” ........ US officials are largely powerless to prevent the shift to Chinese financing. .......... Although US officials are “sounding increasingly menacing vis-à-vis the Chinese ‘threat’ … there is little they can really do to halt China’s inexorable advance” ....... Ninety per cent positive and only 10 per cent negative – that is Cui’s verdict on China’s investments in Latin America. ....... “It is true some have made mistakes and they have their flaws … It will take some time for them to become aware of the need to protect the environment, follow local laws and interact with communities. But they are learning and their operations are improving ... It’s not fair to ignore the positive side of it.”...... China has treated Latin American countries as equal partners and “does not meddle in their internal politics or try to control the local economy”. ......... “It’s a better option in the Ecuadorean context over North American interference,” he says. “Yes, we are in debt, but there is technological development and it’s still cheaper than if we had to deal with international institutions.” ........ Many of the failures involved in Chinese projects are actually the responsibility of local authorities, he argues. “Building schools and community centres is the government’s responsibility ... The obligation of the companies is to pay their taxes, and the government should do the rest.” ...... “many non-governmental organisations here have a very negative view of Chinese investment. They see these investments as predatory. And that has a lot to do with a Eurocentric vision that is still very ingrained in Latin America,” he says. “Here, the ideal is still the Western world.” ....... But for people such as Taish Mercedes, 65, part of the Shuar minority, who are indigenous to Ecuador and Peru, there is little difference between Chinese, American or any other foreign source of investment....... Her home was bulldozed by the local government to make way for a Chinese-backed mining project in the Ecuadorean region of the Amazon basin......... “Our motherland can provide us with everything. That is our way of life. But the colonisers came and taught people how to live with money. Many became greedy,” she says, describing the impact of the Spanish......... “Now the Chinese are the new colonisers – just like the ones before. They are ruining the harmony of our land.”

How Chinese projects are tearing communities in Ecuador apart Investments from Beijing have brought infrastructure and jobs – but they have also seen communities forced off their land as well as the murder of a strident critic. To some Ecuadoreans, the social and environmental impact is too high a cost ...... The biodiversity that makes it stand out, some fear, may soon be gone thanks to the country’s largest mine. ....... Out of 15 countries in Latin America that have received Chinese funding, Ecuador is among the top three borrowers, with a total of 15 loans estimated at US$18.4 billion........ The mine covers some 10,000 hectares, and the Ministry of Mining calculates it will produce 3.18 million tonnes of copper, 843.21 tonnes of silver and 105.44 tonnes of gold. ...... The region’s mountains are being carved up, there is ongoing deforestation and rivers are being discoloured by run-off from the mine. .......... “As you can see, I am here alone after they destroyed the community,” he says, referring to San Marcos, whose residents had their land seized by the government. “I rarely have visitors. I spend eight or 15 days without seeing people. Living alone is bad.” ...... What we asked was to be relocated to similar areas. But instead [EcuaCorriente] went there, offered some money [to the people in the area as compensation for their land] and that was it ...... “Many of us don’t care about money,” Uyuguari insists. “What we care about is to have a dignified house and land to work on. They don’t understand this and, unfortunately, the judiciary here in Ecuador is all in favour of the big companies. The policies don’t take into consideration campesinos like myself.” ....... The contract between the Ecuadorean government and Chinese firm EcuaCorriente was signed in 2012, and the construction of the mine began three years later. Many remember the optimism that followed. There were promises of new roads, schools and hospitals. ............ Tundayme residents also say there is a stark cultural gap between locals and Chinese workers that is hard to overcome, and interactions between the two are limited due to the language barrier. ....... “When the Canadians were here it wasn’t good, but there was some equality,” said a 30-year-old former worker at the mine. “They spoke more Spanish and they ate our local food.” ........... “I am not against the mine,” the worker says, noting its importance for the region. “But many things have not been done properly. We Ecuadoreans are barely benefiting from this project.” ....... the mine may not be the best solution for the region, Quinatoa says “given our local economy, it’s the best at the moment”....... The environmental group Amazon Watch estimates that total deforestation in the region affected by the mine from 2010 to the end of 2017 was 1,307 hectares. ...... “The construction method of the dams that [EcuaCorriente] is building at the Mirador mine is so risky that its construction is illegal in Chile and, a few weeks ago, was declared illegal in Brazil,” Prieto says. The case is now being dealt with by Ecuador’s Constitutional Court............ “The fact that José Tendetza was killed, that this case remains unpunished and that his family was silenced and isolated is profoundly racist, classist and violent.”

The Ecuadorean resistance From farmers who say the water in their land has been drained to indigenous groups on the verge of disappearing, the effects of Chinese-run projects are rippling across the country – and Ecuadoreans are making their displeasure felt ........ Observers say many of these investments got off the ground after faulty or non-existent consultations. Once they are set up, they are protected by opacity – with reports such as environmental studies often kept hidden from the public – and high security measures. ........ In August 2016, hundreds of police officers and soldiers entered the parish of Santiago de Panantza, in the province of Morona Santiago, and evicted a small Shuar community of eight families – about 32 people – known as Nankints to make way for the mine. ...... public security forces have been called to protect international investments during protests; laws and regulations have been bent to suit new economic policies; and foreign investments are often prioritised over traditional livelihoods and the environment. ....... In 2018, the country produced about 517,000 barrels a day of crude oil – its top export. ..... According to the environmental group Amazon Watch, the park contains more endemic tree species in one hectare than all of the United States and Canada combined. It is also home to the Waorani indigenous people, and two nomadic Waorani clans – the Tagaeri and Taromenane – who live there in voluntary isolation. ........ Up north, in the Amazon basin, the giant dam known as Coca Codo Sinclair – financed and erected by the state-owned Chinese Sinohydro Corporation – had a grand opening in 2016, attended by Chinese President Xi Jinping and then Ecuadorean president Rafael Correa. ...... communities living near the project “were left weakened”: “What is happening in these places is that people feel they have little say over their own territory.” ..... The US$90 million project was expected to bring in more than US$300 million for the Ecuadorean government over that period, and create hundreds of jobs....... “We used to support the mine. I think most of us only became aware of its impacts in 2017,” she says. “We realised that the water was drying up.” ...... Violent confrontations have occurred between authorities and locals – and even between communities who have differing opinions on the project. ...... Those against the mine welcomed a landmark decision last June, when a court ordered Ecuagoldmining to halt work because indigenous communities in the area had not been consulted......... A Chinese environmental lawyer, Jingjing Zhang, contributed to that victory. She testified to the court in Cuenca that China had ratified the United Nations Declaration on the Rights of Indigenous Peoples in 2007, which meant it supports prior consultation and consent...... She also noted that Chinese enterprises abroad are bound by the laws and environmental regulations of the host country ....... She recalls the violence from last year, when there were clashes between residents from different villages, and between locals and authorities. “We are in danger and we don’t know what will happen. Virgin Mary help us! So much cruelty,” Urtado says.