Five Americans detained in Iran are expected to be set free. Iran will in exchange receive $6 billion in humanitarian aid from oil sales frozen in restricted accounts.
Iran’s foreign minister said Emad Shargi, Morad Tahbaz, and Siamak Namazi, who all have dual citizenship in the U.S. and Iran, will be flown to Doha, Qatar on a Qatari jet Monday, according to CNN. The other captives were not named.
The Center for Iran Human Rights said Namazi and his 80-year-old father were arrested for “collaborating with enemy states” in 2015 and sentenced to 10 years in prison. Namazi, 51, graduated from White Plains High School just north of New York City.
Tahbaz was also sentenced to a 10-year term after being detained with several members of an environmentalist group in 2018 and convicted on espionage charges in 2019. Shargi was convicted on unspecified espionage charges in 2021. He was detained in 2018, according to NPR.
The U.S. State Department said all three men were being wrongfully held.
Patrick Semansky/AP
Neda Shargi, sister of Iranian prisoner Emad Shargi, hugs former Syrian hostage Sam Goodwin before a news conference with families of Americans currently being held hostage or wrongfully detained overseas in Lafayette Park near the White House, Wednesday, May 4, 2022, in Washington.
Funds headed to Iran will be wired through Switzerland to Iranian accounts in Qatar. The money is designated strictly for humanitarian purposes and its use will be monitored by the U.S. CNN said Iran was allowed to sell oil under an agreement with the Trump Administration. Those funds were kept in a restricted account in South Korea.
The Biden Administration has previously negotiated the release of Americans being held in Russia and Venezuela. Some Republican lawmakers were critical of the deal, which they compared to a “ransom” agreement, according to NBC News.
Ukraine has filed lawsuits against Poland, Hungary and Slovakia at the World Trade Organization (WTO) over their decision to ban grain imports, in a row that has split the EU and could hurt Kyiv’s prospects of joining the bloc.
“It is fundamentally important for us to prove that individual member states cannot ban the import of Ukrainian goods. That is why we are filing lawsuits against them in the WTO,” First Deputy Prime Minister and Minister of Economy of Ukraine Yuliya Svyridenko said in a statement.
Svyridenko added that the lawsuits, together with pressure from the European Commission and other member countries, “will help restore normal trade between Ukraine and neighboring countries, as well as show solidarity between us.”
The decision comes after the three countries rebelled against a European Commission decision last Friday to end temporary import restrictions — implemented in the spring in an attempt to mitigate a supply glut — and once again allow Ukrainian grain sales across the EU.
The bans by the three central European countries are intended to protect their farmers from a surge in exports from grain superpower Ukraine, following Russia’s blockade of Ukrainian ports on the Black Sea.
“We hope that these states will lift their restrictions and we will not have to clarify the relationship in the courts for a long time,” Svyridenko said.
The U.S. stock market, as measured by the S&P 500 Index SPX, is trapped in a trading range, and volatility seems to be damping down considerably. The significant edges of the trading range are support at 4330 and resistance at 4540. Both of those levels were touched in the latter half of August. A breakout from this range should give the market some strong directional momentum.
Since Labor Day, prices have hunkered down into an even narrower range. Typically, the latter half of September through the early part of October…
Deep in the Wyoming wilderness last month, Christine Lagarde, president of the European Central Bank, stood before a large audience of elite central bankers and casually predicted the collapse of the international financial order. Resplendent in red and black, she resembled a humanoid Lindor chocolate truffle — and though her warning was diluted by the usual impenetrable jargon, the subtext was sufficiently clear and dramatic.
“There are plausible scenarios where we could see a fundamental change in the nature of global economic interactions,” Lagarde announced drily to the crowd, which was gathered for the annual central banker confab in Jackson Hole, Wyoming. The assumptions that have long informed the technocratic management of the global order were breaking down. The world, she said, could soon enter a “new age” in which “past regularities may no longer be a good guide for how the economy works.”
“For policymakers with a stability mandate,” she added with understatement, “this poses a significant challenge.”
A “new age”? — and coming from a member of that most dreary and unimaginative of the global technocratic-priesthoods, the central bankers? The warning at Jackson Hole wasn’t even the first time Lagarde has fretted publicly about the fate of the international order of free markets, dollar dominance and globalization that she had a hand in creating. While others have raised the issue, Lagarde has been outspoken. Just in April, she was the first major Western central banker to raise explicit concerns about the fragility of the greenback, whose international dominance she said “should no longer be taken for granted.”
It was, all told, decidedly odd from the leader of the hallowed monetary authority, whose communications department rarely holds forth on anything more gripping than balance sheet policy and deposit rate adjustments. Coming from a woman whose long career in the upper echelons has been defined by a deference to the U.S.-led international order, it was apostasy, even. Most alarming was Lagarde’s seeming indifference to the power of her own words over the state of said international order. One official at the ECB was startled enough by the April comments that he asked the speechwriter what they meant, only to be reassured that they had been “misinterpreted” and were simply an affirmation of the institution’s narrow mandate for price stability.
But it’s hard not to wonder whether Lagarde, after a lifetime managing the global establishment from crisis to crisis, has identified a potential extinction event — and is making her pitch that, once more, it is she who ought to help the world avert it. “I agree she’s on to something,” said the retired fixed-income investor Jay Newman. “There will be big shifts in trade and investment.” Paul Podolsky, another longtime trader, speculated that Lagarde was preparing the ECB, in trademark French fashion, for a “possible situation in which the euro would have more leadership in the global system than it would normally have.”
Elsewhere, the prevailing sense is confusion, not least at Lagarde’s apparent disregard for the tradition of blandness in a business where every utterance is heavily scrutinized by obsessive, knee-jerk market forces. “What Lagarde said is not the natural thing for a central banker to say, in the sense that they typically don’t go for the tail-risk as a baseline,” panicked one analyst in nervous anonymity, referring to a kind of risk that is rare but deadly. “Maybe she doesn’t realize what an unusual communication it is for a central banker — or maybe she knows something we don’t.”
So what does Lagarde want? The problem is it’s tricky to get a grip on what, if anything, actually moves her. Few have been able to discern in her any strong feelings or guiding principles beyond some vague notion of “service” to the institutions she invariably ends up leading through dramatic, epoch-defining crises. A sphinx with a winning smile, she possesses a charm that can come off as both authentic and calculated. “She could be funny when she needed to be,” said one former colleague.
What does she do for fun? She rarely reads for pleasure. Nobody interviewed by POLITICO has ever seen her read a book, or anything that isn’t a policy briefing. She has scant time, understandably, for the pursuit of hobbies. She does enjoy making jam, in July, for her family, and she is prone to the odd round of golf with the central bankers. She used to swim regularly but now not as often, constrained as she is by an intense work schedule. In terms of world-view, those who know her deduce that if she believes in anything she’s a centrist, or vaguely center-right. But most stop short at “pragmatic.”
Unlike many of the technocrats she finds herself surrounded by, however, she is a charming chancer and a skilled communicator. She possesses an uncanny, Forrest-Gump-like predisposition for finding the driving beat of history — and if not exactly seizing it, surviving it.
From the outset, she enjoyed a near-vertical trajectory, rising from the depths of suburban Normandy to lead the major Chicago law firm Baker McKenzie, where she wooed colleagues and the international business elite alike. (“She is perhaps the nicest person I’ve ever had the pleasure of knowing,” said former Baker colleague Marc Levey.) At a time of peak globalization, the firm helped big upstart firms like Dell break into Europe, and by 2005 her growing prominence had landed her in an unelected role in French politics. As finance minister, she wrestled with the financial crisis, professed undying allegiance to Nicolas Sarkozy (“Use me for as long as it suits you,” she wrote the then French president) and was later convicted for “negligence” in a sordid affaire involving payments of public funds to a billionaire businessman — but escaped punishment when the judge took pity on her. (“She acted on orders,” a former political colleague told the Guardian newspaper. “She has done nothing wrong in her life.“)
With uncommon ease, Lagarde remained at the ever-changing forefront of establishment consensus, a quasi-ceremonial, Elizabeth II-like figure who was perceived as an effective steward but was nevertheless often constrained by circumstance from exercising any real power. Consider her time as managing director of the International Monetary Fund, the venerable, 77-year-old institution that lends out money, often on harsh terms, to indebted countries when nobody else will. She joined the IMF in 2011. It was a dark time — the height of the eurozone crisis. Greece was the unhappy protagonist, forced to near-fatally gut its public spending at the behest of its Franco-German creditors after a decade-long spending binge, the effects of which it masked by manipulating its official data.
As part of the French government, Lagarde, in line with the prevailing consensus, had resisted the IMF’s involvement. But when the fund’s chief, Dominique Strauss-Kahn, was arrested on sexual assault charges in New York, she leaped for the top job. She embarked on a glitzy world tour, schmoozed China and split the Latin American vote, handily beating her rival, the distinguished Mexican central banker Agustín Carstens. Given the trashed reputation of her predecessor — and in spite of previous assurances that the Europeans would cede control to the emerging economies who were now among their creditors — it was a sleek, if ultimately predictable, victory.
Once in office, however, she was rarely more than an elegant middle manager, readily admitting that she was not the one making the big decisions. Neither, she admitted, was she much of an economist — her own chief economist, Olivier Blanchard, likened her, with warmth, to a “first-year undergraduate.” “I’ll try to be a good conductor,” Lagarde said upon joining. “And, you know, without being too poetic about it, not all conductors know how to play the piano, the harp, the violin, or the cello.” She was principally an informed mediator who would sway but not dictate, there to build consensus among the nation-states represented on the IMF’s board — which in practice, according to some, meant winning acceptance for whatever decision the Europeans and U.S. had already made beforehand.
She played upstart nations against one another, offering big concessions to the most powerful new arrival, China, while sidelining others, according to Paulo Nogueira Batista, the Brazilian board member at the time. “The managing director and staff of the fund would approach us individually to explain what they were thinking, and explain their views, and they’d say, ’Look, we understand you’re not happy with the solution, but let me tell you, we already have the required majority,’” Batista recalled. “And then, if we were still resisting, we’d be in the minority.” She was also conspicuously close to the American board member, David Lipton. “Christine wouldn’t have been so good without David, and David needed her to be the face of the fund — with her charisma and her charm,” said Daniel Heller, who represented Switzerland on the board.
The result? Against the advice of the U.S., many emerging world members and the Fund’s own thinkers, including Blanchard, the Fund bowed to European pressure and signed up to a deal that left Greece lumbering under its debts for a further four years before it had another chance to renegotiate. Even when Lagarde herself came around to Blanchard’s view, pressure from a German-led bloc in Europe meant she could change little. Exactly nobody was surprised when, in 2015, the tensions caused by that bailout came to a heady boil, triggering the rise of a rebel left-wing government in Greece.
At the ensuing tense summits of the eurozone’s finance ministers, situated at a long table in a windowless, harshly lit room in Brussels, she was able to offer the occasional morsel of benign distraction. “She was great fun,” said Jeroen Dijsselbloem, then the Eurogroup’s head, recalling that at the “most impossible moments,” with the fate of Greece and the eurozone in the balance, “she’d reach into her bag and take out some M&M’s and say, ‘Let’s have some chocolates.’”
“Yes, Lagarde was personally warm,” granted Yanis Varoufakis, Greece’s finance minister at the time. But to him, that counted for little. “Because she was straitjacketed by the IMF, she was powerless,” he said. “And given that she was very keen not to jeopardize her position in the institutional pecking order, she was happy to go along with our crushing.”
With the U.S. exasperated and with the eurozone appearing to have overcome its existential crisis, the Fund withdrew from tense negotiations over a third bailout with the Greek government at the 11th hour, citing major disagreements between Athens and her creditors. Lagarde — her hands carefully washed of whatever would come next — emerged with her reputation intact.
So what to make of her recent turn as a minor visionary? Lagarde has always held forth on the big, worthy problems of the day across an eclectic range of media — appearing last year on Irish prime-time TV, for instance, to offer an armchair psychological diagnosis of Vladimir Putin, and discussing her sex life in Elle France magazine in 2019. But now, her words — as she learned the hard way — carry momentous weight.
Initially, with trademark tact, she claimed she didn’t even want the job at the ECB, though within months she was asked to run, and by November 2019 she got it, as a compromise candidate that saw the German Ursula von der Leyen take charge of the European Commission. “So Lagarde was brought in for, like, greening up the economy, and other stuff beyond monetary policy,” recalled Carsten Brzeski, the chief economist at ING Economics and a wry critic of Lagarde. “And then we had the pandemic.”
The novel coronavirus was more than a match for Lagarde’s vaunted communication skills (or, indeed, anyone else’s). But that didn’t mean she couldn’t do a whole lot of damage. Disaster came right at the pandemic’s outset, at a conference on March 12, 2020, when she was answering questions from the media about the early alarming spread of COVID-19 in northern Italy. Asked whether she would act to reduce the perilously high “spread” on the interest paid on Italian debt, Lagarde offered a now-infamous response that blew up the Italian economy — and much of her credibility with it.
The cataclysmic soundbite? “We are not here to close spreads.”
It may not sound like much, but in the arcane world of central banking, it was tantamount to uttering a hex. Years before, Mario Draghi, Lagarde’s predecessor, had famously “saved the eurozone” by announcing that the ECB would do “whatever it takes” to back billions of euros of at-risk sovereign debt. Central banking relies on a certain enigmatic mysticism, which Draghi, the reclusive, Jesuit-trained technocrat par excellence, had in spades. At the Italian’s mere beckoning, debt markets calmed. Draghi didn’t even need to deploy the figurative “bazooka” of actually flooding the eurozone with money. His words were enough.
Lagarde’s comment was “whatever it takes” in reverse — a bazooka turned faceward. “I saw the Draghi spirit leave the room,” recalled Brzeski hauntedly. “For years we were spoiled by his famous magic — the man could calm financial markets just by reading out the telephone book — and then Lagarde comes and ruins it in ten minutes. The Draghi magic was exorcized, and Lagarde was the exorcist.”
The bond markets exploded. Before joining the bank, Lagarde had been pitched as an arbiter whose main role would be to forge consensus among the central bank governors who make decisions at the ECB. But the “spreads” fiasco was a sharp reminder that she was uniquely accountable as the voice of euro monetary policy. And she blew it. Her authority collapsed. “In the past, we knew we needed to listen very carefully to Draghi,” said Brzeski. “Now markets know it’s normally not Lagarde who calls the shots.” Plus, she was enjoying herself too much, pontificating on climate change and social justice. “As a central banker you don’t improvise,” harrumphed Brzeski. “You are boring, you repeat the same messages over and over again.” Once, when a presser ended, recalled one analyst, reporters swamped the ECB’s head of market operations Isabel Schnabel — leaving Lagarde alone, taking notes.
Former colleagues wonder whether she misses the IMF, where she was able to be a rockstar financier, to propound without worrying about how her pronouncements landed. “I mean that job is incredible, it connects you with global power at the highest level,” said Heller, the Swiss board member. French media, as usual, speculated that her eye was really on the presidency, a rumor that has never entirely gone away.
“Maybe she looks down on central banking,” wondered Brzeski, sounding wounded. “Maybe she finds it boring.”
All that is to say that now, when Lagarde says something, it’s safe to assume she’s saying it with intent. “She had a very steep learning curve, but she also climbed the learning curve very quickly,” said Klaas Knot, the governor of the Dutch central bank. Even Brzeski observed that the past year’s harrowing experience of inflation has forced a certain weary seriousness onto Lagarde, and she recently snapped at a Reuters journalist who questioned her shifting views on monetary policy. She looks lifeless at the pulpit, bored and no longer having fun — a growing despair, Brzeski said, that has at least made her more credible with the markets.
Just as she has offered her thoughts on climate change and the war in Ukraine, it may be that Lagarde, with her recent comments, is looking for that next big crisis over which to assume ceremonial leadership. As well as policy tightening, her overworked publicity team prioritizes policy branding: snappy soundbites, alliterative triplets, cartoon-based policy explainers. “She sees the big picture,” said Latvian central bank Governor Mārtiņš Kazāks. “Just look at her CV.” “I think she’s jealous and still looking for her ‘whatever it takes’ moment,” said the ECB staffer cited above, somewhat less charitably.
It is also highly likely that she earnestly believes things are taking a turn for the worse, and is, in a way, mourning the collapse of the globalized system that she shaped and that in turn shaped her. And in grappling with a world off balance, it helps to have a lawyer deliver the bad news. Effective monetary policy requires the synthesis of planetary volumes of data, and, as her colleagues say, Lagarde has the training to inhale great galaxies of the stuff, spending much of her waking life wading through dense briefing material. “Read the footnotes in her speech,” the veteran market-watcher Podolsky urged. “All she is doing is, lawyerly-like, reading — or having her staff read — all the staff research coming from the ECB, OECD, and IMF, and pulling out the pieces that support her questioning.”
Like an owl before an earthquake, Lagarde seems alive, said Podolsky, to the prospect of “a more hostile world,” of war and deglobalization, of Chinese decline and inflation that never quite dies. It is a chaotic uncertainty that left the ECB’s own Governing Council divided and markets uneasy, ahead of an announcement Thursday on whether the bank will continue to raise interest rates or take a break, an acknowledgment that the economy — and the politically sensitive manufacturing sector in particular — has cooled. (The ECB and Lagarde, through the bank’s press office, declined to comment for this article.)
There’s another possibility, however. As Lagarde has learned, predictions from a major central banker carry the risk of being self-fulfilling. “If she was finance minister nobody would pay attention,” noted the analyst speaking on condition of anonymity. With inflation raging, as Lagarde herself noted in a recent speech, the public is ever more attuned to the bank’s operations and communications, which makes the economy, in turn, more sensitive to Lagarde’s touch. This, she added, provides “a valuable window of time to deliver our key messages.”
Key messages! Monetary policy is already a weak form of mass mind control — could Lagarde be trying to verbalize into existence a new economic paradigm on which to hitch her professional fortunes? She has always been willing to say, well, whatever it takes, for her survival, even when doing so strains beyond her level of competence. A legacy as the ECB chief who oversaw the euro’s rise as a challenge to the domination of the dollar would be an elegant feather in her cap.
And if armageddon never arrives? She’ll be well placed to take credit for averting it. Lagarde — as with most central bankers — was humiliated by the sudden rise in inflation. As Brad Setser, a former staff economist at the U.S. Treasury, said, her recent comments reflect a desire to emphasize the risks as a form of damage control. “It comes from a need to be reserved,” he said.
Call it apocalyptic expectations management. If ECB policy fails to steer Europe safely through global economic fragmentation, Lagarde can quite comfortably say that, well, sorry, but she always warned it might. And then, as usual, she will emerge from the calamity blameless — sure, the opera house may be flaming rubble, the brass players at each other’s throats and the wind section reduced to cinders, but she’s just the “conductor” after all.
Lettering by Evangeline Gallagher for POLITICO.Source images by Hollie Adams/Bloomberg via Getty Images, Thomas Lohnes/Getty Images, Boris Roessler/Picture Alliance via Getty Images and pool photo by Sebastian Gollnow via Getty Images. Animation by Dato Parulava/POLITICO.
The injury happened when Jets left tackle Duane Brown tried to cut Bills edge rusher Leonard Floyd. But Floyd avoided Brown, which allowed him to sack Rodgers.
It appeared the play in which Rodgers was injured was designed for him to throw it away on a three-step drop. Wide receiver Garrett Wilson was open across the middle, but Rodgers held on to the football and took the sack
“It sucks, man,” Brown said on Monday night. “I’ve got all the respect and love for Aaron.”
At first, it appeared Rodgers was fine as he got up after the sack. But he quickly fell back down to the ground as trainers and Saleh came out to the field to check up on the former four-time NFL MVP.
Rodgers would then be escorted to the medical tent to be looked at. He was later taken to the X-ray room by cart as he was seen in a walking boot after the Jets ruled him out for the remainder of the game.
To say Rodgers’ injury is devastating is an understatement. After acquiring Rodgers in a trade from the Packers in April, many thought the Jets would end their 12-season playoff drought and contend for a Super Bowl championship. Now those prospects seem bleak as Gang Green will turn to Zach Wilson, who it selected No. 2 overall in the 2021 draft.
It has been an up-and-down career for Wilson, as he was once pegged as the future of the Jets franchise. However, he was benched multiple times last year during the Jets’ 19-3 loss to the Jaguars when he threw for 92 yards and an interception. Jets’ fans at MetLife Stadium booed Wilson as he was benched for Chris Streveler, as he didn’t start in the team’s final two games of the 2022 season.
Throughout the preseason, the Jets said they were getting back to basics with Wilson’s game as he learned a brand new offense in Nathaniel Hackett’s system as they also worked on the 24-year-old’s mechanics. Now we will see how much Wilson has improved.
Monday night was a good start for Wilson as he helped the Jets defeat the Bills 22-16, completing 14 of 21 passes for 140 yards, one touchdown, and one interception. Saleh said Wilson would be the Jets starter quarterback if Rodgers was out for the season, but don’t be surprised if the team signs a veteran quarterback behind Wilson. Tim Boyle is the only other quarterback on the Jets roster, as he’s on the team’s practice squad.
India’s Prime Minister Narendra Modi (2L) addresses the opening session of the G20 Leaders’ Summit at the Bharat Mandapam in New Delhi on September 9, 2023.
Ludovic Marin | Afp | Getty Images
NEW DELHI — The Group of 20 nations on Saturday overcame differences in references to the war in Ukraine, reaching a consensus on a joint declaration that paves the way for frameworks on debt resolution, and country-specific climate financing solutions among other pledges aimed at enhancing development in the Global South.
In an 83-paragraph joint communique aimed at deepening the integration of the needs of developing economies into the multilateral forum’s agenda, the Delhi declaration omitted words from the last year’s statement that overtly condemned Russian aggression against Ukraine — instead highlighting the human suffering and other negative impacts of the war in Ukraine that have complicated recovery efforts in the aftermath of the Covid-19 pandemic.
The wording of “most members strongly condemned the war” was among the changes. Instead, G20 member states agreed to lean on the tenets of the United Nations charter on territorial integrity and against the use of force.
“Considerable time was spent — especially in the last few days — in regard to geopolitical issues, which really centered around the war in Ukraine,” Indian Foreign Minister Subrahmanyam Jaishankarsaid Saturday at a press conference following Prime Minister Narendra Modi’s initial announcement of the consensus on a joint declaration.
“Everybody helped, because everybody came together for the consensus, but the emerging markets took a particular lead on this and many of us have a strong history of working together,” Jaishankar added.
This accomplishment underscores India’s diplomatic clout at a time when global alliances are shifting. With the Russian and Chinese heads of state conspicuously absent from this year’s leaders’ summit, Modi has been keen to position India as a key global player advocating the interests of the Global South, while serving as an interlocutor with the developed nations.
Yet, there were some fears Delhi negotiators and diplomats might not have been able to broker a consensus at this year’s meeting. Fierce objections by the Russians and Chinese to references to the ongoing war in Ukraine have hobbled India’s efforts at fostering consensus in the major discussion tracks in the course of its year-long presidency.
Oleg Nikolenko, a spokesperson for the Ukraine’s foreign ministry, criticized the compromise in a Facebook post, saying the G20 joint communique was “nothing to be proud of.”
In the Delhi declaration, G20 leaders called for the “full, timely and effective implementation” of the Black Sea grain deal “to ensure the immediate and unimpeded deliveries of grain, foodstuffs, and fertilizers/inputs from the Russian Federation and Ukraine.”
Russia unilaterally withdrew from the deal — brokered between Turkey, the United Nations, Ukraine and Russia in July 2022 — that helped ease the Kremlin’s naval blockade in the Black Sea and established a humanitarian corridor for agricultural exports.
The ensuing food insecurity from the festering Ukraine crisis added to the many challenges that have afflicted the world in the last few years, complicating policy efforts to recover from the adverse economic and social impact of the Covid-19 pandemic.
“Years of cascading challenges and crises have reversed gains in the 2030 Agenda and its Sustainable Development Goals,” G20 leaders said in the Delhi declaration, as they pledged to protect the most vulnerable in the world by promoting equitable growth and enhancing macroeconomic and financial stability.
To further cement that goal, India also fostered the admission of the African Union as the second regional grouping to gain full G20 membership after the European Union.
Other than the mitigation of the impact on geopolitics of food and energy security, the Delhi declaration also included the expediting of climate action, the provision of more loans to developing nations by multilateral institutions and restructuring the world’s debt architecture as well as an international framework for cryptocurrencies.
These pledges build on a G20 agreement to expand lending by multilateral institutions such as the World Bank and the International Monetary Fund. Such steps could yield as much as $200 billion in extra funding in the next decade, Indian Finance Minister Nirmala Sitharaman said Saturday at the press conference explaining the Delhi declaration.
These four countries represent the current and the next three G20 member states that are due to hold the rotating presidency of the multilateral forum founded in 1999 to tackle the issues that afflict the global economy.
In the flurry of activities independent of the auspices of the main G20 summit, Modi and U.S President Joe Biden underscored not only the deepening partnership between their two countries, but also their urgency and resolve in persuading the world they represent a more viable strategic proposition in facilitating the developmental needs of the Global South.
Biden and Modi’s second bilateral meeting in less than six months on the eve of the two-day G20 leaders’ summit kicked off a series of other deals and announcements — a stark contrast, in particular, to Chinese President Xi Jinping’s decision to stay away from this summit.
Modi and Biden were joined by leaders from Argentina, Brazil, Italy, Mauritius, and the United Arab Emirates in launching the Global Biofuels Alliance, a partnership aimed at deploying greener fuels around the world that help meet decarbonization goals.
The two leaders also announced a plan to develop a network of railways and sea routes that will connect India, the European Union and Middle Eastern countries such as Israel, Jordan, Saudi Arabia and the United Arab Emirates in “a transformative regional investment.”
This seeks to not only counter China’s influence in the energy-rich Middle East, but also its Belt and Road global infrastructure initiative.
Biden also announced a partnership with the European Union in a new greenfield rail line expansion to develop the Lobito Corridor connecting the southern part of the Democratic Republic of the Congo and northwestern Zambia to regional and global trade markets via the port of Lobito in Angola.
“This is a big deal, this is a real big deal,” Biden said Saturday. “The world stands at an inflection point in history, a point where decisions we make today affect the course of all our futures for decades to come.”
Indian artist Jagjot Singh Rubal gives final touches to an oil painting of U.S. President Joe Biden, at his workshop in Amritsar on September 5, 2023, ahead of the two-day G20 summit in New Delhi.
Narinder Nanu | Afp | Getty Images
NEW DELHI — Indian Prime Minister Narendra Modi and U.S. President Joe Biden pledged Friday to deepen the partnership between their countries in their second bilateral meeting in less than six months, as Delhi prepares to host a meeting among leaders of the Group of 20 leading industrialized and developing countries.
The two leaders met shortly at Modi’s official residence after Biden’s arrival in Delhi and then issued a 29-point statement that highlighted the depth and breadth of their relationship at a time of evolving global alliances — from building resilient strategic technology value chains and linking defense industrial ecosystems, to collaborating on renewable and nuclear energy, climate financing and cancer research.
The two leaders “reaffirmed the importance of the Quad in supporting a free, open, inclusive, and resilient Indo-Pacific” and “expressed their appreciation for the substantial progress underway to implement the ground breaking achievements of Prime Minister Modi’s historic June 2023 visit to Washington.” The Quad is an informal security alignment of Australia, India, Japan and the U.S., which came about in response to China’s rising strength in the Indo-Pacific region.
This closed-door meeting with Biden was the third — after meetings with leaders from Mauritius and Bangladesh — that Modi convened on the eve of the G20 leaders’ summit and part of the dozen or so bilateral meetings planned for this weekend, underscoring India’s strategic ambitions as a key global player connecting the developed world and the Global South.
The summit is an important one for Modi, whose government has turned the normally sedate rotating G20 presidency into a branding vehicle to burnish India’s geopolitical importance ahead of national elections next year. Many governments, investors and businesses are also starting to look toward India — as China slows — which the International Monetary Fund expects to be the fastest growing economy this year.
This weekend’s agenda includes the expected admission of the African Union as an official G20 member as part of India’s broad focus on elevating the place of the Global South and fostering inclusive and sustainable growth in the multilateral forum founded in 1999 as a platform to address issues afflicting the global economy.
Russian President Vladimir Putin and China President Xi Jinping though won’t be in attendance this weekend.
While Putin is sending Foreign Minister Sergey Lavrov to take his place, China Premier Li Qiang will take Xi’s place — the first time Xi is skipping the G20 meeting in the decade since he became president.
Putin has not traveled outside of Russia since the International Criminal Court issued a warrant for his arrest for war crimes in Ukraine.
The pair’s absence has sparked fears that a communique binding member states may not be issued at the end of a G20 leaders’ summit — undercutting India’s clout and diminishing his domestic messaging.
India’s diplomats have been unable to foster binding agreements in the key discussion tracks since it assumed the rotating presidency in December 2022 — because Russia and China have objected to the wording referring to the war in Ukraine.
A war of words has ensued ahead of this weekend’s meeting.
“The G7 countries (primarily the US, the UK, Germany, and France) have been exerting pressure on India in a bid to have their unilateral approaches to the Ukraine situation reflected in the final documents of G20 forums,” the Russian foreign ministry said in a statement.
At a pre-summit press conference Friday, India’s G20 sherpa Amitabh Kant said the final declaration “is almost ready.”
“I can assure you our presidency has been inclusive, decisive and action-oriented,” Kant said.
With Putin and Xi conspicuously absent this weekend, India and the U.S. will hope this will be sufficient to persuade member states and other observers from the Global South they represent a more viable proposition from food security to debt resolution.
In their joint statement after their Friday bilateral meeting, Biden and Modi “reaffirmed their commitment to the G20.”
They also “expressed confidence that the outcomes of the G20 Leaders’ Summit in New Delhi will advance the shared goals of accelerating sustainable development, bolstering multilateral cooperation, and building global consensus around inclusive economic policies to address our greatest common challenges, including fundamentally reshaping and scaling up multilateral development banks.”
While Putin has an obvious reason accounting for his absence, Xi, though, has not indicated a reason — triggering speculation the Chinese leader may be snubbing Modi for a variety of reasons.
Despite recently traveling to South Africa for a BRICS meeting, Xi has rarely traveled abroad. Instead, he has tended to receive visiting dignitaries in Beijing — including Zambia and Venezuela in overlapping visits this weekend.
India’s warming ties with the U.S. also sharply contrasts against its standoff with its neighbor, China.
India — along with Malaysia, the Philippines, Vietnam and Taiwan — sharply rebuked China last week for a new national map that Beijing claims contested territories as its own.
India also stands to gain from American companies looking to diversify their supply chains — at China’s expense — as the U.S. ramps up efforts to limit the transfers of strategic technology to China on the grounds of national security.
This would likely be what Modi and Biden conceived as “their ambitious vision for an enduring India-U.S. partnership that advances the aspirations of our people for a bright and prosperous future, serves the global good, and contributes to a free, open, inclusive, and resilient Indo-Pacific.”
NEW DELHI — With the clock likely ticking on his time in Downing Street, Rishi Sunak wants to secure a legacy on the world stage. The rise of Artificial Intelligence (AI) may be just what he needs.
The British prime minister faces a general election next year with his Conservative Party languishing 18 points behind the Labour opposition in the polls.
But though Sunak told reporters travelling with him to the G20 leaders’ summit in India this weekend he was “entirely confident” he can still win re-election, U.K. government insiders say the PM already has one eye on his possible post-Downing Street legacy.
Sunak takes pride in how he has helped repair the U.K.’s diplomatic standing after the rancour of Boris Johnson’s premiership and Liz Truss’ brief but disastrous stint in power. He sees the Windsor Framework — the agreement on post-Brexit trade checks in Ireland which markedly improved U.K. relations with the EU and the U.S. — as his signature achievement so far.
Now the bigger prize in Sunak’s sights is the opportunity to position the U.K. as the leading authority on the governance of AI.
“He sees it as one of his long-term legacy pieces,” one government adviser told POLITICO. “Shaping the world’s response to a paradigm-shifting technology would be a big deal — and it would be recognized as a big deal.” A second government official said Sunak “never misses a chance” to bring up AI.
There are several existing international forums for governments to discuss AI regulation, including a G7 process and the EU-U.S. Trade and Technology Council. Sunak’s challenge is to convince countries to take the U.K. seriously as a place to bring existing initiatives together and fold in unrepresented countries. And that will require some skillful diplomacy.
From G20 to AI summit
Sunak used conversations with other world leaders at the G20 to drum up interest in his landmark AI safety summit, which is taking place in the U.K. in November. The invitation list has yet to be made public, but is expected to include a range of countries including China.
The prime minister told POLITICO en route to New Delhi: “So far, the response we’ve had has been really positive, people are really keen to participate and they recognize that the U.K. can play a leadership role in AI.”
At a technology-focused session of the summit on Sunday the PM made comments on the need to develop AI responsibly. He praised India for “bringing AI to the top of the agenda at the G20” and said that there was “an opportunity for human progress that could surpass the industrial revolution in both speed and breadth.”
He told leaders that first and foremost, the development of AI had to be done safely to manage risks. “This requires international cooperation,” he said. “The U.K. will be hosting the first ever international AI Safety Summit in November to help drive this forward.”
Sunak added that the technology must also be developed securely “to protect the digital economy from malevolent actors and states” and fairly to “ensure inclusivity.”
“Getting this right is one of the greatest challenges and opportunities of our age,” Sunak said. “Let’s work together to make sure we all benefit.”
Lacking luster
But to make Sunak’s summit a success — and help secure his legacy — he will be reliant on the buy-in and active participation of fellow world leaders.
Despite Sunak congratulating his host Indian Prime Minister Narendra Modi on a successful summit, the G20 was noteworthy for the absence of powerful figures including China’s Xi Jinping and Russia’s Vladimir Putin.
Sunak will be hoping to avoid similar ‘no shows’ at his AI summit. He has already been dealt a blow with news last month that U.S. President Joe Biden will not be attending.
Key European leaders have also failed to confirm their attendance. In comments to POLITICO, one French official questioned the need for U.K. mediation, given alternative international avenues for discussing AI.
Sunak’s experience at the G20 also demonstrates the difficulties of choreographing the good optics and effective diplomacy required for a successful summit.
Predictions from U.K. government figures that Sunak would be mobbed by the adoring public did not materialize in a locked-down New Delhi where there were few people on the streets.
There were also hiccups in Sunak’s summit agenda. He had been due to meet Modi at his house on Friday but that was replaced with a 20-minute meeting on the margins of the summit on Saturday. On Friday night Modi hosted President Biden for dinner instead. The two leaders held talks for about an hour.
A planned business reception for Sunak on Friday at the British High Commission was also cancelled, because of transport issues. Sunak’s spokesperson said rescheduling was “part and parcel” of any summit.
Things did improve over the weekend for the British PM. Modi and Sunak were filmed bear-hugging each other when they met. According to the U.K. government’s readout, Modi “noted the warm reception” Sunak had had in India, and the pair had agreed to continue moving towards a free trade agreement “at pace.”
The Indian government said Modi has now formally invited Sunak for a bilateral visit, after POLITICO reported that U.K. officials were already drawing up plans for a possible return trip for Sunak later this year.
LONDON — A year is a long time in politics — but the reverberations of the surreal fall of 2022 are still being felt across the U.K.
Wednesday marks the first anniversary of Liz Truss’ ill-fated appointment as prime minister — a year on from that rainy day in September when she stood outside No. 10 Downing Street and vowed to “transform Britain” with free market shock therapy.
Truss’ £45 billion package of unfunded tax cuts — with the promise of more to come — instead sunk the pound, sent interest rates soaring, caused chaos on the bond markets and forced the Bank of England to prop up failing pension funds.
Humiliated, Truss had little choice but to junk her entire economic program and less than four weeks later she was gone — the U.K.’s shortest-ever serving prime minister, famously outlasted by a supermarket lettuce.
The legacy of the period still is fiercely debated among Britain’s left and right-wing commentariat. In Westminster, some Tory factions still push for Truss’ successor Rishi Sunak to embrace her brand of free market economics.
But the period sticks in the memory of most ordinary Brits as one of high farce and incompetence and significantly, it’s a view shared in boardrooms across London and beyond.
“It was such a short, sharp, weird time. It had such a febrile sense of impending doom,” said one partner at a Big Four accounting firm who was granted anonymity — like other figures quoted below — to speak candidly about Truss for this article.
The money men
Senior employees of major financial and professional services firms say Truss’ brief period in office still taints Britain’s reputation around the globe.
Annual Foreign Direct Investment (FDI) into the U.K., already down significantly since the 2016 Brexit referendum, fell further — behind France — last year, according to an EY survey.
Britain has also been the second-worst performing G7 economy post-COVID, despite an upgrade in GDP growth figures by the Office for National Statistics last week.
The U.K.’s stuttering economic growth since the pandemic always was going to put a dent into Britain’s prospects for international investment. Experts give a myriad of reasons for Britain’s decreasing international competitiveness.
But a director at one U.S. investment bank said: “The No. 1 issue I hear from clients is that the U.K. is still un-investable because of what happened last year in Westminster, particularly with what happened during Liz Truss’ time in office.”
Senior employees of major financial and professional services firms say Truss’ brief period in office still taints Britain’s reputation around the globe | Leon Neal/Getty Images
A managing director at another investment bank agreed. “This stuff matters for clients who are looking at the U.K., seeing three different prime ministers and four different chancellors in a matter of a few months, and saying ‘why on earth would we choose that place to build our new factory?’ The results of that will still be felt today.”
Such views are confirmed in a recent survey by transatlantic lobby group BritishAmericanBusiness and management consulting firm Bain and Co.
The survey found U.S. business confidence in Britain has sunk for the third straight year, with political instability cited as a key factor.
BritishAmericanBusiness’ chief trade and policy officer Emanuel Adam said: “The instability in No. 10 last autumn, coupled with ongoing concerns over Brexit, growth prospects and taxation have led to a drop of confidence in the U.K. for a third year in a row.
“The message from U.S. investors is clear. They are calling for a stable political environment and business friendly policies from the U.K. government.”
But if foreign direct investors have been put off, the pound’s stronger-than-expected performance since Truss left office suggests they may have compensated with other forms of inward flows.
The Big Four partner quoted at the top of the article says Truss’ disastrous premiership was one of several factors making the British economy less competitive on the world stage.
“Trussonomics plus Brexit plus political uncertainty plus a misplaced sense of British exceptionalism are all contributing to making Britain a less attractive place than we ought to be,” they said.
“I’m aware of real-life examples of decisions being made to invest elsewhere, because they couldn’t be confident about the stability of their return on investment.”
Gloom in Westminster
But even more than the U.K. economy, it is Truss’ Conservative Party which is haunted most by the specter of her brief tenure.
Polling from Ipsos shows the British public’s trust in the Conservatives to manage the economy fell off a cliff during Truss’ time as prime minister, and has never recovered.
With an election looming next year, their Labour opponents — now 18 points ahead in the polls — cannot believe their good fortune.
“The two most important things for an opposition are to be able to show people that they can be trusted to protect the economy, and trusted with the defence of the realm,” said one Labour shadow Cabinet minister. “Liz Truss did a lot of the heavy lifting in allowing us to get a hearing on the economy from the public.”
One moderate Tory MP, and Sunak supporter, said “the damage done by the 49 days of Truss could still be the thing that loses us the next general election.”
“At least part of the party’s problem at the moment is that although the economy is starting to improve, no one is going to give us the credit for that because of the seismic events of last year,” they said.
Julian Jessop, an independent economist who acted as an informal adviser to Truss during her leadership campaign, agreed that the public became infuriated once mortgage rates began to surge during last September’s financial meltdown, but said “it is a bit much” to continue to blame the Tories’ poor polling on the former PM.
“If that were the big problem, then confidence should have recovered,” he said. “We have a new prime minister in place.”
A different view
Indeed some economists — and Truss defenders — see the past 12 months in a very different light.
Even more than the U.K. economy, it is Truss’ Conservative Party which is haunted most by the specter of her brief tenure | Ian Forsyth/Getty Images
They point to bond yields which recently have hit similar levels to the worst moments of the Truss era, thanks to successive Bank of England rate rises.
Truss’ prediction that inflation would help the U.K. eat through some of its debt pile — used as justification for funding her tax cuts through borrowing — has also been borne out in reality. And tax receipts have come in higher than expected this year, thanks to larger than expected growth and inflationary pressures.
Truss’ former Chancellor Kwasi Kwarteng, speaking on a forthcoming episode of POLITICO’s Westminster Insider podcast, insisted that while he and Truss admittedly pushed it “too much, too far,” their overall policy direction was sound.
“I think there’s a big lesson in life,” he said. “It’s all very well thinking you’ve got the right answer, but you’ve also go to have a staged, methodical approach to getting to the answer.”
Russell Napier, author of The Solid Ground investment report, added the unexpectedly strong performance of sterling against the U.S. dollar and other major currencies this year indicates capital inflows into Britain must be stronger than expected.
“Is there something that’s unique and dangerous about the U.K.? No there isn’t,” Napier added. “Our bond yields are at a dangerously high level, but so is the bond yield of Sweden and France, and Canada and South Korea and Australia.
Some of Truss’ closest supporters on the Tory backbenches have now set up pressure groups to fight for the type of low-tax policies advocated in her time in office.
Truss, for her part, is writing a book which aides suggest will be “more manifesto than autobiography.” She is also giving a keynote speech on the economy this month — just five days after the anniversary of her ill-fated “mini-budget.”
But for many Tory MPs still feeling the political repercussions of her tenure and fearing a brutal defeat at next year’s election, a period of silence would be welcome.
“It could be worse,” notes one Tory MP, a minister under Sunak. “It could have been a lot worse if she’d stayed.”
Ukraine is threatening to take Brussels and EU member countries to the World Trade Organization if they fail to lift restrictions on its agricultural exports to the bloc this month.
The country’s grain exports — its main trade commodity — are currently banned from the markets of Poland, Hungary and three other EU countries under a deal struck with the European Commission earlier this year to protect farmers from an influx of cheaper produce from their war-torn neighbor.
The glut, triggered by Russia’s invasion of Ukraine and its blockade of the country’s traditional Black Sea export routes, has driven a wedge between Ukraine and the EU’s eastern frontline states which have been among the strongest backers of Kyiv’s military fightback.
The restrictions, already extended once, are due to expire on September 15. Amid speculation that Commission President Ursula von der Leyen will let them lapse, Poland and Hungary have threatened to impose their own unilateral import bans, in violation of the bloc’s common trade rules.
“With full respect and gratitude to Poland, in case of introduction of any bans after [September 15], Ukraine will bring the case against Poland and the EU to the World Trade Organization,” Taras Kachka, Ukraine’s deputy economy minister, told POLITICO.
Kyiv has argued that the restrictions violate the EU-Ukraine free-trade agreement from 2014.
Kachka’s comments backed up a warning this week from Igor Zhovka, a senior aide to President Volodymyr Zelenskyy. If Brussels fails to act against the countries that violate the trade agreement, Kyiv “reserves the choice of legal mechanisms on how to respond,” Zhovka told Interfax-Ukraine.
The Ukrainian foreign ministry said Kyiv reserved the right to initiate arbitration proceedings under its association agreement with the EU, or to apply to the WTO.
“We do not intend to retaliate immediately given the spirit of friendship and solidarity between Ukraine and the EU,” explained Kachka. But, he added, the systemic threat to Ukrainian interests “forces us to bring this case to the WTO.”
Crisis warning
Russia’s war of aggression and partial occupation has cut Ukraine’s grain production in half, compared to before the war, while Moscow’s withdrawal in July from a U.N.-brokered deal allowing safe passage for some seaborne exports has raised concerns that EU-backed export corridors won’t be able to cope.
The bloc’s agriculture commissioner, Janusz Wojciechowski, struggled to explain to European lawmakers at a hearing on Thursday how Brussels would handle the situation after September 15.
Wojciechowski, who is Polish, also appeared to sympathize with the right-wing government in Warsaw, which has latched on to the fight over Ukrainian grain as a campaign issue ahead of mid-October general elections in which it is seeking an unprecedented third term.
The bloc’s agriculture commissioner, Janusz Wojciechowski, struggled to explain to European lawmakers how Brussels would handle the situation after September 15 | Olivier Hoslet/EFE via EPA
The curbs should be extended at least until the end of the year; otherwise “we will have a huge crisis again in the five frontline member states,” Wojciechowski said, adding that this was his personal position and not that of the EU executive.
The Commission’s decision in April to restrict imports to the five countries, which came with a €100 million aid package, met widespread disapproval from other EU governments and European lawmakers for undermining the integrity of the bloc’s single market.
Kachka, in written comments sent in response to questions from POLITICO, said there was no evidence of price deviations or a significant increase in grain supplies that would justify extending the import restrictions. Kyiv had engaged in “constructive cooperation” with the Commission, the five member states, as well as Moldova, a key transit hub for Ukrainian exports to the EU.
“We got a lot of support for ensuring better transit of the goods through the territory of neighboring member states, including Poland and Hungary,” Kachka said. “During [the] last two months we significantly advanced cooperation with Romania on transportation of goods from Ukraine.”
I can’t believe school is here (cue: happy dance!). It can never hurt to have some tricks from a mom who not only scours parenting boards for hacks but Pinterest too, so here are a few of my back to school tricks.
Start early. If you haven’t started your school supply shopping, now is the time. You’ll need the extra days to track down that illusive “fish notebook,” and you don’t want to be turning Walmart upside-down the day before school starts. Plus you’ll give yourself time to take advantage of all the sales that will inevitably happen from now until school time.
Shop online and in-person. Get what you can online now (you can still receive everything on time if you place your order today) and then fill in the holes with in-person shopping.
Buy ready-made labels. Yes, they cost a bit of money, but it’s a worthwhile investment when every single individual school supply down to pencils and markers have to be labeled (and even more so if you have multiple children).
Cook ahead. I already have a list of things I want to prepare now and then freeze for quick dinners and easy lunches and snacks. For example, I always make a huge pot of meat sauce that I freeze in ziplock bags, as well as chilli or soups and stews. My bean has also requested banana bread, bacon and cheddar muffins, and chocolate chip muffins. Lunch meat and cooked breakfast meats (bacon, ham, sauasage) also freezes beautifully.
Meal plan. I promise: if you take the time to do a bit of weekly meal planning every Sunday, your week will be much more streamlined. You can buy a simple dry-erase board and hang it in your kitchen for weekly meal menus so there’s no guesswork once the busy week is underway. Heck- you can even use your fridge door as a makeshift dry-erase board and write right on it!
Get organized now. Where will backpacks and lunch bags get stored after school? Get those designated hooks up now. Is the Tupperware cupboard a mess? Now is the time to get that in tiptop shape and take an inventory of what you have and what you need.
A full-time work-from-home mom, Jennifer Cox (our “Supermom in Training”) loves dabbling in healthy cooking, craft projects, family outings, and more, sharing with readers everything she knows about being an (almost) superhero mommy.
China’s dominance in rare earths makes U.S. supply chains vulnerable, U.S. Trade Representative Katherine Tai said in an exclusive interview Saturday with CNBC’s Martin Soong.
Rare earth metals are used in high-tech products such as electric car motors. Over the decades, China has built up its ability to process the metals — giving it enormous pricing power in a critical global market.
“What I want to draw your attention to is not just the vulnerabilities around China’s investments [overseas], but the fact that China’s dominant position in the world market now in [rare earths] means that it is able to turn on the faucet and turn off the faucet,” Tai said.
“And until we are able to access and create additional supply chains we remain entirely vulnerable to that leverage,” the U.S. trade representative said. Tai was speaking in New Delhi, India, on the sidelines of B20, the official business dialogue forum of the G20.
Tai pointed out that about a decade ago, China raised rare earths prices so high that some U.S. mines were able to operate in the industry again, only to have to close once China cut prices.
The U.S. held a majority stake in the rare earths metals market prior to the 1980s. But lower labor costs overseas, as well as less pressure on environmental standards, helped send the rare earths industry out of the U.S.
Meanwhile, Beijing supported the industry.
“The advantage in terms of China’s dominance isn’t necessarily a natural advantage,” Tai said. “It’s not that they have more rare earths but that they were able to pursue coordinated industrial and trade policies that allowed them to corner the market.”
The Chinese government sets economic plans at least every five years, with some goals — such as boosting self-sufficiency in technology and reaching carbon neutrality — set years earlier in advance.
While such top-down planning isn’t guaranteed to achieve results, the electric car industry has become an example of where Chinese industry has been able to capture significant market share across the supply chain, including the end product.
The level of U.S. reliance on China-based manufacturing came to the forefront during the Trump administration, and accelerated when the Covid-19 pandemic in 2020 disrupted global supply chains. The Biden administration has announced multibillion-dollar initiatives to encourage companies to develop and manufacture critical technologies in the U.S.
“Where we are in terms of our supply chains today is not where we want to be,” Tai told CNBC on Saturday. “We know that we’re vulnerable. Where we want to be is in a place where our supply chains are more diversified, where we have more confidence in them, where we just have more options.”
In the case of rare earths, Tai pointed out that China has a monopoly in the global market. She noted that in the case of Australia’s lithium production, China is also the only buyer — giving Beijing another point of market leverage.
While lithium is a key component of electric car batteries, it isn’t one of the 17 metals scientifically categorized as rare earths.
This year, U.S. and European government officials have talked of de-risking, or reducing the level of dependency on China alone. In a speech to global business leaders in June, Chinese Premier Li Qiang said de-risking is a false proposition because global economic interests are so entwined.
Just before the pandemic began, the U.S. and China signed a “phase one” trade agreement which called for China to increase its purchases of U.S. goods as a way to offset the massive U.S. trade deficit with China.
When asked Saturday about where the agreement stands, Tai said the U.S. is still looking at China’s shortfalls in meeting those purchase targets.
She said another aspect to that discussion is the degree to which U.S. trade with China is “imbalanced.”
Official U.S. data said the country’s trade deficit with China rose by 8.3% to $382.9 billion in 2022.
U.S. Secretary of Commerce Gina Raimondo is set to visit China from Sunday to Wednesday, as high-level U.S. official trips to the country have resumed this summer after a lull.
Tensions between the U.S. and China have escalated over the last several years, starting with trade and spilling over into tech and finance.
Many businesses have increasingly started to look for opportunities in India, while the country’s relationship with the U.S. has improved.
On Saturday, Tai also met with India’s Minister of Commerce and Industry Piyush Goyal, and raised concerns about India’s import license requirements for tech equipment, a release said.
“The stars really are aligning between the United States and India and that’s across all of the policy areas,” Tai told CNBC. She described the relationship as “experiencing new heights.”
She said in her area of economics and trade, the potential for working more with India was always there, but previously, “we just couldn’t figure out how to tap it.”
— CNBC’s Samantha Subin contributed to this report.
El Niño — or “the little boy” in Spanish — marks the unusual warming of the surface waters in the tropical central and eastern Pacific Ocean. It is a naturally occurring climate pattern which takes place on average every two to seven years.
The effects of El Niño tend to peak during December, but its full impact typically takes time to spread across the globe. This lag is why forecasters believe 2024 could be the first year when humanity surpasses the key climate threshold of 1.5 degrees Celsius. Global average temperatures in 2022 were 1.1 degrees Celsius warmer when compared with the late 19th century.
In drought-stricken Panama, low water levels have prompted the Central American country to reduce the number of vessels that pass through the critically important Panama Canal.
The restrictions have created a logjam of ships waiting to traverse the route, which many companies favor, as it typically slashes the travel time between the Atlantic and Pacific oceans.
The Panama Canal Authority, which manages the waterway, said earlier this month that the measures were necessary because of “unprecedented challenges.” It added that the severity of this year’s drought had “no historical precedence.”
The Panama Canal pileup comes shortly after the U.N. weather agency declared the onset of El Niño, which is likely to pave the way for a spike in global temperatures and extreme weather conditions.
What we see right now is perhaps only the starter of the main course that is being served next year.
Peter Sands
Chief analyst at Xeneta
Peter Sands, chief analyst at air and ocean freight rate benchmarking platform Xeneta, said maritime chokepoints exist “all over the place,” but that typically only calamitous events such as the 2021 Suez Canal obstruction tend to expose the fragility of the “just-in-time” delivery model.
“I think global shipping is like the world’s largest invisible sector,” Sands told CNBC via videoconference. “We all rely on services and the goods carried by sea, but we hardly ever get to think about how they end up on the shelves — unless something goes wrong.”
The Ever Given, one of the world’s largest container ships, ran aground for almost a week in March 2021 while contending with strong winds. The obstruction halted all traffic on one of the world’s busiest trade routes, causing massive disruption between Europe, Asia and the Middle East.
Analysts have since warned that extreme weather driven by the climate crisis could increase the frequency of Ever Given-like events, with potentially far-reaching consequences for supply chains, food security and regional economies.
Vessels waiting to cross Panama Canal from Pacific Ocean side. Red square indicates Panama Canal
‘Planet Labs PBC’
Addressing the unusually long delays at the Panama Canal, Sands said that, while officials have previously imposed restrictions on ships due to low water levels, the onset of El Niño could exacerbate the problem.
“What we see right now is perhaps only the starter of the main course that is being served next year because it could be [a] more severe drought when we get to the first half of 2024,” Sands said, citing the impact of El Niño.
“Right now, we do not see that filling up of the water levels that a normal year would bring around. So, it is literally a potential disaster in the making,” he added.
Danish shipping giant Maersk said it had been “largely unaffected” by the Panama Canal delays, although it warned that climate risks to major shipping routes were becoming more prevalent with potentially severe impacts.
“We have actually had to deal with some of this back from the 1990s,” Lars Ostergaard Nielsen, head of the Americas liner operations center at Maersk, told CNBC via videoconference.
“I think the difference is that it is perhaps becoming more prevalent, it is more perhaps severe, if you like, in terms of the impact today.”
A crane loads a shipping container branded A.P. Moller-Maersk onto a freight ship.
Balint Porneczi | Bloomberg | Getty Images
Referring to low water levels and the restrictions in place on the Panama Canal, Nielsen said the drought is prompting Maersk to load approximately 2,000 containers fewer than usual on the same vessel.
Typically, Nielsen said container ships might need to comply with a maximum depth of 50 feet on the Panama Canal. Current restrictions require ships to adhere to 44 feet of draft, forcing container ships to either weigh less or transport fewer goods.
“Six feet of water, that makes a big difference,” Nielsen said.
While the Panama Canal is likely to be one of the shipping routes most exposed to climate vulnerabilities, it is not the only waterway struggling to cope with the effects of extreme weather.
Low water levels on the Rhine River, an important trade route that runs through Germany via European cities to the port of Rotterdam in the Netherlands, is also of concern.
Ships sail across the Rhine at Bacharach in Rhineland-Palatinate.
Falling water levels on Europe’s busiest waterway have become a regular occurrence in recent years, making it more difficult for vessels to transit at capacity and increasing shipping costs.
“On the Rhine … it’s basically more daily tactical decisions simply because it’s short trips [and] it’s relatively easy to find alternatives so you can actually deal with that quite late in your processes,” Nielsen said.
“Whereas [with the] Panama Canal, you really have to plan it quite early because by the time you have a crossed the Pacific etc., you don’t really have any other options once you arrive,” he added.
Global insurance broker Marsh warned in a report published late last year that greater focus should be given to understanding the vulnerabilities of maritime chokepoints, given the increasing incidence of climate-driven disruptive weather events.
In the case of the Suez Canal, Marsh cited coastal inundation — where the sea level rises high enough to flood infrastructure — and the increasing chance of extreme heat as physical risks that will only be aggravated by the climate emergency.
If any of the five major waterways worldwide were disrupted by accidents or political events, analysts at Marsh said the impacts will be felt far beyond global supply chains. The broker recognized these five major waterways as the Suez and Panama canals, the Strait of Malacca between Indonesia and Malaysia, the Strait of Hormuz between Iran and Oman, and the Bab-el-Mandeb between Djibouti and Yemen.
For people anxious to get rolling in the retail marijuana business, it is another day and another delay.
On Friday, a State Supreme Court judge blocked the state’s marijuana retail licensing program after siding with complainants who argued that limiting the first dispensary licenses to people with prior convictions violated state law.
The injunction is part of a civil suit filed by service-disabled veterans, who argue that allowing “justice-involved individuals” to have the first recreational dispensary licenses is unconstitutional.
The decision by Justice Kevin Bryant, who had temporarily halted the program last week while legal arguments were heard, creates another hurdle in the fledgling marijuana industry that has been beset with delays in getting licensing off the ground…
Yet another medical marijuana dispensary is coming to Citrus County.
RISE will replace the old Huddle House off State Road 44 in Crystal River and be added to the growing number of such businesses, which now total over 500 in Florida.
The Chronicle two weeks ago put out a question on its Facebook page, asking for comments from those who patronize one of the dispensaries in Citrus County and whether medical marijuana is helping.
Get more from the Citrus County Chronicle
Here are randomly selected edited comments from the 133 people who responded:
Frank Griswold: “I opted for mine when I got cancer. The pills they were trying to cram down me were doing nothing but turning me into a zombie. It literally helped me pull through everything. Now that I’m getting better I have backed off of it majorly. But on occasion I still like to enjoy it as stress relief.”
Cheryl German: “If marijuana can be sold legally at a dispensary because you have a doctor’s note, it can be legal for everyone. These dispensaries are making money hand over fist so they know there’s nothing wrong with marijuana. They just want to profit off of it. Legalize it.”
Karlin Ray: “Everybody with a card has back problems and the same symptoms – just ask them (lol).”
Containers in a shipping terminal at the Honmoku pier in Yokohama, Japan, on Monday, June 19, 2023.
Bloomberg | Bloomberg | Getty Images
Japan posted its first monthly decline in exports in more than 2 years, as weaker demand in its biggest trading partners in China and the rest of Asia dimmed prospects for growth in the world’s third-largest economy.
Exports fell 0.3% in July from a year earlier for the first time since February 2021, according to provisional data released Thursday by Japan’s Ministry of Finance. Exports to Asia plunged almost 37%, while those to China contracted 13.4% in an eighth consecutive monthly decline, underscoring the magnitude of the slowdown in the mainland.
“Luckily at this moment, [the weakness in China exports] is completely offset by increase in exports to U.S. and Europe, but as you know, there are a lot of uncertainties with regard the U.S. and European economies,” Sayuri Shirai, an economics professor at Keio University, told CNBC “Squawk Box Asia” Thursday.
Japan’s domestic demand showed no meaningful improvement, underscored by imports that slumped 13.5% in July. Both export and import numbers were slightly better than expected, though Japan swung to a trade deficit of 78.7 billion yen (539.6 million dollars), falling far short of a median estimate for a 24.6 billion yen surplus.
A surge in imports had propelled a provisional 6% growth in Japan in the second quarter, though economists are expecting global demand to weaken in the second half of the year.
“I think for Japan, Japan’s exports to China counts for 20% of its total and Asia, 50%, so we have to really watch what’s happening in China,” Shirai said.
Coupled with faltering domestic demand, the Bank of Japan is unlikely to have the impetus to move away from its ultra-easy monetary policy aimed at reflating the economy.
Continued weakness in the Japanese yen is another source of concern, as the currency touched 146 yen to the dollar.
Shirai said BOJ intervention “could happen quite soon” since the Japanese yen is nearing 150 against the dollar, the level when Japan’s Finance Ministry intervened with roughly $68 billion to prop up the yen last September and October.
Separate data released by the Japanese government showed core machinery orders — regarded by some as a leading indicator of capital expenditure despite its volatility — declined 5.8% in July from a year earlier.
The Russian ruble plunged to its lowest level against the U.S. dollar in more than 16 months on Monday, as blowback related to President Vladimir Putin’s bloody invasion of Ukraine continued to weigh on the currency.
The U.S. dollar USDRUB, +2.17%
surged to 101.74 rubles on Monday, according to FactSet data. That’s the weakest level for the Russian currency since March 28, 2022. Since the start of the year, the dollar has gained more than 38% against the ruble, making the ruble one of the worst performing major emerging-market currencies of the year compared with the greenback.
Weakness in the ruble has intensified over the past week weeks, and just a few days ago the Russian central bank announced it would halt buying of foreign currency on the open market through the end of the year. Instead, it will rely on Russia’s National Wealth Fund’s largess to supply them. The decision was enacted with the intention of “reducing volatility” in financial markets. The central bank has also said it’s launching a digital-ruble pilot program.
Economists, including Konstantin Sonin, a political economist at the University of Chicago, have blamed capital flight and falling budget revenues (due to lower oil and gas income and tax revenue) for the ruble’s troubles.
Data released by Russia’s central bank last week showed Russia’s current-account surplus has shrunk markedly during the first seven months of the year to an estimated $25.2 billion, compared with $165.4 billion during the same period in 2022. The central bank blamed the decline on a shrinking trade surplus caused by the drop in crude oil prices since the first half of 2022.
The Bank of Russia, the country’s central bank, has attempted to shore up the ruble with little benefit. Last month, the central bank hiked interest rates by 100 basis points, the first increase since before Putin ordered the invasion of neighbor Ukraine in February 2022. It hinted that more hikes were possible.
A weak ruble was one reason for the hike, as the weak currency has caused inflation to accelerate.
While the ruble remains weak, it’s still holding above its lows around 130 to the dollar seen in March 2022, weeks after the West imposed a first round of sanctions on Moscow following the invasion of Ukraine, which has morphed into a bloody stalemate with no end in sight.
The annual inflation rate rose to 4.5% in July from 3.25%, but economists at Goldman Sachs warned in a note earlier this month that inflation will likely head above the bank’s target again.
“With continuing loose fiscal policy, we expect inflation to continue to rise throughout the year to +7.0% yoy [year-over-year] in December, above the CBR’s July inflation forecast range of +5.0% – +6.5%,” said a team of economists led by Kevin Daly.
Russian officials have blamed the ruble’s latest bout of weakness on the central bank. Oreshkin Maxim, Putin’s economic aide, wrote in an editorial published in state media outlet Tass on Monday, that “loose monetary policy” was to blame for the weak ruble and urged action on that front.
“The Central Bank has all the necessary tools to normalize the situation in the near future and ensure that lending rates are reduced to sustainable levels,” he wrote.
Many economists and currency strategists expect the ruble’s slide to continue. However, a recent rebound in global crude-oil prices is leading to a modestly improved outlook.
In the U.S., West Texas Intermediate crude for September settled at $84.40 a barrel on Wednesday, its highest level of 2023, according to FactSet data. That reflects a wider trend of rising energy prices globally. However, prices remain well below the peak of roughly $130 a barrel from March 2022, when prices spiked in the immediate aftermath of the invasion.
Airport operator accuses county commissioners of being anti-business
When Andy Chan, the CEO of Right Rudder Aviation, asked county commissioners for a 50-year renewal of the lease for Right Rudder, the fixed-based operator at the Inverness Airport since September 2018, they said no.
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But not before a contentious discussion in which Chan explained that the 50-year renewal would allow him time to help recoup a planned $5 million investment on new hangars at the airport. He outlined all the services his company provides and how he has brought high-paying jobs to Citrus County.
The board voted 3-1 on a motion by Commissioner Rebecca Bays on a two-year lease extension. Commissioner Jeff Kinnard pushed for a longer lease agreement and criticized his colleagues’ apparent disfavor with Right Rudder.
Kinnard called it a “vote of no confidence” and one that will reflect badly on the county’s treatment of businesses.
Bays said her motion is not a vote of no confidence and she has nothing against Right Rudder.
Rather, she said, it is about setting a higher standard in general for businesses in Citrus County and not continuing the piecemeal development that’s been the norm.
A deepening confrontation between the U.S. and China is eroding trade ties between the world’s two largest economies, with goods from China accounting for the smallest percentage of U.S. imports in 20 years.
BRUSSELS — The Netherlands on Friday started enforcing new export controls restrictions on advanced microchips production machines to China, siding with Washington in the geopolitical tussle over who controls the critical technology.
The Dutch rules come in support of a U.S.-led strategy to choke off China from critical parts of the supply chain needed to manufacture high-end microchips used in consumer electronics, computing and other domains — including military applications. “It’s necessary to check in advance who’s the end user and what the end use is of the production equipment,” the Dutch advocate in the regulation.
But the measures also put a target on the back of Dutch semiconductor champion ASML — Europe’s highest-valued tech company with a market value of around €240 billion — and have caused critics in Europe to accuse the Dutch government of bowing to U.S. pressure too easily.
ASML already faced restrictions on the export of its most advanced machines, which use extreme ultraviolet light (EUV). The new rules require the company to apply for a permit for at least three types of its machines that use less advanced deep ultraviolet (DUV). The government expects about 20 annual applications in total for a permit because of the additional DUV restrictions.
Decoupling will be ‘extremely expensive’
The Dutch decision to align export controls policy with Washington and Tokyo has sidelined other European Union member countries and Europe’s own chips industry in past months.
The rules don’t seem to bite in the short term: ASML didn’t change its financial outlook for this year, nor its “longer-term scenarios.” Part of the explanation there is that ASML was still granted the necessary licenses it needed until the end of the year, an ASML spokesperson said Thursday, allowing the company to “fulfill contractual obligations.” The company added though that it was “unlikely” to receive export licences for Chinese customers from January onward.
But the company is fully aware that restrictions to the Chinese market out of security concerns could become a slippery slope, threatening its unique position in a global — and highly efficient — supply chain.
Decoupling between the West and China will be “extremely difficult and extremely expensive,” Christophe Fouquet, the company’s executive vice president, said in June. Earlier, ASML CEO Peter Wennink said that putting “locks” on the global chips ecosystem would have “far-reaching consequences.”
It could also incite China to accelerate its own production ecosystem for advanced chips — something that has not been sufficiently taken into consideration, according to critics of the export restrictions.
ASML CEO Peter Wennink said that putting “locks” on the global chips ecosystem would have “far-reaching consequences” | Bas Czerwinski/EFE via EPA
“We’re giving a clear signal to the world: The export of our products can stop if a country bothers the U.S., because the Netherlands immediately succumbs under the pressure,” Laurens Dassen, a Dutch lawmaker for the pan-European Volt party, said in a statement.
“You already see that China is starting to produce these chips itself instead of buying them from us,” Dassen said.
Seeking security
The Dutch decision has prompted the rest of the European Union to speed up their work to coordinate export controls and manage risks emanating from trading with China.
Before the summer, the European Commission presented its economic security package — including a promise to review the bloc’s export control regime. The Commission has said that it wants to come up with a “list of technologies which are critical to economic security” as part of the package.
Behind the scenes, diplomats and officials are squabbling over how to balance Europe’s need for trade defenses for security purposes with its strategy to promote free trade and keep its industries competitive with other regions.
It’s something that Dutch politicians welcome, if only to avoid being the only ones in Europe pioneering ways to regulate sensitive tech.
“In the previous decades, technology has become determinate for geopolitical relations. If that’s the case, you will need a policy in the area of technology,” Bart Groothuis, a liberal lawmaker who co-negotiated the bloc’s Chips Act, said. The Chips Act already has some provisions that allow for more European cooperation on export controls.
The Netherlands and Europe shouldn’t follow the U.S. “blindly” in that area, Volt’s Dassen added: “It’s about time that Europe determines its own fate. We have to make our own strategic choices and not be dependent” — on China, nor on the U.S.
