HEADLINES
US:Commerce Secretary Wilbur Ross defended US tariffs on imported steel and aluminum before Congress on June 20 amid bipartisan criticism from senators who condemned the levies as unjustified and economically ruinous. This came after the United States announced potential additional 10% tariffs on $200 billion in Chinese products on June 18.
EU: The EU adopted rebalancing measures in reaction to US steel and aluminium tariffs on June 20. The tariffs, targeting €2.8 billion ($3.4 billion) in US products, will come into effect on June 22. Meanwhile, German Chancellor Angela Merkel and French President Emmanuel Macron bridged gaps on June 18, when the two met in Meseberg, Germany to discuss the future of Europe. They reached broad agreement on issues including: creating a Eurozone budget, repurposing the European Stabilization Mechanism (ESM), and using the ESM as a backstop for European banks.
Brexit: British Prime Minister Theresa May and her government fended off a Conservative rebellion in the House of Commons on June 20th. Up for a vote was a House of Lords amendment that would have increased Parliament’s role in the case of a no-deal Brexit.
Upcoming: The European Commission is convening a mini summit on June 24 to discuss migration. Italy has threatened to boycott the summit. The meeting will be a preview to the June 28-29 EU Summit, where 28 member states will be addressing a range of difficult issues, not limited to: the Eurozone, the EU budget, trade war with the United States, and migration.
After successfully launching trade talks with Australia on June 18, European Trade Commissioner Cecilia Malmström will travel to New Zealand on June 21 to begin similar bilateral negotiations.
Mexico is gearing up for a presidential election on July 1. The front-runner, Andres Manuel Lopez-Obrador (AMLO), would be a left turn for the country and has expressed that no NAFTA is better than a bad NAFTA talks are continuing in Washington, DC with the negotiators hoping to reach a deal in the upcoming days.
SPOTLIGHT
How to Increase Pressure if Diplomacy with North Korea Fails by Daleep Singh and Peter E. Harrell
The uncertain results of President Trump’s June 12 summit with North Korean dictator Kim Jong Un underscore the fact that the United States needs to keep developing tools to intensify the “maximum pressure” campaign that helped bring North Korea to the negotiating table. In this issue brief authors Daleep Singh, a senior fellow at the Atlantic Council and the Center for a New American Security (CNAS), and Peter E. Harrell, adjunct senior fellow at CNAS, explain that a truly “maximum pressure” campaign on North Korea would require the credible threat of targeted sanctions against China. Read more on their three-pronged strategy here.
The DETER Act Will Not Deter Russia. It Will Instead Hurt US, EU Economies by Daniel Fried and Brian O’Toole
To be blunt: the DETER Act is a crude instrument that would inflict damage on global markets and US, EU, and other key economies, without sufficient benefit from the mandatory sanctions to justify the collateral damage. We applaud the initiative but there is a better way. Read the full analysis here.
TRADE
Statement: Statement from the President Regarding Trade with China, The White House
Official Report: How China’s Economic Aggression Threatens the Technologies and Intellectual Property of the United States and the World, The White House
Official Statement: EU Adopts Rebalancing Measures in Reaction to US Steel and Aluminium Tariffs, European Commission
News: Trump Said to Push for Tariff Action on Foreign Cars Ahead of Midterms, Adam Behsudi and Nancy Cook, Politico
News: Germany’s Largest Auto Makers Back Abolition of EU-U.S. Car Import Tariffs, William Boston and Bojan Pancevski, The Wall Street Journal
Official Statement: Meseberg Declaration, Bundeskanzleramt (German Federal Government)
News: Ross Says U.S. must Create ‘More Painful’ Environment in Trade, Reuters
Analysis: US Consumers Poised for Impact of Trump’s China Tariffs, Shawn Donnan, Financial Times
Analysis: Risk of Chinese Currency Devaluation Rises with Latest Tariffs Threat, Chelsey Dulaney, The Wall Street Journal
Opinion: Trump’s Tariffs Aren’t the Biggest Trade Problem. Will China Step up to Protect the WTO?, Karen J. Alter, The Washington Post
Study: Arrested Development: Chinese FDI in the US in 1H 2018, Thilo Hanemann, Rhodium Group
Analysis: Trump Picks Economic Winners, Guided by Nostalgia, Brad Plumer and Jim Tankersley, The New York Times
Opinion: The Topsy-Turvy Logic of Donald Trump’s Trade Tirades, Tim Harford, Financial Times
Podcast: Steel Cage Death Match Over Trade, Politico Money
Opinion: Postcard-Sized Agreements Could Solve Trade Disputes, John K. Veroneau, The Hill
Analysis: Just the Fear of a Trade War is Straining the Global Economy, Peter S. Goodman, Ian Austen, and Elisabeth Malkin, The New York Times
Analysis: How Just 14 People Make 500,000 Tons of Steel a Year in Austria, Thomas Biesheuvel, Bloomberg
News: Perdue: USTR Aiming for Nafta Deal with Mexico First, Then Canada, World Trade Online
TWEET/FACTOID OF THE WEEK
Did you know that..
…the World Cup will cost Russia a total of $14.2 billion? Brazil’s expenditure of over $15 Billion was the most ever spent by a host country on the tournament. Comparatively, Russia spent $51 billion on hosting the 2014 Winter Olympics in Sochi, making it the most costly global sports event of all time. Read more here.
GLOBALIZATION
Opinion: Corruption Thrives in a Globalised World, Gideon Rachman, Financial Times
Analysis: Forget ‘Techlash’ – The Biggest Problem for Tech is a Widening Transatlantic Rift, Mark Scott, Politico
Analysis: China Wants to Rewrite the Rules of the Internet, Samm Sacks, The Atlantic
Opinion: China is Winning the Global Tech Race, Michael Moritz, The Financial Times
Blog: Women Working Behind the Wheels? Not Everywhere – Yet, Katrin Schulz and Nato Kurshitashvili, The World Bank
Analysis: The Immigrants Fueling the Gig Economy, Lauren Markham, The Atlantic
Analysis: As Western Lenders Retreat, African Banks See an Opportunity, The Economist
WHAT WE ARE READING
Blog: A Call to Work Together, Valerie Rouxel-Laxton, New Atlanticist
Official Report: French and German Roadmap for the Euro Area, French Finance Ministry
Analysis: Three Visions, One Direction, European Political Strategy Center, European Commission
Official Statement: European Commission and United Kingdom Publish Joint Statement Outlining Further Progress in Article 50 Negotiations, European Commission
Official Report: Deepening Europe’s Economic and Monetary Union, European Commission
Opinion: In the Balkans, a Chance to Stabilize Europe, George Soros and Alexander Soros, The New York Times
Opinion: OFAC Off, Esfandyar Batmanghelidj and Axel Hellman, Foreign Policy
News: EU Extends Sanctions Against Russia for a Year Over Crimea, Associated Press, The Washington Post
Analysis: Russia Used to See Itself as part of Europe. Here’s Why That Changed, Andrew Foxall, The Washington Post
UPCOMING EVENTS
June 26: The Global Innovation Sweepstakes: A Quest to Win the Future, Atlantic Council
June 26 (Brussels): EU-LAC Economic Forum 2018, Bruegel
June 27: Ethics and Economics: Is the Economy Too Sensitive to Economic Downturns? Peterson Institute for International Economics
June 27: CETA: A Trade Agreement of the Future and The Future of Trade Agreements, European American Chamber of Commerce
June 28 (Brussels): Trade War Trinity: Analysis of Global Consequences, Bruegel
July 6 (Aspen): SOF Forum: Working in America/Making America Work Again, Aspen Institute
Your Newsletter Team:
Marie Kasperek, Associate Director, Global Business & Economics, Atlantic Council
Cecilia Pan, Intern, Global Business & Economics, Atlantic Council
Tristan van Rooden, Intern, Global Business & Economics, Atlantic Council
Please send us suggested news stories, opinion pieces, publications, and upcoming events that you would like us to highlight! Email mkasperek@AtlanticCouncil.org with your ideas and suggestions.
The views expressed in this newsletter and linked external articles and content do not necessarily reflect the opinions of the Atlantic Council, its staff, or its sponsors.
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