HOW U.S.-MADE AMMUNITION ENDS UP IN RUSSIAN RIFLES: A POLITICO investigation has found that Russian companies have declared hundreds of thousands of rounds of ammunition obtained from Western suppliers in an apparent evasion of export controls that Washington and Brussels have imposed to strangle Vladimir Putin’s war in Ukraine. Filings obtained by POLITICO indicate that Russian firms Promtekhnologiya and Tetis have acquired hundreds of thousands of rounds made by Hornady, a company in Grand Island, Neb., that trademarks its wares as “Accurate. Deadly. Dependable.” CEO Steve Hornady denied selling ammunition to Russia in wartime when contacted by POLITICO. The findings add to a growing body of evidence that supplies of lethal and nonlethal military equipment are still reaching Russia despite the West’s imposition of unprecedented sanctions in response to Russia’s invasion of Ukraine last year. The exigencies of war have exposed Russia’s lack of capacity to manufacture high-end sniper rounds, say defense experts, and that is fueling a flourishing black market for Western ammunition. Information on the procurement of such gear is hiding in plain sight: Details of deals — importers, suppliers and product descriptions — can be found online by anyone with access to the Russian internet and a grasp of international customs classification codes. Read the full report for more on what POLITICO uncovered. BIDEN RAMPS UP MEXICAN LABOR COMPLAINTS: The Biden administration is taking aim at alleged workers’ rights violations in Mexico with increasing frequency. U.S. officials have initiated six labor complaints against facilities in Mexico over the past six months, including four in just the past four weeks, using the rapid response mechanism in the U.S.-Mexico-Canada Agreement. That’s a significant uptick compared to the five complaints officials filed throughout 2021 and 2022. The most recent complaint, announced on Friday, targets a mine in the Mexican city of Zacatecas that stands accused of replacing striking workers and otherwise violating the terms of a collective bargaining agreement. Mexico now has 10 days to decide whether to review and another 45 to conduct the investigation. The bigger picture: The increase comes as senior administration officials are seeking to persuade key political constituencies and foreign partners that Biden’s new worker-centered trade policy can boost the economic interests of workers in the U.S. and abroad. U.S. Trade Representative Katherine Tai and national security adviser Jake Sullivan have specifically touted the rapid response mechanism in the USMCA, which was negotiated and signed under former President Donald Trump, as a prime example of how the Biden administration is using trade to uplift workers. Tai said in a speech Thursday that the administration has been “securing wins for workers at several facilities” in Mexico, including new collective bargaining agreements and safer working conditions. “This is not just about Mexican workers,” she said. “It helps American workers, too, because raising labor standards reduces the incentive to ship jobs overseas by removing the artificial advantages created through exploitation and abuse.” In his own policy speech in late April, Sullivan said the administration “is developing a new global labor strategy that advances workers rights through diplomacy and we will be unveiling the strategy in the weeks ahead.” Sullivan added the new strategy will “build on tools like the rapid response labor mechanism in USMCA.” Popular with unions: The rapid response mechanism was essential to the USMCA winning the support of labor unions and most of the U.S. complaints to date were first brought to the Biden administration’s attention by labor organizers. Friday’s complaint against the Zacatecas mine, for instance, was raised by the AFL-CIO and United Steelworkers in coordination with a Mexican labor union known as Los Mineros. “Workers in Mexico are seeing the RRM as an important tool to address worker rights violations in their workplaces,” said Cathy Feingold, the director of AFL-CIO’s international department. Of course, remaining popular with union voters is a centerpiece of Biden’s reelection strategy — and so far he is maintaining their support. Also on Friday, the general board of the AFL-CIO, which represents 60 unions and more than 12.5 million workers, voted to endorse Biden for 2024. BLINKEN’S ECONOMIC MESSAGE TO BEIJING: Secretary of State Antony Blinken culminated his long-awaited visit to Beijing on Monday with a meeting with Chinese President Xi Jinping. Among Blinken’s priorities: communicating to Chinese officials that the U.S. doesn’t want to break up or shut them out economically. “One of the important things for me to do on this trip was to disabuse our Chinese hosts of the notion that we are seeking to economically contain them. We’re not,” Blinken told reporters at the end of the trip. Blinken told Chinese officials — he also met with Beijing’s top diplomat, Wang Yi, and Foreign Minister Qin Gang — that the Biden administration’s economic approach to Beijing focuses on “de-risking and diversifying” in critical sectors. The U.S. is also “pushing for level playing fields for our workers and our companies” and “defending against harmful trade practice,” he said. The U.S. aim to “de-risk, not decouple” — a phrase he acknowledged was borrowed from European Commission President Ursula von der Leyen — will also mean continuing to cut off China’s access to American technology that could further its development of nuclear weapons, hypersonic missiles or repressive technologies. But none of those efforts, Blinken contends, are meant to stifle China’s growth. “We also benefit tremendously when there is growth and progress in other countries – especially of one of the world’s largest economies, when it comes to China. So, it simply would not be in our interest to seek to decouple,” he said. No big breakthroughs: Blinken told reporters that his meetings with senior Chinese Community Party officials did not yield any major breakthroughs on the issues that have divided Washington and Beijing, but added that he did not expect those to be resolved during a single visit. “My hope and expectation is we will have better communications, better engagement going forward,” Blinken told reporters. “That’s certainly not going to solve every problem between us — far from it. But it is critical to doing what we both agree is necessary. And that is responsibly managing the relationship.” PUSHBACK ON BIDEN’S EV TAX CREDIT RULES: A coalition of advocacy groups is criticizing the Biden administration’s guidance on electric vehicle tax credits as “vague and inadequate,” suggesting the language as written will allow countries that mine critical minerals “under dirty and dangerous conditions” to access perks in the Inflation Reduction Act. “If we want to achieve a clean energy transition that is both just and equitable, it is critical that, in the process of sourcing those minerals, we do not contribute to worker exploitation and environmental degradation in the communities where these minerals are located,” the groups told the Treasury Department and Internal Revenue Service. The comments are backed by Public Citizen, United Auto Workers and Sierra Club, among others, and come as the Biden administration seeks public feedback on its plans for implementing the Inflation Reduction Act, Democrats’ signature climate legislation passed last year. The law makes tax credits available for electric vehicle batteries made with critical minerals either harvested or processed in the U.S. or in countries that have a “free trade agreement” with the U.S. The Treasury Department subsequently decided it will determine which agreements qualify as a free trade agreement for the purposes of the law, opening the tax credits up to a broader range of trading partners as the Biden administration brokers new critical minerals pacts with Japan, the EU and U.K., among others. The groups take specific aim at the critical minerals agreement that the U.S. and Japan signed earlier this year. In their comments, they write that the pact was negotiated without transparency or public input, and that the resulting agreement contains commitments on labor rights and environmental protections that are “not binding or enforceable.” In other comments: The Japanese Automobile Manufacturers Association is predictably pleased with the critical minerals pact that helps Japanese automobiles gain greater access to the tax credits. But the industry group criticized separate requirements in the Inflation Reduction Act requiring vehicles to be assembled in North America in order to qualify for the full suite of tax benefits. In their own comments, the automakers write that the assembly requirement limits customers’ choices and thus “reduces the [tax] credit’s effectiveness in increasing the rate of consumer adoption of clean vehicles.” They also argue that the timeline for implementing the tax credits is too fast for companies to bring new manufacturing facilities online.
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