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Why the US is sending aid to Ukraine, Israel, and Taiwan
Ian Bremmer's Quick Take: Hi, everybody. Ian Bremmer here. And a Quick Take to kick off your week. A big $90 billion package that has been approved by the US House of Representatives, going through the Senate shortly after months of debate and, all of the package, all three major pieces of it, have some significant, complicated features.
First of all, the biggest piece for Ukraine, $60 billion, massive military support.
They had been in danger of losing significant more territory. This certainly shores them up. It helps the Ukrainians. It makes the Europeans panic less, but, you know, can they longer term hold on? What is the end game? The Ukrainians are, of course, running short not just of material to fight, but also air defense capabilities and, critically, people, soldiers. It's much harder for them to get people for the front lines than it is for the authoritarian, and much larger populated Russia. And so, the intention is that the Ukrainians don't fall apart, but of course, longer term, the idea that the US will continue to be able to provide 60 billion in support year after year. Certainly not true if Trump becomes president, probably not true if Biden wins a second term. What you really want to do is try to find a way to get them in a better position so that negotiations, inevitably, that need to occur with Russia, can be more productive and more constructive from the Ukrainian side, from the European side, from the NATO side. The US kick the can on this last year when the Americans, were in much better position supporting Ukraine. Now it's harder. Always is the case is that you think that things are going to get better. You don't feel like taking the political risk and as a consequence you extend and pretend. And now they're in a worse position. So I'm glad that the money came through. I'm glad the Ukrainians, are still fighting courageously and want to fight courageously. But of course, longer term, this war leads to some degree of partition where the Ukrainians are losing their land.
Israel, closest ally of the United States in the Middle East. Some 17 billion in military support for Israel, also some 9 billion in humanitarian aid in Gaza in this plan.
But, of course, increasingly, the United States does not support Israel continuing to fight against Hamas in Gaza. They want to see a lot more protection for Palestinian civilians, which the Israelis have been reluctant to put in place. They don't want to see a ground offensive into Rafah. Over a million Palestinians shelter in there. The Israelis are fully intent on continuing with that, proceeding with it. They did want to see a cease-fire that was linked directly to a hostage release. Now, increasingly, the US is talking about those two things as critical but delinked. And at the same time as the US is providing all this money, you have sanctions being placed by the United States on battalions of the Israeli Defense Forces engaged in human rights violations. This shows just how impossible this position is for President Biden to maneuver domestically, not to mention internationally. The US is overwhelmingly, the one country that is most supportive of Israel. Biden is overwhelmingly the political leader that is most supportive of Israel. But most of his constituents are not. And this is absolutely going to hurt him, even though it's a foreign policy issue and they don't usually play that heavily in recent decades in the election coming up in November. And you’ll see it, of course, across campuses all over the country, including my own at Columbia.
And then finally Taiwan. And this is in a sense the least controversial, because everyone on the Democratic and Republican side pretty much supports more support for Taiwan, is opposed to China. It's very easy to get lots of legislation that makes life more difficult for China. At the same time, though, the long term strategy of the United States is to make Taiwan less important, less important for the Americans in making sure that semiconductor production, moves from Taiwan to the United States, to other allies, not just a few miles off of the mainland Chinese coast, but also export controls that prevent the Chinese from getting advanced semiconductors from Taiwan as well. In other words, the big US strategy is not just arming the Taiwanese and helping them defend themselves, but also making Taiwan fundamentally less important to mainland China. and one of the main reasons that the Chinese would not be interested in attacking Taiwan long term or squeezing them hard economically long term, is because they're so indispensable to the Chinese economy. This is not going to be the case long term.
In all three of these areas, you've got the United States with friends, but they are less aligned with strategically than they are tactically. And that means that this money that we see going forward is all about kicking the can on short term gains that make sense politically for the US right now. But long term do not resolve the challenges that exist for the US with these countries.
That's it for me and I'll talk to you all real soon.
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U.S. Speaker of the House Mike Johnson (R-LA) makes a statement to members of the news media in Washington, U.S., February 27, 2024.
Split the difference: Johnson to push separate bills for Ukraine, Israel, Taiwan
For months, we’ve all wondered how US House Speaker Mike Johson was going to square this circle: The Biden administration, most Democrats, and much of the GOP establishment want more aid for Israel and Ukraine, while hardliners in Johnson’s own Republican Party, led by Georgia congresswoman Marjorie Taylor Greene, say foreign wars aren’t America’s business and that border security is more important.
Now we know. The Louisiana Republican plans to break that unsquarable circle into a handful of little strips (this metaphor ends here, we promise) – crafting country-specific aid bills for Israel, Ukraine, and Taiwan.
The move may skirt a right-wing rebellion in Congress, but it’s a rebuke to the White House, which had called for Johnson to simply take up a version of a bipartisan Senate bill from February, which earmarked $95 billion for Israel and Ukraine.
Johnson thinks he can get the split-up bills passed as soon as this week, but we’re watching to see if his separate-but-equal strategy provokes a backlash from Democrats, whose support he needs to bring these new bills to a vote in the Senate.
Jess Frampton
How stable is the US-China relationship?
The most geopolitically important relationship in the world is fundamentally adversarial and devoid of trust. Its long-term trajectory remains negative, with no prospect of substantial improvement.
And yet, ever since US President Joe Biden and Chinese President Xi Jinping met at the Asia-Pacific Economic Cooperation summit in Woodside, Calif., last November, US-China relations have looked comparatively stable amid a sea of chaos.
In the months that have followed, both sides have continued to seek steadier ties through frequent high-level engagement as well as new dialogue channels on a wide range of policy areas. In January, the US and China resumed military-to-military talks for the first time in nearly two years. On April 2, Biden and Xi spoke by telephone and ratified their ongoing commitment to manage tensions. The presidential call came after the third in-person meeting between US National Security Adviser Jake Sullivan and Chinese Foreign Minister Wang Yi in less than a year on Jan. 16-17. It set the stage for US Treasury Secretary Janet Yellen’s trip to China this past week – where she met with senior Chinese officials, local and provincial leaders, and top economists – as well as US Secretary of State Antony Blinken's upcoming visit. Both militaries are currently in the final stages of preparation for a maritime dialogue and a likely ministerial meeting at the Shangri-La Dialogue in June.
However, while better managed than they have been historically, US-China relations are coming under stress from a number of flashpoints that threaten to disrupt the relative calm that has prevailed since Woodside.
Second Thomas Shoal. This is the most likely, imminent, and dangerous tripwire for US-China military conflict, following an incident on March 23 in which Chinese Coast Guard ships fired high-pressure water cannons on a Philippine vessel attempting to deliver construction materials to the rusting BRP Sierra Madre – a symbolic Philippine warship, home to a small detachment of Philippine marines, that was intentionally grounded by Manila in the South China Sea’s Second Thomas Shoal in 1999 to assert Philippine sovereignty over the disputed territory.
Beijing refuses to allow any construction materials to reach the Sierra Madre, and Philippine President Ferdinand Marcos feels he must continue sending materials to prevent it from sinking lest he renounce Manila’s claim. The latest run-in injured several Filipino sailors but stopped short of causing fatalities. US defense officials believe that if a Philippine sailor were to get killed, Manila would invoke its Mutual Defense Treaty with Washington, prompting the US to send military escorts for Philippine resupply ships. Chinese contacts say that if that happened, Beijing would consider towing the Sierra Madre off the reef, setting up a showdown between the US and Chinese navies.
Tech competition. Xi views Washington’s ever-expanding restrictions on China’s advanced semiconductor and artificial intelligence industries – and its pressure on US allies like Japan, the Netherlands, Germany, and South Korea to follow suit – as an effort to curb his country’s technological and economic development. More than ordinary trade barriers, tech restrictions get under Xi’s skin because they hit at the heart of his strategy to shift the sources of Chinese growth away from real estate and infrastructure investment toward “new productive forces.” Insofar as the US containment policy persists – and it will, as it is driven by a bipartisan national security consensus to “de-risk” – Beijing will eventually be compelled to retaliate.
Trade. A sticking point for labor unions in an election year, Chinese industrial “overcapacity” was a central theme of both Biden’s call with Xi and Yellen’s China trip. Washington’s core contention is that China accounts for a third of global production but only a sixth of global consumption. As a result, China’s heavily subsidized (or outright state-owned) firms are flooding Western and global markets with low-cost goods, especially in key sectors such as electric vehicles (EVs), batteries, and solar photovoltaics, benefiting consumers worldwide through lower prices – and reducing emissions by increasing the adoption of renewables – but hurting the less competitive American manufacturers.
American accusations ring hollow in Beijing when the US is simultaneously granting TSMC, the world’s leading producer of semiconductors, billions of dollars in subsidies to expand chip manufacturing in America. Separate but related, the irony of the US (and Europe) complaining about China making the global energy transition cheaper while at the same time chastising the country for not doing enough to decarbonize their economy is not lost on the Chinese and many in the global South. But I digress.
From Washington’s perspective, overcapacity is a problem at the core of China’s industrial policy model that will be made worse by Xi's aversion to boosting domestic consumption. Given the election-year politics of the issue for Democrats, at least some market access barriers before November are likely – whether through the Section 301 review of China’s steel industry, the Chinese EV data security probe, and/or the likely realignment of Trump-era tariffs on EVs and other imports. Still, anything Biden might do on trade pales in comparison to the risk of major tariff escalation that Beijing will face if Donald Trump returns to the White House.
Taiwan. China’s leadership has concluded that Taiwanese President-elect William Lai is an irredeemable separatist, and Lai sees little upside in trying to persuade Beijing otherwise. Xi’s embrace of Lai’s Kuomintang predecessor, Ma Ying-jeou, in a high-profile meeting on April 8 didn’t help defuse tensions. Lai’s inaugural address on May 20 will accordingly set the stage for a gradual erosion of cross-strait ties over the next four years. The pressure will start as soon as this summer when China begins to regularly enter Taiwan’s contiguous zone, “erasing” the island’s territorial waters and airspace. While these moves will be calibrated and telegraphed to Washington through backchannels to limit retaliation, Lai could escalate and force Biden to respond with a show of resolve in support for Taipei that risks a dangerous cycle of escalation.
But while these irritants will strain the bilateral relationship, there are still plenty of reasons for both leaders to want to maintain relatively stable ties, at least through the US elections.
Biden can’t afford to start a new war when he’s already managing two abroad – one in Ukraine, one in the Middle East – and fighting another at home. Xi continues to face major domestic economic challenges that require him to be much more geopolitically cautious than he would otherwise. Tensions are further constrained from spiraling out of control by enduring interdependence between the world’s two largest economies, neither of which would benefit from faster decoupling let alone military conflict.
Of course, as we saw both in 2022 with former House Speaker Nancy Pelosi’s visit to Taiwan and in 2023 with the Chinese surveillance balloon incident, accidents and miscalculations can easily overwhelm leaders’ ability to manage the tensions. But the communications channels established since November make such flare-ups less likely.
Neither the US nor China want a free-fall in their relationship this year, and thanks to Woodside, they now have the tools to avoid one. The Woodside truce may bend, but it won’t break.
The logo of Taiwanese chip giant TSMC is seen at southern Taiwan science park in Tainan, Taiwan.
TSMC gets billions to build in Phoenix
Taiwan Semiconductor Manufacturing Company will receive as much as $6.6 billion from the US government to expand its chip-making complex in Phoenix, Arizona. As part of the deal, TSMC will also receive $5 billion in loans and invest $65 billion to build a third factory in the complex. It’ll receive the money if it complies with due diligence requirements set forth by the 2022 CHIPS and Science Act, a $200 billion investment in America’s domestic semiconductor infrastructure.
TSMC, based in Taiwan, has become perhaps the world’s most important chip fabrication company. Chip designers like AMD and Nvidia — the two companies at the forefront of made-for-AI graphics chips — contract with TSMC to make their chips.
The government also sees its investment as a job-creator, with TSMC set to hire 20,000 people for construction and 6,000 for manufacturing, and $50 million of the grant will be set aside for job training programs.
The US sees chip infrastructure as a matter of huge national importance. “It’s a national security problem that we don’t manufacture any of the world’s most sophisticated chips in the United States,” Commerce Secretary Gina Raimondotold reporters. “Now, because of this announcement, these chips will be made in the United States."
TSMC remains at the heart of Taiwan's “Silicon Shield,” the protection that semiconductor dominance provides the island nation by giving the United States good reason to protect it from Chinese attack. Could shifting more of TSMC’s production to Arizona eliminate that incentive?
That's unlikely, says Xiaomeng Lu, a director of Eurasia Group’s geo-technology practice. "TSMC will always keep their most advanced capacity in Taiwan, and their pledge of making 2nm chips is not legally binding," she says. So while "it may run the risk of thinning the silicon shield if fully materialized, weakening it is less likely."
US-China relationship at its most stable in years as Yellen visits
Ian Bremmer's Quick Take: A Quick Take to kick off your week. Want to talk about the most important geopolitical relationship in the world, the US and China. Janet Yellen, the secretary of treasury, back over to China yet again, both to help ensure that the relationship is reasonably stable, also to deliver tough messages in places where she feels like that is required, the Biden administration feels it's required. And it's been a useful trip.
On the one hand, the United States, like the Europeans, delivering tough messages on Chinese dumping, on overproduction and low-cost goods going into the American and European markets, because of massive state subsidy, into key sectors. Particular concern on transition energy. On the one hand, great to see more effort to reduce carbon emissions, both in China and globally, and as the prices come down, that's a good thing. On the other hand, really hurting less competitive corporates that don't have that level of state subsidy in the United States and Europe. Tesla was really fast out of the box, hasn't got much support from the White House, but that's been the American champion to the extent that there is one. On the other hand, when you talk about other corporations, American and European, nowhere close to the Chinese. The hundreds of Chinese EV companies that are less expensive, they are higher quality, they are manufacturing at scale, and people can buy them all over the world. So, that is creating a lot of friction.
On the one hand, Americans and Europeans that are saying, “We want to move towards net-zero faster.” On the other hand, if the Chinese government is leaning into that and US and European jobs are at stake, and production is at stake, then they don't feel so comfortable with it. So, that's the primary area of tension between Yellen and her counterparts in China. Having said all of that, the meetings have been open, they've been pretty frank, they've been reasonably friendly, certainly not hostile, and Chinese state media and state influence media has been both very detailed and very fair in their coverage of Yellen, as they have been every high level meeting the Americans have had with the Chinese for months now. And that clearly has been a shift from the top in China, saying, “We don't want you to be picking on the Americans. We want you to show that this is a relationship that is treated with respect, and we want you to cover it reasonably accurately.” That's a big plus.
You know, you go to Russia, you go to Iran, you read their media and I try to follow their media pretty closely, it is overwhelmingly anti-US, anti-Western, strongly propaganda in orientation. That used to be more the case in China. It is not today. In fact, in many ways, I would argue, presently, US media covering US officials, certainly much more hostile, towards China, than the Chinese are towards the United States right now. That's very unusual in this relationship. And in large part it's because the Chinese economy continues to underperform and they're trying to get more American, more Western investment in, they're trying to have less pressure for capital flight out.
There are plenty of other areas where there are big tensions. In particular, we see that with semiconductors, with TSMC now getting, speaking of industrial policy, billions and billions in American government loans, as well as direct grants, subsidies, to expand production in the United States, which TSMC is now planning on doing. The Americans want 20% of semiconductor production globally in the United States by 2030. It is plausible that they get there. A big fact is at TSMC, the world's leading producer of semiconductors, now saying they are going to put their highest end production in part in the United States. That's a big win for the Americans.
It also, over time, makes Taiwan less critically important. That's also true for mainland China, as the Chinese will have to build their own. Finally, when you talk about Taiwan, you talk about the upcoming, in a month, inauguration and an incoming Chinese, Taiwanese president, who is has no engagement with mainland China as former President Ma is meeting with XI Jinping this week. Those things are not connected. They are very far apart. So former president of Taiwan, that China says, “We can work with that guy, we can't work with the incoming guy,” potential for greater tensions going up.
Also, especially around the South China Sea, in the Philippines, their president coming to the United States this week, He’s going to meet with Biden in addition to Japanese PM Kishida and it's going to be more coordinated and deepening defense relations as the Chinese are pushing the Philippines pretty hard in contested waters that the international legal community has ruled on in favor of the Philippines and the Western position. The Chinese say, “Sorry, we don't accept that outcome.”
So, plenty of areas where there is fighting, plenty of areas with this tension, but lots of communication at the high level and generally speaking, and Yellen said this, but I completely agree, the relationship is more stable than we've seen it, certainly in the first three years of the Biden administration and the four proceeding of Donald Trump.
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FILE PHOTO: Chinese President Xi Jinping waves as he walks with U.S. President Joe Biden at Filoli estate on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit, in Woodside, California, U.S., November 15, 2023.
Biden and Xi catch up
US President Joe Biden and Chinese President Xi Jinping spoke for nearly two hours on Tuesday, in a wide-ranging conversation meant, as one senior official put it, to serve as a “check-in.” Both men agreed to periodic phone calls when they met last year in San Francisco in a bid to boost dialogue and stabilize relations.
So far, Washington and Beijing have avoided any major flare-up, but Biden and Xi had no shortage of risks and gripes to discuss. Biden emphasized his commitment to the status quo over Taiwan and urged Xi to respect freedom of navigation in the South China Sea, where Chinese and Filipino vessels have had tense confrontations recently. He also expressed concern about China’s support for Russia’s military-industrial base. Xi, meanwhile, criticized “endless” US sanctions on the tech sector in an attempt to restrict Chinese access to militarily sensitive gear.
It wasn’t all complaints. The two leaders discussed recent progress on military-to-military communications, fentanyl trafficking, climate policy, and artificial intelligence, among other items. Cooperation on those less sensitive issues helps ease pressure on more intractable ones.
What’s next? The call comes just ahead of US Treasury Secretary Janet Yellen’s expected visit to China. Given Xi’s complaints today, she might be in for a less-than-relaxing trip, as she’s expected to press Beijing harder on “unfair” trade practices.
Secretary of State Antony Blinken and Defense Secretary Lloyd Austin will also travel to China in the coming weeks. And we have our eye on the inauguration of Taiwanese President William Lai next month, when a vigorous Chinese display of strength could test relations with Washington, which would face pressure to back up Taipei.Halime Adam Moussa, a Sudanese refugee who is seeking refuge in Chad for a second time, waits with other refugees to receive a food portion from an international aid agency near the border between Sudan and Chad in Koufroun, Chad, May 9, 2023.
Hard Numbers: Children starving in Sudan, Israel’s credit downgraded, Two tales of Chinese balloons, Chiefs win Super Bowl, Senate advances aid bill
2: Moody’s bond rating agency on Friday announced a first-ever downgrade of Israel's credit rating from A1 to A2, due to the negative economic impacts of the Gaza war and the potential conflict with Hezbollah. Israeli Finance Minister Bezalel Smotrich dismissed it as “a political manifesto,” but if other major agencies follow suit, it would make it harder for Israel to sell bonds, impacting its war effort and post-war recovery.
700,000: UNICEF reports that 700,000 children in Sudan face malnutrition due to the 10-month conflict that has ravaged the country, with tens of thousands at risk of death from lack of food, mass displacement, and disease. The agency is calling for $840 million in assistance and lamented the fact previous requests for aid have not been met.
8: Taiwan's defense ministry reported that eight Chinese balloons crossed the Taiwan Strait Friday and five sailed over the island on Saturday. China has previously claimed such balloons were for “meteorological purposes,”, not surveillance, but Taipei accuses them of being a threat to aviation safety and a form of “psychological warfare.” China’s balloon activity has increased since the election of pro-independence President Lai Ching-Te.
38,000: In more high-flying news, a Hong Kong mall's dragon sculpture, crafted from a hoard of 38,000 balloons, roared into the Guinness Book of World Records just in time for this year’s Chinese New Year celebrations. The 137.04-feet-long masterpiece was assembled by balloon artists Sze Tai "Wilson" Pang and Kun Lung Ho and over 60 volunteers.
3: The Kansas City Chiefs won their third Super Bowl in five years on Sunday night, defeating the San Francisco 49ers 25-22. It was a nail-biter of a game – and just the second Super Bowl in history to go into overtime. Quarterback Patrick Mahomes threw the game-winning touchdown pass to receiver Mecole Hardman after the 49ers gained a short-lived lead off of a field goal.
18: The Democratic-controlled Senate on Sunday moved closer to passing a $95.3 billion foreign aid bill that includes assistance for Ukraine, Israel, and Taiwan – voting 67-27 to clear a procedural hurdle and advance the legislation. Eighteen Senate Republicans voted to advance the bill despite vocal opposition from Donald Trump, who recently helped tank a bipartisan bill that lumped foreign aid and border security together. Though the foreign aid bill could pass in the Senate within days, it faces an uphill battle in the Republican-controlled House.FILE PHOTO: Donald Trump dancing during the campaign rally for the Republican primary for the 2024 American presidential election. Manchester (NH), USA, January 20, 2024.
For China, Russia, and Israel, patience is a virtue in 2024
In January, Taiwan elected pro-independence candidate William Lai and, despite warnings, China’s response has been restrained, possibly influenced by Beijing’s belief that the leading US presidential candidate may treat Taiwan like a “discarded chess piece.”
That’s what Chinese Taiwan Affairs Office spokesperson Chen Binhua said would happen if Donald Trump won the US election in November after the former president refused to say whether he would defend Taiwan. His comments shook US ally Japan strongly enough that senior Kishida administration officials are reportedly contacting Trump’s camp to warn against cutting any kind of deal with China.
The view from China: The prospect of a friendlier – or at least more transactional – US administration might be good news for cross-strait relations in the short term. There's no point in rocking the boat in a way that might hurt either Trump’s prospects or what trust Beijing has built with the Biden administration over the last year (Joe Biden, after all, could win too).
Beijing isn’t alone in recognizing that a little patience could pay big dividends after November. In an interview with the Wall Street Journal on Sunday, Israeli far-right leader Itamar Ben-Gvir said Israel would have carte blanche under Trump 2.0.
“Instead of giving us his full backing, Biden is busy with humanitarian aid and fuel, which goes to Hamas,” he said. “If Trump [were] in power, the US conduct would be completely different.”
The view from the Kremlin is just as rosy. Former US Ambassador to Russia Michael McFaul has been arguing for months that Vladimir Putin is waiting for Trump to be re-elected to sue for peace in Ukraine because of how destabilizing another dose of Trump will be to NATO. Former US Ambassador to NATO Ivo Daaldermade a similar argument last week. And Trump did tell European Commission President Ursula von der Leyen, “By the way, NATO is dead, and we will leave, we will quit NATO” in 2020.
GZERO also has its eye on North Korean leader Kim Jong Un. He and Trump left it in a bad place after their whirlwind romance in 2018 … but who knows what another love letter might spark?