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Xi’s visit stress-tests Macron’s plans for a sovereign Europe

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Xi’s visit stress-tests Macron’s plans for a sovereign Europe

This article is an on-site version of our Trade Secrets newsletter. Premium subscribers can sign up here to get the newsletter delivered every Monday. Standard subscribers can upgrade to Premium here, or explore all FT newsletters

Welcome to Trade Secrets. Last week Olaf Scholz was in Beijing; this week Xi Jinping is in the EU, stress-testing EU unity and particularly the Franco-German relationship. Today I’ll make a couple of observations on that score and then Thursday’s Trade Secrets column will look in detail at Brussels’ apparent new get-tough regime towards Chinese companies in Europe. The rest of today’s newsletter is an author Q&A on the new book by former Australian trade negotiator and Trade Secrets favourite Dmitry Grozoubinski, a rare exception to the rule that nothing interesting on trade ever comes out of Geneva. Charted Waters is on China’s currency.

Get in touch. Email me at alan.beattie@ft.com

Xi loves EU, yeah, yeah, yeah?

The dynamics around Xi Jinping’s visit to the EU aren’t exactly difficult to make out. It’s clear from Olaf Scholz’s muted rhetoric during his trip to China last month that Germany’s dependence on the Chinese market still restrains Berlin from regarding China as a full-on economic competitor, let alone a strategic rival.

Emmanuel Macron, whom Xi met yesterday, gives off a more combative air, and is trying to stop China from driving a wedge between France and Germany. The French president’s recent speech at the Sorbonne (here in translation) set out a strategy aiming to operationalise “strategic autonomy”, a concept the EU invented in 2020 and has been trying to define ever since, with much more interventionist trade and industrial policy to create European industries and actively to manage supply chains.

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But though Macron’s vision sounds cohesive, it will struggle not just with Germany’s continued reliance on the Chinese market but a lack of trust elsewhere in the EU. For one, Macron has a history of lurching back and forth on China. It’s not just his notorious comments on Taiwan after his trip to China last year but also a sudden last-minute switch to support the doomed Comprehensive Agreement on Investment deal with Beijing in 2020, reportedly because some trade and investment goodies were dangled in front of France to get it to shift.

The immediate deliverable of yesterday’s Macron-Xi meeting was for China to hold off on retaliatory tariffs on cognac, another France-specific concession. (Meanwhile, Scholz’s trip to Beijing apparently won him some favours on German exports of beef, pork and apples: the Chinese approach to buying off trading partners’ discontent really isn’t subtle.)

This feeds the old suspicion, fair or not, that France’s EU-wide solutions reflect its own interests. It’s less a strategic vision of the EU car industry that caused France privately to push for the investigation into subsidies for electric vehicle imports than French carmakers suffering more than their German counterparts from Chinese competition.

One of France’s previous attempts to create a pan-EU industrial policy through a sovereignty fund essentially fizzled out, again partly because of a belief elsewhere in the EU that here was Paris wanting to bail out French companies again. Macron has identified pressing issues with an overarching analysis and proposed some solutions. But France unfortunately isn’t the best country to be pushing them, at least unless Macron can convince Scholz to embrace his vision as well.

Lying trade lies and the lying pols who tell them

Dmitry Grozoubinski’s “Why Politicians Lie About Trade” comes out in May. If you want a two-word review, it’s great. It describes official myths and distortions, from overselling trade deals to claiming distance no longer matters in trade to saying corporations control the world by infiltrating the WTO. To give you a flavour of the tone, corporate lobbyists’ occasional visits to a WTO meeting have “the bemused and mildly horrified ‘what’s all this then?’ air of an English constable arriving on the scene of an out of control food fight at the local clown college”.

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AB You want the book to be “accessible hard work worth doing”. (Obviously a cynical play for the mass market.) Who most needs to know this stuff? Politicians themselves, journalists, businesses, voters?

DG My publisher’s preferred answer would be “every man, woman and child on planet Earth”, but that’s probably a touch ambitious. I wrote this book for people who have policy issues they care about, whether it’s climate change, job creation, national security or anything else. Trade and the decisions governments make about it impact all of these.

AB Brexit and Trump’s trade wars might be expensive ways to learn about trade, but have they oddly led to more appreciation of the issues?

DG Absolutely. One of the reasons trade has historically been so easy to lie about is how separated causes and effects are. You sign a free trade agreement today and 10 years from now you can look back and (if you squint) make some guesses about what it actually did.

Brexit and Trump’s trade wars, because they were about unpicking the existing order and potentially doing so very abruptly, forced all sorts of people to take these issues a lot more seriously and start asking far harder questions about what’s under the hood. There’s nothing like staring down the barrel of mile-long queues at the border and empty supermarket shelves to make everyone, from voters all the way up to prime ministers, ask a few follow-up questions.

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AB You had a very interesting observation about economists being brought in only at the end of trade talks to make up some figures to justify the deal.

DG What I was trying to illustrate as gently as I could is that trade negotiations and trade policy are first and foremost about politics and power. In a fight between a policy the economic modelling says will have greater long-term GDP benefits, and a policy the political affairs folk say has the strong backing of a large and vocal interest group, my money is on the latter. Polish farmers aren’t being coddled on Ukrainian grain imports because some wonky IMF econometric analysis said so.

AB I remember talking to Doug Irwin once who said that Nafta boosters said it would create half a million jobs and Nafta bashers said it would destroy half a million jobs. In fact jobs-wise it was probably a wash. How much is overstatement on both sides a problem?

DG Overstatement is the greatest problem humanity has ever faced, or ever will. More seriously, yes I think it’s a problem that especially before the text is public, both supporters and detractors of a trade agreement can say literally anything about its impacts in an ultimately unfalsifiable way. A trade agreement could do just about anything. 

More practically though, I think the challenge is that we focus on tools like trade agreements when we should be having a discussion about the problems we’re trying to solve. A trade agreement isn’t a goal in and of itself, any more than “surgery” is an objective.

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AB I literally can’t think of a question to ask you about the WTO. Is that OK?

DG Probably not a great sign for the organisation, but absolutely fine by me!

AB If you had to advise governments to make a positive but honest case for more trade that they’re currently not making, what would you say?

DG I would say that tariffs are taxes on your own citizens for being insufficiently patriotic in their purchasing choices, and that feels like there should be a high bar to clear before we reach for them as a policy tool.

I would say that climate change requires us to pool the ingenuity, creativity and productivity of the entire world and we can’t afford to caveat our climate ambitions on all solar panels and electric vehicles being made exclusively in our swing electoral districts.

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And I would say that people are smarter than the current level of discourse and can be trusted to understand trade-offs if they’re clearly and honestly explained.

Charted waters

China doesn’t want a sharp destabilising devaluation of the renminbi, as George Magnus argues here, even if in theory it would help its renewed export drive. But downward pressure on the currency from falling interest rates and capital outflows suggests that at some point it might not have much choice.

Trade links

The OECD, WTO and IMF are all predicting a sharp rebound in global goods trade this year driven by strong US economic growth and falling inflation.

My FT colleagues consider the controversial plans among some of the rich democracies to seize Russia’s frozen assets.

A report from the Center for Strategic and International Studies think-tank looks at new tools the US can use to combat Chinese coercion.

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The Economist examines how China and the US are trying to recruit countries as allies in their tussle with each other.

The EU agriculture commissioner has asked China not to target agriculture in trade disputes, one of the more quixotic requests to come out of Brussels in recent years and one that essentially confirms where Europe’s economic weak spot is.


Trade Secrets is edited by Jonathan Moules


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Trump Says Israel and Lebanon Agree to Extend Cease-Fire by Three Weeks

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Trump Says Israel and Lebanon Agree to Extend Cease-Fire by Three Weeks

President Trump announced a three-week extension of a cease-fire between Israel and Lebanon that had been set to expire in a few days, after hosting a meeting between Israeli and Lebanese diplomats at the White House on Thursday.

Hezbollah, the Iranian-backed militant group that has been attacking Israel from southern Lebanon, did not have representatives at the meeting and did not immediately comment on the announcement. The prime minister of Israel and the president of Lebanon also did not comment.

A successful peace agreement would hinge upon Hezbollah halting attacks, which Lebanon’s government has little power to enforce because it does not control the militia. Lebanon’s military has mostly stayed out of the fighting and is not at war with Israel.

The cease-fire, which was scheduled to end on April 26, would last until May 17 if it takes effect as Mr. Trump described it. Before the cease-fire was brokered last week, nearly 2,300 people were killed in Lebanon and 13 in Israel. Since then, the number of Israeli airstrikes and Hezbollah attacks have been dramatically reduced, though the two sides have continued exchanging fire.

The Lebanese Ambassador to the United States, Nada Hamadeh, credited Mr. Trump for extending the cease-fire, saying that “with your help and support, we can make Lebanon great again.” Mr. Trump replied, “I like that phrase, it’s a good phrase.”

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Asked about the potential of a lasting peace agreement between Israel and Lebanon, Mr. Trump said that “I think there’s a great chance. They are friends about the same things and they are enemies on the same things.”

But Lebanon and Israel have periodically been at war since Israel’s founding in 1948. Israel has invaded Lebanon for the fifth time since 1978, incursions that have destabilized the country and the delicate balance of power between Muslim, Christian and Druze communities.

In the hours before the president’s announcement on social media, Israel and Hezbollah were trading attacks in southern Lebanon, testing the existing cease-fire.

Mr. Trump said the meeting at the White House had been attended by high-ranking U.S. officials, including Vice President JD Vance, Secretary of State Marco Rubio and the U.S. ambassadors to Israel and Lebanon.

Earlier on Thursday, an Israeli strike near the southern Lebanese city of Nabatieh killed three people, according to Lebanon’s health ministry. Hezbollah claimed three separate attacks on Israeli troops who are occupying southern Lebanon, though none were wounded or killed.

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Hezbollah set off the latest round of fighting last month by attacking Israel soon after the start of the U.S.-Israeli bombing campaign in Iran. Israel responded to Hezbollah’s attacks by launching airstrikes across Lebanon and widening a ground invasion of the country’s south.

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U.S. soldier charged with suspected Polymarket insider trading over Maduro raid

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U.S. soldier charged with suspected Polymarket insider trading over Maduro raid

Smoke rises from Port of La Guaira in Venezuela on Jan. 3, 2026 after U.S. forces seized the country’s president, Nicolas Maduro and his wife.

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Federal prosecutors on Thursday unsealed an indictment against a U.S. Army soldier, accusing him of using his insider knowledge of the clandestine military operation to capture Venezuelan leader Nicolás Maduro in January to reap more than $400,000 in profits on the popular prediction market site Polymarket.

The Justice Department says Gannon Ken Van Dyke, 38, who was stationed at Fort Bragg, in North Carolina, was part of the team that planned and carried out the predawn raid in Caracas earlier this year that resulted in the apprehension of Maduro.

The Department of Justice and the Commodity Futures Trading Commission filed the actions against Van Dyke, the first time U.S. officials have leveled criminal charges against someone over prediction market wagers.

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According to the indictment, Van Dyke now faces counts of wire fraud, commodities fraud, misusing non-public government information and other charges.

Trading under numerous usernames including “Burdensome-Mix,” Van Dyke allegedly traded about $32,000 on the arrest of Maduro, resulting in profits exceeding $400,000.

“Prediction markets are not a haven for using misappropriated confidential or classified information for personal gain,” said U.S. Attorney Jay Clayton for the Southern District of New York. “Those entrusted to safeguard our nation’s secrets have a duty to protect them and our armed service members, and not to use that information for personal financial gain.”

Van Dyke’s defense lawyer is not yet publicly known. Polymarket did not return a request for comment.

The charges against Van Dyke come at a sensitive time for the prediction market industry, which has been growing exponentially, despite calls in Washington and among state leaders for the sites to be reined in.

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Van Dyke is the first to be charged in the U.S. for suspected Polymarket insider trading, but Israeli authorities in February arrested several people and charged two on suspicion of using classified information to place bets about military operations in Iran on Polymarket.

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Senate Adopts GOP Budget, Laying the Groundwork to Fund ICE and Reopen DHS

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Senate Adopts GOP Budget, Laying the Groundwork to Fund ICE and Reopen DHS

The Senate early Thursday morning adopted a Republican budget blueprint that would pave the way for a $70 billion increase for immigration enforcement and the eventual reopening of the Department of Homeland Security.

Republicans pushed through the plan on a nearly party-line vote of 50 to 48. It came after an overnight marathon of rapid-fire votes, known as a vote-a-rama, in which the G.O.P. beat back a series of Democratic proposals aimed at addressing the high cost of health care, housing, food and energy. The debate put the two parties’ dueling messages on vivid display six months before the midterm elections.

Republicans, who are using the budget plan to lay the groundwork to eventually push through a filibuster-proof bill providing a multiyear funding stream for President Trump’s immigration crackdown, used the all-night session to highlight their hard-line stance on border security, seeking to portray Democrats as unwilling to safeguard the country.

Democrats tried and failed to add a series of changes aimed at addressing cost-of-living issues, seizing the opportunity to hammer Republicans as out of touch with and unwilling to act on the concerns of everyday Americans.

Here’s what to know about the budget plan and the nocturnal ritual senators engaged in before adopting it.

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The budget blueprint is a crucial piece of Republicans’ plan to fund the Department of Homeland Security and end a shutdown that has lasted for more than two months. After Democrats refused to fund immigration enforcement without new restrictions on agents’ tactics and conduct, the G.O.P. struck a deal with them to pass a spending bill that would fund everything but ICE and the Border Patrol. Republicans said they would fund those agencies through a special budget bill that Democrats could not block.

“We can fix this with Republican votes, and we will,” said Senator Lindsey Graham, Republican of South Carolina and the Budget Committee chairman. “Every Democrat has opposed money for the Border Patrol and ICE at a time of great peril.”

In resorting to a new budget blueprint, Republicans laid the groundwork to deny Democrats a chance to stop the immigration enforcement funding. But they also submitted themselves to a vote-a-rama, in which any senator can propose unlimited changes to such a measure before it is adopted.

The budget measure now goes to the House, which must adopt it before lawmakers in both chambers can draft the legislation funding immigration enforcement. That bill will provide yet another opportunity for a vote-a-rama even closer to the November election.

Democrats took to the floor to criticize Republicans for supercharging funding for federal immigration enforcement rather than moving legislation that would address Americans’ concerns over affordability.

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“This is what Republicans are fighting for,” said Senator Chuck Schumer, Democrat of New York and the Democratic leader. “To maintain two unchecked rogue agencies that are dreaded in all corners of this country instead of reducing your health care costs, your housing costs, your grocery costs, your gas costs.”

Democrats offered a host of amendments along those lines, all of which were defeated by Republicans — and that was the point. The proposals were meant to put the G.O.P. in a tough political spot, showcasing their opposition to helping Americans afford high living costs. Fewer than a handful of G.O.P. senators crossed party lines to support them.

The G.O.P. thwarted an effort by Mr. Schumer to require that the budget measure lower out-of-pocket health care costs for Americans. Two Republicans who are up for re-election this year, Senators Susan Collins of Maine and Dan Sullivan of Alaska, voted with Democrats, but the proposal was still defeated.

Republicans also squelched a move by Senator Ben Ray Lujan, Democrat of New Mexico, to create a fund that would lower grocery costs and reverse cuts to food aid programs that Republicans enacted last year. Ms. Collins and Mr. Sullivan again joined Democrats.

Also defeated by the G.O.P.: a proposal by Senator John Hickenlooper, Democrat of Colorado, to address rising consumer prices brought on by Mr. Trump’s tariffs and the war in Iran; one by Senator Edward J. Markey, Democrat of Massachusetts, to require the budget measure to address rising electricity prices, and another by Mr. Markey to create a fund to bring down housing costs.

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Senator Jon Ossoff, a Democrat who is up for re-election in Georgia, also sought to add language requiring the budget plan to address health insurance companies denying or delaying access to care, but that, too was blocked by Republicans.

While Republicans had fewer proposals for changes to their own budget plan, they also sought to offer measures that would underscore their aggressive stance on immigration enforcement and dare Democrats to vote against them.

Mr. Graham offered an amendment to allocate funds toward a deficit-neutral reserve fund relating to the apprehension and deportation of adult immigrants convicted of rape, murder, or sexual abuse of a minor after illegally entering the United States. It passed unanimously.

Senator Josh Hawley, Republican of Missouri, sought to bar Medicaid payments to Planned Parenthood, which provides abortion and other services, and criticized the organization for providing transgender care to minors. Senator John Kennedy, Republican of Louisiana, also attempted to tack on the G.O.P. voter identification bill, known as the SAVE America Act. Both proposals were blocked when Democrats, joined by a few Republicans, voted to strike them as unrelated to the budget plan.

The Republicans who crossed party lines to oppose their own party’s proposals for new voting requirements were Ms. Collins along with Senators Mitch McConnell of Kentucky, Lisa Murkowski of Alaska and Thom Tillis of North Carolina.

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Ms. Collins and Ms. Murkowski also opposed the effort to block payments to Planned Parenthood.

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