Half of this article’s word count seems to be the writer snarking about how he doesn’t care about these games and doesn’t know much about them. I guess it’s good to show contempt for your audience…
Italy’s far-right government has taken the honorable step of reinstating UNRWA funding, yet the UK and US are still sending thoughts and prayers (or maybe not even those).
For the US to invade Saudi Arabia, where Mecca and Medina are located, would have turned the entire Muslim world against it for generations. It would have been Afghanistan+Iraq times a hundred.
From the FT story about this, it appears the Israeli far right is going to respond with more repression:
Israel’s far-right finance minister, Bezalel Smotrich, on Wednesday wrote to Netanyahu, demanding “punitive steps” be against the Palestinian Authority in response to the European decisions and other Palestinian moves on the international stage, including seeking action against the Jewish state by the ICC.
Smotrich called for a series of measures including a major expansion of Jewish settlement construction in the occupied West Bank, the establishment of a new settlement for every country that recognises Palestinian statehood, and the freezing of Israeli tax transfers to the PA.
Well said. One thing I’d add is that it wasn’t only Putin going all in, but Xi’s own strategic impatience. China needed at least another generation to grow into its strengths as a world power, but Xi had, for various reasons, convinced himself that he, not his successors, would be the one to see it all through. By finishing the job Mao had started, Xi would be the one lauded by history as the one inheriting Mao’s mantle.
Xi likes to wax poetic about geostrategic “changes not seen in a century”. Ironically, his own ego and hamfistedness has given the West a once in a century opportunity to kneecap China and prevent it from consolidating into a true world power.
What’s interesting is that before the war, China and Ukraine had excellent relations, to the point where Russia was worried about Chinese influence in Ukraine. There’s some remnant of these ties, like how China has never recognised Russia’s annexations of Ukrainian territory.
But the thing is, China’s overwhelming interest at this point is for Russia not to lose. A Russian humiliation at the hands of the West – or worse still a Russian collapse leading to a reduced state that could be dominated by the West – would leave China geopolitically isolated, and give the US the freedom to squeeze China with no further distractions.
At the end of the day, Xi Jinping has blundered his way into a strategic cul-de-sac. The Russia-Ukraine war is a geopolitical disaster for China, and Xi’s dumb bromance with Putin was a key reason it happened. Strategically, he’s the worst Chinese leader in at least a century.
There are rules concerning how to determine the country of origin, involving how much value is added at each step. Final assembly doesn’t make the cut if the amount of work is too trivial. (The rules can be gamed somewhat but I’m sure the Biden administration will be putting this under a microscope.)
What is more problematic for Biden is that Chinese EV companies are building whole factories and supply chains in Mexico, so the product will be unambiguously Mexican and allowed to enter the US under the USMCA. If the US government feels strongly enough about keeping Chinese firms out simply on the basis of being Chinese, they will probably resort to threatening Mexico to strongarm them into shutting down those factories. The US has a long history of running roughshod over Mexico, so this seems pretty likely to me.
The US closing off its market was totally predictable and has been priced in. You’ll notice that no Chinese EV makers made any plans to export directly into the US, even as they were selling around the world.
The US market is significant, sure, but the US car industry could easily end up where its shipbuilding industry is: hanging around thanks to government protection, catering to the domestic market, but a bit of a joke by global standards.
The idea of prices going up and down by the same amount is based on an equilibrium situation. This isn’t ruled out; it could very well be that the high profits of grocery companies is transient (or “transitory” as they say). But in the short run, prices don’t move in lockstep.
Aside from market power or collusion, there are other reasons prices could shift more quickly for some sectors than others (even as all prices are going upward). For example, does the industry rely on long term contracts or short term contracts? Is inflation hedging widely available for the goods and services in question? Is the activity more or less sensitive to interest rates?
But these are questions about relative prices. Instead of playing a game of whack a mole, better not to set off inflation in the first place.
There’s irony here. Europe went along with the US push to block Chinese access to semiconductors. China turns to domestic chip manufacturing, and the obvious first step is to get into mature nodes, the segment of the semiconductor industry where European firms have been successful. European Commission: shocked Pikachu face.