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“outsourcing production to China does not always relieve consumers in the United States — or for that matter many countries in the Northern Hemisphere — from the environmental impacts of air pollution.”

The movement of air pollutants associated with the production of goods in China for the American market has resulted in a decline in air quality in the Western United States

“Trade changes the location of production and thus affects emissions.”

“Dust, ozone and carbon can accumulate in valleys and basins in California and other Western states,” the statement said.

Black carbon is linked to asthma, cancer, emphysema, and heart and lung disease.

in 2006, sulfate concentrations in the Western United States increased as much as 2 percent, and ozone and carbon monoxide levels also increased slightly because of the transportation of pollutants from emissions that resulted from the manufacture of goods for export to the United States.

The amount of air pollution in the Western United States resulting from emissions from China is still very small compared with the amount produced by sources in the United States that include traffic and domestic industries.

They estimated that in 2006, China’s exporting of goods to the United States was responsible for 7.4 percent of production-based Chinese emissions for sulfur dioxide, 5.7 percent for nitrogen oxides, 3.6 percent for black carbon and 4.6 percent for carbon monoxide.

. Coal-burning factories were the biggest sources of pollutants and greenhouse gases, which contribute to global warming.

“This is a reminder to us that a significant percentage of China’s emissions of traditional pollutants and greenhouse gas emissions are connected to the products we buy and use every day in the U.S. We should be concerned, not only because this pollution is harming the citizens of China, but because it’s damaging the air quality in parts of the U.S.”

So the overall percentages of economic output might not by themselves be fair indicators of the importance of exports to the Chinese economy.

But several senior E.U. officials argued that revealing the immense export efforts that are keeping countries around the world vaccinated and helping the world economy restart might help Europe’s reputation after last week’s dispute.Italy was able to block the shipment to Australia last week under a new emergency rule that allows any E.U. member to halt exports of the vaccines produced in the bloc.

A spokesperson for Moderna, for example, said that the company’s entire supply made in the United States had been bought up by the government

But it did secure a broad portfolio of vaccines on favorable terms on behalf of its members that granted the countries relatively quick access to immunization that most could not have dreamed of had they been acting alone.

Moderna, whose vaccine has also been approved for use by the bloc, has likewise had some problems with supply. Many E.U. countries have also done a poor job getting the vaccines they do have to their citizens because of poor organization and logistics.

Each pharmaceutical company producing in the E.U. would need to request permission to ship vials overseas. The Commission, accused of vaccine nationalism, said the policy was about forcing pharmaceutical companies to be transparent and serve their contracts with the E.U. fully, instead of shortchanging the bloc — where they were operating — to serve other global clients.

“For governments it has always been convenient to say that their hands are tied because they don’t have enough vaccines because of the European Commission,” Mr. Kirkegaard said.

Hopes that supply woes could be eased in the second quarter of this year largely hinge on AstraZeneca’s production picking up and a robust delivery plan by Johnson & Johnson, whose Covid-19 vaccine is set to be authorized by the E.U. regulator on Thursday.

Oil prices dropped from over $100 a barrel in 2014 to just about $35 a barrel today. That's about the same amount it costs to produce a barrel, meaning right now oil producers are making nothing. Natural gas prices are down to their lowest levels in 16 years.

Thanks to new technologies, mostly fracking, which allows producers to extract gas and oil from rocks thousands of feet below the surface of the earth with a mix of high-pressured water and chemicals, production of oil skyrocketed from about 5,000 barrels a day in 2008 to 8,700 in 2014.

On New Year's Eve a Bahamian tanker called the "Theo T" cruised out of Corpus Christi, Texas with the first batch of crude oil to leave US shores in four decades, thanks to the budget bill that enabled it.

The short answer: politics. Without throwing a bone to oil-backed Congresspeople, the budget bill last month would have likely been blocked.

The other problem is leakage: Natural gas has been touted by Obama as a "bridge fuel" to get the world off of coal and other dirtier fuels. But it's only better than coal if the vast majority of it doesn't leak into the atmosphere before being burned.

negate any of its climate benefits,

But it's slightly more clear what oil exports will do: one analysis found exports will allow for 3.3 million more barrels a day of oil to be produced in the US between 2015 and 2035.

"We're already on the frontlines of oil and gas production," Raleigh Hoke, an activist with the Gulf Restoration Network, which works with communities affected by oil and gas in Louisiana, told VICE over the phone. "There are already 28 export facilities being constructed along the coast, so that means countless new pipelines through people's backyards, new trains carrying oil which are dangerous, and it hinders our efforts to restore our wetlands."

"Frankly we just have to wait until November," Athan Manuel, an organizer at the Sierra Club, told VICE. "And then hope we have an anti-fossil fuel Senate and an anti-fossil fuel President."

Of particular concern to Commerce are so-called frontier models. The phrase, popularized in the Washington lexicon by some of the very companies that seek to build these models—Microsoft, Google, OpenAI, Anthropic—describes a kind of “advanced” artificial intelligence with flexible and wide-ranging uses that could also develop unexpected and dangerous capabilities. By their determination, frontier models do not exist yet. But an influential white paper published in July and co-authored by a consortium of researchers, including representatives from most of those tech firms, suggests that these models could result from the further development of large language models—the technology underpinning ChatGPT

The threats of frontier models are nebulous, tied to speculation about how new skill sets could suddenly “emerge” in AI programs.

Among the proposals the authors offer, in their 51-page document, to get ahead of this problem: creating some kind of licensing process that requires companies to gain approval before they can release, or perhaps even develop, frontier AI. “We think that it is important to begin taking practical steps to regulate frontier AI today,” the authors write.

Microsoft, Google, OpenAI, and Anthropic subsequently launched the Frontier Model Forum, an industry group for producing research and recommendations on “safe and responsible” frontier-model development.

Shortly after the paper’s publication, the White House used some of the language and framing in its voluntary AI commitments, a set of guidelines for leading AI firms that are intended to ensure the safe deployment of the technology without sacrificing its supposed benefit

AI models advance rapidly, he reasoned, which necessitates forward thinking. “I don’t know what the next generation of models will be capable of, but I’m really worried about a situation where decisions about what models are put out there in the world are just up to these private companies,” he said.

For the four private companies at the center of discussions about frontier models, though, this kind of regulation could prove advantageous.

Convincing regulators to control frontier models could restrict the ability of Meta and any other firms to continue publishing and developing their best AI models through open-source communities on the internet; if the technology must be regulated, better for it to happen on terms that favor the bottom line.

The obsession with frontier models has now collided with mounting panic about China, fully intertwining ideas for the models’ regulation with national-security concerns. Over the past few months, members of Commerce have met with experts to hash out what controlling frontier models could look like and whether it would be feasible to keep them out of reach of Beijing

That the white paper took hold in this way speaks to a precarious dynamic playing out in Washington. The tech industry has been readily asserting its power, and the AI panic has made policy makers uniquely receptive to their messaging,

“Parts of the administration are grasping onto whatever they can because they want to do something,” Weinstein told me.

The department’s previous chip-export controls “really set the stage for focusing on AI at the cutting edge”; now export controls on frontier models could be seen as a natural continuation. Weinstein, however, called it “a weak strategy”; other AI and tech-policy experts I spoke with sounded their own warnings as well.

The decision would represent an escalation against China, further destabilizing a fractured relationship

Many Chinese AI researchers I’ve spoken with in the past year have expressed deep frustration and sadness over having their work—on things such as drug discovery and image generation—turned into collateral in the U.S.-China tech competition. Most told me that they see themselves as global citizens contributing to global technology advancement, not as assets of the state. Many still harbor dreams of working at American companies.

“If the export controls are broadly defined to include open-source, that would touch on a third-rail issue,” says Matt Sheehan, a Carnegie Endowment for International Peace fellow who studies global technology issues with a focus on China.

What’s frequently left out of considerations as well is how much this collaboration happens across borders in ways that strengthen, rather than detract from, American AI leadership. As the two countries that produce the most AI researchers and research in the world, the U.S. and China are each other’s No. 1 collaborator in the technology’s development.

Assuming they’re even enforceable, export controls on frontier models could thus “be a pretty direct hit” to the large community of Chinese developers who build on U.S. models and in turn contribute their own research and advancements to U.S. AI development,

Within a month of the Commerce Department announcing its blockade on powerful chips last year, the California-based chipmaker Nvidia announced a less powerful chip that fell right below the export controls’ technical specifications, and was able to continue selling to China. Bytedance, Baidu, Tencent, and Alibaba have each since placed orders for about 100,000 of Nvidia’s China chips to be delivered this year, and more for future delivery—deals that are worth roughly $5 billion, according to the Financial Times.

In some cases, fixating on AI models would serve as a distraction from addressing the root challenge: The bottleneck for producing novel biochemical weapons, for example, is not finding a recipe, says Weinstein, but rather obtaining the materials and equipment to actually synthesize the armaments. Restricting access to AI models would do little to solve that problem.

there could be another benefit to the four companies pushing for frontier-model regulation. Evoking the specter of future threats shifts the regulatory attention away from present-day harms of their existing models, such as privacy violations, copyright infringements, and job automation

“People overestimate how much this is in the interest of these companies,”

AI safety as a domain even a few years ago was much more heterogeneous,” West told me. Now? “We’re not talking about the effects on workers and the labor impacts of these systems. We’re not talking about the environmental concerns.” It’s no wonder: When resources, expertise, and power have concentrated so heavily in a few companies, and policy makers are seeped in their own cocktail of fears, the landscape of policy ideas collapses under pressure, eroding the base of a healthy democracy.

Together with—and perhaps because of—its economic malaise, the country is living through a political earthquake. Germany’s wealth, its exemplary parliamentary democracy, and its big efforts to confront its Nazi history are no longer keeping nativist parties at bay.

Outside the EU, “made in Germany” goods struggle to find new clients. Exports to China have been roughly flat since mid-2015 and may even start to drop, as President Xi Jinping has made clear that he wants to make his country less dependent on European industry

The Federal Republic is the only big Euro member whose economy has not yet fully recovered to pre-pandemic levels. In fact, German GDP has roughly stagnated since 2019. And German manufacturing is the main problem: Industrial output lags pre-pandemic levels by some 5 percent.

The reason Germany ceased to be Europe’s growth engine has less to do with Russian energy than with changing circumstances in the export markets where the country’s industrial champions once flourished

In the 2000s, former Chancellor Gerhard Schröder slashed unemployment benefits and created a low-wage sector to help German exporters increase their market shares across Europe. Since then, many other European countries, including France and Italy, have made reforms to cut labor costs themselves, and Germany faces tougher competition in its biggest export market and has been running a trade deficit in goods with other EU members since 2020.

We are living through the end of German exceptionalism. The country’s economy is fragile, and the rise of the AfD makes its politics as unpredictable as those of Austria or Italy. In short, Germany is joining the European mainstream. And that means that trouble is ahead.

German car exports to China were down 24 percent in the first three months of 2023 compared with the same period in 2022

The U.S. is Germany’s second-largest market after the EU, accounting for 8.9 percent of its exports, but to top off Germany’s troubles, Washington is becoming more protectionist under Joe Biden.

The obvious solution is for Germany to spend more. Greater investment could raise productivity in a country where the railways have the worst delays among major European countries and cellphone and internet connectivity are underfunded

Investment could boost demand, and liberalizing policies could rebalance the economy toward services.

But a dogma of balanced budgets and debt avoidance remains deeply anchored among German politicians and voters.

Now Germany, whose effort to confront its Nazi history seemed to inoculate its politicians from having to deal with a large far-right party, is also falling prey to populism and nationalism.

ore and more governments across Europe are led by right-wing parties: in Italy, Sweden, Finland, and soon possibly Spain. In all of these countries, the center-right no longer has qualms about working with the far-right.

the penny has not yet dropped. Germany’s political elite hasn’t been moved to take the risky step of running up debts and liberalizing at the same time. But until it does, the country’s economy will likely lag European growth. And if the economy ceases to serve as a source of national pride, political forces may thrive by brandishing more nativist concepts of German identity.

The AfD’s rise to 20 percent in the polls—twice what it commanded in the 2021 parliamentary elections—has many causes. The party’s bastion is the formerly Communist east, where authoritarian attitudes and resentment of traditional parties feed off of feelings of having been the losers in Germany’s reunification

But something broader is going on. For Germans, the hallmark of good government is “Ruhe und Ordnung,” calm and order. The three parties in Scholz’s ruling coalition—the center-left SPD, the Greens, and the pro-business FDP—squabble over everything

The party has also benefited from a backlash against Germany’s progressive agenda on climate and migration

Despite the country’s reputation abroad as a climate champion, in a poll of seven European countries, Germans were the least willing among Europeans to switch to electric cars, cut meat consumption, or spend out of their own pockets to renovate their houses to save the climate.

As for migration, racist views are ingrained in Germany’s formerly Communist east

But the AfD has also been able to mobilize an anti-immigration electorate in big, rich, formerly West German states, such as Bavaria, the land of Siemens and Weisswurst, and Baden-Württemberg

the CDU will need to decide whether it will continue marginalizing the far-right or start working with it instead. The AfD is leading the polls in Thuringia and polling a strong second in Saxony

ermany is joining the European mainstream, with its political class struggling to counter rising far-right support and an economy that is no longer best-in-class. The two things that made postwar Germany unique in Europe are no more

the rise of the AfD is pushing Berlin to become an unreliable partner in Europe. The CDU was once the champion of Schengen, the EU’s policy to allow for passport-less travel across the continent. The party’s leader, Merz, clearly concerned about covering his right flank, has now called for reintroducing passport checks at Germany’s borders with other EU members, such as Czechia, in order to turn away migrants.

As the AfD criticizes the “reckless” spending of the Scholz government, the FDP and the chancellor are doubling down on spending cuts. Germany is becoming less willing to spend for itself and the EU.

The AfD may one day accede to national government, but it cannot do so on its own. To work in a coalition, the party will almost certainly have to compromise on its most radical policy propositions, such as closing the U.S. military base in Ramstein. But even with the AfD merely exerting pressure on German politics, the EU must sooner or later face an adjustment—to a future in which Germany is no longer an economic and political anchor so much as a source of instability.

“This is something that European politicians and consumers didn’t want to admit for quite a long time. It sounds terrible, but that’s the reality. In wartime the economy is mobilized. The decisions are made by the governments, not by the free market. This is the case for Europe this winter,” she said, adding that we may see forced rationing, price controls, the suspension of energy markets and shutdowns of whole industrial sectors. “We are not actually talking about extremely high prices, but we are talking about physical absence of energy resources in certain parts of Europe.”

I think you would see Russia continue to restrict gas exports and maybe cut them off completely to Europe — and a very cold winter. I think a combination of those two things would mean sky-high energy prices.

Europe has been finding all the supplies that it can, but governments are realizing that’s not going to be sufficient. There are going to have to be efforts taken to curb demand as well and to prepare for the possibility of really severe energy rationing this winter.

If things become really severe this winter, I fear that you could see European countries start to look out for themselves rather than one another.

I think we could start to see governments saying, “Well, we’re going to restrict exports. We’re going to keep our energy at home.” Everyone starts to just look out for themselves, which I think would be exactly what Putin would hope for.

it would be wise to assume that Russia will use every opportunity it can to turn the screws on Europe.

It’s increasingly clear that Vladimir Putin is using gas as a weapon and trying to supply just enough gas to Europe to keep Europe in a perpetual state of panic about its ability to weather the coming winter.

governments will have to ration energy supplies and decide what’s important.

Since Russia invaded Ukraine and maybe until very recently, I’ve had the sense that the European public and the public beyond Europe, as well as policymakers, have been a little bit sleepwalking into a looming crisis.

here was some unrealistic optimism about how quickly Europe could do without Russian gas. And we took too long to confront seriously just how bad the numbers would look if the worst came to pass.

I think there was continued skepticism that Putin would really cut the gas supply. “It might be declining. It might be a little bit lower,” people thought. “But he’s not really going to shut off the supply.” And I think now everyone’s recognizing that’s a real possibility.

Putin has the ability to do a lot of damage to the global economy — and himself, to be sure — if he cuts oil exports as well.

There’s no extra oil supply in the world at all, as OPEC Plus reminded everyone by saying: No, we’re not going to be increasing production much, and we can’t even if we wanted to.

For all the talk about high gasoline prices and the rhetoric of Putin’s energy price hike, Russia’s oil exports have not fallen very much. If that were to happen — either because the U.S. and Europe forced oil to come off the market to put economic pressure on Putin or because he takes the oil off the market to hurt all of us — oil prices go up enormously.

That’s because there’s just no extra supply out there today at all. There’s a very little extra supply that the Saudis and the Emiratis can put on the market. And that’s about it. We’ve used the strategic petroleum reserve, and that’s coming to an end in the next several months.

it depends how much he takes off the market. We don’t know exactly. If Russia were to cut its oil exports completely, the prices would just skyrocket — to hundreds of dollars a barrel, I think.

We’re heading into a winter where markets might simply not be able to work anymore as the instrument by which you determine supply and demand.

if prices just soar to uncontrollable levels, markets are not going to work anymore. You’re going to need governments to step in and decide who gets the scarce energy supplies — how much goes to heating homes, how much goes to industry. There’s going to be a pecking order of different industries, where some industries are deemed more important to the economy than others.

a lot of governments in Europe are putting in place those kinds of emergency plans right now.

if the worst comes to pass, governments will, by necessity, step in to say: Homes get the natural gas, and parts of industry get dumped. Probably they would set price caps on energy or massively subsidize it. So it’s going to be very painful.

Worryingly for the European economy, this may mean that factories that can’t switch fuels will go dormant.

Today, before winter comes, gas prices in Europe are around $60 per million British thermal units. That compares to around $7 to $8 here in the United States

if the worst comes to pass, the market, as a mechanism, simply won’t work. The market will break. The prices will go too high. There’s just not enough energy for the market to balance at a certain price.

don’t forget, the amount of liquid natural gas that Europe is importing today — Asia is competing for those shipments. What happens if the Asia winter is very bad? What happens if China and others are willing to pay very high prices for it?

I think we’re in a multiyear potential energy crisis.

one thing that hasn’t gotten enough attention and that I worry most about is the impact this is having on emerging markets and the developing economies, because it is an interconnected market. When Europe is competing to buy L.N.G. at very high prices, not to mention Asia, that means if you’re in Pakistan or Bangladesh or lower-income countries, you’re really struggling to afford it. You’re just priced out of the market for natural gas — and coal. Coal is incredibly expensive now,

I think that that is a real potential humanitarian crisis, as a ripple effect of what’s happening in Europe right now.

right now, the price of gas in Europe is about four times what it was last year. Russia has cut flows to Europe by two-thirds but is earning the same revenue as it did last year. So Putin is not being hurt by the loss of gas exports to Europe. Europe’s being hurt by that.

this situation could last for several years.

Could the energy crisis bring about a change of heart, in which European countries withdraw some of their support or even begin to pressure Ukraine to negotiate a settlement? Is it possible that could even happen in advance of this winter?

you would imagine that, over time, when you don’t see Ukraine on the front page each and every day, eventually people’s attention wanes a bit and at a certain point the economic pain of high energy prices or other economic harms from the conflict reach a point where support may start to fracture a bit.

Whether that reaches a point where you start to see the West put pressure on Ukraine to capitulate, I think we’re pretty far away from that now, because everyone recognizes how outrageous and unacceptable Putin’s conduct is.

3) Nuclear capabilities have been provenA series of successful missile tests have demonstrated the regime's ability to develop nuclear weapons, each one more seemingly more sophisticated than the last. And despite the bellicose rhetoric from the US and Donald Trump, North Korea has managed to consistently conduct its missile tests with no real retaliation or repercussions, barring sanctions. Image copyright EPA Image caption South Korea's President Moon wants more engagement with the North So in a sense, Kim Jong Un isn't losing anything by negotiating with South Korea.

In summary...Let's be realistic. Kim Jong Un isn't desperate yet. Sanctions and a weaker economy aren't going to have the regime discarding its nuclear goals. And there are still plenty of ways for it to make money, including via the latest asset class to hit international markets - cryptocurrencies.But it IS possible to see why North Korea may be more inclined to head to the negotiating table - especially with South Korea which has already said it may consider removing some sanctions temporarily during next month's Winter Olympics.

The economic crisis is everywhere. In December, bread lines stretched around the corner. And as the Turkish lira plunged, Turks around the country rushed to change money into U.S. dollars.

But President Recep Tayyip Erdogan says it's part of his plan.

The economic pain runs deep. Extensive borrowing and previous interest rate cuts were already driving up prices. But analysts say Erdogan's recent medicine is making the country sicker. Under his pressure, since September, Turkey's Central Bank slashed interest rates four times.

Soner Cagaptay, Washington Institute for Near East Policy: Anyone who took econ 101 in college would know, if your inflation climbs up, interest rates have to follow that. Erdogan is doing the opposite.

He says Erdogan's motivation is difficult to know, but, in the last few months of 2021, the lira lost almost half of its value, in December, 18.4 for $1. And a weak lira can boost tourism and Turkish exports.

Erdogan is maybe trying to create what is called growth out of contraction. In other words, let the economy crash and burn, and that will make Turkish exports very affordable, because the lira has lost its value, and the country will have a restored growth driven by strong export sector and also demand for Turkish tourism and services.

There are some signs of increased tourism. Last month, Bulgarians by the busload arrived in Istanbul to buy cheap groceries and bargain bazaar Christmas gifts.And Erdogan says exports are at an all-time high. Turkish authorities have also raised the minimum wage by 50 percent. And a new plan pays Turks to keep their bank deposits in lira. But the depreciation is still large, as is the anger. In November, protesters called for the government to resign and the police to back down.

If Erdogan does not restore economic growth, he's not going to win the next elections in 2023. We're going to see the country's economic resilience pushed back, and also a more unified opposition.

At this stage, I think the only way for him to stick to power — it looks like he's not going to be able to restore strong economic growth — is by becoming more autocratic only.

maybe most controversially, the Biden team added a “foreign direct product rule” that, as The Financial Times noted, “was first used by the administration of Donald Trump against Chinese technology group Huawei” and “in effect bars any U.S. or non-U.S. company from supplying targeted Chinese entities with hardware or software whose supply chain contains American technology.”

This last rule is huge, because the most advanced semiconductors are made by what I call “a complex adaptive coalition” of companies from America to Europe to Asia

The more we push the boundaries of physics and materials science to cram more transistors onto a chip to get more processing power to continue to advance artificial intelligence, the less likely it is that any one company, or country, can excel at all the parts of the design and manufacturing process. You need the whole coalition

The reason Taiwan Semiconductor Manufacturing Company, known as TSMC, is considered the premier chip manufacturer in the world is that every member of this coalition trusts TSMC with its most intimate trade secrets, which it then melds and leverages for the benefit of the whole.

“We do not make in the U.S. any of the chips we need for artificial intelligence, for our military, for our satellites, for our space programs” — not to mention myriad nonmilitary applications that power our economy. The recent CHIPS Act, she said, was our “offensive initiative” to strengthen our whole innovation ecosystem so more of the most advanced chips will be made in the U.S.

It managed to pilfer a certain amount of chip technology, including 28 nanometer technology from TSMC back in 2017.

Because China is not trusted by the coalition partners not to steal their intellectual property, Beijing is left trying to replicate the world’s all-star manufacturing chip stack on its own with old technologies

China can’t mass produce these chips with precision without ASML’s latest technology — which is now banned from the country.

Raimondo rejects the idea that the new regulations are tantamount to an act of war.

“The U.S. was in an untenable position,” she told me in her office. “Today we are purchasing 100 percent of our advanced logic chips from abroad — 90 percent from TSMC in Taiwan and 10 percent from Samsung in Korea.” (That IS pretty crazy, but it IS true.)

Until recently, China’s premier chip maker, Semiconductor Manufacturing International Company, had been thought to be stuck at mostly this chip level,

Imposing on China the new export controls on advanced chip-making technologies, she said, “was our defensive strategy. China has a strategy of military-civil fusion,” and Beijing has made clear “that it intends to become totally self-sufficient in the most advanced technologies” to dominate both the civilian commercial markets and the 21st century battlefield. “We cannot ignore China’s intentions.”

So, to protect ourselves and our allies — and all the technologies we have invented individually and collectively — she added, “what we did was the next logical step, to prevent China from getting to the next step.” The U.S. and its allies design and manufacture “the most advanced supercomputing chips, and we don’t want them in China’s hands and be used for military purposes.”

Our main focus, concluded Raimondo, “is playing offense — to innovate faster than the Chinese. But at the same time, we are going to meet the increasing threat they are presenting by protecting what we need to. It is important that we de-escalate where we can and do business where we can. We don’t want a conflict. But we have to protect ourselves with eyes wide open.”

China’s state-directed newspaper Global Times editorialized that the ban would only “strengthen China’s will and ability to stand on its own in science and technology.” Bloomberg quoted an unidentified Chinese analyst as saying “there is no possibility of reconciliation.”

“It’s a historic, big deal,” said Robert McNally, an energy adviser to President George W. Bush. “This will reshape not only commercial relationships but political and geopolitical ones as well.”E.U. officials have yet to release all the details of their effort to squelch Russian oil exports but have said those policies will go into effect over months. That is meant to give Europeans time to prepare, but it will also give Russia and its partners time to devise workarounds. Who will adapt

Russian natural gas for some time, possibly years. That could preserve some of Mr. Putin’s leverage, especially if gas demand spikes during a cold winter. European leaders have fewer alternatives to Russian gas because the world’s other major suppliers of that fuel — the United States, Australia and Qatar — can’t quickly expand exports substantially.Russia also has other cards to play, which could undermine the effectiveness of the European embargo.

Another hope of Western leaders is that their moves will reduce Russia’s position in the global energy industry. The idea is that despite its efforts to find new buyers in China, India and elsewhere, Russia will export less oil overall. As a result, Russian producers will need to shut wells, which they will not be able to easily restart because of the difficulties of drilling and producing oil in inhospitable Arctic fields.

“Why wait six months?” asked David Goldwyn, a top State Department energy official in the Obama administration. “As the sanctions are configured now, all that will happen is you will see more Russian crude and product flow to other destinations,” he said. But he added, “It’s a necessary first step.”

In addition, Germany and Poland have pledged to stop importing oil from Russia by pipeline, which means Europeans could reduce Russian imports by 3.3 million barrels a day by the end of the year.And the union has said European companies will no longer be allowed to insure tankers carrying Russian oil anywhere. That ban will also be phased in over several months. Because many of the world’s largest insurers are based in Europe, that move could significantly raise the cost of shipping Russian energy, though insurers in China, India and Russia itself might now pick up some of that business.Before the invasion of Ukraine, roughly half of Russia’s oil exports went to Europe, representing $10 billion in transactions a month. Sales of Russian oil to E.U. members have declined somewhat in the last few months, and those to the United States and Britain have been eliminated.

India is getting about 600,000 barrels a day from Russia, up from 90,000 a day last year, when Russia was a relatively minor supplier. It is now India’s second-biggest supplier after Iraq.But India could find it difficult to keep buying from Russia if the European Union’s restrictions on European companies insuring Russian oil shipments raise costs too much.“India is a winner,” said Helima Croft, RBC’s head of commodity strategy, “as long as they are not hit with secondary sanctions.”

China’s technocrats have, to date, demonstrated competence in managing the economy’s imbalances.

Mainland China has delivered significant extra returns -- 87 basis points a year more than the mighty S&P -- for anyone willing to hack the wild volatility

“On balance,” Adam sums up, “If you want to be part of history-making economic transformation, China is still the place to be.”

The third point is where we disagree. We just don’t see China as having any good options for maintaining strong growth. 

we think China’s underlying growth story is coming to an end as the country’s economic imbalances become unsustainable and global decoupling picks up steam. The volatility and low valuations, on the other hand, are likely here to stay. 

Replace bad investment with domestic consumption. 

What imbalances are we talking about? In crude summary, China’s growth has been driven by debt-funded investment, especially in property and infrastructure. The problem is that the returns on these investments are in fast decline, even as debt continues to build up.

This can’t go on forever. Eventually, you have all the bridges, trains, airports and apartment blocks you need, and the return on new ones falls below zero (How do you know that you have arrived at that point? When you have a financial crisis).

The problem is that without a healthy consumer, China’s only real options to create growth are investment and exports -- and at the same time as return on internal investments are declining, the rest of the world, led by the US, are increasingly wary of dependence on Chinese exports. 

What are China’s policy options? Broadly, there are five, as Micheal Pettis explained to us:

Stay with the current model.

Replace bad investment in things like infrastructure and real estate with good investment in things like tech and healthcare.

Beijing has policy options.

Replace bad investment with (even) move exports and a wider current account surplus.

Just quit it with the bad investment. 

we think that options 1 and 5 are not really options at all. The current model will lead to a financial crisis as return on investment falls further and further behind the costs of debt. Simply ceasing to overinvest in infrastructure and real estate, without changing anything else, will simply kill growth. 

Option 2 might be summed up -- as Jason Hsu of Ralient Global Advisors summed it up to us -- as China becoming more like Germany.

The idea is that China would steer more and more money away from real estate and towards high value-add sectors from biotech to chip manufacturing. 

The problem with option 2 is that investment is such a huge part of the Chinese economy that it is difficult to see how that the capital could be efficiently allocated to the country's tech-heavy, high value-add sectors, which are comparatively small

The most promising Chinese firms are swimming in capital as it is. And developing productive capacity isn't just about capital. It takes things the state can't rapidly deploy, like knowhow and intellectual property.

Option 3 is more promising. China could start, as Adam suggests, by building up a proper welfare safety net. But it is reasonable to expect pretty serious social and institutional resistance to this sort of mass redistribution.

why hasn’t China increased its welfare state until now? Longtime China watcher and friend of Unhedged George Magnus suggests it is because of a deep bias in the Chinese policy establishment. “It’s how Leninist systems operate: they think production and supply are everything … if you see a demand problem as a supply problem, you get the wrong answers.”

Option 4, increasing exports’ share of China’s economy even further, may be in the abstract the most appealing. But it runs directly into the fact that both China and the US and its allies have reasons to reduce mutual dependence on their economies.

The emergence of geopolitical divisions between the west, on the one hand, and Russia and China, on the other, will put globalisation at risk. The autocracies will try to reduce their dependence on western currencies and financial markets. Both they and the west will try to reduce their reliance on trade with adversaries. Supply chains will shorten and regionalise… 

Russia must remain a pariah so long as this vile regime survives. But we will also have to devise a new relationship with China. We must still co-operate. Yet we can no longer rely upon this rising giant for essential goods. We are in a new world. Economic decoupling will now surely become deep and irreversible.

In all, the most likely scenario is that China’s growth just keeps slowing. That does not mean that investors in China will necessarily lose money. But it does suggest that generic China exposure -- simply owning Chinese equity or credit indices -- is going to be a losing proposition in the long-term

No border divides the pain caused by drugs from the pain brought about in Latin America by the drug business and the narcotraficantes.  It’s one big continent of pain–and in the last several years the narcos have begun selling drugs in earnest in their own countries, creating new cultures of addiction and misery.  

Many talk about legalizing drugs, and there’s something to be said for changing the economic arrangements. But what about reducing their use by developing and promoting more interesting and productive ways of dealing with suffering? Or even getting directly at the causes of that suffering?

Here in the United States, there’s no room for sadness, but there are plenty of drugs for it, and now when people feel sad, even many doctors think they should take drugs. We undergo losses and ordeals and live in circumstances that would make any sane person sad, and then we say: the fault was yours and if you feel sad, you’re crazy or sick and should be medicated. Of course, now ever more Americans are addicted to prescription drugs, and there’s always the old anesthetic of choice, alcohol, but there is one difference: the economics of those substances are not causing mass decapitations in Mexico.

We give you money and guns, lots and lots of money. You give us drugs. The guns destroy. The money destroys. The drugs destroy. The pain migrates, a phantom presence crossing the border the other way from the crossings we hear so much about.The drugs are supposed to numb people out, but that momentary numbing effect causes so much pain elsewhere. There’s a pain economy, a suffering economy, a fear economy, and drugs fuel all of them rather than making them go away.

We’ve had movements to get people to stop buying clothes and shoes made in sweatshops, grapes picked by exploited farmworkers, fish species that are endangered, but no one’s thought to start a similar movement to get people to stop consuming the drugs that cause so much destruction abroad.

I have been trying to imagine the export economy of pain. What does it look like? I think it might look like air-conditioning. This is how an air conditioner works: it sucks the heat out of the room and pumps it into the air outside. You could say that air-conditioners don’t really cool things down so much as they relocate the heat. The way the transnational drug economy works is a little like that: people in the U.S. are not reducing the amount of pain in the world; they’re exporting it to Mexico and the rest of Latin America as surely as those places are exporting drugs to us.

Mexico, I am sorry.  I want to see it all change, for your sake and ours. I want to call pain by name and numbness by name and fear by name. I want people to connect the dots from the junk in their brain to the bullet holes in others’ heads. I want people to find better strategies for responding to pain and sadness. I want them to rebel against those parts of their unhappiness that are political, not metaphysical, and not run in fear from the metaphysical parts either.

A hundred years ago, your dictatorial president Porfiro Díaz supposedly remarked, “Poor Mexico, so far from God and so close to the United States,” which nowadays could be revised to, “Painful Mexico, so far from peace and so close to the numbness of the United States.”

Based on the current trajectory, war between the United States and China in the decades ahead is not just possible, but much more likely than recognized at the moment. Indeed, judging by the historical record, war is more likely than not.

A risk associated with Thucydides’s Trap is that business as usual—not just an unexpected, extraordinary event—can trigger large-scale conflict. When a rising power is threatening to displace a ruling power, standard crises that would otherwise be contained, like the assassination of an archduke in 1914, can initiate a cascade of reactions that, in turn, produce outcomes none of the parties would otherwise have chosen.

The preeminent geostrategic challenge of this era is not violent Islamic extremists or a resurgent Russia. It is the impact that China’s ascendance will have on the U.S.-led international order, which has provided unprecedented great-power peace and prosperity for the past 70 years. As Singapore’s late leader, Lee Kuan Yew, observed, “the size of China’s displacement of the world balance is such that the world must find a new balance. It is not possible to pretend that this is just another big player. This is the biggest player in the history of the world.”

More than 2,400 years ago, the Athenian historian Thucydides offered a powerful insight: “It was the rise of Athens, and the fear that this inspired in Sparta, that made war inevitable.

Note that Thucydides identified two key drivers of this dynamic: the rising power’s growing entitlement, sense of its importance, and demand for greater say and sway, on the one hand, and the fear, insecurity, and determination to defend the status quo this engenders in the established power, on the other.

However unimaginable conflict seems, however catastrophic the potential consequences for all actors, however deep the cultural empathy among leaders, even blood relatives, and however economically interdependent states may be—none of these factors is sufficient to prevent war, in 1914 or today.

Four of the 16 cases in our review did not end in bloodshed. Those successes, as well as the failures, offer pertinent lessons for today’s world leaders. Escaping the Trap requires tremendous effort

Lee Kuan Yew, the world’s premier China watcher and a mentor to Chinese leaders since Deng Xiaoping. Before his death in March, the founder of Singapore put the odds of China continuing to grow at several times U.S. rates for the next decade and beyond as “four chances in five.

Could China become #1? In what year could China overtake the United States to become, say, the largest economy in the world, or primary engine of global growth, or biggest market for luxury goods?

Could China Become #1? Manufacturer: Exporter: Trading nation: Saver: Holder of U.S. debt: Foreign-direct-investment destination: Energy consumer: Oil importer: Carbon emitter: Steel producer: Auto market: Smartphone market: E-commerce market: Luxury-goods market:   Internet user: Fastest supercomputer: Holder of foreign reserves: Source of initial public offerings: Primary engine of global growth: Economy: Most are stunned to learn that on each of these 20 indicators, China has already surpassed the U.S.

In 1980, China had 10 percent of America’s GDP as measured by purchasing power parity; 7 percent of its GDP at current U.S.-dollar exchange rates; and 6 percent of its exports. The foreign currency held by China, meanwhile, was just one-sixth the size of America’s reserves. The answers for the second column: By 2014, those figures were 101 percent of GDP; 60 percent at U.S.-dollar exchange rates; and 106 percent of exports. China’s reserves today are 28 times larger than America’s.

On whether China’s leaders are serious about displacing the United States as the top power in Asia in the foreseeable future, Lee answered directly: “Of course. Why not … how could they not aspire to be number one in Asia and in time the world?” And about accepting its place in an international order designed and led by America, he said absolutely not: “China wants to be China and accepted as such—not as an honorary member of the West.”

As the United States emerged as the dominant power in the Western hemisphere in the 1890s, how did it behave? Future President Theodore Roosevelt personified a nation supremely confident that the 100 years ahead would be an American century. Over a decade that began in 1895 with the U.S. secretary of state declaring the United States “sovereign on this continent,” America liberated Cuba; threatened Britain and Germany with war to force them to accept American positions on disputes in Venezuela and Canada; backed an insurrection that split Colombia to create a new state of Panama (which immediately gave the U.S. concessions to build the Panama Canal); and attempted to overthrow the government of Mexico, which was supported by the United Kingdom and financed by London bankers. In the half century that followed, U.S. military forces intervened in “our hemisphere” on more than 30 separate occasions to settle economic or territorial disputes in terms favorable to Americans, or oust leaders they judged unacceptable

When Deng Xiaoping initiated China’s fast march to the market in 1978, he announced a policy known as “hide and bide.” What China needed most abroad was stability and access to markets. The Chinese would thus “bide our time and hide our capabilities,” which Chinese military officers sometimes paraphrased as getting strong before getting even.

With the arrival of China’s new paramount leader, Xi Jinping, the era of “hide and bide” is over

Many observers outside China have missed the great divergence between China’s economic performance and that of its competitors over the seven years since the financial crisis of 2008 and Great Recession. That shock caused virtually all other major economies to falter and decline. China never missed a year of growth, sustaining an average growth rate exceeding 8 percent. Indeed, since the financial crisis, nearly 40 percent of all growth in the global economy has occurred in just one country: China

What Xi Jinping calls the “China Dream” expresses the deepest aspirations of hundreds of millions of Chinese, who wish to be not only rich but also powerful. At the core of China’s civilizational creed is the belief—or conceit—that China is the center of the universe. In the oft-repeated narrative, a century of Chinese weakness led to exploitation and national humiliation by Western colonialists and Japan. In Beijing’s view, China is now being restored to its rightful place, where its power commands recognition of and respect for China’s core interests.

Last November, in a seminal meeting of the entire Chinese political and foreign-policy establishment, including the leadership of the People’s Liberation Army, Xi provided a comprehensive overview of his vision of China’s role in the world. The display of self-confidence bordered on hubris. Xi began by offering an essentially Hegelian conception of the major historical trends toward multipolarity (i.e. not U.S. unipolarity) and the transformation of the international system (i.e. not the current U.S.-led system). In his words, a rejuvenated Chinese nation will build a “new type of international relations” through a “protracted” struggle over the nature of the international order. In the end, he assured his audience that “the growing trend toward a multipolar world will not change.”

Given objective trends, realists see an irresistible force approaching an immovable object. They ask which is less likely: China demanding a lesser role in the East and South China Seas than the United States did in the Caribbean or Atlantic in the early 20th century, or the U.S. sharing with China the predominance in the Western Pacific that America has enjoyed since World War II?

At this point, the established script for discussion of policy challenges calls for a pivot to a new strategy (or at least slogan), with a short to-do list that promises peaceful and prosperous relations with China. Shoehorning this challenge into that template would demonstrate only one thing: a failure to understand the central point I’m trying to make

What strategists need most at the moment is not a new strategy, but a long pause for reflection. If the tectonic shift caused by China’s rise poses a challenge of genuinely Thucydidean proportions, declarations about “rebalancing,” or revitalizing “engage and hedge,” or presidential hopefuls’ calls for more “muscular” or “robust” variants of the same, amount to little more than aspirin treating cancer. Future historians will compare such assertions to the reveries of British, German, and Russian leaders as they sleepwalked into 1914

The rise of a 5,000-year-old civilization with 1.3 billion people is not a problem to be fixed. It is a condition—a chronic condition that will have to be managed over a generation

Success will require not just a new slogan, more frequent summits of presidents, and additional meetings of departmental working groups. Managing this relationship without war will demand sustained attention, week by week, at the highest level in both countries. It will entail a depth of mutual understanding not seen since the Henry Kissinger-Zhou Enlai conversations in the 1970s. Most significantly, it will mean more radical changes in attitudes and actions, by leaders and publics alike, than anyone has yet imagined.

One area is freeing itself from US hegemony and is thriving, but may founder if Chinese and Indian growth slows. Another is increasingly integrated with the US and Canada. Despite its current travails, it will discover a path to prosperity when the US does.

Our postwar statesmen were neither weak nor incompetent. They were the architects of the greatest foreign policy triumph in U.S. history.

o successful was this policy that Americans now—most of whom weren’t alive to witness the enormity of these wars—see peace, unity, prosperity and stability as Europe’s natural state. This is an illusion. For centuries, Europe was the fulcrum of global violence. With the age of global exploration, it became the globe’s primary exporter of violence

The U.S. military was always an integral part of the plan to unite and rebuild Europe from the rubble. Since World War II, U.S. troops have been deployed in Eurasia to ensure the continent cannot be dominated by a single power capable of monopolizing its resources and turning them against the U.S. The United States has built overwhelmingly massive military assets there to deter local arms races before they begin, and it has simultaneously assured those under U.S. protection that there is no need to begin local arms races, for their safety is guaranteed.

Only America, and massive power as the U.S. exercised it, could have pacified and unified Europe under its aegis. No other continental country possessed half the world’s GDP. No other country had enough distance from Europe to be trusted, to a large extent, by all parties and indifferent to its regional jealousies. No other country had a strategic, moral and economic vision for Europe that its inhabitants could be persuaded gladly to share

The founders of these institutions fully intended them to be the foundations of a United States of Europe, much like the United States of America. Profound economic interdependence, they believed, would make further European wars impossible.

At the same time, the United States built an open, global order upon an architecture of specific institutions: the United Nations, the International Monetary Fund and the International Court of Justice. This order is in many respects an empire—a Pax Americana—but it is more humane than any empire that preceded it, with institutions that are intended to benefit all parties.

Through the application of economic, diplomatic and military force majeure, the United States suppressed Europe’s internal security competition. This is why postwar Europe ceased to be the world’s leading exporter of violence and became, instead, the world’s leading exporter of luxury sedans.

American grand strategy rests upon the credibility of its promise to protect American allies; this credibility rests, in turn, upon U.S. willingness to display its commitment.

The Soviet Union’s criticism of the Marshall Plan and other American involvement in Europe was eerily similar to the language Russia’s now uses in its campaign to undermine NATO and the EU. The vocabulary and tropes of Russian propaganda are widely echoed, wittingly or unwittingly, by far-right, far-left and other antiliberal politicians, parties and movements throughout the West

The loudest exponent of the idea that the U.S. is getting rolled, that the European Union was “created to destroy us,” and that multilateral institutions such as the World Trade Organization assault the “sovereignty” of the nations concerned is, unfortunately, the president of the United States.

It’s hard to understate how foolish and reckless these notions are. History can be shoved down the memory hole, for a time, but reality is never so cooperative.

The Second World War proved not only that isolationism and American-Firstism were fantasies, but exceptionally childish and dangerous ones, at that. In the age of hyperglobalized trade, international air travel, the internet, nuclear weapons and intercontinental ballistic missiles, these fantasies are even more childish and dangerous. The U.S. may be on another continent, but it is not on another planet.

It is true that the U.S. spends more on its military, in absolute dollars and as a percentage of GDP, than any European country. That was always part of the deal. The U.S. is a global superpower. It can fight a war anywhere in the world, invade any country at will, and (at least in theory) fight multiple simultaneous major wars—even in space. Of course this costs more. It is in America’s advantage to be the only power on the planet that can do this.

Conversely, it is not remotely in America’s advantage for other countries to spend as much money on their militaries as we do

Trump’s refusal to deter our shared enemies and protect our allies risks provoking a regional European arms race—exactly what the U.S. has sought to avoid for 74 years

Above all, Trump’s overt support for sordid, Kremlin-backed actors who seek to undermine Europe’s unity is unfathomable: How could it be in Europe’s interest, or in ours, for the American president to lend the United States’ prestige and support to Europe’s Nazis, neo-Nazis, doctrinal Marxists, populists, authoritarians, and ethnic supremacists, particularly since all of them are ideologically hostile to the United States?

Should the unraveling of the order the U.S. built proceed at this pace, the world will soon be neither peaceful nor prosperous. Nor will the effects be confined to regions distant from the United States. America will feel them gradually, and then, probably, overnight—in the form of a devastating, sudden shock.

The American-led world order, undergirded by the ideal of liberal democracy, has been highly imperfect. But it has been the closest thing to Utopia our fallen and benighted species has ever seen. Its benefits are not just economic, although those benefits are immense. Its benefits must be measured in wars not fought, lives not squandered

With no deal, Britain and the EU would impose tariffs on each other’s imports for the first time in more than 40 years.

effect of tariffs on final goods prices is diluted by several factors: importers may absorb them rather than pass them on to customers, and they do not apply to rent, transport and other elements of the cost of supplying goods.

Cars exported from Britain to the EU would incur a tariff of 10%; most car parts would be taxed at between 3% and 4.5% (though the EU’s rates reach 8%, for soft-top roofs). That is a blow to an industry that accounts for 14% of British goods exports.

Non-tariff barriers, such as administrative and safety checks, and the requirement to fill in customs forms, also impose costs.

Even with an FTA, some of these barriers would remain. But without one, as The UK in a Changing Europe, an academic think-tank, notes, “the full panoply of checks and formalities [would apply] immediately”.

If they stay away, British shops and factories may find themselves short of supplies.

These include the treatment of pensioners and students caught on either side of the new divide, driving licences and pet passports. Of greatest economic importance is trade in services—in particular, financial services, of which Britain is a big net exporter.

However, companies have been waiting to see how the trade talks go before deciding whether to shift more posts to Frankfurt, Paris and elsewhere. No-deal could mean a further drain.

“When you consider how much of our plastic waste isn’t actually recyclable because it is low-value, contaminated or difficult to process, it’s not surprising that a lot of it ends up polluting the environment,”

Americans are using more plastic than ever and the current study included pollution generated by United States exports of plastic waste, while the earlier one did not.

researchers had evaluated waste-disposal practices in countries around the world and used their “best professional judgment” to determine the lowest and highest amounts of plastic waste likely to escape into the environment. They settled on a range of 25 percent to 75 percent.

Of the plastics that go into the United States recycling system, about 9 percent of the country’s total plastic waste, there is no guarantee that they’ll be remade into new consumer goods. New plastic is so inexpensive to manufacture that only certain expensive, high-grade plastics are profitable to recycle within the United States, which is why roughly half of the country’s plastic waste was shipped abroad in 2016, the most recent year for which data is available.

China and many countries in Southeast Asia have stopped accepting plastic waste imports. And lower oil prices have further reduced the market for recycled plastic.

“We will need a new generation of export controls, at least the evolution of the export controls we have, to ensure that these models are not stolen or not used in ways that would violate the country’s export control requirements,”

Smith also argued in the speech, and in a blogpost issued on Thursday, that people needed to be held accountable for any problems caused by AI and he urged lawmakers to ensure that safety brakes be put on AI used to control the electric grid, water supply and other critical infrastructure so that humans remain in control.

He urged use of a “Know Your Customer”-style system for developers of powerful AI models to keep tabs on how their technology is used and to inform the public of what content AI is creating so they can identify faked videos.

Some proposals being considered on Capitol Hill would focus on AI that may put people’s lives or livelihoods at risk, like in medicine and finance. Others are pushing for rules to ensure AI is not used to discriminate or violate civil rights.