INTERNATIONAL ECONOMY – TRENDS
[Reuters] Fed’s Powell warns of cautious, patient approach after rate cut The Federal Reserve cut interest rates by a quarter percentage point on Thursday following the U.S. election. Fed Chairman Jerome Powell said the Fed will continue to evaluate data to determine the pace and destination of interest rates as officials adjust the currently tight monetary policy to account for inflation that has slowed and is approaching the 2% target. At the same time, he stated that the results of the presidential election would not have a near-term impact on U.S. monetary policy and that as the new administration’s proposals take shape, the central bank will begin to estimate the impact on the twin goals of stable inflation and maximum employment. In the meeting minutes, some participants noted that the Committee could pause its rate easing and keep it at a restrictive level if inflation remained too high, and some said that rate cuts could accelerate if the labor market slumps or economic activity falters.
[SCMP] China sharpens its edge in global trade with zero-tariff deal for developing world China will eliminate tariffs for goods from countries classified as the world’s least developed (as classified by the United Nations) starting in December, a move that is expected to reduce shipping costs from parts of Africa and Asia. Of the 43 countries that will benefit, 33 are in Africa. The scheme would apply to all import categories, according to the State Council Customs Tariff Commission. The elimination of tariffs means these countries would pay less to ship crops, fruit, seafood or commodities to China and exporters, in turn, would save on shipping household goods, smartphones and electric vehicles to applicable countries.
[Bloomberg] U.S. efforts to contain Xi’s drive for technological supremacy are faltering Despite more than six years of U.S. tariffs, export controls and financial sanctions, Xi Jinping is making steady progress in positioning China to dominate the industries of the future. According to Bloomberg research, Made in China 2025 has largely been a success. Of the 13 key technologies tracked by the researchers, China has achieved a global leadership position in five of them and is rapidly catching up in seven others. That means the world outside the United States is increasingly driving Chinese electric vehicles, surfing the Internet with Chinese smartphones and powering their homes with Chinese solar panels. For Washington, the risk is that policies aimed at containing China will end up isolating the United States and hurting its businesses and consumers. Although China is still struggling to develop advanced semiconductor manufacturing processes, it now has a clear advantage in electric vehicles, automotive software and lithium battery technology. The LNG shipbuilding and high-speed rail industries are well on their way to achieving their goals. It also produces the world’s most efficient and lowest-cost solar panels and is developing innovative medicines.
[CBC] Trudeau government bans TikTok from operating in Canada The innovation minister said the decision to close TikTok’s two Canadian offices, in Toronto and Vancouver, was based on information and evidence that emerged during a national security review and advice from Canada’s security and intelligence community. Despite shutting down its operations, users will still be able to access the app. The decision was made in accordance with the Investment Canada Act, which allows for the review of foreign investments that may harm Canada’s national security. In February 2023, the Canadian government banned the social networking platform on all government devices. Later, it ordered a national security review of the app. The current decision is the result of that review.
[Bloomberg] China nears record $1 trillion trade surplus with Trump’s return The gap between Chinese exports and imports will reach nearly $1 trillion if it continues to widen at the same pace it has so far this year. The goods trade surplus soared to $785 billion in the first 10 months, the highest on record for that period and up nearly 16% since 2023. China has relied more on exports to offset weak domestic demand, which Beijing has sought to correct by injecting stimulus into the economy. In this regard, the new Trump administration is likely to impose tariffs that would reduce the flow of exports to the United States. Foreign companies are also pulling money out of China, and foreign direct investment liabilities fell in the first nine months of the year. The surplus with the United States rose 4.4% year-to-date over the same period last year. It increased 9.6% with the European Union and jumped nearly 36% with the 10 Southeast Asian nations in Asean.
[CBS News] 50 Years of Tax Cuts for the Rich Have Had No Impact A London School of Economics study examining 18 developed countries – from Australia to the United States – over a 50-year period from 1965 to 2015 claims that 50 years of tax cuts for the rich have only benefited one group: the wealthy. The study compared countries that passed tax cuts in a specific year, such as the United States in 1982, when President Ronald Reagan cut taxes on the wealthy, with those that did not, and then examined their economic performance. The analysis found that the incomes of the
rich grew much faster in countries where tax rates were cut. Gross domestic product per capita and unemployment rates were almost identical after five years in countries that reduced taxes on the rich and those that did not. In this sense, the research argues that the economic justification for keeping taxes on the rich low is weak.
[Financial Times] EU to require technology transfers from Chinese firms The EU would plan to introduce new criteria requiring Chinese firms to have factories in Europe and share technological know-how when Brussels invites bids for €1 billion in subsidies to develop batteries in December. The pilot could be extended to other EU subsidy schemes. The plans represent part of a toughening stance by Europe toward China as it seeks to protect the bloc’s companies, subject to strict environmental regulations, from being undercut by cheap, more polluting imports. Last month, the European Commission confirmed tariffs of up to 35 percent on Chinese electric vehicles, on top of the existing 10 percent tax. It has also introduced stricter requirements for companies applying for hydrogen subsidies, decreeing that only 25 percent of the parts for electrolyzers used to produce hydrogen can come from China. If Trump follows through on his threat to impose 60 percent tariffs on Chinese exports, Beijing is likely to seek to divert them to other regions such as the EU, which in turn would require measures to stem the flood.
[Bloomberg] Trump’s tariff plans For Trump, import tariffs are a tool to achieve major strategic objectives and also to achieve tactical victories against adversaries and even partners. In this regard, Trump threatened tariffs of 60% or more on products from China and a universal levy of 10% to 20% on imports from all countries. But would the full 60% levy on China affect all imports or a set of goods? Will the tariffs be used as a bargaining tool or become a more permanent fixture, raising revenue to offset promised tax cuts? Some members of Trump’s close circle believe faithfully in tariffs, while others see them as temporary tools. Moreover, Trump has been less enthusiastic about national security arguments for limiting trade than his advisors, many of whom see corralling China as the urgent task. Tariff promises could be recalibrated. That could mean a 60% tariff on Chinese imports that would apply only to certain goods, which could lead to another round of supply chain changes or even negotiations between Washington and Beijing. Beyond universal tariffs, new tariffs on European shipments also seem likely, perhaps with an eye toward a deal in which EU countries agree to buy more U.S. soybeans and liquefied natural gas, as they did in 2018, or perhaps this time Teslas as well.
[Financial Times] China unveils $1.4 trillion package to shore up economy The fiscal plan is one of the biggest aimed at the country’s struggling local authorities, but disappointed investors who had hoped for more support for weakening household consumption. The measures follow September’s monetary stimulus package, which was Beijing’s biggest since the pandemic. Beijing would authorize local governments to issue bonds for three to five years to restructure most of about 14 trillion yuan in “hidden” or “implicit” debts. These debts were used by local governments to invest in infrastructure and property-related sectors. Many of these bets failed when China’s property market entered a deep slow down three years ago, sinking local government finances and undermining the overall economy. Stimulus efforts became more urgent in September after it became clear that third-quarter GDP growth of 4.6 percent year-on-year would fall short of the official annual target of 5 percent.
[Financial Times] Huawei to launch smartphone with own software in latest sign of China-US rift Huawei is set to launch its first flagship phone, the Mate 70, which will run its own operating system, HarmonyOS Next, aiming to compete with Apple’s iOS and Google’s Android. This marks an important milestone for Huawei, as U.S. sanctions forced it to develop its own ecosystem after losing access to Google services in 2019. Despite initial challenges, including the need for developers to rewrite apps to work on HarmonyOS Next, Huawei has already built a base of 15,000 native apps, including major Chinese services such as WeChat and Taobao. Although the operating system is still evolving, with some key apps lacking full functionality, Huawei is optimistic about its success, leveraging its large user base in China. The company has invested in developer support and training to ensure the growth of its app ecosystem. However, international developers remain wary due to the high costs of adapting apps for the platform. Despite these challenges, experts believe that Huawei’s push for a domestic operating system is essential for China’s technological sovereignty.
INTERNATIONAL SYSTEM
[BBC] Trump’s top teams. government will be less favorable to vaccination. RFK Jr, Trump’s nominee for Secretary of Health and Human Services, has been a known vaccine opponent for many years. Now, RFK Jr. is tapping a variety of vaccine opponents to help him shape the Department of Health and Human Services (HHS) team under Trump. Meanwhile, Dave Weldon, Trump’s appointee to head the CDC, has also expressed anti-vaccine views. In addition, several prominent Trump supporters, such as hedge fund mogul Bill Ackman, have also publicly shown skepticism toward vaccination.Trump’s pick for HHS Deputy Secretary, Jim O’Neill, is very reasonable on the issue of vaccines. Therefore, there is hope that the institutional damage will not be as severe. At the same time, on November 22, Trump announced that Scott Bessent, a hedge fund mogul, would be appointed as Secretary of the Treasury. Bessent appears to be deeply concerned about containing government debt: in a speech in June, he called the large deficits and state subsidies of the Biden era a “return to central planning.” Any plan to reduce the deficit would almost certainly include cutting green subsidies from the Inflation Reduction Act, a law enacted in 2022 that he has described as a “budget apocalyptic machine.” Moreover, at times, he has seemed lukewarm about the maximalist tariffs Trump promised on the campaign trail against China and other countries, describing them as more of a negotiating position than actual policy.
[Financial Times] Taiwan considers major U.S. defense purchases Taiwan is considering a major U.S. arms package to demonstrate its commitment to strengthening defense against China and align with the new Trump administration’s focus on allies increasing military spending. The potential package includes Aegis destroyers, E-2D Advanced Hawkeye radar systems, Patriot missiles and possibly F-35 fighter jets, among other items. Discussions have been informal, with Taiwan seeking to demonstrate seriousness through an ambitious proposal that could exceed $15 billion. Defense experts such as Elbridge Colby and Heino Klinck have stressed the need for Taiwan to focus on critical capabilities such as munitions and missile defense. While the F-35s might be less operationally practical, the package aims to strengthen the relationship with the U.S. Taiwan has increased its defense spending, and officials cite bipartisan support in the U.S. despite concerns about a second Trump term. During the first Trump administration, Taiwan secured $21 billion in arms deals, while the Biden administration approved $7 billion, prioritizing cost-effective defenses. China has condemned these developments, urging Taiwan to abandon what it describes as “secessionist” moves.
[Global Times] Kremlin denied phone call between Putin and Trump The Washington Post reported that Trump had spoken with Putin, advising the Russian president not to escalate the conflict with Ukraine and reminding him of Washington’s “considerable military presence in Europe.” The Kremlin denied the call and said Putin had no concrete plans to speak with Trump. The attention on Putin’s interaction with Trump reflects the weight he carries in global geopolitics. Amid recent escalations on the front line between Russia and Ukraine, Europe has expressed new concerns about possible policy shifts in the conflict and, in turn, the potential impact it would bring to the continent’s security. It is believed that, with just over two months remaining in the White House, Biden is running out of time to expedite the delivery of funds and weaponry needed to ensure that Ukraine can stay in the fight. In this regard, Trump’s re-election raises new concerns in Europe about reducing U.S. aid to Ukraine.
[SCMP] Philippines to host advanced U.S. missiles The United States is planning to deploy advanced missile units in Japan and the Philippines to counter China’s regional assertiveness and enhance defense cooperation with its key allies. Washington is reportedly considering establishing temporary bases in Japan and the Philippines to deploy missiles “in the event of a contingency in Taiwan.” The U.S. Marine Corps will deploy its Marine Littoral Regiment, equipped with High Mobility Artillery Rocket Systems (HIMARS) and other weapons, to the Nansei island chain in southwestern Japan, while the U.S. Army Multi-Domain Task Force will station its long-range fire units in the Philippines.
[Financial Times] German defense minister paves way for Scholz to lead SPD in elections Boris Pistorius has decided not to run as his party’s candidate for chancellor in the upcoming elections, ending speculation about his possible replacement for Chancellor Olaf Scholz. Pistorius said that the public debate surrounding his candidacy was damaging the Social Democratic Party (SPD), and that he was stepping aside to end the uncertainty. He expressed his support for Scholz, considering him the right candidate, and emphasized the need for unity in the party. Scholz was expected to remain the candidate automatically after calling early elections, despite having low ratings. Pistorius, however, had gained popularity, which sparked calls within the party for a change of leadership to avoid an electoral defeat. Ultimately, Pistorius decided to withdraw and support Scholz’s re-election. The decision sets the stage for a contest between Scholz and Friedrich Merz of the opposition Christian Democrats (CDU), who is leading in the polls. Despite his appeal and communication skills, Pistorius faced criticism for his lack of experience in federal politics, and his stance on Ukraine and economic issues did not fully coincide with the party or public sentiment.
[The Economist] Once dominant, Germany is now desperate. Danyal Bayaz, the finance minister of Baden-Württemberg, warns that Germany has squandered the “globalization dividend” over the past 15 years, leaving its economy vulnerable as energy prices rise and global competition intensifies. Despite Germany’s strengths in basic research and engineering, it has failed to embrace new technologies, and its export-oriented economy is struggling as globalization slows. The country’s manufacturing sector faces challenges, including high energy costs and job losses in industries such as steel production, while a shortage of skilled labor and bureaucratic hurdles compound the situation. Germany’s trade relationship with China, once a key driver of exports, has changed as China becomes more competitive. Meanwhile, trade tensions with the U.S. under Donald Trump add further uncertainty. The country’s heavy reliance on exports and industry is being questioned, with some experts suggesting that Germany needs to focus on advanced technology and green industries. However, structural problems such as the “debt brake” (a constitutional limit on the deficit) remain obstacles to needed public investment in infrastructure, defense and education.
ARTIFICIAL INTELLIGENCE
[The New York Times] Meta allows its AI models to be used for U.S. military purposes Meta announced that it will allow U.S. government agencies and contractors working on national security to use its artificial intelligence (AI) models, a change from its previous policy prohibiting military use. The company will make its Llama AI models available to federal agencies and defense contractors such as Lockheed Martin, Booz Allen, Palantir and Anduril. These models are open source, meaning they can be copied and distributed by developers, companies and governments. Meta’s decision is an exception to its “acceptable use policy,” which previously prohibited military, war and nuclear use. The company’s president of global affairs, Nick Clegg, stated that Meta supports “responsible and ethical uses” of technology that are aligned with U.S. and democratic values in the global race for AI. Meta will share its technology with the Five Eyes intelligence alliance (US, Canada, UK, Australia and New Zealand). Although Meta is looking to catch up with rivals such as OpenAI, Microsoft and Google in the race for AI by making its software widely available, it could face criticism for the military applications of its technology and its open source approach.
Meta executives are concerned about possible strict regulation of open source AI and the misuse of Llama by research institutions linked to the Chinese government. Despite this, Clegg emphasized that Meta’s AI could help the U.S. track terrorist activities and improve cybersecurity while maintaining a technological edge globally.
[Folha de S. Paulo] The world does not have enough energy for future AI OpenAI’s public policy leader for Latin America and the Caribbean, Nicolas Robinson de Andrade, warned that the world does not have enough energy to sustain the artificial intelligence (AI) of the future. This relates to OpenAI’s plans to develop a superintelligence capable of surpassing collective human knowledge, but which faces environmental concerns due to high electricity consumption. The International Energy Agency estimates that consumption in data centers could more than double from 460 TWh in 2022 to 1,050 TWh in 2026, driven by the use of GPUs, which consume up to ten times more electricity than ordinary chips. Although more efficient, these chips have increased energy demand. During the Data Privacy Global Conference in São Paulo, Andrade pointed out that solving this challenge will require increased clean energy production and international cooperation. Countries such as Brazil, with 88% of its electricity matrix renewable, are advanced, but lack AI infrastructure, such as dedicated data centers. Meanwhile, tech giants like Mark Zuckerberg and Bill Gates are betting on nuclear power as a sustainable alternative. Meanwhile, Sam Altman, CEO of OpenAI, is investing in nuclear fusion, promising a cleaner energy future.
CLIMATE CHANGE – COP29
[Financial Times] Making sense of COP29 outcomes The conference began five days after the re-election of Trump, who has shown distaste for both climate action and generous foreign aid. Other developed countries were wary of making a large collective commitment, fearful that the Trump administration might pull out of the agreement and leave it to them to take up their share. Although the summit reached a
major agreement on international carbon trading, the so-called New Collective Quantified Collective Goal was the key element of COP29.
During the summit, the proposed agreement was adopted, calling on developed countries to take the lead in mobilizing $300 billion a year in climate finance for developing countries. Then a number of developing countries, including India, Cuba, Nigeria, Bolivia, Malawi, Kenya, Pakistan and Indonesia expressed their dissatisfaction with the text. The hasty decision contributed to the feeling of many developing country representatives that they had been forced to accept an agreement that was far less than fair. The final summit text at least made reference to the magnitude of developing countries’ needs, and called on “all actors” to work to enable them to receive climate finance of at least $1.3 trillion by 2035.
He did not give many details on how this will be achieved, but did announce a new initiative, the “Roadmap from Baku to Belém to reach $1.3 trillion”, under which a report on the subject will be prepared at next year’s COP30 in the Brazilian city of Belém.
CHIPS and SEMICONDUCTORS
[Reuters] S. ordered TSMC to halt shipments to China of chips used in artificial intelligence applications The U.S. Commerce Department sent a letter to Taiwan Semiconductor Manufacturing Co (TSMC) imposing export restrictions on certain sophisticated chips, of 7-nanometer or more advanced designs, destined for China that power artificial intelligence accelerators and graphics processing units. The U.S. order comes weeks after TSMC notified the Commerce Department that one of its chips had been found in a Huawei artificial intelligence processor, an apparent violation of export controls. The move affects many more companies and will allow the U.S. to assess whether other companies are diverting chips to Huawei for its artificial intelligence processor. Analysts believe that, despite relentless U.S. pressure, the Taiwanese chipmaker cannot afford to lose the mainland market and will look for ways to preserve some flexibility.
ELECTROMOBILITY
[Bloomberg] Expectations for electric vehicle growth during the Trump years are already being slashed The slowdown in electric vehicle adoption is likely to accelerate further as Trump makes good on his promise to eliminate the plug-in vehicle-friendly policies he called the “new green scam.” Forecasters already cut the outlook for electric vehicle market share in the U.S. by 2030. It is believed that billions of dollars in investments in electric vehicles in North America through 2027 would be at risk, also the tax credit consumers can receive for buying an electric vehicle made in North America. Automakers will continue to reduce spending on electric vehicles and delay or cancel battery-powered models. Along these lines, Trump is reportedly seeking to reduce fuel efficiency requirements for new cars and light trucks as part of plans to undo Biden’s policies. Also targeted are related standards imposed by the U.S. Environmental Protection Agency that limit tailpipe emissions of carbon dioxide and smog-forming compounds.
[Bloomberg] Chinese Electric Vehicles Made in Europe Turn to Local Suppliers to Avoid Tariffs Chery Automobile Co.’s Spanish partner, EV Motors, is working to source locally made components for its joint venture in Barcelona, with the aim of marketing the vehicles as European-made. The collaboration, announced earlier this year, seeks to produce combustion, hybrid and electric vehicles. Local procurement is crucial to reduce costs and comply with EU regulations, especially following the imposition of high tariffs on Chinese electric vehicle imports. Production of the Ebro brand’s conventionally powered SUVs starts this month, while the launch of Chery’s Omoda 5 EV has been postponed until October 2025 due to tariffs. Initially, the Barcelona plant, located in a former Nissan facility, will assemble disassembled kits, with plans to move toward fuller production requiring local components in 2024. The facility will initially employ 200 workers, expanding to 1,250 by 2026, with a capacity to produce a car every 10 minutes. Rafael Ruiz, president of EV Motors, expressed confidence that the locally assembled Omoda 5 EV will not face tariffs. Spain’s strong automotive supply chain is expected to support the project. Ebro, founded in 1954, is now listed on the BME Growth market in Madrid, with a value of €406 million as of November 14.
[Bloomberg] China, EU Reach ‘Technical Consensus’ in Electric Vehicle Talks China and the European Union reportedly reached a “technical consensus” in their talks aimed at reducing or reversing tariffs the bloc applied to Chinese-made electric vehicles.The two sides have been exploring an agreement on so-called price commitments, a complex mechanism to control prices and export volumes used to avoid tariffs. China and the trade bloc held talks from Nov. 2-7, after which they said they had made “technical progress” and would continue negotiations. The European Union is believed to see very limited progress in the negotiations and little prospect of a quick agreement.
[Reuters] Chinese battery giant CATL would build U.S. plant if Trump allows it The world’s largest battery maker, CATL, would consider building a plant in the United States if Trump opens the door to Chinese investment in the electric vehicle supply chain, according to the company’s founder and chairman, Robin Zeng. Chinese electric car and battery manufacturers have been shut out of the U.S. market through a variety of protectionist trade measures supported by both Democrats and Republicans, including Trump, who launched a trade war with China during his first term as president.Chinese-made batteries do not qualify for consumer electric vehicle subsidies enacted during the Biden administration, which also took steps to block any vehicles with Chinese technology. Chinese electric vehicle imports are subject to a 100% tariff. Trump wants to prevent Chinese auto imports, but has said he remains open to Chinese automakers making vehicles in the United States. CATL is a major supplier to Tesla for the electric vehicle maker’s Shanghai factory.
[Financial Times] The Northvolt dilemma, Can Europe’s electric vehicles avoid relying on Asian batteries? The collapse of Northvolt, formerly Europe’s best hope in batteries, highlights the challenges facing the EU in building a competitive battery industry, key to its climate goals. Despite increasing its share of the global battery market from 3% to 17% since 2017, Europe remains highly dependent on Asian producers such as CATL, LGES and SK On, which dominate 70% of the market. Northvolt’s difficulties reflect broader issues such as high costs, slower adoption of electric vehicles, and reliance on Chinese and Korean technology and materials. Other European players, such as Verkor and Automotive Cells Company, are also facing financing problems and are scaling back expansion plans due to economic pressures. Meanwhile, Asian manufacturers are scaling back their investments in Europe due to geopolitical tensions and lower demand for electric vehicles. This makes it unlikely that Europe will reach its target of producing 90% of its EV batteries locally by 2030. The collapse of Northvolt has also forced European automakers to turn again to Asian suppliers, further highlighting the region’s vulnerability in this critical sector.
CONFLICT IN THE MIDDLE EAST
[Politico] How Netanyahu arrest warrant alters world politics The International Criminal Court (ICC) in The Hague issued arrest warrants for Israeli Prime Minister, former Defense Minister Yoav Gallant, and Hamas commander Mohammed Deif. The ICC ordered the arrest of the two to face charges of “crimes against humanity and war crimes” allegedly committed during the year of bloody fighting in Gaza since Hamas’ October 7 attacks on the country. An estimated 44,000 Palestinians have died as a result of the attacks and international observers warn that humanitarian aid is being prevented from entering the blockaded region. While Israel is not a member of the court, 125 countries are, from the United Kingdom and Germany to South Africa and the Seychelles. These countries would be legally bound to arrest Netanyahu if he set foot on their territory. The Israeli politician is the first world leader to face such an arrest warrant since Vladimir Putin, who has since had to absent himself from a series of international summits. The move risks dividing Israel’s allies and partners.
[CNN] Israeli security cabinet approves cease-fire deal with Lebanon after last-minute attacks in central Beirut. Israel has agreed to a cease-fire with Lebanon, which will take effect at 4 a.m. local time, U.S. President Joe Biden confirmed. The truce, facilitated by U.S. mediation, aims to end 13 months of fighting and establish a lasting peace in the region. Israeli Prime Minister Benjamin Netanyahu secured approval of the ceasefire, with majority backing from the Security Cabinet. The agreement allows Israel’s military forces to focus on other regional threats, including Iran, while dealing with Hezbollah’s diminished capacity. Thousands of displaced Lebanese civilians have begun returning to their homes after the cease-fire went into effect. The Biden administration’s role in brokering the agreement could influence regional diplomacy, although the incoming Trump administration could play a key role in advancing broader peace efforts, especially with respect to Gaza and other unresolved tensions. However, with conflicts in Gaza still active and rising tensions with Iran, the situation remains fragile.
UCRANIA
[Bloomberg] Russia’s war against Ukraine enters a dangerous new chapter 1000 days into the conflict, Ukraine took advantage of the newly granted U.S. long-range missile capability to attack a military base on Russian territory. Later, Putin signed a decree expanding Russia’s nuclear doctrine under which Moscow could consider using nuclear weapons in response to an attack on its territory by Kiev using conventional Western weapons. Russia will also consider a joint attack by a non-nuclear state supported by a nuclear power. The recent arrival of North Korean troops to support Russian forces had already upped the ante. The prospect of Trump’s return in January and his promise to end the war soon created a new sense of urgency for Ukraine and its allies. At the G20, Russian Foreign Minister Sergei Lavrov sought to calm concerns about a nuclear escalation, “we are firmly in favor of doing everything possible not to allow a nuclear war to happen.”
[Foreign Policy] Biden’s complicated legacy in Ukraine Prior to the Russian invasion of Ukraine on February 24, 2022, the Biden administration planned to send limited aid, anticipating clandestine resistance following an expected Russian victory. However, Ukraine demonstrated unexpected resilience, leading to an improvised U.S. response, providing crucial military assistance but deemed insufficient for a decisive victory. The U.S. strategy has been to provide support while avoiding escalation with Russia. This has generated criticism both for limiting the scope of support and for the risks of direct conflict with another nuclear power. Ukraine requested F-16 aircraft and ATACMS missiles months after the war began, but faced long delays. In 2023, after reconsiderations, the U.S. began supplying both systems, albeit with initial restrictions. Only in April 2024 was long-range ATACMS allowed for use in Russian-occupied territories, excluding attacks inside Russia. Recently, the White House approved the use of these missiles on Russian territory, including the Kursk region, partially controlled by Ukraine. Jake Sullivan, national security advisor, defended the strategy, arguing that war depends on multiple factors, such as troops, munitions and national cohesion, beyond a single weapon system.
BRASIL
[APNews] Dozens of recordings reveal that top Brazilian officers pressured Bolsonaro to carry out a coup. Leaked audio recordings from late 2022 reveal that senior members of Brazil’s military discussed plans to pressure then-President Jair Bolsonaro to carry out a coup to prevent Luiz Inácio Lula da Silva from taking office. The 53 recordings, obtained by federal police, include military officers such as Colonel Roberto Raimundo Criscuoli and General Mario Fernandes, who advocated drastic actions, including a possible civil war, to keep Bolsonaro in power. Lt. Col. Mauro Cid, Bolsonaro’s aide, warned of limited time before the confirmation of Lula’s victory and expressed frustration over inaction. Although Bolsonaro does not appear in the recordings, his rhetoric and the actions of his supporters, including the January 8, 2023 riots in Brasília, are consistent with discussions of the coup. Supreme Court Judge Alexandre de Moraes mentioned some of the recordings in his decision to arrest five people linked to assassination plots against Lula and attempts to undermine his presidency. Bolsonaro remains under investigation for multiple alleged crimes and is barred from running for office until 2030. Despite calls for intervention, the military high command reportedly lacked sufficient support for a coup, and Bolsonaro’s supporters disbanded after Lula’s inauguration. Brazil’s top prosecutor is not likely to issue any indictments until next year against former President Jair Bolsonaro, members of his government and military officers who allegedly planned a coup following his election defeat in 2022, four sources told Reuters. This is because Attorney General Paulo Gonet plans to merge three Federal Police investigations into Bolsonaro’s actions against Brazil’s democratic system and produce a single comprehensive indictment against him, they said.
CHINA and LATIN AMERICA
[The Hindu] Brazil becomes the second BRICS country, after India, not to join China’s BRI Celso Amorim, Brazil’s presidential advisor for International Affairs, said Brazil decided not to join Beijing’s Belt and Road Initiative (BRI) and will instead seek alternative ways to collaborate with Chinese investors. Brazil would seek to “take the relationship with China to a new level, without having to sign an accession contract.” According to Amorim, the goal is to use part of the framework of the Belt and Road Initiative to find “synergies” between Brazilian infrastructure projects and investment funds associated with the initiative, without necessarily formally joining the group. He also mentioned that Brazil defined priority projects that may or may not be accepted by Beijing. Recently, U.S. Trade Representative Katherine Tai urged Brazil to consider the proposal to join the BRI through an “objective” and “risk management” lens.
[Atlantic Council] As Biden bids farewell, Xi promotes China’s influence in Latin America at APEC Summit in Peru Biden’s presence in Peru will be overshadowed by what Xi will inaugurate on the sidelines of his visit: a giant deep-water port in the Peruvian coastal city of Chancay, which is set to redefine trade between China and Latin America. At a cost of $3.5 billion, state-owned China Ocean Shipping Company Limited (COSCO) developed one of China’s most visible and controversial infrastructure projects after five years of construction. For Peru, the port will offer material benefits. Many Peruvians are hopeful that the mega-port will elevate Peru to a key role as a hub for global supply chains, particularly for Latin American exports to Asia. Observers have also suggested that the port could help diversify the Peruvian economy, increase the volume of trade between Peru and China, and attract more Chinese investment to Peru. Its construction has given a boost to the local economy, generating approximately 7,500 jobs. Once the port is operational, many residents, who for decades have aspired to develop their skills through education, hope to become trained port workers with specialized skills in computer systems and cargo logistics. These aspirations are directly related to a priority for this year’s APEC summit: promoting the transition to the formal, global economy.
By Dafne Esteso (@dafnech_esteso) y Brenda Vladisauskas (@bvladisa)
