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📰 Israeli strikes hit Lebanon

📰 Israeli strikes hit Lebanon

and Russia backs Zangezur corridor

Ross Crabtree & Billy Robinson
September 20, 2024

Hello and welcome back,

In the past 24 hours, Beijing has imposed sanctions on U.S. companies supplying arms to Taiwan, while the Brookings Institute has outlined the European Union’s economic strategy regarding China.

At the United Nations, the General Assembly has voted to end the Israeli occupation of Palestinian territories, and the Security Council has convened to address gender discrimination in Afghanistan and rising terrorism, including attacks by ISIL-K.

Additionally, Russian and Iranian delegations are meeting to discuss the proposed Zangezur corridor—a transport route in the South Caucasus that has heightened tensions between the two countries.

Top 5 Stories

1️⃣ 🇺🇸 Federal Reserve slashes interest rates, declares inflation is over: The Federal Reserve has announced that it is turning the tide in its fight against inflation. After two years of raising interest rates to control rising prices, the central bank has begun to reverse course, stating that prices are finally starting to come down. In its latest move, the Fed cut interest rates by 0.50 percent and hinted that future reductions would follow a similar pattern. This approach is more aggressive than many anticipated, but even at this pace, the ultra-low rates of pre-pandemic times remain far off. As a result, the immediate financial impact will be limited. What’s more significant is the signal being sent: inflation is no longer the primary threat, and the Fed is now prioritising economic stability, particularly employment. However, concerns linger that the Fed may have acted too late. Inflation has been near the target for nearly a year, but the economy is slowing—job openings are down, unemployment has risen, and more people are struggling with debt payments. While these signs aren't alarming yet, the effects of rate changes take time to be felt, and if the Fed continues tightening too much, it risks overshooting its goal. As economists Christina and David Romer noted, the impact of tighter policy could extend for months after rate hikes stop. Several other economists have issued similar cautions.

2️⃣ 🇺🇳 🇮🇱 🇵🇸 UN General Assembly votes to end Israeli occupation of the Palestinian territories: The United Nations General Assembly (UNGA) has passed a resolution urging Israel to end its illegal occupation of Palestinian territories within a year, a decision hailed as "historic" by Palestine. The nonbinding resolution was approved with a 124-12 vote, while 43 countries abstained. The UNGA demanded that “Israel immediately cease its unlawful presence in the Occupied Palestinian Territory," labelling it a continuous violation of international law that holds Israel accountable. The resolution sets a 12-month deadline and calls for reparations to Palestinians for damages caused by the occupation. As a body dedicated to upholding "human rights and fundamental freedoms," the UNGA's vote highlights the significant global opposition to Israel's occupation of Palestine. The resolution also supports an advisory opinion by the International Court of Justice (ICJ), which declared Israel’s occupation illegal and called for its termination.

3️⃣ 🇷🇺 🇮🇷 🇦🇲 🇦🇿 Russian delegation in Iran to discuss Zangezur corridor: Russia and Iran are at odds in the South Caucasus, with tensions rising over the proposed Zangezur corridor. This transport route would connect Azerbaijan and its exclave Nakhchivan to Russia and Turkey, bypassing Armenia’s checkpoints and establishing a new link between Asia, Europe, and the Middle East. Russia, including Foreign Minister Sergey Lavrov, has voiced support for the corridor, but Iran sees it as a strategic threat and a violation of its borders. On 3 September, Tehran’s reformist government summoned Russian ambassador Alexey Dedov for talks, signalling Iran’s dissatisfaction with Moscow’s stance. The corridor would pass through Armenia’s Syunik province, but Azerbaijan insists on full sovereignty over the route. Iran strongly opposes this, fearing a change in its borders. The Zangezur corridor gained traction after Azerbaijan’s 2020 victory in Nagorno-Karabakh, a conflict that shifted regional power dynamics and unsettled Iran, which is wary of Russia’s role in the settlement.

4️⃣ 🇱🇧 🇮🇱 20 killed and 450 wounded in Lebanon after secondary communication device attack: A coordinated series of explosions targeting Hizbollah, using booby-trapped walkie-talkies, has killed at least 20 and injured over 450 in cities across Lebanon. International observers warned that the simultaneous detonation of thousands of communication devices could constitute a war crime. The attack followed another the day before, involving exploding pagers, which left 12 dead and over 2,800 injured, and has been attributed to Israel. Global leaders expressed concern that these events could ignite a full-scale conflict between Israel and Hizbollah, despite efforts by the U.S. and UN to prevent escalation. UN Secretary-General António Guterres condemned the attacks and urged both sides to exercise restraint, while the UN Security Council is set to meet to discuss the situation. Guterres suggested these strikes may be a prelude to a larger Israeli offensive. Meanwhile, Israeli Defense Minister Yoav Gallant announced a shift in military focus towards Hizbollah’s front, indicating increasing resources would be allocated to the north in preparation for future action.

5️⃣ 🇺🇳 🇦🇫 UN Security Council convenes for Afghanistan talks: On 21 August, the Taliban enacted a “Law on the Promotion of Virtue and the Prevention of Vice,” expanding the powers of their morality police and imposing new restrictions, particularly on women, including strict dress codes and limitations on their interactions with men. A UN draft statement criticising the law was blocked by China and Russia, but 13 Security Council members later condemned the gender-based oppression in Afghanistan, calling for a reversal of these policies. The law has worsened the humanitarian crisis, with 12.4 million Afghans facing severe food insecurity, and aid efforts being hindered by Taliban policies. The Taliban also suspended polio vaccination campaigns, citing security concerns over female involvement. Additionally, rising terrorism, including ISIL-K attacks, is a growing concern. The UN will continue to work on an independent assessment of Afghanistan, with members emphasising the need for women's meaningful participation in the process.

Major Story

🇪🇺 🇨🇳 THE EUROPEAN UNION’S CHINA STRATEGY

Background

The EU's move to increase tariffs on Chinese electric vehicles (EVs) has sparked discussions about a potential cooperative "de-risking" strategy with the U.S. Like the U.S., the EU has its own "de-risking" strategy aimed at shielding its economy from external threats—enhancing its competitiveness—and collaborating with others to strengthen its economic position and address vulnerabilities. The term "de-risking" was first introduced by European Commission President Ursula von der Leyen and later adopted by the Biden administration and G7 leaders.

While the EU doesn’t use the U.S. framework of "protect, promote, and partner," its strategy mirrors these goals with a European focus. Despite similarities in their agendas, the EU approaches China with different strategies, tools, and urgency compared to the U.S.

Protect

The EU has become more assertive against China due to concerns over its support for Russia, human rights violations, and strategic threats. Chinese industrial overcapacity and critical material dependencies are additional worries. The EU has imposed provisional tariffs on Chinese EVs and enhanced protective measures, including new regulations on foreign subsidies and investment screening.

Promote

In response to recent shocks, the EU is strengthening its competitiveness. It introduced the Net-Zero Industry Act and European Chips Act to counter U.S. and Chinese subsidies and set global standards through regulations like the General Data Protection Regulation.

Partner

The EU is expanding partnerships to bolster its de-risking strategy, including enhanced coordination with the G7, a new Trade and Technology Council with India, and investments in global infrastructure. It is also pursuing significant trade deals, such as with Mercosur.

The Strategy’s Effectiveness

The EU leads globally in mechanical engineering, advanced manufacturing, and several other fields, including life sciences and information technology. However, it faces significant challenges, including lagging investments, slow productivity growth, and high energy costs. Despite its innovation clusters, the EU struggles to scale up cutting-edge research. It trails the U.S. and China in AI investment and has a high dependency on China for critical raw materials and pharmaceuticals.

The EU’s "de-risking" strategy needs a stronger focus on boosting competitiveness while addressing Chinese encroachments. Despite progress in protection and partnership, internal issues and external shocks have hampered efforts. Collaboration with the U.S. could enhance effectiveness, but differing approaches and competitive tensions may complicate this. The outcome of the 2024 U.S. presidential election could influence future U.S.-EU relations and their joint strategy.

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Other News

1️⃣ 🇨🇳 🇹🇼 🇺🇸 China sanctions US companies selling arms to Taiwan: On Wednesday, China’s foreign ministry announced sanctions on nine U.S. defence contractors in response to Washington’s recent approval of arms sales to Taiwan. Foreign ministry spokesman Lin Jian condemned the arms deal, stating that it violates the One-China principle, infringes on China's sovereignty and security, and harms China-US relations. “China strongly condemns and firmly opposes this, having lodged formal protests with the U.S.,” Lin said. He urged the U.S. to halt its support of Taiwan’s military, warning against fueling Taiwan independence and undermining peace in the Taiwan Strait.