EsadeGeo Daily Digest, 14/01/2020

Financial Times – James Politi & Brendan Greeley / US lifts China ‘currency manipulator’ tag ahead of trade deal

  • The United States Treasury department has dropped the designation of China as a currency manipulator in a gesture that aims to ease tensions with Beijing before this week’s signing of a deal to halt their trade war. “China has made enforceable commitments to refrain from competitive devaluation, while promoting transparency and accountability, stated Steven Mnuchin, Treasury secretary.
  • After the announcement, China’s renminbi strengthened to a five-month high against the dollar in Asian trade. The onshore renminbi, which trades 2 per cent either side of a daily midpoint set by the People’s Bank of China, was 0.2 per cent stronger at Rmb6.8809 per dollar, its highest level since July. The offshore renminbi, which is less tightly controlled, was flat at Rmb6.8799 to the dollar.
  • The trade agreement will pause any escalations in tariffs for the foreseeable future and roll back a small portion of existing US levies in Chinese goods. In exchange, China has said it would purchase at least $200bn in US goods, including at least $40bn in American farm products. However, the “phase one” deal does not address some of the deeper and more thorny sources of economic tensions between Washington and Beijing.
  • South China Morning Post – Finbarr Bermingham, Ben White & Doug Palmer / Trade war: China to make huge purchases of US goods as details of phase one deal revealed

Foreign Policy – Stephen M. Walt / Why is the United States so bad at foreign policy

  • Current American foreign policy is based on brute force coercion, divorced from clear objectives and implemented by an ignorant president with poor impulse control. After nearly three years in office, President Trump has managed to increase the risk of war, push Iran to gradually restart its nuclear program, provoke Iraq into asking the United States to prepare to leave and raise serious doubts about U.S. judgment and reliability.
  • However, other presidents did not have a clear foreign policy either. Bush believed ending tyranny and evil forever should be the central goal of U.S. foreign policy and thought the U.S. military could quickly transform the Middle East into a sea of pro-American democracies. Obama had a more realistic view of U.S. power, but he did little to reduce America’s military involvement overseas and fully backed the energetic use of U.S. military power.
  • What’s going on there? Part of the problem today is the remarkable position of primacy that the United States has enjoyed ever since the Cold War ended. Because the United States is so powerful, wealthy, and secure, it is mostly insulated from the consequences of its own actions. As I said in my previous column, we have reached a point where foreign and national security policy in the United States is more like performance art.

The Washington Post / Xi Jinping’s approach to Taiwan and Hong Kong has backfired

  • Xi Jinping has suffered the most painful consequence yet of his misguided crackdown on dissent in Hong Kong: the landslide reelection Saturday of Taiwanese President Tsai Ing-wen. She was considered politically dead a year ago after her party suffered a crushing loss in local elections. But Mr. Xi revived her with his uncompromising response to last year’s mass demonstrations in Hong Kong.
  • Ms. Tai rejected Hong Kong’s fate, telling voters that their choice was between democracy and dictatorship: “Young people in Hong Kong have used their lives and blood and tears to show us that ‘one country, two systems’ is not possible,” she defended. Her opponent, populist mayor Han Kuo-yu of the Kuomintang party, was tagged with the pro-China label despite trying to distance himself from the “one country, two systems” formula.
  • President Xi has proved in the past six months that “one country, two systems” is not a workable formula. Rather than respect Hong Kong’s rule of law, his appointees there have ridden roughshod over it. Simple logic would suggest that more of Mr. Xi’s authoritarian intolerance will simply bring about more reverses.
  • Foreign Policy – Lev Nachman / Taiwan’s voters show how to beat populism

The New York Times – Adam Nossiter / France agrees to small troop increase, but little else, at Sahel summit

  • French partnership with West African armies to combat Islamist terrorism is flailing, but little new to reinforce it emerged from a summit on Monday. Flanked by the leaders of five West and Central African states, Mr. Macron pledged to send 220 French troops to the region, adding to the force of 4,500 already there. That force is under increasing criticism in some of the countries for failing to halt recurring massacres of local armies’ troops.
  • Mr. Macron, who had warned that France might withdraw its troops, wanted the leaders of the Sahel to make clear, in public, that they wanted French forces to stay. Subsequently, the summit accomplished that goal.  
  • The West African countries did pledge Monday to work more closely together, and with the French, to concentrate forces on the dangerous tri-border region shared by Mali, Burkina Faso and Niger, and to focus on the regional affiliate of the Islamic State. However, whether this move will improve the military situation is not clear.

The selected pieces do not necessarily reflect the views of Javier Solana and EsadeGeo. The summaries above may include word-for-word excerpts from their respective pieces.

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