Trade war between US and China takes off
Tit-for-tat tariffs between the US and China took effect on Friday after the Trump administration followed through on its threat to impose duties on $34 billion worth of Chinese imports, an escalation in trade tensions that could see major repercussions for companies in both countries.
Beijing accused Washington of launching the ‘biggest trade war in economic history’ and matched the US move by imposing retaliatory tariffs on $34 billion worth of US goods, appearing to target products coming largely from parts of the country that voted for President Donald J. Trump. Trump has threatened to impose tariffs on up to $500 billion worth of Chinese goods.
‘The place where the US should be worried and where China really can respond asymmetrically in a way that would damage the US is the possibility that the trade war will prompt China to let its currency weaken because that is something that is very difficult for the US to counter,’ Brad W. Setser states for the Council of Foreign Relations.
‘Trump’s trade war will not succeed in driving China to abandon its aspiration to catch up to the advanced economies. China is ready to fight a war of attrition,’ writes Yu Yongding in the Nikkei Asian Review.
‘What really worries me about the opening of the China front on the trade war is the absence of any end game. In every trade dispute I have watched over nearly three decades, it was always clear what the US wanted. The goals were explicit and deals were possible. Not this time,’ tweeted Edward Alden from the Council of Foreign Relations.
Middle East & North Africa
Syrian rebels reach a compromise with Russia
Thousands of Syrians who had fled fighting began to return to their homes Friday after the Syrian rebels in southern Syria reached an agreement with Russia. Russia is a key ally of the Syrian regime and had been leading talks for a ceasefire. The rebels agreed to hand over heavy weapons and some of their areas of control near Dera’a.
The deal is good news for the Syrian regime, Iran, Russia and Hezbollah, who have all won this round, easily vanquishing the rebels in the south after seven years of civil war. It is also good news for Jordan because it means that the massive pressure of around 200,000 civilians who had fled fighting toward Jordan’s border will now let up since they are likely to begin returning home.
Seth j. Frantzman writes the following for the Jerusalem Post: ‘In some ways the defeat of the rebels in southern Syria marks the end of the Syrian conflict. The civil war began with protests in Dera’a. The rebels are either defeated, or have ended up under Turkish protection in the north. But a new round is beginning: the fight over the post-conflict era of Syria. That is a complex struggle involving the US and Turkey, but it also involves Israel. And for Jerusalem the main questions are whether Damascus will come out stronger or Iran will come out more of the winner in southern Syria, and what the Russian role will be. If the rebel deal near Dera’a succeeds, the regime will set its sights on the Golan border area and all of these questions will take on greater importance.’
Sub Saharan Africa
African leaders talk security with Macron
African heads of state have pledged to coordinate efforts to improve the continent’s security and defeat jihadist organizations, particularly in Nigeria and the Sahel region, during talks Monday at the 31st African Union summit held in Mauritania’s capital. French President Emmanuel Macron arrived in Nouakchott Monday to discuss the battle against Islamic extremism and ways to finance counterterrorism and peacekeeping operations.
Meanwhile, the African Union summit past week was set up to address the issue of corruption and to discuss a mechanism to return stolen money, which is largely placed in tax havens abroad. The AU says approximately 70 per cent of income from Africa’s resources are squandered or diverted.
Merkel saves government from collapse following migration deal
German Chancellor Angela Merkel agreed to set up border holding camps for asylum seekers in a deal that could stave off a collapse of her government but puts her legacy of welcoming refugees and preserving open borders on the line.
The deal, between Merkel’s Christian Democrats and their Bavarian sister party, calls for asylum seekers in Germany who have registered in another EU country to be held in transit camps along the southern border with Austria until authorities can return them. Interior Minister Horst Seehofer had called for those asylum seekers to be immediately turned away, threatening to resign over the issue. The new policy must still be approved by the Social Democrats, who are also part of Merkel’s coalition.
‘It’s not clear if Merkel’s other coalition partner, the Social Democrats, will go along with the compromise. The party already rejected a similar proposal that Merkel suggested some time ago,’ Judy Dempsey opines for Carnegie Europe.
‘Current events in Germany span well beyond what might become the swansong of a still-powerful leader. They illustrate the frontlines in a major battle over identity, and the future orientation of the federal republic’s party system,’ Almut Moller states in an article for the European Council on Foreign Relations.
‘Immigration has remained a hot-button issue across Europe, owing to the shock of the initial refugee crisis, which still reverberates in voters’ minds. Politics is about perceptions, not raw numbers,’ Carl Bildt writes for Project Syndicate.
Indonesia ready for retaliation if US imposes tariff
Trade Minister Enggartiasto Lukita has said that Indonesia will prepare a retaliatory policy if the US moves forward with its plan to impose tariffs on 124 products imported from Indonesia as part of its effort to reduce the trade deficit between the two countries.
However, to prevent the US from imposing tariffs, he said that the Indonesian government and the Indonesian Embassy in Washington would first pursue a soft approach to explain that the trade deficit was not caused by the export of products listed in the Generalized System of Preferences (GPS).
Pompeo visits North Korea
US Secretary of State Mike Pompeo is travelled to Pyongyang, his third such trip, to follow up on North Korea’s pledge to dismantle its nuclear program, a commitment made last month in a summit between the North Korean and US leaders.
Pompeo is expected to press Pyongyang to give Washington a list of nuclear facilities it plans to dismantle. The visit comes amid growing doubts about the country’s intention to follow through on denuclearization, as a US-based monitoring group reported that North Korea continues to upgrade its Yongbyon nuclear complex. Pompeo will travel to Tokyo, Hanoi, and Abu Dhabi after concluding his visit to the North Korean capital on Saturday.
‘The administration assumed they could ride the wave of momentum following the summit toward quick progress, but this is not how the North Koreans work. Arriving at a detailed plan for next steps should be the priority for US negotiators,’ Suzanne DiMaggio said in an interview with Vanity Fair.
‘There is no precedent for a country that has openly tested nuclear weapons and developed a nuclear arsenal and infrastructure as substantial as the one in North Korea to give up its nuclear weapons,’ Daryl G. Kimball writes for Arms Control Today.
‘The North will not give up and dismantle everything first and wait for rewards later. Provision of benefits can and should be built in an overall phased process,’ Tong Kim states in an article for the Korea Times.