United States

  • The Winners and Losers of the US-China Trade War

    Recently, US President Donald J. Trump announced that the United States would apply a 10 percent tariff to $300 billion worth of Chinese goods, adding to already existing tariffs. In retaliation, China devalued its currency, prompting the US Treasury Department to officially label China as a currency manipulator. Behind the fiery rhetoric from both camps, China posted its lowest economic growth numbers in twenty-seven years and the US Federal Reserve cut interest rates for the first time since the Great Recession, despite low unemployment and reasonable growth.

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  • Back to the Future on Trade with the USMCA

    Even as the US-China trade war proceeds to the next gripping chapter, another trade drama is unfolding between the Trump administration and the US Congress on the fate of the US-Mexico-Canada Agreement (USMCA) as a replacement to the North American Free Trade Agreement (NAFTA).  The administration missed the opportunity to obtain Congressional approval for USMCA prior to the August break, and House Democrats’ insistence that there be key changes to the agreement before it is taken up remains a central dynamic in its future prospects.

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  • House Amendment Could Scuttle US Attempts to Decrease Reliance on Russian Gas

    For years, policy makers in Washington have been focused on measures to reduce their European allies’ dependence on natural gas from Russia, from the promise of the Three Seas Initiative to pending bipartisan legislation championed by Senators Ted Cruz (R-TX) and Jeanne Shaheen (D-NH) introducing economic sanctions against foreign companies helping construct the controversial Nord Stream II pipeline from Russia to Germany.

    Amidst this push, the US House of Representatives and US Senate are preparing for the final conference on the fiscal year 2020 National Defense Authorization Act (NDAA), which will also have an impact on Russia’s export of gas to Europe. The House version of the NDAA contains a floor amendment—the Huffman Amendment— sponsored by Congressman Jared Huffman (D-CA), striking out NDAA legislative language that calls to limit the use of Russian Federation fuels at US defense installations in Germany and other European nations. This amendment works against the goal of US energy policy in Europe that aims to boost energy security and help its allies diversify away from Russian gas.

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  • With One Small Step, Trump Makes History in North Korea

    Trump, Kim agree to restart nuclear negotiations

    On June 30, Donald J. Trump became the first US president to set foot in North Korea. Trump made history when stepped across a low concrete marker accompanied by North Korean leader Kim Jong-un and walked a few steps into the North. The two leaders agreed to have their negotiators resume an effort to reach what has so far been an elusive nuclear deal.

    “The United States, under the Trump administration, has disrupted the longstanding, but failing, US policies of past administrations by seeking to build trust from the top down,” said Barry Pavel, senior vice president, Arnold Kanter chair, and director of the Atlantic Council’s Scowcroft Center for Strategy and Security.

    “This was helpful for reducing the near-term threat, but so far it is unclear whether it will help to achieve the denuclearization that we seek,” said Pavel. “How much trust building will be required before North Korea begins the process of denuclearization? Certainly, today’s ceremony and symbolism is not unhelpful, but it is unclear how and when this path will lead to a nuclear-free North Korea.”

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  • Trump, Xi Pause US-China Trade War

    Trump lifts some restrictions on Chinese telecommunications firm Huawei

    US President Donald J. Trump agreed on June 29 to lift some restrictions on Chinese telecommunications giant Huawei and delay imposing new tariffs on Chinese goods. These concessions were announced following a meeting between Trump and Chinese President Xi Jinping on the sidelines of the G20 summit in Osaka, Japan, at which the two leaders agreed to restart trade negotiations between their countries.

    “Frankly, this was all fairly predictable,” said Mark Linscott, a senior fellow with the Atlantic Council’s South Asia Center and a former assistant US trade representative (USTR) for South and Central Asian Affairs.

    “The two sides had already made progress before and intensifying the war is in neither side’s interest,” Linscott said, adding, “At this point, it seems a lot easier to impose tariffs than to lift them, so avoiding new ones makes a lot of sense, particularly to allow more space for negotiation.”

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  • How NATO Can Adapt for the Future

    Seventy years since it was founded, NATO remains the foundation for the security of North America and Europe. However, the Alliance is now confronting new threats and challenges from within and without that require it to adapt to a new world. “People and institutions at seventy need to have a little refurbishing” and the transatlantic alliance is no different, former US Secretary of State Madeleine K. Albright said at an Atlantic Council event on the future of NATO on June 27, in partnership with the NATO Defense College Foundation.

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  • The Trump-Xi Summit and Beyond

    It would be comforting to believe that an agreement between the United States and China that deescalates the current trade war and resolves a number of key problems between the two would restore tranquility and mutual harmony. But history tells us that frictions and occasional disputes between a rising power with high aspirations and ambitions and an established power that has become accustomed to occupying a position of preeminence tend to be the norm.

    There is reason to assume this will be the case for the United States and China—countries with very different political and economic systems, very different historic and cultural perspectives, but very similar aspirations for global and regional preeminence, or at least equality, in economic strength, technological advancement, and military capability. But these need not, and with skilled management by the leaders of both nations should not, lead to major political, economic, or military confrontations. That will be a decades-long responsibility of and challenge for both countries.

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  • US-China Trade War: The Issues Ahead of the Trump-Xi Meeting

    In order to bring to an end, or at least significantly deescalate, the current US-China trade war, numerous issues will need to be either resolved, placed on a course toward resolution, or managed in a mutually agreed way. It is difficult to see a breakthrough agreement being reached by US and Chinese negotiators prior to the meeting in Japan between US President Donald J. Trump and Chinese President Xi Jinping on June 29 or by the leaders themselves. Perhaps the best we can hope for would be agreement on a few items as a show of progress and good faith, and a commitment not to take further adverse actions against one another for a designated period of time while negotiations continue. Something more than that would be warmly welcomed by markets, by a wide range of businesses and consumers, as well as by many in the world who fear massive disruption if escalation continues.

    Most of the issues the two nations continue to grapple with relate to difficult systemic or “structural” differences on such matters as protection of intellectual property and trade secrets; equal access and rights for foreign investors in both the United States and China; a level playing field for businesses; and a consensus on what are appropriate amounts and types of government support for critical 21st century technologies and state enterprises.

    And even if US and Chinese negotiators surprise us by reaching an agreement that both Trump and Xi can sell to their publics as a major success, that agreement will be unlikely to resolve all of the economic differences between the United States and China. This is just the beginning of a much longer process.

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  • How the US-China Trade War Could Impact US-EU Negotiations and the WTO

    The US-China trade war could be a complicating factor in the US-European Union (EU) trade negotiations and undermine the World Trade Organization (WTO). 

    China has developed close economic ties, including through the Belt and Road Initiative, with a number of Central and Eastern European countries and several Southern European countries, like Italy and Greece. Many EU members see an important economic benefit in being more closely engaged with China on BRI trade and investment projects and many have become major users of Chinese telecommunications and other technologies.

    In coming negotiations, will the United States say to the EU “as a precondition for making the deal you have to reduce your ties with China or agree not to further increase them or not participate in BRI projects or not buy certain Chinese advanced technology products?” And will China step up its efforts to involve greater numbers of European countries in the BRI, further develop its markets in the region, and apply pressure on countries to use Chinese companies in domestic projects as well as purchase Chinese technology or Chinese products rather than American ones?

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  • The Global Implications of an All-Out Trade War

    An all-out trade war between the United States and China will slow growth not only in these two countries, but also in countries that sell substantial amounts of goods in both markets—which means most countries in the world. Growth will decline not just because of the direct quantitative effects of tariffs and other barriers, but also because of major disruptions to supply chains, adverse effects on profitability of many companies, investment uncertainty, and fears about the future course of the confrontation.  

    Both China and the United States are also likely to attempt to establish “zones” or “spheres” of economic/trade/investment/rule-making influence, or preeminence, to broaden and deepen their market positions in their regions, and worldwide, at the expense of the other. This will be particularly true with respect to advanced telecommunications and information technology. Recently, for example, Chinese President Xi Jinping and Russian President Vladimir Putin agreed that the Chinese telecommunications firm Huawei would cooperate with MTS, Russia’s largest mobile operator, to develop a 5G network for Russia.

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