Daily News Brief

May 14, 2024

Top of the Agenda

The White House announced plans today to introduce tariffs on $18 billion of Chinese imports, saying they are designed to shield U.S. industries from unfair competition from China. Starting this year, imported Chinese electric vehicles will face a 100 percent tariff, while solar cells will see a 50 percent rate. A range of technologies and resources including semiconductors, batteries, and critical minerals will also get a tariff hike. The changes are the result of an in-depth, four-year review on trade policies toward China and are designed to “make sure that we have healthy and active firms,” U.S. Treasury Secretary Janet Yellen told reporters (AP) yesterday.

China’s foreign ministry spokesperson Wang Wenbin criticized (Nikkei) the expected measures yesterday, saying they go against a consensus reached in November bilateral talks in San Francisco and “will harm the world’s green economic transition and climate action.” The financial forecast company Oxford Economics estimated that due to the way the tariffs are structured, they will have a hardly noticeable effect on inflation, raising levels by just 0.01 percent. 

Analysis

“This is pretty measured. We see China generally matching U.S. actions in scope and scale. So I’d expect their response to also be measured,” Wiley Rein’s Greta Peisch tells the Washington Post.

“One version of U.S. leadership on trade calls for restoring that old [free trade] model by launching new negotiations in Asia or Latin America that would further reduce tariffs or regulatory impediments to trade. Even if that were politically possible—and with the Republican Party under Donald Trump abandoning its support for free trade it is almost certainly not—the case for restoration is weak. With tariffs already at historic lows, the gains from further market-access negotiations are likely to be small,” CFR expert Edward Alden writes in this article.

For the RealEcon initiative, CFR experts discuss the trade-offs that are part of policymaking around economic security.

Pacific Rim

Officials from the White House and U.S. Departments of Commerce and State are holding (Reuters) a first-of-its kind dialogue with Chinese envoys today on risks and potential safeguards regarding artificial intelligence (AI). U.S. officials stressed that Washington’s policies on AI were not up for negotiation. 

At this CFR meeting, experts discuss foreign policy in the age of AI. 

Hong Kong/United Kingdom: British police charged (SCMP) three people with assisting Hong Kong’s intelligence service and foreign interference. One was an office manager at Hong Kong’s trade office in London; Hong Kong’s chief executive said “any attempt to make unwarranted allegations against the [Hong Kong] government is unacceptable.”

South and Central Asia

India’s shipping minister called (BBC) yesterday’s deal a “historic moment in India-Iran ties,” while a U.S. State Department spokesperson said in response that anyone considering deals with Iran should be aware of the “potential risk of sanctions.” The port in the Iranian town of Chabahar is near the border with Pakistan.

Pakistan: A civil rights group that demonstrated against price hikes in Pakistan’s Kashmir region in recent days called off (AP) their planned rally after authorities agreed to reduce the price of wheat and electricity yesterday. Four people were killed in clashes at the protests that erupted last Friday.

Middle East and North Africa

A Hamas police force in the Gaza Strip maintained files for years on journalists and people who questioned the Hamas government in the enclave, according to internal documents seen by the New York Times. Hamas security officials followed journalists and other critics and discussed ways to defame political adversaries. Israeli forces said they seized the documents during raids of Gaza and provided them to the Times, which interviewed people named in the files. 

Tunisia: Police raided (Reuters) the Tunisian bar association’s headquarters for the second time in two days and arrested a lawyer critical of President Kais Saied, witnesses said yesterday. The move followed weekend arrests of two journalists and another opposition lawyer. The bar association held a nationwide strike in response to the detentions. 

Sub-Saharan Africa

President Cyril Ramaphosa said yesterday that he will sign (News24) a bill tomorrow that provides a framework for universal healthcare through a government-run fund. Critics say the cost of the program is not sustainable (Bloomberg) and it could be challenged in court. Ramaphosa’s announcement comes two weeks before an election in which the ruling African National Congress party risks losing its majority for the first time since taking power three decades ago. 

Australia/Ghana: Australia-based Atlantic Lithium debuted shares (Bloomberg) on the Ghana Stock Exchange as it moves forward with developing Ghana’s first lithium mine. Ghana’s new green minerals policy requires miners to allow for a minimum 30 percent local stake in projects.

Europe

U.S. Secretary of State Antony Blinken’s visit to Kyiv today is the first (CNN) by a U.S. official since Washington passed a bill providing Ukraine with an additional nearly $61 billion in aid last month. Blinken said he understood it was a challenging time, but that the United States was determined to help Ukraine hold its own, and that the aid was going to “make a real difference” on the battlefield. 

In this article, CFR expert Liana Fix looks at whether Washington’s aid package for Ukraine was too little, too late. 

Germany: A court upheld a designation (AP) yesterday that the far-right Alternative for Germany party is a possible extremist group and thus can be subject to state monitoring. The country’s intelligence service first made this call in 2022.

Americas

The relief is designed to encourage (Bloomberg) a free and fair presidential vote on July 28, even while the European Union (EU) extended other sanctions against Venezuela yesterday. The EU is currently negotiating access with Venezuela to monitor the upcoming vote.

Argentina: The International Monetary Fund yesterday praised “better than expected” performance on Argentina’s economic targets under President Javier Milei and announced it would release (FT) the next tranche of loan funds according to schedule. But the fund held off on signaling if a new loan is imminent, despite Milei’s statement in March that the country was in a strong position to reach a new deal.

This Backgrounder by CFR’s Diana Roy overviews Argentina’s struggle for stability.

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