US-China Trade: The Next Episode

US-China Trade: The Next Episode

Today US Treasury Secretary Steven Mnuchin and trade representative Robert Lighthizer were in Shanghai to meet with China's top trade negotiators. This week's meetings, which began on Tuesday, mark the first time the two sides in the world's most important trade dispute have met in person since the last round of talks broke down in May.

What's at stake: The US and China are trying to reach an agreement that would reduce or eliminate tit-for-tat tariffs they have imposed on roughly $360 billion of each other's goods, from Shenzhen electronics to California wine. The costs of those tariffs are being borne by businesses and consumers (i.e. you). Bigger picture, the US is using this fight to try to get China to agree to new ground rules for economic competition in the 21st century – particularly in the tech sector, an industry that both China and the US see as vital to their future economic and national security.

What's changed since May: China's economic growth has slowed to its weakest rate in almost 30 years, but that's only partly due to US tariffs. Donald Trump is three months closer to the November 2020 election, and he's itching to make a deal that will ease financial strain on US farmers, an important political constituency. Most importantly, the US has banned most US tech companies from selling equipment or software to Huawei, China's most important global technology company. The ban threatens Huawei's global business model, and China's willingness to meet US trade demands may now hinge on the Trump administration restoring Huawei's access to critical hardware and software.

What happens now: This week's meetings are just an opening bid to restart talks that flew off the rails after Chinese negotiators backtracked on several concessions in May. With the two sides still far apart on important issues, like opening China's cloud computing market to US technology giants and protecting intellectual property, and China hawks in Congress eager to tie President Trump's hands when it comes to a reprieve for Huawei, it's going to be a long slog to get to an agreement that President Trump and Xi Jinping can shake on. As Trump himself noted on Tuesday, at some point, China may decide it's better just to wait and see if there's a new occupant in the Oval Office after the 2020 US election who's more willing to strike a deal. lWe'll be watching the official statements out of Shanghai, and President Trump's Twitter feed, for signs of how talks are progressing.

"I think there are certain times where you have tectonic shifts and change always happens that way."

On the latest episode of 'That Made All the Difference,' Vincent Stanley, Director of Philosophy at Patagonia, shares his thoughts on the role we all have to play in bringing our communities and the environment back to health.

One of the biggest threats to 21st century international peace is invisible. It recognizes no borders and knows no rules. It can penetrate everything from the secrets of your government to the settings of your appliances. This is, of course, the threat of cyberattacks and cyberwarfare.

During the coronavirus pandemic, cyberattacks have surged, according to watchdogs. This isn't just Zoom-bombing or scams. It's also a wave of schemes, likely by national intelligence agencies, meant to steal information about the development and production of vaccines. Attacks on the World Health Organization soared five-fold early in the pandemic.

Why is the threat of cyberwarfare growing, and why isn't more being done to stop it?

Hacking is increasingly the business of nation-states. Not so long ago, hackers were mainly hooded freelancers sitting in their basements stealing credit card numbers. Now they are increasingly the employees of national intelligence services.

Why are countries investing more and more in the cyber game? For one thing, hacking is a cheap way to level the playing field with larger global rivals. For North Korea or Iran, you no longer need a powerful military in order to project power across the globe. You just need a laptop and a few good programmers. What's more, unlike missile launches or invasions, the targets can't always tell where a cyberattack has come from. Plausible deniability comes in handy, especially when attacking someone bigger than you.

Targets are getting fatter. As countries build out 5G networks, data flows will increase massively, as more than a billion more people move online over the next decade. The so-called "internet of things," the network in which everything from your watch to your (potentially self-driving) car to your refrigerator are being hooked up to the internet. (That said, huge gaps in internet access persist, as we wrote here.)

There are no rules. Conventional war has rules about whom you can and cannot attack, occupy, or imprison. They aren't always respected or enforced — but the cyber realm has very few rules, mainly because the world's major cyber powers don't want them. If you're Vladimir Putin, hacking has brought dividends that your flagging economy and mediocre military cannot. If you're the US, you're historically wary of any binding rules about the conduct of war. (If you're Gulliver, why tie yourself to the ground for the sake of Lilliput?) So, while various groups of countries have, under UN auspices, started to develop "norms" – they are not binding.

Unfortunately, it may take a catastrophe to create those rules. So far, the damage inflicted by hackers has mostly been economic. In 2017, the NotPetya virus, which targeted Ukraine, quickly spread around the globe, inflicting $10 billion worth of pain. It was, so far, the worst cyberattack in history.

But it's not hard to imagine a cyberattack on a hospital network, a power grid, or a dam that kills thousands of people and forces even more from their homes. How can those responsible be called to account? And what would it take to make future such attacks much less likely?

Will it take an event that inflicts that much human damage for governments and tech companies to sit down and hammer out cyber-rules of the road?

Malaysian political drama: Malaysia's (eternal) opposition leader Anwar Ibrahim says he finally has enough votes in parliament to be appointed prime minister, seven months after the coalition that was going to support him collapsed amid an internal revolt that also forced out 95-year-old Mahathir Mohamed as head of the government. Two years ago, Mahathir — who governed Malaysia from 1980 to 2003 — shocked the country by running in the 2018 election and defeating his former party UMNO, which had dominated Malaysian politics since independence in 1956. After winning, Mahathir agreed to hand over power to Anwar — a former protégé with whom he had a falling out in the late 1990s — but Mahathir's government didn't last long enough to do the swap. Will Anwar now realize his lifelong dream of becoming Malaysia's prime minister? Stay tuned for the next parliamentary session in November.

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Carl Bildt, former Prime Minister and Foreign Minister of Sweden, shares his perspective on Europe In 60 Seconds:


Why can't Europe agree on Belarus sanctions?


I think they can agree but the problem is that Cyprus has blocked. There's a veto right inside the European Union and they have blocked everything. I mean, everyone agrees, all of other Member States agrees that we should have had those sanctions in place. But the Cypriots have their own views. And then they are blackmailing, they are saying you have to sanction Turkey as well, at the same time. And most other states say there's no connection between the two. So, we do have somewhat of a constitutional crisis over foreign affairs inside the European Union. Distinctly not a good situation.

LIVE 11a - 12p ET TODAY: Will the global challenges of 2020 lead to more inclusive multilateralism in the future?

At 11a ET/8a PT/4p BST, our livestream panel, "Crisis Response & Recovery: Reimagining while Rebuilding," will discuss how government, companies, citizens and other organizations can partner to solve today's major crises.

Watch at: https://www.gzeromedia.com/unga/livestream

Governments can't tackle today's global challenges alone. Will 2020 be seen as a shaping moment for a more modern and inclusive multilateralism, or a retrenchment to "business as usual"?

Our panel includes:

  • Brad Smith, President, Microsoft
  • Ian Bremmer, President and Founder, Eurasia Group & GZERO Media
  • Jeh Johnson, Partner, Paul, Weiss, Rifkind, Wharton & Garrison, LLP and former Secretary of Homeland Security.
  • John Frank, Vice President, UN Affairs at Microsoft
  • Susan Glasser, staff writer and Washington columnist, The New Yorker (moderator)

Special appearances by António Guterres, Christine Lagarde, and Trevor Noah.

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