The Trade War In Your Pocket

The Trade War In Your Pocket

We need to talk about the geopolitics of supply chains. Bear with me, here – this is an important story, and I’m going to explain why using the handy example of Apple’s iPhone. Over the weekend, Donald Trump went on Twitterto explain that if Apple wants to avoid the new tariffs his administration is preparing on billions of dollars of Chinese consumer goods, it should make its products in the US instead of China. “Start building new plants now,” the President said. “Exciting!”


If you’re one of the many readers out there reading Signal on your iPhone, you may have noticed the slogan on the back that says, “Designed by Apple in California. Assembled in China.” That isn’t just a clever marketing tagline, it summarizes an entire approach to running a modern technology business.

Supply chains are global: While Apple pays Silicon Valley types handsome salaries to design its phones and the software that runs them, it relies on 300,000 Chinese employees to assemble the final product with a level of precision and at a low cost that workers in the US can’t match. The phone itself is made of hundreds of component parts – some from the US and other countries, but also many sourced from factories and warehouses that have sprung up to serve a sprawling assembly facility in Shenzhen and the company’s “iPhone city” in Zhengzhou. Such intricately coordinated supply chains are what makes the iPhone and many other tech products affordable.

Going local is costly: Moving production of the iPhone to the United States wouldn’t just be a matter of building a new factory and putting up a “Help Wanted” sign. It would involve shifting an entire production ecosystem that has taken years to develop and fine tune. That would be expensive – not just for Apple, but for consumers who would pay higher prices for the company’s products.

That’s unlikely to matter to Trump, or more hawkish members of his administration who want to pull the US and China apart technologically and bring manufacturing jobs back to the US. Any day now, the administration is poised to hit China with tariffs of up to 25 percent on another $200 billion of its goods – and it’s threatening tariffs on $260 billion more. Combined, the tariffs would account for all of China’s exports to the US. If China digs in its heels, which seems likely, the two sides could be in for a long fight. Just the threat of an extended period of tariffs could force many tech companies to make tough decisions about relocating production – if not moving entire ecosystems, then at least trying to move parts of their supply chains to other countries, like Vietnam or Mexico. That, too, would come at a cost.

This is part of a bigger story: It isn’t just about phones, or encouraging US companies to make stuff in the USA instead of China. The Trump administration has been arguing in favor of barring Chinese technologies from the US and other Western countries, too, as a part of a broader struggle for control of the technologies of the future. The US, Australia, Canada, and Japan have already either effectively banned the use of Chinese networking equipment in their next-generation “5G” data networks because of concerns about national security, or are considering doing so. The stakes are high, because 5G networks are what will make driverless cars, smart cities, and other economy-changing technologies possible. The decisions that companies and governments make over the next few months and years about whose equipment to use, or where to locate new factories could have big effects on the relative fortunes of US and Chinese suppliers, and even how these innovations develop over the long term.

But long before those decisions are made, you’ll start to feel the effects of the US-China tech and trade conflict in your wallet.

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The European Union is, for better or worse, the most ambitious experiment in human history in institutionalized multinational cooperation. Its success depends on the willingness of its members to abide by its rules.

In recent years, the populist-nationalist governments of former Communist bloc members Hungary and Poland have flouted some of those rules in order to boost their own popularity with citizens suspicious of the EU's liberal values on issues like immigration and minority rights. In response, the EU has scolded these "illiberal" governments and threatened forceful action – so far without much effect.

The fight between EU institutions and Poland and Hungary has escalated.

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Ian Bremmer is joined on GZERO World by artificial intelligence scientists Kai-fu Lee, who recently wrote about how AI will change the world over the next two decades, precisely to talk about AI's future. After this week's Facebook debacle, how can we align interest to regulate AI-driven algorithms? Will AI steal all our jobs? And what should we do to learn from AI to improve our lives before it gets smarter than us?

Watch this episode of GZERO World with Ian Bremmer: Is a robot coming for your job? Kai-fu Lee explains AI

US elections officials have always persuaded losing candidates that they've, ahem, lost. Now it's worse because there's a new paradigm, according to former DHS and Election Assistance Commission official Matt Masterson, policy fellow with the Stanford Internet Observatory. Candidates that won't accept defeat regardless of the margin or evidence of fraud, he says, are undermining trust in the system — and election officials are ill-equipped to deal with this problem.

Matt Masterson made these remarks during a live Global Stage event, Infodemic: defending democracy from disinformation. Watch the full event here: https://www.gzeromedia.com/global-stage/virtual-events/disinformation-is-a-big-problem-what-can-we-do-about-it

Who's most responsible for spreading misinformation online? For Ginny Badanes, senior director for Democracy Forward at Microsoft, the problem starts with those who create it, yet ultimately governments, companies and individuals all share the burden. And she's more interested in what we can do to respond.

Ginny Badanes spoke at a live Global Stage event, Infodemic: defending democracy from disinformation. Watch the full event here: https://www.gzeromedia.com/global-stage/virtual-events/disinformation-is-a-big-problem-what-can-we-do-about-it

Some of the worst sectarian clashes since Lebanon's 15-year civil war (1975-1990) broke out in Beirut this week between supporters of Hezbollah and Amal, both Shiite political parties, and Christian, far-right Lebanese Forces. Shiite protesters were rallying against the state probe into the Beirut port blast, which occurred last year. They say authorities were singling out Shiite politicians for questioning and blame. In this video, watch Ian Bremmer's conversation with Lebanese journalist and author Kim Ghattas on GZW talking about the future of Lebanese politics and sectarianism in the county after the after the blast. It was originally published on August 19, 2020.

In Lebanon, "a majority (are) united in wanting a different future, a future that is non-sectarian, that is non-corrupt, that provides prosperity, justice, dignity for people," journalist Kim Ghattas told Ian Bremmer on GZERO World.

In this interview, Ghattas discusses the opportunity that could arise from the tragedy of the Beirut explosion which killed 200 and injured thousands more. The Lebanese are "fed up" with the militant group Hezbollah, she tells Bremmer, and want to strive for a government that better resembles the diversity and cosmopolitan nature of its citizens.

Watch the GZERO World episode: Lebanon Post-Blast: Rage in the Streets of Beirut.

Some of the worst sectarian clashes since Lebanon's 15-year civil war (1975-1990) broke out in Beirut this week between supporters of Hezbollah and Amal, both Shiite political parties, and Christian, far-right Lebanese Forces. Shiite protesters were rallying against the state probe into the Beirut port blast, which occurred last year. They say authorities were singling out Shiite politicians for questioning and blame. Below is our original piece on the Beirut port explosions published on August 5, 2020.


The twin explosions at Beirut's port on Tuesday were so powerful that the aftershocks reverberated as far as the Eastern Mediterranean island of Cyprus, 150 miles away. The specter of fire and smoke was such that many suggested on social media that Beirut had experienced a nuclear blast.

In the days ahead, more details will come to light about why a deadly cache of materials was haphazardly stashed at a port warehouse, and why Lebanon's government failed to secure the site. So, what comes next for crisis-ridden Lebanon?

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

What does it actually mean to cut $1 trillion from the Democrats' $3.5 trillion social spending bill?

President Biden has proposed one of the most ambitious expansions of federal spending in recent memory. If he gets everything he wants, it would probably be the largest expansion of government since the Great Society, but he's not going to get everything he wants. Democrats have basically said they cannot do all $3.5 trillion in spending. They're probably going to end up around $2 trillion. So what gets cut? Well, we don't know yet. There's kind of two ways to go about this. They could either cut the number of programs that have been proposed, doing fewer things with more money on a permanent basis, or they could try to do more things, each program getting less money and potentially doing them on a temporary basis. So, a future Congress would have to extend it. What does this mean for you? Well, a lot of the money in here is designed to go directly to families, either in the form of cash payments, through the tax code, the Child Tax Credit and the Earned Income Tax Credit, or subsidies for things like child care, early childhood education, and community college. And if you cut these things back, it means less money is going to go out the door to the American people. It also means less tax increases to finance it. So the implications of what's being proposed could actually end up being a big deal for a lot of Americans who would qualify for benefits under these new programs.

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