| | | | |  | | By Doug Palmer | | | — G7 leaders share a common view that China’s economic “policy distortions” are harming their democracies by undercutting investments in productive capacity, reducing supply chain resilience and threatening national security interests, a U.S. official said. — U.S. Trade Representative Katherine Tai discussed how to strengthen economic ties with Central Asian economies and expressed hope that Uzbekistan’s bid to join the World Trade Organization could soon cross the finish line. — Kevin Rudd, the Australian ambassador to the United States, said worrisome developments in the global nickel market are a sign of what could happen to other critical minerals needed for the green transition. It’s Monday, June 17. Welcome to Morning Trade. Today is a good day to consider whether you need an evaporative cooler, according to my 1974 Popular Science Homeowners Almanac. I’d never heard of them before, but apparently they are an option in low-humidity regions (although not too low) to keep your house reasonably cool. They don’t sound great for the D.C. area, where we like to “crank up the AC” when the temperature and humidity spikes. But if you have one, let me know how it works! Send your trade news to gbade@politico.com, ahawkins@politico.com, and dpalmer@politico.com. You can also follow us on X: @_AriHawkins, @GavinBade and @tradereporter.
| | | | JOIN US ON 6/26 FOR A TALK ON AMERICA’S SUPPLY CHAIN: From the energy grid to defense factories, America’s critical sites and services are a national priority. Keeping them up and running means staying ahead of the threat and protecting the supply chains that feed into them. POLITICO will convene U.S. leaders from agencies, Congress and the industry on June 26 to discuss the latest challenges and solutions for protecting the supply lines into America’s critical infrastructure. REGISTER HERE. | | | | | Want to receive this newsletter every weekday? Subscribe to POLITICO Pro. You’ll also receive daily policy news and other intelligence you need to act on the day’s biggest stories.
| | G7 HEAPS PRESSURE ON CHINA: The world’s wealthiest democracies pledged to confront China over its excess capacity in sectors such as electric vehicles, but also called on Beijing not to restrict exports of critical minerals so they can build those products themselves. “We are not decoupling or turning inwards,” the G7 leaders insisted in a joint statement Friday after their meeting in Apulia, Italy. “We are de-risking and diversifying supply chains where necessary and appropriate, and fostering resilience to economic coercion. We further call on China to refrain from adopting export control measures, particularly on critical minerals, that could lead to significant global supply chain disruptions.” The seven nations — the United States, Japan, Canada, Germany, France, the United Kingdom and Italy — along with the entire European Union, which has 27 member states, represent a huge collective market for Chinese goods. But the leaders warned Beijing they would not accept “China’s persistent industrial targeting and comprehensive non-market policies and practices that are leading to global spillovers, market distortions and harmful overcapacity in a growing range of sectors, undermining our workers, industries, and economic resilience and security.” A senior Biden administration official told reporters the joint statement reflects “an acceptance of the competition that we're in,” including the expectation that China’s economic model is becoming more and more “state-led and centralized.” “None of the leaders felt as though the trend line was likely to change, because market-oriented reforms require a loss of control that the leadership appears unwilling or unable to accept,” the U.S. official continued. “So if that's the case, then China's growth strategy is going to remain underpinned by national champions and state-owned enterprises that rely on unrivaled levels of government subsidies and non-tariff barriers and currency distortions and weak energy standards, weak labor standards, sometimes outright theft.” E-commerce concerns: The joint statement also touched on a number of other trade concerns, including the possibility that a 26-year-old moratorium against the collection of duties on e-commerce transmissions could expire in 2026. G7 leaders called on World Trade Organization members to make the moratorium “permanent,” even though WTO Director General Ngozi Okonjo-Iweala has expressed doubt members will renew it again at the group’s next ministerial conference in two years. In a related area, the G7 leaders said they were “committed to working towards a prompt conclusion of negotiations of the Joint Statement Initiative on E-Commerce.” That refers to plurilateral talks which could permanently extend the moratorium among the 90 participating WTO members, even if efforts to extend it among all 166 WTO members fail. CARLYLE’S CALMING MESSAGE: Carlyle Group, the private equity giant headquartered between Capitol Hill and the White House, thinks the U.S. will be more stable than you might expect following the November election. POLITICO sat down with co-founder David Rubenstein and other company leaders to get their views on a variety of topics, including the outlook for the U.S. economy, the future of the Inflation Reduction Act and whether rule-of-law and democracy can survive in the United States. They were mostly optimistic. Read more here.
| | TAI IN THE ’STANS: U.S. Trade Representative Katherine Tai is back from a trip to Central Asia last week, where she held talks with top officials from five countries — Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan — that are encircled by three of the United States’ biggest geopolitical headaches: Russia, China and Iran. That proximity — as well as the distance between the U.S. and the largely land-locked region — may explain why two-way trade with the five former Soviet Republics totaled only about $4.2 billion last year, with trade between Kazakhstan and the U.S. making up more than three-quarters of the total. “Senior officials exchanged views on their respective government’s priorities for increasing and diversifying trade and investment opportunities,” a joint statement Friday said in recognition of the stunted relationship. “The parties also noted the challenges of developing new trade routes to improve supply chain resilience and economic diversification but emphasized that this provides an opportunity to use new economic and technical tools to improve trade and integration.” Labor rights: Consistent with the Biden administration’s worker-focused trade policy, “the United States also emphasized the importance of Central Asian partners’ ongoing efforts to increase alignment between domestic labor laws and international labor standards and ensure workers can exercise their internationally recognized labor rights,” the joint statement said. A bid to join the WTO: Tai began her visit with a stop in Uzbekistan, which is the United States’ second largest-trading partner among the five countries. The two countries discussed Uzbekistan’s bid to join the World Trade Organization and expressed interest in finishing related bilateral market access talks “in the near future,” USTR said in a readout. Uzbekistan’s accession to the WTO would put pressure on Congress to approve “permanent normal trade relations” by graduating the country from the Jackson-Vanik amendment, a Cold War-era provision that governed trade with communist countries. Congress took that step for both China and Russia when they joined the WTO, but withdrew PNTR for Russia after it invaded Ukraine in 2022. AUSTRALIA’S NICKEL WARNING: Kevin Rudd, the Australian Ambassador to the United States, is sounding the alarm about the cozy trade relationship between Indonesia, the world’s largest nickel producer, and China, the world’s largest nickel buyer — which could eventually squeeze producers like Australia out of the market. “This particular market finds itself on the precipice of losing some 10 to 20 percent of diversified global supply sources for nickel — this leading to a further concentration in the hands of one single market player controlling 80 percent of the market,” Rudd said Thursday at a conference hosted by Benchmark, a minerals analysis firm, without mentioning Indonesia or China by name. Nickel prices have dropped by about 40 percent since January 2023, Rudd said, putting tremendous pressure on non-Indonesian producers at a time when long-term demand for the metal is expected to rise because of its use in electric vehicle batteries. Unusual activity: The sharp price drop is “inconsistent with normal fluctuations in commodity market prices” and has caused six Australian nickel mining and refining facilities to reduce operations, in some cases significantly, since December, he added. "What we see with critical minerals markets at present is troubling for energy security and troubling for the green transition,” Rudd said. Governments such as the U.S., the EU, Canada, Japan, South Korea and Australia need to work together so that nickel mined in countries with higher environmental, social and governance standards can compete against lower-cost production, Rudd said. “We want to ensure everyone is aware of what is happening with nickel, as we see it as the canary in the coal mine around what comes next with other critical minerals” such as lithium, cobalt and rare earths, Rudd said.
| | NEW SUPPLY CHAIN REVIEW: President Joe Biden has launched a new administration-wide review of supply chains for industries critical to U.S. national or economic security, with a report due by the end of this year that could include recommendations for changes in domestic law and international trade agreements. Biden issued an executive order formalizing the cabinet-level structure of the 7-month-old White House Council on Supply Chain Resilience and directing it to carry out the review as part of a new quadrennial process. The action comes as the USTR is already in the midst of a supply chain review with the assistance of other federal agencies. The new order calls for recommendations in a number of areas, including: — Federal incentives and any potential amendments to federal procurement regulations that may be necessary to attract and retain private sector investments. — A strategic plan that includes diplomatic, economic, security, international development, trade and other policy actions to guide U.S. engagement with allies and partners. — Reforms to domestic and international trade rules and agreements that could be pursued to support supply chain resilience, security, diversity, sustainability and strength.
| | | | THE GOLD STANDARD OF POLICY REPORTING & INTELLIGENCE: POLITICO has more than 500 journalists delivering unrivaled reporting and illuminating the policy and regulatory landscape for those who need to know what’s next. Throughout the election and the legislative and regulatory pushes that will follow, POLITICO Pro is indispensable to those who need to make informed decisions fast. The Pro platform dives deeper into critical and quickly evolving sectors and industries—finance, defense, technology, healthcare, energy—equipping policymakers and those who shape legislation and regulation with essential news and intelligence from the world’s best politics and policy journalists.
Our newsroom is deeper, more experienced, and better sourced than any other—with teams embedded in the world’s most active legislative and regulatory power centers. From Brussels to Washington, New York to London, Sacramento to Paris, we bring subscribers inside the conversations that determine policy outcomes and the future of industries, providing insight that cannot be found anywhere else. Get the premier news and policy intelligence service, SUBSCRIBE TO POLITICO PRO TODAY. | | | | | | | | | Yellen says Trump’s tariff-taxes idea would “make life unaffordable,” POLITICO reports. Biden’s possibly final trip turned out to be all about Trump, POLITICO reports. Germany wants "serious movement" from China on the issue of tariffs on imported electric vehicles, Reuters reports. China has many options in a trade war with Europe, AP reports. India said its car market is "well-protected" against imports of Chinese electric vehicles, Reuters reports. China is facing trade disputes on every continent, Bloomberg reports. China's Premier Li Qiang embarked on a four-day trip to Australia on Saturday, dangling the promise of expanded trade, AFP reports. Canadian national pleads guilty to stealing Tesla trade secrets, Reuters reports. Former Italian Prime Minister Mario Draghi backs French-style trade, industrial policy, POLITICO reports. Russian oil exporters are charging more for their oil in major market India than at any time since the war in Ukraine, Reuters reports. THAT’S ALL FOR MORNING TRADE! See you again soon! In the meantime, drop the team a line: dpalmer@politico.com, gbade@politico.com and ahawkins@politico.com. Follow us @POLITICOPro and @Morning_Trade. | | | | Follow us on Twitter | | | | Follow us | | | | |
No comments:
Post a Comment