British Prime Minister Rishi Sunak and US President Joe Biden have signed the 'Atlantic Declaration'. This groundbreaking agreement propels Britain into the economic orbit of the United States, but falls short of a comprehensive trade deal promised in 2019, according to The Guardian. "While the Biden administration has enacted the Inflation Reduction Act to de-risk its economy from China and create jobs at home, the Conservatives have left Britain’s cupboards bare," the outlet notes.
Against the backdrop of the US-China rivalry, the analytical outlet The Atlantic ponders whether China's economy can continue its growth, as Xi Jinping has also begun shifting trade and investment orientation from the West to the East through his Belt and Road Initiative program. The outlet argues that China's economic rise has been largely dependent on strengthening its relations with the West. However, it notes that consumers in the Global South, despite becoming wealthier, cannot afford to buy as much from China as consumers in the West and other developed economies.
Moreover, the Global South cannot offer the same level of technology as the West. The current trajectory of China's development may make it a less formidable competitor to the US economy. However, American companies are likely to lose profitable opportunities as well, according to The Atlantic.
Yet, the resilience of the US economy has surprised many. But this resilience can be both good and bad news, writes The New York Times. It may mean that the Federal Reserve is capable of managing inflation by slowing down price increases without pushing America into a recession. However, if companies can continue raising prices without losing customers due to high demand, it may lead to excessive inflation growth, forcing consumers to pay more, and as a result, the Federal Reserve will have to exert even more effort.
Meanwhile, France is fighting the economic downturn as best as it can. Under government pressure, the country's food industry has pledged to lower prices on nearly a hundred products starting in July. French Finance Minister Le Maire struck a deal with 75 manufacturers after signs of falling commodity prices. He threatened financial sanctions if companies violate their promise to lower prices for consumers on products that have experienced wholesale cost reductions.
On the other hand, in a joyous moment for health-conscious individuals, British food giant Danone is calling for higher taxes on fat, sugar, and salt. The intervention by Danone UK & Ireland comes after Prime Minister Rishi Sunak declared last week that innovative treatments for combating obesity could be a "gamechanger". Currently, ministers are under pressure to determine whether they can take more effective measures to prevent obesity, as reported by The Guardian.
Professor Graham MacGregor, who leads the "Action on Sugar" campaign, referred to it as "crazy" that the government is unable to effectively regulate the food industry while preparing to spend billions of pounds on new anti-obesity medications. This should concern Ukrainians, as our government tends to introduce taxes with more enthusiasm than reductions.
Turning to countering China's expansion, we should recall the published plans for semiconductor development by the US, EU, and the United Kingdom, as studied by the Center for European Policy Analysis (CEPA). Regarding the latter, CEPA considers it a step forward but highlights significant gaps. "It neglects the need to work with the EU and fails to detail how to confront China," writes CEPA.
The EU document is more problematic, as it allocates 43 billion euros of state funding to semiconductors. However, its main focus is on subsidising troubled companies rather than stimulating innovation or creating an ecosystem. A significant portion of the funds will go to the German company Infineon for constructing a plant near Dresden, ST Microelectronics for construction in France, and Intel for expansion in Germany. The EU plan sets an arbitrary, and likely unrealistic, goal of achieving a 20% share of the global market, which will not lead to the technological sovereignty the EU seeks.
Instead, according to the author, the EU should concentrate on innovative research and development while leveraging its strengths in advanced technologies and chemical compounds. Both sectors are crucial to the semiconductor supply chain, and the EU has a competitive advantage with companies like ASML in the Netherlands and BASF and Merck in Germany.
The US chip law is noted for supporting current production and strategically aiming to relocate the global leader, Taiwan Semiconductor, to the US. The document also supports research and development and fosters the expansion of promising startups. It explicitly focuses on national security and establishes clear rules to restrict Chinese "subversive activities".
Even when it comes to oil, market participants' focus again turns to China. The growth in demand for black gold depends on China. Bloombergis optimistic and believes that if demand remains stable in the current market, a showdown between russia and Saudi Arabia, the only country that committed to production limits in the recent OPEC+ meeting, may occur. The outlet points out that the Saudi Arabian Energy Minister is wrong in claiming that russia is fulfilling its obligations.
"Maybe he needs to look again at the numbers. russia was the group’s biggest and most consistent over-producer throughout 2020 and 2021," writes Bloomberg, noting that Saudi Arabia's patience may once again be tested, as it was in March 2020 if oil market forecasts prove overly optimistic. However, at some point, the patience of the desert kingdom will run out, especially since traders are keeping prices at the same level due to oil demand not exceeding supply due to the rapid increase in russian supplies.
Britain's The Economist devoted an analytical article to the 'dirtiest' energy resource, coal. The policy of restricting investment in coal mining or coal-fired power plants by 2030 is expected to lead to fundamental changes. The outlet predicts that supply restrictions will keep prices high, but the circle of exporters benefiting from this will shrink.
"Colombia and South Africa, which serve Europe, will no longer have a market. russia will find it harder to flog cargoes to China. All three will export less coal for less money. Australia will appease critics by focusing on the most efficient coal; it may export less, but charge more. Indonesia could become the swing exporter, like Saudi Arabia is for oil today. It will sell more of its basic coal – often for more money," the outlet states.
Mercedes-Benz has surpassed Tesla in obtaining a permit for automated driving in California. According to Reuters, California is one of Tesla's largest markets, accounting for 16% of the carmaker's global deliveries last year. However, the German carmaker has outpaced Tesla and become the first carmaker to receive permission to sell or lease vehicles with automated driving systems in California, as reported by The Guardian.
Another blow to Musk could come from Mark Zuckerberg's Meta. According to the technology news site Verge, a separate programme codenamed Project92, potentially named Threads, is targeting figures such as the Dalai Lama and Oprah Winfrey. Chris Cox, Meta's Chief Product Officer, stated in an internal meeting on Thursday that the application is a "response" from the owner of Facebook and Instagram to Twitter.
But perhaps the most interesting news comes from the financial market. On June 11, the Wall Street Journal published an interview with Alex Soros, son of George Soros, who has taken control of the family's $25 billion philanthropic enterprise. Alex positions himself as someone more interested in US domestic politics and is deeply concerned about the possibility of Donald Trump returning to the White House. He has recently met with Biden administration officials, Senate Majority Leader Chuck Schumer, and heads of states, including Brazilian President Luiz Inácio Lula da Silva and Canadian Prime Minister Justin Trudeau. He plans to support Democrats in elections, particularly by engaging Latino and Black voters.
Lastly, there's an article from The Economist that provides food for thought. The outlet has ranked cities around the world and concluded that 'amoral cities' prosper today, as they did not impose strict Covid restrictions. The outlet's index evaluated economic indicators such as population size, economic growth, office vacancies, and housing prices over the past three years and found that cities in different corners of the world that did not impose stringent measures, like Dubai and Miami, emerged as winners – sometimes at the expense of those cities that did, such as San Francisco.
"International overnight visits to Singapore may have been three-quarters lower at the end of 2022 than before Covid, according to Oxford Economics, a consultancy, but life was pretty good when compared with its rivals, Hong Kong and Shanghai, where tough restrictions on movement lasted longer. Indeed, thanks to falling rents, Hong Kong has lost its top spot in a ranking by HSBC, a bank, of the world’s most expensive cities," the outlet states.