The U.S. and European Union pledged Wednesday to deepen its alliance for the sake of advancing common priorities like artificial intelligence, trade challenges and the “underpin” to global economies: semiconductors.

“Semiconductors are the material basis for integrated circuits that are essential to modern-day life and underpin our economies,” U.S.-EU Trade and Technology Council said in a joint statement. “As such, semiconductors power virtually every sector of the economy, including energy, healthcare, agriculture, consumer electronics, manufacturing, defense, and transportation.”

The council said the coronavirus pandemic highlighted the need to increase stable and reliable supply chains for the production of semiconductors.

CHINESE SWITCH TO FLASHLIGHTS, GENERATORS AMID POWER CUTS 

Chip shortages began under the Trump administration, when supply chains were affected by the trade war with China. But chip shortages were further exacerbated by an increased demand for electronics on everything from laptops to at-home health care during the pandemic.

“We recognize that the semiconductor supply chain, from raw materials, design and manufacturing to assembly, testing and incorporation into end products, is extremely complex and geographically dispersed,” the council said. “The United States and European Union have some important respective strengths as well as ongoing, significant mutual dependencies, and common external dependencies.”

Secretary of State Antony Blinken and Secretary of Commerce Gina Raimondo traveled to Pittsburgh to meet with European Commission Executive Vice Presidents Valdis Dombrovskis and Margrethe Vestager to bolster ties, as relations between the U.S. and Europe have become strained.

EU Internal Market Commissioner Thierry Breton warned last week that there is a growing sense that the U.S.-trans Atlantic relationship is “broken” and suggested it was time to “pause and reset” the partnership.

Breton’s comments came after France was sidelined in a U.S.-U.K. deal with Australia that effectively voided an existing submarine contract with the EU nation.

The commissioner was not present for Wednesday’s council meeting in Pittsburgh, but his social media suggested Breton was working to extend the EU’s reach into the global chip market.

On Wednesday Breton announced on Twitter he was in Japan facilitating an EU-Japan “cooperation” and preparing the “ground for our upcoming EU Chip Act.”

The U.S. similarly has looked to strengthen this alliance with Japan and bolster semiconductor production.

The joint U.S.-EU interest in Japan could signal an increased push to distance themselves from China.

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The council pledged to “stand together” against “unfair behavior of state-owned enterprises,” though the statement did not directly identify China.

“We intend to focus on reducing existing strategic dependencies throughout the supply chain, especially through a diversification of the supply chain and increased investment,” the council said, adding they will “work jointly so that any investment made on our territories is done in full respect of our respective security of supply.”

Source: https://www.foxbusiness.com/politics/us-eu-alliance-global-economies-semiconductors

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For Europe, it is reasonable to regard it as a new beginning for the trans-Atlantic relationship. However, after intensive interactions in Britain’s coastal county Cornwall and Brussels, European officials probably found that Trump’s influence is hard to be wiped out, and their relations are difficult to get back where they were.

The rifts and mistrust between the trans-Atlantic partners concerning a series of issues, from trade to regional and global affairs, still remain hard to fix in a long time.

Trade tensions continue to cast a shadow on their ties. Over four months since Biden took office, Washington has yet to abolish the aluminum and steel tariffs the former government slapped on Europe in the name of  “national security,” as upholders of the trade barrier are still politically lucrative for Biden.

The long-standing battle between their aircraft manufacturing giants Airbus and Boeing over government subsidies was temporarily concluded with only a five-year truce, and many experts in the industry sighed because the vague terms will lead the two sides to cross swords again.

It is not difficult to understand Europe was somehow disappointed as they had expected Biden would end the trade war swiftly, but it now turns out to be yet another thorny issue.

From the Group of Seven Summit to the EU-US Summit, Biden has tried to mend Washington’s relations with its European allies, and persuade them to forge a united front to compete with China and Russia. But some European countries, with concerns over their own interests, are less interested in joining the US-led alliance.

Just as Friedrich Merz, a politician of Germany’s Christian Democratic Union party, has warned, Biden’s policies would not deviate too much from Trump’s. A sober approach for Europe might be to pick up the catchphrase “strategic autonomy” again, especially after Biden’s victory.

The recent published Munich Security Report noted Europe must rethink and adjust its strategic and security reliance on the United States, as Washington has shifted its focus eastwards, and it needs to tackle some problems without the safe refuge of its old-time ally.

In other words, siding with the United States might not help, particularly in a time when solving problems need global actors beyond the West.

Sadly, many European politicians and media have been dwelling on the past and are keen on confrontation with China and Russia, following US Cold-War mentality.

In his new book titled “The Hypocritical Superpower,” Michael Lueders, a well-known German writer, reveals why European voices are prone to promote a trans-Atlantic alliance rather than a pragmatic attitude with China and Russia.

The Western media reports are somehow filtered by interest groups in the United States and used a certain framing that it is between “we western allies the good guys” against China and Russia “the evil ones,” Lueders explained.

“Under Joe Biden many things will change, but ‘America First’ will still continue,” Lueders wrote at the end of his book, and that is why Europe should step outside of the shadow of Washington. — Xinhua.

Source: https://www.herald.co.zw/why-europe-should-step-outside-shadow-of-us/

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But hold on. It is not going according to plan. There are already reports that the White House is growing increasingly frustrated with the EU. And in truth, that rift is only going to get wider and wider in the months to come.

And yet, that is just for starters. It is going to get a lot more tense from here on. There are three reasons for that. First, an increasingly mercantilist EU led by Germany is determined to put its own economic interests first. In practice, that will mean doing as much business with China and Russia as possible, despite American objections. The EU talks a lot about how it wants to craft a foreign policy, but it doesn’t seem to have much of an idea what that might consist of, apart from exporting as much of everything as it possibly can to try and keep its economy alive.

Next, the EU is turning increasingly protectionist, with an emphasis on national champions. It has embarked on a crusade against the most successful part of the American economy, the technology giants, with a series of fines, threats, and restrictions designed to curb their profits. It remains determined to promote the continent’s aerospace industry, even if that means hitting Boeing. And now with Tesla riding high, it is doing everything it can to make sure Europe’s auto giants can claw back the market for electric cars. It is hard to see how the Biden administration can do anything other than fight back.

Finally, President Biden’s big idea is for a green energy plan to dominate renewable and clean power. It is the centerpiece of his programme. But the EU is embarked on precisely the same agenda, with the bulk of its €750 billion (£650 billion) Coronavirus Rescue Fund aimed at exactly the same objective. You can’t have two global leaders in green energy. In reality, the conflict to dominate that industry will end up splitting the two sides even further.

President Biden may feel politically close to the likes of Angela Merkel and Emmanuel Macron. But as the EU just keeps throwing him problem after problem, the rift is just going to keep on growing.

Matthew Lynn: Matthew Lynn is a financial columnist and author of ‘Bust: Greece, The Euro and The Sovereign Debt Crisis’ and ‘The Long Depression: The Slump of 2008 to 2031’

Source: https://www.spectator.co.uk/article/biden-s-rift-with-brussels-is-only-set-to-grow

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The tariffs are yet another chapter in a 16-year spat over subsidies for aircraft manufacturers Airbus SE and Boeing Co that turned increasingly sour under US President Donald Trump.

French exporters were hit with hiked tariffs on wine and cognac while Germany saw new levies on aeronautic parts.

“The Commission takes note of today’s entry into force of US tariffs arising from the WTO Airbus case on aircraft subsidies. As we have made clear before, we regret that the US chose to add further EU products to its retaliation list,” a statement said.

The EU is “looking forward to engaging constructively with the new US administration to resolve this long-lasting dispute as part of a renewed transatlantic agenda”, it added.

French wine and spirits exporters believe the new tariffs will cost the sector EUR1 billion in sales, with the cognac business especially punished.

In its last days in office, the Trump administration is blowing hot and cold on trade issues with the Europeans.

Washington last week suspended a plan to impose new tariffs on USD1.3 billion in French products in a dispute over a digital services tax.

source: AFP

Source: https://www.lse.co.uk/news/eu-regrets-us-tariffs-on-french-and-german-products-looks-to-biden-g9cd928u5jej529.html

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The European Union will propose to the United States that it take advantage of an opportunity that appears “once in a generation” and to conclude a new global alliance. The detailed project seeks to bury the tensions of the Trump era and respond to the “strategic challenge” represented by China, reports the Financial Times.

The EU project to revitalize the transatlantic partnership obtained by the Financial Times provides for new cooperation in all areas, from regulating the digital sector and combating the COVID-19 pandemic to combating deforestation.

The proposal, prepared by the European Commission, states that the EU-U.S. partnership needs “maintenance and renewal” for the democratic world to assert its interests in the face of “authoritarian powers” and “closed economies that exploit the openness on which our societies depend.”

The 11-page set of proposals, entitled “A New EU-US Agenda for Global Change,” includes a call for the EU and U.S. to bury persistent sources of transatlantic tension, such as Europe’s calls to tax U.S. technology giants.

The project proposes that the European Union and the United States join forces to shape the regulation of the digital sector, including common approaches to antitrust and data protection, cooperate in examining sensitive foreign investments, and work together to combat threats such as cyberattacks and hackers. Other parts of the proposal call for cooperation in the development and distribution of vaccines for COVID-19 and collaboration for the reform of the World Health Organization.

The plan reflects Brussels’ optimism and relief about the prospect of working with the new U.S. administration, but it also expresses the concern that years of poor transatlantic relations have allowed Beijing to take over geopolitical initiatives.

The document supports the idea of ​​U.S. President-elect Joe Biden organizing a summit for democracies around the world and states that the new transatlantic agenda should be “the basis of a new global alliance of partners who share the same idea.”

The project, co-authored by the European Commission and the EU’s high representative for foreign policy, is expected to be submitted to national leaders for approval at a December 10-11 summit, and, if approved, would be followed by an EU-U.S. summit in the first half of 2021.

Source: https://rmx.news/article/article/eu-proposes-new-alliance-to-the-u-s-to-handle-china-challenge

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German Foreign Minister Heiko Maas on Wednesday called on both China and India to deescalate tensions and peacefully resolve their Himalayan border dispute. “These are two large countries and I don’t want to begin to think about the conflict that could happen if this results in a real military escalation,” Maas told DW. “That’s why we are trying at all levels on both sides to bring about de-escalation.”

Maas said Germany was unlikely to directly involve itself, but added that it was using its influence to dissuade a military clash.

“I don’t think that Germany needs to get involved everywhere as a mediator. But we are sitting on the UN Security Council and we will take on the presidency in July,” he said. “I believe the expectation in the international community is that countries like India and China should not get embroiled in a conflict that would not only affect those two nations, but also the entire region.

“And that’s why we are doing what we can to influence both sides with the clear message to deescalate this conflict and avoid a further escalation, especially a military one.”

Read more: How Chinese and Indian media reacted to border clashes

Over the past few weeks, Chinese and Indian troops have been locked in aggressive posturing at multiple locations along the two nations’ de facto border, known as Line of Actual Control (LAC), raising tensions between the two nuclear-armed neighbors.

While a skirmish this week left 20 Indian soldiers dead, China has refused to confirm if it suffered any casualties. The incident, the first deadly clash at the border in decades, dominated Indian news channels and inflamed social media in both countries.

On EU presidency

Germany is due to take over the rotating presidency of the European Council from July 2020. When asked about Germany’s plans for the EU, Maas said Berlin wanted to make sure that member states severely hit by the coronavirus pandemic were “helped to recover quickly.”

“A large export nation like Germany profits when people prosper in Europe. That’s why we want to make sure the countries that have been hit hard by the coronavirus, like Italy and Spain, will be helped to recover quickly from the crisis,” the minister said, adding: “That’s not only good for those countries and Europe. It’s also good for Germany.”

During its presidency in the second half of the year, Germany would also seek to rein in conflicts “between north and south” in the 27-nation bloc, Maas said. “We want to find a solution to that. We’ve made a proposal with France, and I believe it will be the basis for consensus within the European Union.”

When asked about the intra-EU disagreements between “east and west,” Maas said countries in Central and Eastern Europe such as Poland and Baltic nations, had “different political and security concerns” compared to Western Europe. “So yes, Germany can be a bridge in Europe between east and west,” said Maas in support of a strategy to dispel “any impression that they’re second-class members.”

Regarding two EU rule-of-law proceedings against Hungary and Poland, Maas said these would be on the six-month German presidency agenda. “The rule of law is one of our core values and must not become a point of contention in the European Union,” he asserted.

Trans-Atlantic ties ‘complicated’

Maas also touched on the subject of NATO and the state of trans-Atlantic ties. US President Donald Trump on Monday announced a major reduction in American troop strength in Germany, from around 34,500 personnel down to 25,000.

Germany, Trump said, is not meeting its commitment to spend 2% of its Gross Domestic Product (GDP) on defense as required by the NATO alliance. Member nations had pledged to reach the 2% threshold by 2024. Germany has said it hopes to reach the target by 2031.

Trump has long complained that host nations have not been paying their fair share for the US troops and has repeatedly singled out Germany as a major offender. Until Berlin meets the spending target, he said, the US will reduce its deployment in the country.

Read more: US military in Germany: What you need to know

Trump’s move to reduce US troop numbers in Germany would not leave Europe managing on its own, Maas said. He stressed that Europeans and Americans are united by shared values, namely liberal democracy and freedom, “even if relations are complicated at the moment.”

It was in the United States’ interest to remain closely tied to Europe in terms of foreign and security policy, Maas said, but conceded that “maybe the US will not be the protective shield that it once was for Europe.”

“That will lead to us having to do more for our own security,” he underlined, adding that Europe was “having that discussion” but not to the extent of uncoupling security. “I don’t want Europe to become militarily independent. I want us to realize our security interests as an ally in NATO — with the United States,” Maas said.

“We’ve already taken on a lot of responsibilities, in Africa, for example, both Europe and Germany and France,” he said, referring to Sahel nations such as Mali. Germany was also playing a role in the “intra-Afghan peace process,” said Maas. “It’s always about security, but also diplomacy… because in the end, wars need peace treaties and they need political and not military solutions,” he stressed.

Source: https://www.dw.com/en/germanys-maas-urges-india-china-to-deescalate-border-tensions/a-53852433

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The worldwide scare over the spread of the coronavirus continues to prompt concern if not panic.  China publicly admits they may have as many as 10,000 cases of the deadly sickness.  But they’ve quarantined whole cities, recommended people stay home.  News is that they’ve closed factories and stores and that some cities are like a ghost town where the streets are empty.

Some are skeptical of China’s numbers.  A London medical expert has said that there may actually be as many as 100,000 cases in China and around the world.

The World Health Organization weighed in, weeks after the first realization that there was a new mutant virus on the move, declaring an “emergency.”  It’s been discovered that the virus has a 14 day incubation period and that it can be passed from one person to another even before the infected party knows they’re sick.  Hospitals in China are worrying over a shortage of test kits.  But the doctor in Wuhan (who hasn’t been home in over a week, for fear that he might infect his own family) says that early tests may turn up negative, even though the virus is present and maybe positively identified by subsequent testing.

While travel to and from China is being curtailed by the United States and many other nations, Australia continues to allow flights from China carrying hundreds of passengers at a time.  Additionally, as many as 200,000 Chinese students are scheduled to return to their studies in Australia after having visited home during an annual break.  At present, it appears Australia will continue to allow flights and thousands of people to arrive from China.

The U. S. stock market dropped precipitously today (600 points) and is said to be “spooked” by speculation about how this sickness might play out economically.  Certainly, trade and tourism are already being affected.  It remains to be seen how long the epidemic will persist, or what the long-term economic impact will be.

Today, January 31^st is the day that Britain is officially free from the European Union.  Despite the fact that there will be a ceremonial recognition of that fact, the remainder of 2020 is to be treated as a transition period with many details on immigration, trade and a myriad of other concerns yet to be ironed out.  Other members of the EU are looking on and wondering whether they too may want to divest themselves of membership.  We may well be witnessing the beginning of a trend that will ultimately cripple an organization primarily dependent on the German economy.

Another wrinkle may turn out to be the fact that President Trump has signaled that he’s about to turn his attention to Europe in regard to trade policy.

While America’s legislative bodies have been preoccupied and paralyzed with the impeachment charade, President Trump has been running up the scoreboard with accomplishments.  While Senators dealt with various legal arguments that consumed the entire week, the President was signing the USMCA trade agreement.  He hosted Prime Minister Netanyahu at the White House and unveiled a new proposal for Middle East peace, backed by several Arab nations traditionally on the side of the Palestinians.

He also held two sold-out (many time over) rallies, one in New Jersey, and the other in Des Moines, Iowa.  The happy, energetic enthusiasm on display among his supporters is a far cry from what we see on the network television panels.  They’re not happy, and that’s apparent even with the sound on mute.  It seems they’ve all had their dogs run over this week, or at least that’s their demeanor.  For all our sakes we hope that the Senate will see fit to wrap up the ugly spectacle.  But that would mean a lot of long faces on network outlets.  Better theirs than ours.  Have a great Sabbath!

Mark

Source: http://www.intercontinentalcog.org/fridayupdates.php

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