US-China: On the Verge of a Deal?

US-China: On the Verge of a Deal?

This week's negotiations between US and Chinese officials—and yesterday's White House meeting of President Donald Trump and China's Vice-Premier Liu He—have added to rising expectations that the two governments will soon sign a deal to end their trade conflict.

There seem to be two main sticking points holding up completion of the deal. One, China wants the Trump administration to immediately lift tariffs on Chinese-made products, while the Trump team wants to see China taking steps to demonstrate good faith before it relieves the pressure. Two, the two sides can't agree on a mechanism by which US officials can verify that China is keeping its new promises over time.

Raising the stakes, this conflict is creating headaches in dozens of other countries, and there are many interested observers who hope this impasse can be resolved as soon as possible. Malaysia's trade minister was speaking for many other governments when he urged the US and China to accept a "global responsibility" to resolve their differences and to "stop thinking only of themselves."

Three important reports issued this week detail the collateral damage the US-China trade war is inflicting on other economies.

The Asian Development Bank warned on Wednesday that the US-China conflict poses the biggest current risk to the economy of Asia as its chief economist sharply lowered the region's growth forecasts for this year and next. "Prolonged negotiations," he wrote, "is the biggest risk."

The International Monetary Fund reported on Wednesday that the creation in recent years of complex global supply chains leaves South Korea, Germany, Japan, Italy, the UK, and France especially vulnerable to an economic slowdown triggered by tariffs.

The World Trade Organization this week blamed the conflict for a sharp fall in global trade growth and downgraded trade forecasts for 2019 and 2020. It's "increasingly urgent that we resolve tensions," warned the WTO's director general. Weakening the rules-based trading system, he said, "would be an historic mistake with repercussions for jobs, growth and stability around the world."

The larger problem: Donald Trump and Xi Jinping will probably sign a deal, maybe later this month, but that agreement won't entirely end the uncertainty facing these other governments and the global economy. In part, that's because it's highly unlikely Beijing will accept an enforcement mechanism that creates lasting confidence in Washington that China will keep the promises it makes on paper. This trade war has further eroded the already limited trust between China and the United States.

The bottom line: The market-shaking, confidence-undermining threat of new tariffs will remain one Trump tweet away, and the US president will probably use that power to keep pressure on China and to beat back any criticism that he's made a bad deal.

And by the way: There are many problems more complicated and important than trade tariffs dividing the US and Chinese governments. In particular, competition over intellectual property and next-generation advances in technology will deepen mistrust between the US and Chinese governments. Both sides will claim that problem matters for national security as well as commerce. As with trade, these areas of US-China conflict will also create problems for everybody else.

Building on its previous commitment, Walmart is investing an additional $350 billion in products made, grown and assembled in America - supporting more than 750,000 new jobs by 2030. This pledge will aim to avoid more than 100M metric tons of CO2 emissions, advance the growth of U.S. based suppliers, and provide opportunities for more than 9,000 entrepreneurs to become Walmart suppliers and sellers through Walmart's annual Open Call.

"The people are stronger," pro-democracy demonstrators chanted as news broke that the Sudanese military had staged a coup Monday, overthrowing the joint civilian-military government and dashing hopes of democracy in the war-torn country.

The backstory. In 2019, Omar al-Bashir – a despot who ruled Sudan with an iron fist for 30 years – was deposed after a months-long popular uprising.

Al-Bashir was a bad guy: he cozied up to terrorists like Osama bin Laden and dropped barrel bombs on his own people. He also embezzled truckloads of money from oil production while millions of Sudanese went hungry, and oversaw a genocide in the Darfur region that left 300,000 people dead and displaced 1.6 million.

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500: Fuel shortages in conflict-ridden Haiti are putting many hospital patients at risk. If fuel isn't delivered ASAP, UNICEF says around 500 people – including children and COVID patients – are at very high risk of deterioration. Supplies and deliveries have been disrupted for weeks because of heightened gang activity in the country.

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Sort of, but governments haven't lost all control yet. On the one hand, The Atlantic CEO Nicholas Thompson says that governments can still push tech companies for transparency in their algorithms, while Microsoft has partnered with the US government to together fight hackers "so the company is seen as a champion for freedom and democracy." On the other, over time Thompson expects tech firms in the US and China to gradually become more powerful as the state becomes less powerful toward them. Watch his interview with Ian Bremmer on the latest episode of GZERO World.

Watch this episode of GZERO World with Ian Bremmer: Big Tech: Global sovereignty, unintended consequences

As COP26 nears, the need for real climate action has never been more urgent. There are reasons for hope, but many scientists believe the ambitious goal of net zero emissions by 2050 is unattainable without immediate and significant change. Governments, financial institutions, and private sector companies alike have all recognized the need for a multistakeholder approach to solving this crisis of a lifetime.

Watch "Climate Crisis: Is net zero really possible?" a one-hour virtual livestream, hosted by GZERO Media and Microsoft as part of the Global Stage series, to hear scientists, corporate leaders and policymakers debate this question and offer critical perspectives on the way forward. Live on Tuesday, November 2nd at 11am ET, we'll break down what "net zero" means, take stock of where the world is on the path to carbon neutrality, and discuss critical steps needed to make real progress.

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Ian Bremmer's Quick Take:

Hey everybody and happy Monday. Back in the office, getting a little cool. So I've got my sweater going on. It's the first time I've had a sweater on. What do you do with that? Discussing fashion, as I talk to you about what is on my mind this week?

And what's on my mind this week, Facebook. Facebook is on my mind. It's a tough week for Facebook. There are all sorts of whistleblowers out there. There's testimony going on. There's calls for regulation. Everybody seems unhappy with them. Indeed, you even got the government relations types, Nick Clegg, who I've known for a long time back when he was a policymaker in the UK saying that the headlines are going to be rough, but we're are going to get through it. But I will say, first of all, I'm kind of skeptical that any of this goes anywhere in terms of impact on how Facebook actually operates.

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Turkey's Erdogan ups the ante with the West: Turkey's President Recep Tayyip Erdogan has declared diplomats from 10 Western countries "persona non-grata" after the group — which includes the US, France, and Germany — called on Ankara to release Osman Kavala, a Parisian-born Turkish businessman who's been held in jail since 2017 but hasn't been charged with a crime. Erdogan says that Kavala was involved in an attempted coup against the government in 2016. This latest move is a sign of Turkey's authoritarian drift in recent years, which has seen Erdogan's government increasingly crack down on opposition members as well as journalists. It also reflects Turkey's increasingly fraught relations with the West: things got particularly bad between Washington and Ankara after Turkey purchased missile defense systems from the Russians in 2019. The Council of Europe (the continent's leading human rights organization) had previously warned that Ankara has until November to release Kavala or it would impose "infringements," though it's unclear what those would be.

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ASEAN gets tough(ish) with Myanmar: The leaders of the 10-member Association of Southeast Asian Nations meet Tuesday for their annual summit with one notable absence: the head of Myanmar's military junta. It's a rare snub from ASEAN, a regional bloc that's gotten a lot of heat in the past for giving tyrants a free pass. The junta says ASEAN violated its traditional principles of deciding by consensus by disinviting its leader, and non-interference in domestic affairs for demanding the bloc's special envoy meet detained former leader Aung San Suu Kyi. For their part, the other ASEAN members have grown visibly alarmed at Myanmar's rapidly deteriorating political and economic situation since the February coup, and they're worried about the spillover effects of Myanmar becoming a failed state. More importantly, Myanmar is a big thorn in ASEAN's side as it walks a fine line between keeping warm ties with the US — which most members want cash and security from — and getting along with China, one of Myanmar's few remaining friends and viewed with suspicion by most ASEAN members over its South China Sea shenanigans.

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