Going to War Without Allies

Going to War Without Allies

“Trade wars are good and easy to win,” said Donald Trump following his announcement that the US will impose tariffs on steel (25%) and aluminum (10%).


He has heard the concerns of Speaker Paul Ryan, Defense Secretary James Mattis, heads of US companies that need affordable steel and aluminum, and many others, but Trump’s decision will stand, at least for now. The resignation of Gary Cohn as head of the administration’s National Economic Council, effective in a few weeks, will remove an important White House voice for moderation on future trade actions.

These tariffs are not about China. Canada, the EU, South Korea, Mexico, Brazil, Japan, and even Taiwan (!) send more steel to the US than China does, and Trump knows that. For now, Canada and Mexico will be exempt pending completion of the renegotiation of NAFTA, the North American Free Trade Agreement.

President Trump says the tariffs will protect US national security. “We have serious doubt about that justification,” responded the EU trade commissioner. “We cannot see how the European Union, friends, and allies in NATO, can be a threat to national security in the US.” POLITICO Europe says it has “obtained a four-page list of American imports that the EU has targeted for duties of 25 percent to retaliate against Trump’s tariffs.”

Canada has already brought a WTO case against the US on other issues. South Korea has taken the US before the WTO in response to US trade laws in place before Trump was elected, but it will use his “America First” rhetoric to bolster its case. The EU, China, South Korea, Japan and Taiwan have all demanded compensation in response to the recent US decision to impose “safeguard” duties on solar panels and washing machines.

Trade wars are good and easy to win? Here’s a better rule of thumb: Don’t go to war, any war, against everyone at once.

P.S. Yesterday, 11 countries — including Japan, Canada and Australia — signed a revised version of the Trans-Pacific Partnership, an enormous trade deal that the Trump Administration has rejected.

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Should you believe the hype(rsonic)?

Over the past few months, US officials have become increasingly alarmed about a new type of killing machines called "hypersonic weapons."

The top US General, Mark Milley, said that China's successful test of an advanced hypersonic weapon earlier this year was "very close" to a "Sputnik moment" – referring to the Soviet Union's surprise launch of the world's first artificial satellite in 1957, which raised fears that the US was lagging behind a formidable technological rival.

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The supply chain mess is hitting all of us. Inflation is now the highest it's been in over 30 years.

The costs of food, gas and housing are going through the roof. What's more, almost everything made outside of America is now in short supply — like semiconductors for our cars.

Why is this happening? A lot of it has to do with the pandemic. Asian factories had to shut down or thought there would be less demand for their stuff. So did shipping companies. But then online shopping surged, and now there's a lot of pent-up demand to spend all the cash we saved during COVID.

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Marietje Schaake, International Policy Director at Stanford's Cyber Policy Center, Eurasia Group senior advisor and former MEP, discusses trends in big tech, privacy protection and cyberspace:

What is Facebook planning with the metaverse?

Well, my sense is that Facebook mostly prefers a virtual reality over the actual situation the company is in, with overwhelming criticism about the many harms to people it is causing all over the world. The metaverse at launch would be added to a number of services and experiences online in a more virtual and augmented reality setting. Think about what the gaming sector has done, but now, also, other big tech firms are jumping on the bandwagon. The thing to remember is that the user experience would be more immersive.

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Jon Lieber, head of Eurasia Group's coverage of political and policy developments in Washington, shares insights on US politics:

Why did President Biden renominate Jay Powell to be the chairman of the Fed, and who's his No.2, Lael Brainard?

Well, Powell by all accounts has done a pretty good job of managing the Fed through the coronavirus pandemic. He dusted off the playbook, first pioneered by Chairman Bernanke during the financial crisis, and he's largely continued the relatively easy monetary policy of his predecessor at the Fed, now Treasury Secretary, Janet Yellen. With inflation growing the way it has over the last several months, Biden now owns the policies of the Fed and is essentially endorsing what Powell has been doing and giving Powell the political cover to continue to keep rates low for longer, or as many people expect, raise them slightly over the next 12 months in order to fight inflation.

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When Kyle Rittenhouse was acquitted on all counts, Pulitzer Prize-winning journalist Nikole Hannah-Jones, who created the "1619 Project" tweeted: "In this country, you can even kill white people and get away with it if those white people are fighting for Black lives. This is the legacy of 1619." In an upcoming interview with Ian Bremmer, she explains why she saw the verdict as a consequence of this country's long history of double standards when it comes to racial justice. "The fact that we own more guns in this country than any other country is certainly a legacy of 1619" Hannah-Jones says. "This idea that white Americans can patrol, that they have the right to open carry, this is not something that Black Americans can engage in, in the same way." Watch her full conversation with Ian Bremmer in an upcoming episode of GZERO World.

Ian Bremmer shares his insights on global politics this week with a look at Peng Shuai's public appearance, El Salvador's "Bitcoin City," and Americans' Thanksgiving celebrations.

Why has China silenced its famous tennis player, Peng Shuai?

Well, they haven't completely silenced her in the sense that the head of the IOC, the International Olympic Committee with Beijing Olympics coming up, basically told the Chinese government, "hey, what is the absolute minimum that you can do so that we can get Beijing Olympics back on track?" And they did the absolute minimum, which was a half an hour phone call with her that felt like kind of a hostage phone call. But nonetheless, she says that she is fine and is private and doesn't want to talk about the fact that she had accused the former Vice Premier of sexually assaulting her. That is a fairly heady charge. It was clear, going to get a lot of headlines in the run-up to the Olympics. And she wasn't heard from after that. So big problem for the Chinese in the run-up to the Olympics.

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What We're Watching: Biden's oil dilemma, Abiy Ahmed takes up arms, Iran nuclear talks on life-support

Biden's oil dilemma. The Biden administration says it will release some 50 million barrels of crude from US stockpiles in a bid to reign in soaring gasoline prices. Similar moves were made by Japan, South Korea, and China in recent days as global energy prices rise and supplies remain scarce in many places amid the ongoing economic recovery. Pain at the gas pump and broader inflation concerns in the US have contributed to Biden's tanking poll numbers. With Republicans poised to do well in next year's midterm elections, the president is under pressure to turn things around fast. But Biden has already come under fire from environmental groups, who say the president's move flies in the face of his Glasgow commitments to reduce rather than boost fossil fuel consumption. But in domestic politics, bread-and-butter issues are paramount, and if Biden doesn't "fix" the gas problem hurting American families, the Democrats could suffer a beating at the polls. What's more, Biden has also angered the 23-nation Organization of Petroleum Exporting Countries, which worries that extra US oil on the market will bring down prices for their own crude. Now the organization is warning that it might renege on an earlier promise to produce more oil.

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How did we get to today's supply chain mess?

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