World
State of the Union: EU-China trade talks & interest rates to stay put
The European Commissioner for Trade was in Beijing to temper fears of an all out trade war between the two sides.
It is a make-or-break moment for Europe’s relationship with China – if you believe the EU’s Trade Commissioner.
Valdis Dombrovskis ventured into the lion’s den this week telling his Chinese counterparts that the bloc has had it with their lawless capitalism.
Both sides could now choose a path towards mutually beneficial relations or a path that slowly moves them apart, he said.
Pointing to a staggering EU trade deficit of almost €400 billion with China, Dombrovskis did not mince his words.
“We also have real concerns about market access and other challenges,” the trade commission said this week while in Beijing.
“The business environment has become more political and less predictable. We have requested that our Chinese partners engage with us on these challenges. Specifically, we wish to see greater transparency, predictability and reciprocity.”
Economic relations between China and the EU were thrown into the spotlight earlier this month after the European Commission launched an investigation into Chinese subsidies for its electric car industry.
By distorting the market of one of Europe’s industrial crown jewels, China has crossed a line – this is what Brussels was making Beijing understand.
A serious downturn in the European car business could trigger a domino effect that Europe cannot afford.
This is all in the face of a European economy that remains sluggish and an inflation rate that remains stubbornly high.
Interest rates unlikely to budge soon
And it is the latter that the European Central Bank (ECB) is most worried about.
At a hearing in Brussels this week, ECB president Christine Lagarde made clear that interest rates will remain high until the fight against inflation is won.
“We remain determined to ensure that inflation returns to our 2% medium-term target in a timely manner. Inflation continues to decline, but is still expected to remain too high for too long,” the French bank chief said.
“In any case, our future decisions will ensure that the key ECB interest rates will be set at sufficiently restrictive levels for as long as necessary.”
But as long as interest rates in the euro area remain at historically high levels, it will be difficult for the economy to grow, something that is already starting to affect the rest of Europe, as latest forecasts suggest.
Beata Javorcik, chief economist of the European Bank for Reconstruction and Development, said in an interview that it’s not all doom and gloom for the continent’s economy.
“Inflation has eroded household budgets and led to slower growth of consumption, and uncertainty is detrimental to investment,” Javorcik told Euronews.
“But there is one bright spot, and that is tourism. Some economies in Western Balkans and southern Europe are enjoying a record high number of arrivals.”
World
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World
UN removes quilt panel artwork calling for Israel’s extermination after facing backlash
The United Nations says it has removed a controversial quilt panel artwork that called for the extermination of Israel.
The incendiary painting on the panel featured a map of Israel, resembling a watermelon, without the West Bank or Gaza partition. In the top right-hand corner was the Palestinian flag.
The left side of the map contained the phrase “From the River to the Sea” and the right side contained the phrase, “Will be Free” in an obvious nod to the phrase, “From the River to the Sea, Palestine Will be Free.”
The phrase has become a rallying cry for Palestinians around the world protesting Israel amid the ongoing conflict in Gaza, sparked by Hamas’ Oct. 7, 2023, massacre in Israel. Israelis regard the phrase as a call to genocide, and for Israel to be wiped off the map entirely.
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Fox News Digital was the first to report on the U.N. painting on Monday. It also drew the attention of Danny Danon, Israel’s permanent representative to the U.N., who called the display a “disgrace” and demanded the U.N. remove it.
The U.N. told Fox News Digital on Wednesday that the “Peace Flags” exhibit was a way to “re-purpose fashion waste for positive impact.”
The U.N. said a staffer informed the organizer upon installation that several panels — including the one with the phrase “From the River to the Sea” — could not be displayed.
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The U.N. said the controversial panels were covered in the second week of October, but someone “removed those covers” earlier last week.
“Our colleagues covered it twice last week and were planning to do the same today upon learning that it was uncovered again,” a U.N. spokesperson told Fox News Digital. “We have alerted UN Security to the continued unauthorized interference in the exhibit and to review security footage to find out who is responsible.”
Danon took to X on Tuesday, criticizing the U.N. for what he deemed to be its lack of leadership.
“Yesterday, I exposed the hypocrisy of the U.N. through an exhibition featuring children’s drawings where the State of Israel was erased and filled with hateful imagery,” Danon said. “After firmly addressing the U.N. leadership this exhibition was fixed, and these antisemitic drawings were removed from the walls. We will stand up for truth and each time we witness acts of antisemitism and hypocrisy, we will confront them head-on.”
Fox News Digital confirmed Wednesday that after initially covering the panel with the “From the River to the Sea” drawing, the panel has now been removed entirely.
A spokesperson for the Secretary General told reporters Wednesday: “It is being dealt with, and we’re answering the Israeli ambassador.”
World
EU car and steel industries call to avoid US tariffs
A recent study found that 186,000 jobs could be lost in the European automotive industry over the next decade.
If Donald Trump follow through with his promise on tariffs during the electoral campaign, EU economic growth could be seriously undermined.
The president-elect repeatedly stated his intention to impose a 10% tariff on European products.
One of the worst hit sectors would be the automotive industry, in particular that of Germany.
The Association of the German Automotive Industry (VDA) says everything must be done to ensure that new US tariffs are not imposed. The association’s spokesperson, Simon Schuetz, told Euronews:
“I think that both sides need to talk to prevent this. If it does, we both know what will happen next. And the European Union will probably have some measures in response, and that would be the start of another trade conflict or something of that kind. And that’s not what we need. Europe and the US need to understand that, looking at all the geopolitical challenges, we need to work together, and that politics and economics needs to be considered together.”
The situation for the automotive industry in Germany is already difficult, with Volkswagen recently announcing the closure of three plants. A recent study found that 186,000 jobs could be lost over the next decade, as the industry switches to EV production.
The unsolved issue of steel and aluminium
The other most affected sector would be the steel industry. The US and Europe still have not fully resolved the issue of tariffs imposed by the previous Trump administration – which have already caused a noticeable slump in exports.
According to the European Steel Association (EUROFER), further lengthy and complex negotiations lie ahead.
Axel Egger, its Director General, told Euronews:
“A way forward had been agreed upon between Joe Biden and the European Commission under Ursula von der Leyen to address the trade conflict concerning steel, as well as a global arrangement on sustainable steel and aluminum. The negotiations have stalled since the election campaigns in the US began, however. Our hope is that negotiations can continue after the elections in order to find a solution, because otherwise we will fall back into an era of tough 25% tariffs on European steel”.
The Association also underlines the need for the new US president to be persuaded with regards to climate goals, not least with regards to his country’s own industry, as steel and aluminium manufacturing are one of the biggest carbon-emitters.
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