1 June 2018

Trump breaks trade cease-fire with China ahead of Ross visit to Beijing


President Donald Trump is moving ahead with steps to protect U.S. intellectual property by punishing China with broad investment restrictions, litigation at the World Trade Organization and hefty tariffs on $50 billion worth of Chinese goods. The move, which the White House announced Tuesday morning, reignites trade tensions between the world's two largest economies and ratchets up the pressure just days before Commerce Secretary Wilbur Ross is set to travel to Beijing for further trade talks. A series of tit-for-tat trade actions earlier this year had depressed markets and threatened to harm consumers and industries in both countries, but relations had calmed down after the two sides launched an economic dialogue that led Treasury Secretary Steven Mnuchin to declare just over a week ago that the trade war was "on hold."

A Conversation About U.S. Credibility

By Jacob L. Shapiro

In an era in which reality is so often defined by how well something can be quantified, politics is a stubborn outlier. Some aspects are quantifiable, especially as they relate to military strength or economic conditions: We can measure the number and range of Iran’s missiles, or the widening wealth gap in the United States. But data (especially economic data) is imperfect, and it’s often deceptive. For instance, that Iran has a certain number of missiles says nothing about the quality of the missiles, let alone whether Iran would use them. “Political science” emerged as an academic discipline in the 19th century out of a desire to treat politics like a science – to define its truths in terms of empirical data, not ancient Greek philosophical principles. But exclusive reliance on data is no better than exclusive reliance on theory. And unfortunately, especially in the United States, political science has become not just data-driven but data-obsessed.

Beyond Tech Transfer: The Challenge of Chinese Tech Expanding Abroad

By Grzegorz Stec

Over the last two years, Chinese outward investment has been become the subject of much controversy abroad, especially following the country’s buying spree in 2016. This shift has been particularly visible in the tech sector, where developed countries are becoming increasingly concerned by Chinese attitudes toward intellectual property (IP) and the prospect that China may very soon match their technological capabilities. The most notable in a series of recent moves has been the United States’ probe into China’s policies regarding technology transfer, IP, and innovation under Section 301 of the Trade Act. The results of the controversial probe suggested imposing a 25 percent tariff on around 1,300 industrial technology, medical, and transport products from China. While such probes are often motivated by the risks associated with Chinese firms buying foreign technology, there remains an important discussion to be had on the implications of Chinese tech companies selling their products abroad.

The U.S.-China Trade War

By Roncevert Ganan Almond

Prior to his invasion of Russia, Napoleon reportedly said: “[M]y campaign plan is a battle, and all my politics is success.” However, following a Pyrrhic victory in Borodino, Napoleon found himself without a plan or success. Not anticipating Tsar Alexander I’s refusal to surrender and General Mikhail Kutuzov’s strategic withdraw from Moscow into the vast Eurasian steppe, the Grande Armée was left exposed and exhausted. With the weight of a Russian winter coming, Napoleon submitted to a confused retreat, ultimately leading to the Little Emperor’s defeat. According to historian John Lewis Gaddis, Napoleon had transgressed Carl von Clausewitz’s maxim on strategy, whereby war must be subordinate to policy. When leaders fall in love with war, making it an end unto itself, the “culminating points of their offensives are self-defeat.”

The New Silk Road Is Old: Why You Should Ignore Belt and Road Initiative Maps

By Krzysztof Iwanek

Each conference should have at least one brain-disabling paper. You know, the one during which you doze off to recharge your mental batteries, prepare your own paper which will be in the next panel, or check out your mobile phone (don’t forget to sit behind somebody, ideally somebody tall). Recently, the most brain-disabling presentations have been the ones that focus on maps of the Belt and Road Initiative (once referred to as the “New Silk Road”). I am obviously exaggerating here, but this plague has become so widespread that countering it requires strong language. PowerPoint Instead of Points of Power.

Army leaders need more payoff from cyber

By: Mark Pomerleau  

As the military seeks to better integrate capabilities across the five domains of warfare more seamlessly, operational vignettes provide concrete examples that progress has been made, but more work is required. This is especially true for cyber. Top military leaders have long said cyber isn’t done for cyber’s sake, but rather to support joint force commanders. In fact, former head of U.S. Cyber Command Adm. Michael Rogers has noted that Cyber Command’s success will be defined by others. “I try to do this with all the combatant commands, sit down face-to-face: ‘Where are we? Are we meeting your requirements?’” he said. “Cyber Command, in many ways ... functions to enable and support the success of others. I always tell our team that much of our success will be defined by others, not by us. That’s the way it should be.”

Managing Expectations for NAFTA

By Allison Fedirka

It’s a lesson every world leader learns, even those who understand it going in: Campaigning is easy, governing is hard. Donald Trump, both the candidate and the president, repeatedly said the United States would completely overhaul, if not walk away from, the North American Free Trade Agreement. But time constraints, elections and business pressure have all conspired against any lofty expectations for a renegotiated NAFTA. It now appears the changes to the treaty will be more of a refresh than a remake.

F.B.I.’s Urgent Request: Reboot Your Router to Stop Russia-Linked Malware

By Louis Lucero II
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Hoping to thwart a sophisticated malware system linked to Russia that has infected hundreds of thousands of internet routers, the F.B.I. has made an urgent request to anybody with one of the devices: Turn it off, and then turn it back on. The malware is capable of blocking web traffic, collecting information that passes through home and office routers, and disabling the devices entirely, the bureau announced on FridayA global network of hundreds of thousands of routers is already under the control of the Sofacy Group, the Justice Department said last week. That group, which is also known as A.P.T. 28 and Fancy Bear and believed to be directed by Russia’s military intelligence agency, hacked the Democratic National Committee ahead of the 2016 presidential election, according to American and European intelligence agencies.

The Korean nuclear roller coaster: Has time run out for a summit?

Jonathan D. Pollack

The turbulence and drama on the Korean Peninsula over the past week defies imagination. On May 24, President Trump withdrew from his planned summit with North Korean leader Kim Jong-un, acting almost as impulsively as when he first agreed to the meeting in early March. Following a conciliatory response from Pyongyang’s senior nuclear negotiator Kim Kye-gwan, the president two days later sharply reversed course and said that the summit might still take place.

Cyber Caliphate: What Apps Are The Islamic State Using? – Analysis

By Alexander Mamaev*

As the argument goes, law enforcement agencies must protect the safety of citizens, and to do so, they must be in contact with representatives of the IT sector. This in turn compels the representatives of mail services, messaging apps, and smartphone manufacturers to contact the authorities and disclose user information. However, excesses do occur, and the founder of the Telegrammessaging app Pavel Durov refused to provide the FSB with their encryption keys. Telegram was repeatedly accused of being the messaging application of terrorists, and in the context of the messaging service’s being blocked, the discussion surrounding the rights of citizens to engage in private correspondence grew more heated. The example of the Islamic State, however, only goes to show that militants shall not live by Telegramalone: they act much more competently and work to keep a step ahead of law enforcement agencies. What tools do terrorists actually use and how should we fight against the digital technologies of militants?

The US and North Korea, Still Miles Apart

U.S. President Donald Trump canceled next month’s summit with North Korean leader Kim Jong Un on May 24, citing the “tremendous anger and open hostility” of recent North Korean rhetoric. (Of course, North Korea says angry and openly hostile things all the time; it would be more suspicious if it suddenly stopped.) Trump later said the summit might still happen with unspecified “constructive steps” from Kim. But the U.S. and North Korean positions on the North’s nuclear program are still miles apart, and the U.S. simply wasn’t going to get much of what it wanted in the June 12 summit in Singapore. It’s not clear if the White House ever truly thought otherwise – or, if so, why it did.

Senators look to emphasize U.S. cyber prowess

By: Mark Pomerleau 
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Members of the Senate Armed Services Committee want to ensure Cyber Command can conduct global cyber ops. A Senate committee’s version of the annual defense policy bill emphasizes the Department of Defense’s cyber prowess, particularly against Russia. Following the passage of the House’s version by the full body Thursday, the Senate Armed Services Committee began its process this week, releasing a summary of the measure late this week.

Here’s how to ensure readiness of cyber forces

By: Mark Pomerleau

Earlier this month, U.S. Cyber Command announced a critical milestone for its cyber mission force. Its roughly 6,200-person cyber warrior cadre reached what is known as full operational capability, meaning all 133 teams are manned and passed their qualifications. Now, the command is shifting from building out the teams to bolstering its readiness. “As the build of the cyber mission force wraps up, we’re quickly shifting gears from force generation to sustainable readiness,” Gen. Paul Nakasone, commander of Cyber Command, said in a release marking the milestone. “We must ensure we have the platforms, capabilities and authorities ready and available to generate cyberspace outcomes when needed.”

One of these four robot vehicles could take the load off Army squads

By: Todd South  

This year, two Army IBCTs and a not-yet-disclosed Marine unit will be testing variants of a load-bearing robot vehicle. Todd South tells us more. By November, two Army infantry brigade combat teams and a not-yet-disclosed Marine unit will be testing four variants of a load-bearing robot vehicle for the next year. During a technology demonstration focusing on Secretary of Defense Jim Mattis’ push to make close combat forces more lethal, officials with the Squad Multipurpose Equipment Transportshowcased the four submissions. The options range from vehicles with four, six and eight wheels and a tracked version. Each has its own characteristics but must meet basic needs. Army Capt. Erika Hanson, assistant product manager for SMET at Program Executive Office Combat Support and Combat Service Support, said the vehicle is designed to take the burden off the soldier.

The Pentagon has a ‘major’ automated information systems problem

By: Brandon Knapp  
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The Department of Defense needs to improve its policies for managing and overseeing what it classifies as major automated information systems (MAIS), according to a new report from the Government Accountability Office. The report found that the policies dictating the Defense Department’s 10 MAIS business programs do not meet industry standards for providing performance data. These standards ensure that projects are keeping to their initial cost estimates, schedules, and performance goals. An IT program is designated as a MAIS when its single year costs exceed $40 million, its total acquisition costs exceed $165 million, or its total life-cycle costs exceed $520 million.

Here’s how the Navy is developing information warfare ‘Top Guns’

By: Mark Pomerleau 
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The Navy is looking to develop better information warfare personnel and improve doctrine such as intelligence experts in over the horizon targeting. The Navy recently celebrated the one-year mark of its development center aimed at growing more robust information warfare personnel for 21st century battlefronts. In order to meet evolving threats and challenges, the Navy is standing up a center to train warfighters. Top Navy officials have described the stand up of the Naval Information Warfighting Development Center, or NIWDC, as one of the most important things the service has done in the past two years.

An offensive cyber capability for every country

By: Kelsey Atherton 

Nothing in international politics was ever simple, but sovereignty used to be simpler. The principles of how nations govern themselves within their borders are less clear for how nations should deal with attacks from outside the border that take place inside computers within those borders. International law has adapted somewhat, but we are still in the early days of setting and policing boundaries around cyber war, establishing norms and precedents to shape future action.

Senate Defense Bill Aims to Scrub Cyber Adversaries from U.S. Military Tech

By Joseph Marks
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Companies that sell equipment and services to the U.S. military will be forced to disclose business ties that allow foreign governments to access their sensitive data, such as software source code, under the Senate version of an annual defense bill. Both Russia and China have required companies to submit to source code reviews in order to win certain government contracts. The provision, added by Sen. Jeanne Shaheen, D-N.H., comes amid heightened concern about how U.S. cyber adversaries might use private companies as spying tools. The Senate version of the 2019 National Defense Authorization Act explicitly bars the Chinese telecoms Huawei and ZTE from Defense Department networks while the House draft banned the companies from all federal networks. Intelligence officials and lawmakers have long fretted the companies were tied too closely to the Chinese government.

Encryption: the cornerstone of information and national security

By Nigel Phair 
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Every day we send sensitive information via the internet – whether this is voice, credit card data or government secrets – the success of which lies with competent encryption. Encryption protects information stored and transmitted via computers, including smartphones and other devices. Encryption algorithms provide confidentiality and drive key security initiatives including authentication, integrity, and non-repudiation. Authentication allows for the verification of a message’s origin, and integrity provides proof that a message’s contents have not changed since it was sent. Non-repudiation ensures that a message sender cannot deny sending the message.

Central Command Needs High-Level Middle East Cyber Ops Advisers, Fast

By Aaron Boyd
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U.S. Central Command—responsible for military operations in the Middle East, central Asia and part of northern Africa—is looking for a contractor to help identify targets, plan and execute cyber operations. Beyond basic cyber and geopolitical expertise, CENTCOM needs 8(a) contractors who understand the policy and process behind military cyber operations. CENTCOM is issuing a solicitation through the General Services Administration, which released a presolicitation notice May 24. The agency is looking for a quick turnaround on the procurement process: The request for proposals is expected to land June 5 and give interested vendors three weeks to respond.

Smart Rifles For Foot Soldiers: Army NGSW Prototype Contracts Out In June

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A soldier fires his M249 SAW Squad Automatic Weapon in Afghanistan.

PENTAGON COURTYARD: The Army is just weeks away from awarding contracts to begin buying prototypes of new infantry weapons, with live-fire tests next year. After years of struggle to replace the Vietnam-era M16/M4 family, these prototypes are a big step towards giving squads precision-guided firepower, a key part of both the Army’s Big Six modernization plan and Defense Secretary Jim Mattis’s urgent effort to overhaul the infantry. (The Marines, by contrast, are buying off-the-shelf replacements for the M16).

US Air Force Is Waiting a Year for Parts That It Could 3D-Print

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Someday, the military will 3D-print missiles as needed, the U.S.Air Force’s acquisition chief says. In the shorter term, he just wants to use additive manufacturing technology to get broken planes back in the air. The roadblock is legal, not technical. “I have airplanes right now that are waiting on parts that are taking a year and a half to deliver. A year and a half,” Will Roper, the assistant Air Force secretary for acquisition, technology and logistics, said in an interview. Today’s 3D-printers could make short work of those deliveries, but some of those parts’ original manufacturers control the intellectual property — and so far, the service lacks clear policy for dealing with that.

31 May 2018

The story barely reported by Indian media

Justin Rowlatt

It is a potential scandal that claims to strike at a key pillar of Indian democracy - the freedom of the press - yet it is barely being reported in the Indian media. There's a simple reason for that: this alleged scandal involves many of the most powerful media institutions in the country. A sting operation by a news organisation called Cobrapost claims to have revealed a deeply engrained bias towards the ruling Bharatiya Janata Party (BJP) within many of India's leading media groups, as well as a willingness among some of the country's most senior media executives and journalists to take money in return for pushing a political agenda.

The new world disorder: is war inevitable in the Asian century?

Robert D. Kaplan

Narendra Modi and Xi Jinping met in China’s historic city of Wuhan last month. Greeting each other warmly, the Indian and Chinese leaders talked over cups of tea and strolled in bucolic gardens. President Xi noted he had only twice met a visiting foreign leader outside Beijing. On both occasions, it was for Modi. Yet rather than demonstrating cordial ties between Asia’s ascending giants, the meeting served mostly to highlight divisions, given Sino-Indian relations have worsened greatly since Modi became prime minister in 2014, in particular after a military stand-off near the Bhutanese border last year. Both sides wanted a “reset”. Modi’s position was the weaker of the two. India’s economy is smaller than China’s, and its military far punier. Many in New Delhi feared that the subtext of the summit was a plea that China should avoid more meddlesome border incidents that could destabilise Modi’s re-election campaign next year. Xi appeared more self-assured, having recently extended indefinitely his term as leader. Yet for all the rapidity of his ascent, China’s leader also often appears unsure how best to manage the complexities of his new global reach.

India, Russia conclude negotiations for Rs 40,000 crore air defence missile systems

The official said both Russia and India are likely to announce the deal before an annual summit between Prime Minister Narendra Modi and Russian President Vladimir Putin in October. S-400 Triumf deal: India, Russia conclude negotiations for Rs 40,000 crore air defence missile systems 
India has concluded price negotiations with Russia for a nearly Rs 40,000 crore deal to procure S-400 Triumf air defence missile systems for the Indian Air Force, officials said.  they said the two countries are now trying to find a way out to evade the provisions of a US law that seeks to punish countries and entities engaged in transactions with the defence or intelligence establishment of Russia. 

The Great Afghan Paradox By most metrics the war in Afghanistan is going badly.


By most metrics the war in Afghanistan is going badly. According to the most recent quarterly report by the Special Inspector General for Afghanistan Reconstruction (SIGAR), the troop strength of Afghan Security Forces is in “sharp decline” even as the Taliban are on the march throughout the countryside. The number of “security incidents” is similarly on the rise, to include a series of recent suicide bombings in Kabul, including one in late April attributed to Daesh (aka the Islamic State) that targeted and killed nine journalists and four police officers. Opium production skyrocketed by nearly 90 percent in 2017, and the Afghan government continues to rate near the bottom on Transparency International’s “Corruption Perception Index.” The publication Long War Journal, which tracks the conflict, recently estimated that the Taliban now “controls or contests” 58.5 percent of Afghanistan’s 407 districts, a high-water mark for the Islamist extremist group. 

The United States And Pakistan: Frenemies On The Brink

by Peter R. Mansoor

For much of its short seventy-year history, Pakistan has managed to thoroughly mismanage its strategic relationships with great power patrons, regional competitors, and non-state clients. It has waged and lost four wars with a larger and more powerful India, supported terrorist organizations that have destabilized Afghanistan and conducted deadly attacks in neighboring India, and alienated its long-time American ally. Only Pakistan’s geopolitical position as a land bridge between the Indian Ocean and Central Asia has kept U.S.-Pakistani relations from severing completely, due to the need to ship military supplies and equipment through Pakistani territory to land-locked Afghanistan. Otherwise, there is little love lost between Pakistanis and Americans; polling indicates three-quarters of Pakistanis view the United States as an enemy, while only 10 percent of Americans trust Pakistan. Never have supposed allies hated each other so much.

Top Afghan Security Officials Visit Pakistan for Crucial Talks

A high-level Afghan delegation held a daylong official visit to neighboring Pakistan Sunday to discuss bilateral matters, border management and regional security. Afghan National Security Adviser Haneef Atmar led a team of top security officials, including the country’s interior minister and heads of the army and the intelligence agency. The visitors held discussions with Pakistani National Security Adviser Nasser Janjua after landing in Islamabad. Janjua’s office said in a brief statement both sides reiterated their resolve to work jointly on issues related to bilateral ties and security. The Afghan delegation also met with Pakistan’s military chief, General Qamar Javed Bajwa. Islamabad and Kabul earlier this month put into operation a new bilateral engagement framework called the Afghanistan-Pakistan Action Plan for Peace and Solidarity (APAPPS) for “eliminating terrorism and achieving peace, stability, prosperity and development of the people of the two countries.”

Looking For A Silver Lining In Indonesia's Black May

by Scott Stewart

It has been a violent month in Indonesia. Nicknamed "Black May" by the Jakarta Post, the sheer number of attacks linked to militant group Jemaah Ansharut Daulah (JAD) took many by surprise. Over the course of nine days, about 40 people - including attackers - have died in a string of bombings and edged weapon attacks, leaving more than 50 wounded. Also in contrast to previous years, most of the violence began before Ramadan, a month in which jihadist violence often surges. However, if a silver lining can be found in the attacks, it is this: The tempo has been unusually high, but the level of sophistication has been low, sparing the country from a higher body count. Furthermore, Indonesians have been repulsed by the use of women and children in some of the bombings, and that will continue to keep jihadism marginalized in the world's most populous Muslim country.

How China acquires ‘the crown jewels’ of U.S. technology


The U.S. government was well aware of China’s aggressive strategy of leveraging private investors to buy up the latest American technology when, early last year, a company called Avatar Integrated Systems showed up at a bankruptcy court in Delaware hoping to buy the California chip-designer ATop Tech. ATop’s product was potentially groundbreaking — an automated designer capable of making microchips that could power anything from smartphones to high-tech weapons systems. It’s the type of product that a U.S. government report had recently cited as “critical to defense systems and U.S. military strength.” And the source of the money behind the buyer, Avatar, was an eye-opener: Its board chairman and sole officer was a Chinese steel magnate whose Hong Kong-based company was a major shareholder.

China is taking digital control of its people to chilling lengths

By John Naughton

Watching Donald Trump trying to deal with China is like watching a clown dancing in front of an elephant. The US president’s entire approach is transactional – the methodology he employed in his allegedly successful career as a property developer. It’s all sticks and carrots, bluff and counter-bluff, aggressive bluster followed by rapid retreats. Sometimes, it appears to work. For example, the Chinese leader, Xi Jinping, clearly leant on Kim Jong-un to force him to agree to a summit meeting with Trump. But then Xi leant on Trump to rescue the Chinese tech company ZTE, brought to its knees by a US ban because it had evaded sanctions on trade with Iran. Trump duly complied and ZTE executives breathed again.

China’s missiles in the South China Sea mean girding for war

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The South China Sea China has the potential to become a cauldron of conflict, and China is stoking the fire. By claiming perhaps as much as 90% of the South China Sea, Beijing is trampling on the rights of other nations in the region, nations whose Exclusion Economic Zones (EEZs) and national waters are being violated. China first laid claim to the South China Sea through its Nine Dash Line in the early 1950s. And other than pathetic vocal protestations by other nations – including the US – nothing was done about it for years. Perhaps no one took the claim seriously at the time.

US, Coalition Forces Used Cyberattacks to Hunt Down ISIS Command Posts

By Matthew Cox 

U.S. and coalition forces launched cyberattacks last year to help identify and destroy several command posts of Islamic State leaders, according to the former head of the task force to defeat ISIS in Iraq and Syria. "This is a vignette that actually played out during and after the battle of Mosul and after the battle of Raqqa," said Gen. Stephen Townsend, who commanded Combined Joint Task Force-Operation Inherent Resolve in 2017. Townsend, who now commands Army Training and Doctrine Command, described the multi-domain operation to an audience at the Association of the United States Army's LANPAC Symposium and Exposition in Hawaii.

Top 3 Takeaways from Pompeo’s New Deal for Iran

James Jay Carafano

Mike Pompeo’s first formal speech as Secretary of State can best be described a diplomatic body slam on the Iranian regime. He not only declared the Iran Deal as dead as the Wicked Witch of the West. He laid out the follow-up U.S. strategy to deal with the regime’s nuclear ambitions and destabilizing actions in the region. It’s true that the speech included a long list of complaints about the deal and Iranian behavior that we have heard from Trump before. But Pompeo put three new elements of U.S. policy on the table.

The Populist Revolt Reaches Iraq

by Michael J. Totten

The worldwide populist revolt toppling conventional politicians in the United States, Europe and even the Philippines has now reached Iraq. Most Westerners still following Iraqi politics assumed that incumbent Prime Minister Haider al-Abadi’s Victory coalition would handily win the parliamentary election, but nope. Abadi's coalition came in third. Firebrand cleric Moqtada al-Sadr’s Sairun coalition came in first. You remember Moqtada al-Sadr. He’s the guy who mounted an Iranian-backed Shia insurgency against the United States, the Iraqi government and his Sunni civilian neighbors between 2003 and 2008. He’s a very different person today. He still raises and shakes his fist in the air but today he’s shaking it at crooked elites, and he’s shaking it at his former Iranian patrons.

What Will It Take for Syrian Refugees to Return Home?

By Maha Yahya

Syria’s 18 million people make up less than one percent of the world’s population, but a whopping one-third of all refugees are Syrian. Since 2011, more than 5.5 million people have fled the country and 6.1 million have been internally displaced. Syria’s neighbors have borne the brunt of the crisis: there are 3.3 million registered refugees in Turkey, one million in Lebanon, and 650,000 in Jordan. Another half million Syrian refugees now reside in Europe. (Canada and the United States have taken in approximately 50,000 and 18,000, respectively.)

Oil Shock: Entry Point For Deepening Reform – Analysis

By Sanjeev Ahluwalia

The oil shock poses two risks for India. First, the fear that it will increase the current account deficit. Second, it poses a conundrum of navigating conflicting objectives — preserve the market-based retail oil price mechanism whilst graduating the price shock for consumers and containing inflation. The latest oil shock — an increase from $69 last year to $80 per barrel this week — is courtesy the American President, Donald Trump, who unilaterally pulled the United States out of the 2015 deal that Iran had reached with the UN’s Permanent Five (US, UK, Russia, France, China) plus Germany. This spooked the global financial markets, which justifiably fear renewed trade sanctions on Iran, ending five per cent of world production. The nuclear deal had ended sanctions and boosted world supply. Prices declined from $84.2 in 2014-15 to $46.2 in 2015-16. New sanctions may reverse the trend.

I Served with the Military Leaders Shaping America’s North Korea Plan. Here’s What They’ll Do Next

By James Stavridis

While we were all hoping for a true breakthrough in North Korea by President Donald Trump, let’s face it: the history was never encouraging. Despite similarly hopeful moments in the past, the North Korean pattern is depressingly uniform: come to the peace table, encourage everyone to believe “peace is at hand,” make promises to denuclearize, gain major trade and economic concessions (a whole thumb drive full of them this time, thoughtfully provided by South Korean President Moon Jae-in), then slowly unwind the package of promises and revert to form as a dangerous international outlaw state. What’s different this cycle is the speed: a bipolar burst of seemingly instant high, followed by a crashing low with nuclear threats from both sides again suddenly on the table — all within 60 days. This is the Korea crisis in the key of Trump to be sure.

Erdogan Is Failing Economics 101


Recep Tayyip Erdogan, flanked by his deputy Ali Babacan and Central Bank Governor Erdem Basci with the symbol for the national currency, the Turkish lira, during a ceremony in Ankara, on March 1, 2012. To Recep Tayyip Erdogan’s handlers, it must have seemed like a good idea at the time. Show off Turkey’s president to a group of London bankers and fund managers over a fancy lunch as a way to reassure nervous investors about the country’s economic stability and viability. After all, Turkey’s Central Bank had recently upped interest rates a higher-than-expected 75 basis points, showing a measure of fiscal prudence at a time of lingering questions about the country’s economic health. But the May 14 luncheon and a subsequent interview with Bloomberg quickly went off the rails. Erdogan ranted against interest rates and raised doubts about the independence of the Central Bank, vowing even tighter control of the economy if he wins another full term after the June 24 elections.

A Call for Realism in Europe

Elmar Hellendoorn

President Donald Trump’s abrogation of the Iran agreement indicates again that progressive Europe is increasingly less relevant to the world. At the same time, the world of power politics has an increasing influence upon Europe. Originally, Realpolitiker Konrad Adenauer and Charles de Gaulle wanted to build Europe as a power bloc that could eventually even resist a rising China. However, the generation of May 1968 rejected such “reactionary” thinking, and thus planted the seeds of contemporary populism. As European societies lose control over their own fate, the guardians of the European project lose their legitimacy.

Hamas, Netanyahu and Mother Nature

By Thomas L. Friedman

Israel's Prime Minister Benjamin Netanyahu speaks on stage as U.S. ambassador to Israel David Friedman (L) looks on during the opening of the US embassy in Jerusalem on May 14, 2018 in Jerusalem, Israel. US President Donald J. Trump's administration officially transfered the ambassador's offices to the consulate building and temporarily use it as the new US Embassy in Jerusalem. Trump in December last year recognized Jerusalem as Israel's capital and announced an embassy move from Tel Aviv, prompting protests in the occupied Palestinian territories and several Muslim-majority countries.

The Israel-Palestine Standoff

by Richard A. Epstein 

Few issues produce more political and emotional discord than the Israeli-Palestinian conflict. In principle, there is much to commend a two-state solution. If achieved, it could allow the two groups to live beside each other in peace. Unfortunately, but unsurprisingly, the interminable peace process came to a screeching halt this past week as the American embassy opened in Jerusalem. An exultant Israeli Prime Minister Benjamin Netanyahu proclaimed before Israeli and American dignitaries, “We are in Jerusalem and we are here to stay.” At the same moment, thousands of angry Palestinian demonstrators were rebuffed with deadly force as they sought to storm into Israel from Gaza. The confrontations took place on May 14 and 15—and the Palestinians consciously timed their protests to correspond with the seventieth anniversary of the Palestinian Exodus that resulted in the birth of the Israeli state. Some 62 Gazans died and thousands were wounded as the Israelis used live ammunition to keep protestors from storming over the barricades into Israel.

What You Need to Know About Trump's Plan for Auto Tariff

Although the United States remains heavily focused on its trade dispute with China, the U.S. administration has another target in its crosshairs: the global automotive sector. The damage to supply chains and the auto sector could dwarf all previous moves made by President Donald Trump. But the proposal is also likely to see substantial pushback from within the United States.

Denuclearization and the Demise of Moammar Gadhafi’s Regime

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The United States has canceled its meeting to negotiate an end to North Korea’s nuclear weapons program. One of the many points of contention was not just if Pyongyang would denuclearize but how it would denuclearize. Some in the Trump administration advocated what is colloquially called the Libya model, a total abdication whereby former Libyan leader Moammar Gadhafi gave up his nuclear program, only to die partly at the hands of the United States years later. The graphic above provides a timeline of the events surrounding this deal.

Japan Wants Closer Relations With Russia. Good Luck With That.

Japan Wants Closer Relations With Russia. Good Luck With That. 

The Japanese prime minister's political troubles will add urgency to his country's bid to improve relations with Russia and resolve their long-standing dispute over contested islands.  But the ongoing standoff between Russia and the United States, lackluster Japanese investment in Russia and Moscow's concerns about sovereignty leave little room for a breakthrough that would move beyond the incremental progress of recent years. That said, Russia will maintain its outreach to Japan to gain leverage in the U.S. camp and in an effort to counterbalance China. 

How Italy's Next Government Will Shake Up the EU

By Adriano Bosoni
Internal disagreements, along with Italy's bureaucracy, vested interests and parallel centers of power, could reduce the next Italian government's room for action on its ambitious agenda.
Though the Five Star Movement and the League parties have pledged to keep Italy in the eurozone, they will use the threat of unilateral action, such as ignoring EU fiscal rules, to negotiate softer deficit targets with Brussels. Renegotiating the European Union's economic governance will be almost impossible, but Brussels will have to decide whether to reach a compromise with Italy, at the cost of alienating Northern Europe, or to hold its ground, increasing the risk of unilateral action from Rome.

What the GDPR Means for Companies in Europe and Beyond

Not all EU member states have enacted national laws on data protection, and many will have difficulty shouldering the costs of doing so. The second half of 2018 will provide early indicators of how much the European Union can influence large technology companies to address the privacy concerns of EU citizens. Uncertainty regarding the severity of national enforcement could influence the regional development of technology, especially in terms of small and medium-sized enterprises.

The Big Picture

30 May 2018

Narendra Modi govt’s last mile challenge

The Narendra Modi government’s last year in office will also be the most difficult one, and the biggest challenge will be to protect macroeconomic stability by not compromising on fiscal discipline The last few months before 2019 Lok Sabha elections could be dominated by economic pressure points, yet the Narendra Modi government is likely to leave behind an Indian economy that is in a far better shape than what it inherited in 2014. Illustration: Jayachandran/Mint The Narendra Modi government completed four years in office last week. Its last few months before the nation goes to the polls could be dominated by economic pressure points—rising inflation, a weak rupee, rural distress and a persistent banking crisis. Yet, it is likely to leave behind an economy that is in a far better shape than what it inherited in 2014.