STRATEGIC ASSESSMENT. President Biden sought to revitalize America’s listless relationship with Africa promising a grab bag of economic initiatives to make up for a predecessor who had denigrated the continent and catch up with strategic competitors like China that have expanded their influence.
Assembling most of Africa’s leaders in Washington for the first time since 2014, Mr. Biden vowed to invest what aides calculated will be $55 billion on the continent over the next three years while supporting its ambitions for greater global leadership and bolstering efforts to transform it into a more prosperous, healthier and technologically advanced region.
“The United States is all in on Africa’s future,” Mr. Biden declared in an address to the delegations of 49 nations attending the U.S.-Africa Leaders Summit. Adapting a line he often uses to pitch domestic priorities, the president added, “Together, we want to build a future of opportunity where no one, no one, is left behind.”
Joe Biden signed into law landmark legislation protecting same-sex marriages, hailing it as a step toward building a nation where “decency, dignity and love are recognized, honored and protected”. The signing ceremony on the South Lawn of the White House was an elaborate celebration, with thousands of guests, some waving rainbow flags, and performances by the Gay Men’s Chorus of Washington DC, Sam Smith and Cyndi Lauper.
“The road to this moment has been long, but those who believe in equality and justice, you never gave up,” Biden said in remarks, before signing the Respect for Marriage Act. He added: “This law and the love it defends strikes a blow against hate in all its forms.”
The Pentagon is working to shore up efforts to track weapons provided to Ukraine, according to three senior U.S. officials, including discussing whether to send a small number of additional U.S. troops to Ukraine. The discussion comes as the one-year anniversary of the Russian invasion of Ukraine approaches, and the Biden administration contends with the ongoing ground war and a new political battlefield at home.
The incoming Republican House majority has signaled it will be more skeptical of a “blank check” for Ukraine and will want more accountability about how U.S. weapons are distributed and used. Some GOP lawmakers could try to block economic and military aid — or limit U.S. troop presence.
U.S. lawmakers agreed to provide Ukraine at least $800 million in additional security assistance next year and to boost Taiwan with billions in aid over the next several years, according to an $858 billion defense policy bill unveiled.
The Fiscal 2023 National Defense Authorization Act, or NDAA, authorizes the additional spending for the Ukraine Security Assistance Initiative, an increase of $500 million over President Joe Biden’s request earlier this year.
The bill also strengthens the Pacific Deterrence Initiative, with $11.5 billion in new investments. And it authorizes the Taiwan Enhanced Resilience Act of 2022, legislation to increase security cooperation with Taiwan with up to $10 billion in spending over five years.
The White House said that the U.S. administration is continuing to work with Congress on ways to “reinforce deterrence” against any changes to the status of Taiwan. Spokesperson Karine Jean-Pierre did not detail specifics or lay out the administration’s view on Taiwan legislation currently under consideration. China claims the self-ruled island as its own.
Economic’s issue
The Federal Reserve lightly tapped the brakes on its high-speed interest rate rises following news that suggested two years of runaway inflation may be slowing down in the US. After a two-day meeting the Fed announced another half-point increase in interest rates, its seventh increase of the year but one that follows four straight three-quarter-point interest rate hikes. The increase brings the Fed’s benchmark interest rate – used for everything from setting mortgage rates and loans to credit cards – to a range of 4.25% to 4.5%, its highest level in 15 years.
Fed chair Jerome Powell said: “Having moved so quickly, and having now so much restraint that is still in the pipeline, we think that the appropriate thing to do now is to move at a slower pace.”
With gas prices falling and the Dow Jones rallying, Americans have turned slightly bullish about the outlook for their personal finances, the new IBD/TIPP Poll finds. The share of Americans who think the U.S. economy is in a recession eased to 55% from 58% last month and 61% in October.
The overall IBD/TIPP Economic Optimism Index perked up 2.5 points to a still-gloomy 42.9 in December. The index has been stuck in pessimistic territory, below the 50 neutral level, for 16 straight months, but it’s now 4.8 points above the 11-year low matched in August.
The Economic Optimism Index reached its highest level since September’s 6.6-point surge that came as President Joe Biden moved to forgive up to $20,000 per borrower in federal college loans. The mood change has turned less dour over the past month, even as an appeals court blocked Biden’s student-loan giveaway, which now faces an uphill battle before the Supreme Court in early 2023.
The Biden administration is set to put chipmaker Yangtze Memory Technologies on a trade blacklist, in the latest US effort to target Chinese technology companies that it believes threaten its security. The US commerce department will place YMTC and other Chinese companies on its “entity list” as early as this week, according to three people familiar with the plan. US groups are barred from selling technology to companies on the list unless they have a hard-to-obtain export licence.
It may not have increased by much, and it’s rising from an all-time low, but for the first time during his presidency, Joe Biden’s approval rating on Main Street has gone up. After washing out at an approval rating among small business owners of 31% during the third quarter of 2022, when inflation hit its peak, Biden’s approval rating increased to 34% in the fourth-quarter poll conducted by CNBC and SurveyMonkey. It’s the first time across the eight quarters of his presidency there has been any rise in the quarterly poll and stopped a streak of six straight quarterly declines.
That’s a sign of Biden’s political strength after the midterm elections, but those elections may not be the only, or even best, explanation for the reversal in this trend. The move comes two months after the US unveiled harsh export controls that made it more difficult for China to acquire and produce cutting-edge semiconductors.
The U.S. Department of Agriculture will distribute an additional $325 million in funding for projects tailored to smaller-scale farmers to reduce their greenhouse gas emissions, taking its total annual investment in climate-friendly farming to more than $3 billion, the agency announced Monday.
USDA’s efforts are part of a broader Biden administration goal to cut U.S. emissions, targeting the approximately 10% generated from farming annually, according to the Environmental Protection Agency. Agriculture Secretary Tom Vilsack told Reuters a key goal of the program is to enable more farmers to serve the growing consumer market for sustainably produced food.
US Treasury Secretary Janet Yellen says inflation will be much lower by the end of next year, as long as there are no unanticipated shocks to the economy.
“I believe inflation will be lower,” Yellen said during an interview Sunday on CBS’ “60 Minutes.” “I am very hopeful that the labor market will remain quite healthy so that people can feel good about their finances and their personal economic situation.”
The US this year battled the worst inflation in four decades as the global economy dealt with post-pandemic demand and supply shocks following Russia’s war in Ukraine. After hitting a peak of 9.1% in June, consumer inflation is expected to have slowed to 7.3% in November from 7.7% the previous month, according to economists surveyed by Bloomberg News before a government report.
Japan and the Netherlands have agreed in principle to join the United States in tightening controls over the export of advanced chip-making machinery to China, Bloomberg News reported citing people familiar with the matter.
In October, the Biden administration published a series of curbs aimed at stopping the export of chip-making technology and certain chips made through U.S. equipment anywhere in the world to China.
Apart from some U.S. gear suppliers, Japan’s Tokyo Electron Ltd (8035.T) and Dutch lithography specialist ASML Holding NV (ASML.AS), were the two critical players needed to make the sanctions effective, making their governments’ adoption of the curbs a key milestone, the report said.
Washington has its eyes on the Netherlands, a small but important European country that could hold the key to China’s future in manufacturing cutting-edge semiconductors. The Netherlands has a population of just more than 17 million people — but is also home to ASML, a star of the global semiconductor supply chain. It produces a high-tech chipmaking machine that China is keen to have access to.
The U.S. appears to have persuaded the Netherlands to prevent shipments to China for now, but relations look rocky as the Dutch weigh up their economic prospects if they’re cut off from the world’s second-largest economy.
The U.S. economy is showing “continued resilience” despite a predictable slowdown, a top White House economic advisor said. National Economic Council Director Brian Deese said low rates of credit card delinquency and mortgage concerns point to resiliency in household balance sheets, while the labor market and the savings rate also indicate steadier growth. What’s more, he pointed to slowing inflation as a positive sign for healthier economic growth.
“We need to see a transition to a more stable growth trajectory, but I think if you look at the key elements that you need as part of that, some easing on the inflation side … we’re starting to see some evidence in that direction,” Deese said on CNBC’s “Squawk Box.”
President Biden will announce $36 billion for the Central States Pension Fund. The measure is designed to prevent drastic pension cuts for over 350,000 union workers and retirees.
“These workers paid into the fund for years or even decades, and faced cuts through no fault of their own,” stated the White House. The Pension Benefit Guaranty Corporation approved the fund, and will be the largest-ever award of federal financial support for worker and retiree pension security.
“Ensuring that workers and their families enjoy the retirement security they earned through a lifetime of work is a central part of President Biden’s economic plan. President Biden is building the economy from the bottom up and middle out, including helping to ensure a dignified retirement for all American workers and their families,” said the White House.
The US trade gap edged only slightly higher in October than the month before, to $78.2 billion. The latest reading was up just 5.4%, less than half the pace of increase from the revised September reading, when the trade deficit jumped by 12.7% to $74.1 billion.
A strong dollar and weaker global demand weighed on exports both months. A strong dollar makes US goods more expensive to foreign buyers and it also makes imports more affordable for US buyers. But economic slowdowns in overseas markets also hit US exports in the most recent readings.
Prices for goods and services in the United States rose 7.7% during the 12-month period ending in October, the lowest annualized rate since January, leading to speculation that the efforts of the Federal Reserve to tame inflation through interest rate hikes may be bearing fruit.
According to data released by the Bureau of Labor Statistics, the Consumer Price Index (CPI) for all urban consumers rose by 0.4% month over month, which was enough to lower the annualized rate significantly from last month’s 8.2% figure.
Stripping volatile food and energy prices out of the measurement — something economists believe presents a truer picture of the overall direction of prices in the U.S. — had prices rising by just 0.3% in October, significantly slower than the 0.6% measured a month before.
Under President Joe Biden, the United States aims to cut all carbon pollution by 2035 from the power plants that run American homes and businesses. It’s a first step toward the broader goal of zeroing out greenhouse gas emissions across the entire economy by midcentury to rein in climate change.
But the ambitions of the Biden administration are set to collide with the country’s power industry, which looks like it will continue burning fossil fuels for the foreseeable future. Over the next few years, the U.S. is expected to build around 17 gigawatts of natural gas plants, enough to power close to 12.8 million homes, according to the U.S. Energy Information Administration. Unless they’re closed early, those plants could operate for decades on an electric grid that still gets almost 60% of its power from fossil fuels.
After a nearly two-year honeymoon since the inauguration of U.S. President Joe Biden, major rifts are opening up between Washington and its European allies over economic policy. After quietly rumbling for months, the spats burst into the open last week.
Thierry Breton, the European Union’s internal market commissioner, announced he would pull out of this week’s meetings in Maryland of the U.S.-EU Trade and Technology Council, a key coordinating body for trans-Atlantic economic policy.
He said the agenda “no longer gives sufficient space to issues of concern to many European industry ministers and businesses,” pointing to EU complaints over new U.S. subsidies for electric vehicles and clean energy that disadvantage European carmakers and other companies.
Chinese government-linked hackers have stolen at least $20 million in US government coronavirus relief funds, a US Secret Service spokesperson told CNN Monday – the first time the agency has connected Covid-19 fraud to hackers affiliated with a foreign government.
The hackers raided unemployment insurance funds and Small Business Administration loan money in more than a dozen US states, said Secret Service spokesperson Justine Whelan. It is unclear if the hackers conducted the theft for personal gain or if they were operating on behalf of Beijing. CNN has requested comment from the Chinese Embassy in Washington, D.C.
