Wokesterism is all over, yet as corporation after corporation has learned the hard way, stoking racial or other grievance-group resentment doesn’t actually add value, and in fact is a very good way to go broke.
Therefore, money is drying up for corporations that embrace it, and the cash they dole out to downstream institutions, such as universities, think tanks, activist groups, and big white-shoe foundations. The Bud Light fiasco pretty well shows what happens to those who dive in to embrace woke.
It’s not just scandal-plagued groups like Black Lives Matter, which has done little but riot in cities (hitting black-owned businesses hard) and feather its leaderships’ nests, that has suddenly seen both a drop in public support and incoming funds.
Now it’s the fancy stuff, the university think tanks, such as Boston University’s Center for Antiracist Research, led by Ibram X. Kendi, which is seeing big layoffs.
The Boston University Center for Antiracist Research is firing between 15 and 20 employees, Semaforreported Thursday. Kendi launched the center in June 2020 at the height of the movement to defund police in the wake of the death of George Floyd. It employed 45 people as of August, according to a since-deleted page on the center’s website reviewed by the Washington Free Beacon.
Kendi has built a lucrative career teaching people about “antiracism,” defined as “the practice of actively identifying and opposing racism.” He received a $625,000 MacArthur “Genius” grant in 2021 and charges $20,000 for speaking engagements. His books Antiracist Baby and How to Be Antiracist have landed on the New York Times best-seller list. Kendi has argued the United States is an inherently racist country, asserted that police “inherently are harmful,” and called for a constitutional amendment to ban “racial inequity over a certain threshold, as well as racist ideas by public officials.
Kendi is a big one, the granddaddy of all things woke, the intellectual locus of wokery. He’s perfected the art of wokecraft, having written a series of bestsellers mau-mauing whitey liberals with titles such as “Antiracist Baby” and “How to be an Antiracist,” sold at places like Target, doing the act Shelby Steele once described as offering “absolution” to guilt-beaten whites for their immutable, inborn, incurable, racism, and making bank while he’s at it. America is a flawed, racist country from its very start, and for which there is no cure.
The Beacon said it was unable to find the exact reason for the layoffs, but did note that public polls were showing a dropoff in public support for woke organizations, which has cut into donations for wokester groups and reduced corporate giving to foundations and academic institutions.
Woke organizations of all sorts are now being affected — Black Lives Matters is losing donations. Bigfoot foundations such as those run by the Soros family and Mark Zuckerberg are laying off staff. Corporations themselves have been getting rid of DEI departments, too. Obviously, that may be at least one reason why even woke Boston University is reducing the ever-expanding grievance group industry within its think tanks.
As for why the public is not responding to grievance clarion calls, well, perhaps it’s because thus far these woke groups who offer themselves as the solution to all things racist, haven’t fixed anything by stoking rage and grievance politics. All they have proven adept at is raking in political spoils for themselves and mau-mauing their donors, making all sides angrier. People get tired of that. If they can’t fix a problem they claim to see all over, and can only make it bigger, then it’s time to go. That’s the American way and try as they might, they aren’t going to stop that.
Mississippi River Barge Prices Highest In Decade For This Time Of Year As Drought Crisis Worsens
The Mississippi River, which ferries key commodities and finished goods between the Heartland and the Gulf Coast, is again facing reduced water levels south of St. Louis. This is due to worsening drought conditions in the Midwest, which has increased barge prices.
According to the US Department of Agriculture’s weekly grain transportation report, the latest barge grain rate on the Mississippi River is $28.76 per ton, up 256% since June and the highest since January.
AP News noted, “Prices [barge prices] have risen because the river south of St. Louis does not remain consistently deep enough now to accommodate typical barges, forcing companies to load less into each vessel and string fewer barges together.”
For this time of year, just before harvest season, barge prices are the highest in a decade and even higher than last year when low water levels on the critical waterway caused logjams of vessels.
Drought conditions across the Midwest are severe.
All eyes are on the nation’s most crucial waterway as barge prices increase. If the flow of farm goods and other commodities from the Heartland is disrupted, this could have significant implications for customers who rely heavily on US exports. Also, these impacts could lead to higher food inflation due to soaring transportation costs. Earlier this month, Morgan Stanley added El Nino to inflation risks.
The Internal Revenue Service (IRS) has announced pausing a small-business tax credit program from the pandemic era for the remainder of the year following worries that ineligible claims are being filed.
The Employee Retention Credit (ERC) was instituted during the COVID-19 pandemic to encourage small businesses to retain their employees on payroll. It offered a refundable tax credit for businesses that paid employees while being shut down due to lockdowns and other restrictions. More than three years later, applications for ERC claims continue to pour in at the agency.
Amid “rising concerns about a flood of improper Employee Retention Credit claims,” the IRS announced an immediate moratorium on the program on Sept. 14 that is valid through “at least the end of the year.”
With the moratorium in effect, it would mean that new claims for ERC would not be processed. However, the agency would continue working on previously submitted ERC claims, it said. Processing times may be longer due to fraud concerns.
The moratorium was ordered by IRS Commissioner Danny Werfel due to worries that third parties or “promoters” were aggressively pressuring ineligible businesses to file for ERC claims. Such third parties can charge hefty fees for services, which can go up to 25 percent of the ERC refund.
Even though promoters advertise that ERC claim-submissions as “risk free,” businesses filing such claims face “significant risks” as the agency increases its audit and criminal investigation into the matter.
According to the IRS, any business that improperly files for ERC claims must pay back the received credit together with potential interest and penalties.
“A business or tax-exempt group could find itself in a much worse financial position if it has to pay back the credit than if the credit was never claimed in the first place,” the IRS stated.
The agency has received around 3.6 million ERC claims over the course of the program, which is roughly a fourth of the total number of U.S. businesses that file tax returns annually.
The IRS has already referred thousands of ERC claims for audit. Hundreds of claims have been referred to the IRS’s Criminal Investigation division which is “actively working to identify fraud and promoters of fraudulent claims for potential referral for prosecution to the Justice Department.”
As of July 31, the division has initiated 252 investigations related to potential ERC claim fraud worth over $2.8 billion.
Out of these 252 cases, 15 have resulted in federal charges. And among the federally charged cases, six have ended in convictions and four have reached the sentencing phase. The average sentencing is 21 months.
“The IRS is increasingly alarmed about honest small-business owners being scammed by unscrupulous actors, and we could no longer tolerate growing evidence of questionable claims pouring in,” Mr. Werfel said.
“The further we get from the pandemic, the further we see the good intentions of this important program abused. The continued aggressive marketing of these schemes is harming well-meaning businesses and delaying the payment of legitimate claims, which makes it harder to run the rest of the tax system. This harms all taxpayers, not just ERC applicants.”
Tax Credits and Fraud
When the program was initially introduced during the pandemic, the tax credit offered to businesses was 50 percent of a qualified employee’s wages, limited to $10,000 per year.
As such, a qualifying business could receive a credit of up to $5,000 per employee per annum. The credit was later updated to 70 percent of wages, limited to $10,000 in wages per quarter.
To qualify for ERC, a business should have shut down due to a government-imposed restriction during 2020 or during the first three quarters of 2021. Businesses that experienced a decline in gross receipts during this period may also qualify. These employers must have paid wages to their employees during the period to claim ERC.
Like the Sept. 14 warning, the IRS had issued a similar alert about ERC fraud back in March. At the time, acting IRS Commissioner Doug O’Donnell advised businesses that “if the tax professional they’re using raises questions about the accuracy of the Employee Retention Credit claim, people should listen to their advice.”
“People need to think twice before claiming this,” he said.
Despite ERC being only applicable to businesses that were shut down or saw a steep decline in revenue during the pandemic, fraudsters entice business owners by claiming that most businesses qualify for the credit.
During an interview an with The Washington Post, Laurel Blatchford, a Treasury Department official, said that the extensive ERC fraud should prompt Congress to consider new legislation to tackle the issue.
An IRS spokesperson said that the agency has paid over $230 billion in ERC claims, which far exceeds the original congressional estimate for the program.
The IRS advised businesses who have not yet filed for their ERC claim to consider reviewing the guidelines and wait to file for the credit.
“The IRS believes many of the applications currently filed are likely ineligible, and tax professionals note anecdotally that they are seeing instances where 95 percent or more of claims coming in recent months are ineligible as promoters continue to aggressively push people to apply regardless of the rules.” the agency said.
Where the number of retirees for every 100 workers already stood at 52 in Japan and 40 in Italy in 2020, projections say this could hit 81 and 74 by 2050.
The challenges posed by such demographic changes will affect a growing number of countries in the coming decades, including China and the United States, whose populations currently remain younger than those of the other nations on this chart.
Economists have practically sounded the all-clear on a looming recession, but plenty of signs are still flashing red.
Clearly, economists were wrong earlier this year when they forecast an economic contraction that has yet to manifest. Could they be wrong now?
To be sure, economic growth, the labor market and consumer spending have proven unexpectedly resilient in the face of rising interest rates and elevated inflation. But there are still plenty of signs a recession might still be on its way.
1. An “uncertain outlook” from leading indicators
Many mainstay economic indicators measure the past. So-called leading indicators reflect what likely lies ahead.
“The outlook remains highly uncertain,” said Justyna Zabinska-La Monica, senior manager of business cycle indicators, at The Conference Board.
“The leading index continues to suggest that economic activity is likely to decelerate and descend into mild contraction in the months ahead.”
The index is based on 10 components, ranging from stock prices and interest rates to unemployment claims and consumer expectations for business conditions.
2. Consumer confidence is just a hair above recessionary levels
The Conference Board’s consumer confidence index came in at 80.2 in August, hovering just above 80, the level that often signals the U.S. economy is headed for a recession in the coming year.
It is also a leading indicator used to predict consumer spending, which drives more than two-thirds of U.S. economic activity.
3. Consumers are foregoing big-ticket purchases
Retailers report that their customers have shifted their purchasing habits, spending less on furniture and other big ticket items in favor of necessities. They have also been trading down on grocery items, ditching pricier cuts of beef and buying chicken.
“We saw some switch even to some canned products, like canned chicken and canned tuna and things like that,” Costco’s Chief Financial Officer Richard Galanti told analysts on a May conference call.
Consumer spending has remained one of the bright spots in the economy, but most investors expect consumer spending to slow by as early as next year, Bloomberg’s latest Markets Live Pulse survey found.
4. Credit cards are getting maxed out
U.S. consumers ran up their credit card debt past the $1 trillion mark for the first time last month, according to a report on household debt from the Federal Reserve Bank of New York.
Total household debt, which includes home and auto loans, has eclipsed $17 trillion.
The Federal Reserve Bank of St. Louis reports that credit card delinquencies, which are still low compared to periods such as the Great Financial Crisis, are on the rise.
5. Banks are increasingly reluctant to lend
The latest Senior Loan Officer Opinion Survey by the Federal Reserve reports tightening credit conditions across the board, from business loans to home mortgages and consumer credit.
“Regarding banks’ outlook for the second half of 2023, banks reported expecting to further tighten standards on all loan categories,” the Fed survey concluded.
“Banks most frequently cited a less favorable or more uncertain economic outlook and expected deterioration in collateral values and the credit quality of loans as reasons for expecting to tighten lending standards further.”
When banks pull back on lending, businesses curb their investments and consumers cut spending, and this trend is expected to continue for at least the rest of the year.
6. Corporate bonds are maturing and refinancing them will be costly
Goldman Sachs estimates that $1.8 trillion in corporate debt is coming due over the next two years and it will have to be refinanced at higher interest rates.
The expense will eat up more corporate resources, possibly leading to slower growth and investment.
Recessions occur as debt levels peak and borrowers begin to default.
Moody’s has already reported a surge in corporate defaults this year. In the first half of the year, it counted 55, that’s 53% more than the 36 that defaulted in all of 2022.
7. Manufacturing remains in a prolonged post-pandemic slump
Respondents to the ISM survey reported weaker customer demand because of higher prices and interest rates.
“Orders are in fact falling faster than factories are cutting output, suggesting firms will need to continue scaling back their production volumes into the near future,” writes Chris Williamson, chief business economist at S&P Global Market Intelligence.
“An increasing sense of gloom about the near-term outlook has meanwhile hit hiring and led to a further major pull-back in purchasing activity.”
8. ‘Cascading crises’ could tip the balance of a slowing global economy
China, a growth engine for the past 40 years, is still struggling to recover from the pandemic, global economic growth has fallen below long-term average, and the ailing world could pull the U.S. economy down with it.
Like a plane crash, every economic disaster stems from a confluence of mishaps. Along these lines, G20 nations on Saturday put out a dire warning:
“Cascading crises have posed challenges to long-term growth,” the group said.
“With notable tightening in global financial conditions, which could worsen debt vulnerabilities, persistent inflation and geoeconomic tensions, the balance of risks remains tilted to the downside.”
9. The yield curve, a classic recessionary signal, is still inverted
Investors should be paid more for taking a long-term risk than they should for a short-term risk. That’s why the yield on a 10-year Treasury is supposed to pay a higher yield than a 2-year Treasury.
When this is not the case, it’s called an inverted yield curve, and it has long been considered a sign that a recession is due within the next 18 months.
The yield curve for 10-year and the 2-year Treasury has been inverted since July 2022. It’s been inverted for so long that many observers have given up on its reliability — though it still hasn’t been 18 months since it first inverted.
As for history, the yield curve last inverted was in late 2019, just before the pandemic U.S. recession.
10. Inflation is sticky, and the Fed isn’t done
The soft landing scenario that is so widely embraced is based on observations that inflation has dropped precipitously as the economy continues to grow at a healthy pace and the labor market is still holding strong with the unemployment rate at 3.8%.
The Fed, which has raised interest rates 11 times since March 2022 to curb inflation, can now take a bow. The consumer price index, which measures inflation, has come down from a peak of over 9% in June 2022 to 3.2% on its last reading in July.
The latest reading on CPI, for August, came out Wednesday, and re-accelerated more than expected, with The Fed’s most-watched ‘Core Services CPI Ex-Shelter’ back above 4.00%…
Meanwhile, the Fed, which next meets on Sept. 19-20 to decide on interest rates, is holding fast to its 2% target for inflation and will keep rates higher for longer, or possibly even raise them further to meet that goal.
Wall Street traders are not expecting another increase this month, according to the CME FedWatch tool, which is based on Fed funds futures trading.
Policy makers are still waiting to see what happens next after raising rates to their highest level in 22 years. Perhaps those actions have already sent the economy on a path of contraction. Or perhaps they haven’t done enough to continue slowing inflation.
Sticky inflation presents on ongoing risk of a recession.
“I believe we must proceed gradually,” Dallas Fed President Lorie Logan said last week, “weighing the risk that inflation will be too high against the risk of dampening the economy too much.”
UK Officially Declares Wagner A Terrorist Organization
On Friday the United Kingdom officially declared the Russian mercenary Wagner Group a terrorist organization, which comes over a week after the measure was first introduced in Parliament.
“This order comes into force with immediate effect and will make belonging to the Wagner Group or actively supporting the group in the UK a criminal [offense], with a potential jail sentence of 14 years which can be handed down alongside or in place of a fine,” the UK Home Office stated.
Wagner is now on a list along with 78 other proscribed organizations that includes ISIS, Hamas, Islamic Jihad, and other better known terror organizations which have lengthy histories of attacking civilians and conducting terror bombings.
“The UK has consistently called out the violent and destructive actions of Wagner Group, and included the group in a first wave of sanctions against Russia in early 2022,” the release said.
UK officials further said Wagner’s new listing as a terrorist organization “sends a clear message that the UK will not tolerate Russia’s proxies and their barbaric actions in Ukraine.” The move to make this happened gained steam after in July the British government sanctioned 13 Wagner-linked individuals and businesses.
But the Biden administration has yet to declare Wagner a terror organization, amid an ongoing fight in Congress where there’s debate over proposed legislation.
Biden’s reluctance has angered hawks in Congress. An FTO designation would impose far-reaching costs on the group and open up more means of targeting the mercenary firm by Washington, including going after third parties that deal with Wagner.
But one Congressional aide previously explained to The Hill that the hesitancy relates to other regions of the world where Wagner is active, and that unexpected consequences would accrue and impact US relations with certain countries:
“[The State Department] is concerned that if suddenly the FTO designation lands on Wagner, that those governments, where there’s various officials that deal with them [Wagner], that they would all, immediately be blocked from travel to the United States and have their assets seized for coming into contact with the FTO. So that’s the nature of their concern,” the aide said.
“They claim they’re not opposed to it on Ukraine grounds, but they’re opposed to it on Africa grounds.”
But with Yevgeny Prigozhin believed dead after his plane was downed on August 23, and with Wagner having been essentially disbanded and outlawed inside Ukraine, there may be less of Congressional incentive and drive at this point to attempt to push the designation through. However, Wagner is still very active in Africa.
Prior to being elected mayor of New York City in 2021, Eric Adams’ campaign posted on Twitter, now known as X, “We should protect our immigrants. Period. Yes, New York City will remain a sanctuary city under an Adams administration.”
Less than two years later, now-mayor Adams is suggesting the influx of illegal immigrants will “destroy New York City.”
“Let me tell you something, New Yorkers. Never in my life have I had a problem that I did not see an ending to. I don’t see an ending to this. … This issue will destroy New York City,” Mr. Adams said on Sep. 6, during a town hall meeting on the Upper West Side. “We’re getting 10,000 migrants a month.”
Texas Gov. Greg Abbott, a Republican, began busing illegal immigrants to several large U.S. cities, known as “sanctuary cities,” beginning in April 2022 to alleviate border cities in his state. And although only a fraction of the illegal immigrants arriving in New York City are arriving on Mr. Abbott’s buses, Mr. Adams has called the program “morally bankrupt.”
A jurisdiction is dubbed a sanctuary because it has enacted policies that shield illegal immigrants, including criminals, from federal immigration authorities and deportation.
The cities Mr. Abbott chose as his busing program recipients are among the 10 “largest sanctuary cities in the United States,” according to the Federation for American Immigration Reform (FAIR).
As of Sept. 8, Mr. Abbott’s office reported it had bused more than 11,300 illegal immigrants to Washington since April 2022; more than 13,500 to New York City and more than 7,000 to Chicago since August 2022; and more than 2,600 to Philadelphia since November 2022.
This year, Texas started busing illegal immigrants to Denver and Los Angeles. Denver has received around 1,100, and Los Angeles around 480.
Border Patrol agents have apprehended 1,973,092 illegal immigrants along the southwest border in the past 11 months, according to Customs and Border Protection (CBP) data.
In response to the border surge in 2021, Mr. Abbott launched his Operation Lone Star border security initiative in March 2021. The governor deployed troops from the Texas National Guard and the Texas Department of Public Safety to the southern border, increased funding for border security, designated Mexican drug cartels as foreign terrorist organizations, and started his busing program the following year.
“The crisis at our southern border continues to escalate because of Biden administration policies that refuse to secure the border and invite illegal immigration,” Mr. Abbott said in a press release at the time.
“Texas supports legal immigration but will not be an accomplice to the open border policies that cause, rather than prevent, a humanitarian crisis in our state and endanger the lives of Texans.”
Cities Cry Foul
On Aug. 9, Mr. Adams said the influx of illegal immigrants to New York City has led to an “unprecedented state of emergency.” The city cited the lack of work authorization as one of the problems with “asylum seekers.”
“They do not have the authorization to work, so we have to provide shelter. We have supplied food and access to healthcare. We have enrolled children in schools. We have opened almost 200 emergency sites, including more than a dozen large-scale humanitarian relief centers. And we have assisted migrants with asylum applications,” Mr. Adams said
“But we are past our breaking point. … For each family seeking asylum through the city’s care, we spend an average of $383 per night to provide shelter, food, medical care, and social services. With more than 57,300 individuals currently in our care, on an average night, it amounts to $9.8 million a day, almost $300 million a month, and nearly $3.6 billion a year,” he said.
On May 9, the state’s Democratic Gov. Kathy Hochul declared a state of emergency over the influx.
In reaction to Mr. Abbott sending 42 illegal immigrants to Los Angeles on June 14, the Los Angeles City Council on Aug. 30 unanimously approved two motions to file against Mr. Abbott and Texas.
The first motion states, “Investigate and report on whether human trafficking, kidnapping, or any other crime was committed on or before June 14, 2023, when Governor Greg Abbott of Texas sent 42 migrants from McAllen, Texas, to Los Angeles, California.”
The second states, “Investigate and begin proceedings on any potential civil legal action that could be taken against the State of Texas, Governor Greg Abbott, or any other entity relating to planning and actions of June 14, 2023. “
Before the vote, LA City Council member Hugo Soto-Martínez stated, “These motions are about investigating whether Gov. Greg Abbott committed kidnapping, human trafficking or any other crimes when he sent vulnerable families on a 23-hour bus ride with little or no food or water.
“The competition between these Republicans about who can be the most racist, I think, is just an utter failure and shows, clearly, that they do not have any intention of governing effectively.”
When reached for comment about the motions, the southern border, and illegal immigrants, Josue Marcus, an employee with the LA city clerk’s office told The Epoch Times via email that the city clerk’s office “cannot comment on these matters.”
The LA Mayor’s office didn’t respond to The Epoch Times’ request for comment.
As with New York and LA, the City of Chicago calls itself a “welcoming city” to “asylum seekers.”
“We have a responsibility to provide access to shelter, food, and medical care to everyone, regardless of immigration status,” the city website states.
“Many of our new arrivals have walked hundreds of miles, navigating great danger through multiple countries in pursuit of safety and opportunity in the United States. We are committed to assisting each family and individual, providing human services with respect and dignity.”
However, after receiving about 8,000 illegal immigrants via Mr. Abbott’s bus program, then-Democrat mayor Lori Lightfoot pushed back.
“We simply have no more shelters, spaces, or resources to accommodate an increase of individuals at this level,” Ms. Lightfoot wrote in a letter to Mr. Abbott.
“Though I am sympathetic to the significant challenges that border cities face, this situation is completely untenable. The national immigration problem will not be solved by passing on the responsibility to other cities.”
Mr. Abbott responded to Ms. Lightfoot on May 1, “As the mayor of a self-declared sanctuary city, it is ironic to hear you complain about Chicago’s struggle to deal with a few thousand illegal immigrants, which is a fraction of the record-high numbers we deal with in Texas on a regular basis,” Mr. Abbott wrote.
“You are right that ‘this situation is completely untenable,’ but this is not a Texas problem—this is a problem for the entire United States of America. … Until Biden secures the border to stop the inflow of mass migration, Texas will continue this necessary program.”
Ms. Lightfoot issued a Declaration of Emergency on May 9.
Neither Chicago’s City Council nor the mayor’s office responded to The Epoch Times’ request for comment.
On Aug. 28, Chicago’s new mayor, Brandon Johnson, and Illinois’ Democratic Gov. JB Pritzker wrote a letter to Department of Homeland Security (DHS) Secretary Alejandro Mayorkas stating that the City of Chicago had spent over $250 million supporting asylum seekers, and requested DHS to streamline work authorization for “non-citizens.”
As with other sanctuary cities, the arrival of buses from Texas to Washington, D.C., met with resistance.
A representative from Washington Mayor Muriel Bowser’s office wrote to the Secretary of Defense on July 19, 2022, requesting the assistance of the National Guard to “help prevent a prolonged humanitarian crisis” in the nation’s capital.
“The pace of arriving buses and the volume of arrivals have reached tipping points. Our collective response and service efforts have now become overwhelmed: the regional welcome center we helped establish in Montgomery County, Maryland, is at capacity; our homeless services system is already under great strain,” the mayor’s office wrote, according to an NBC reporter, who posted the letter on X.
“With pledges from Texas and Arizona to continue these abhorrent operations indefinitely, the situation is dire, and we consider this a humanitarian crisis—one that could overwhelm our social support network without immediate and sustained federal intervention.”
The Department of Defense declined to provide support. It also declined when Ms. Bowser again requested help on July 22 and Aug. 11, 2022.
German FM Baerbock Calls Xi A “Dictator” In Live Fox Interview
German Foreign Minister Annalena Baerbock went on Fox News on Friday and issued some bold words which are sure to harm already strained Berlin-Beijing relations. She was making a point about her country staying the course in support for Ukraine when she in passing referred to Chinese President Xi Jinping as a “dictator”.
“We will support Ukraine as long as it takes,” Baerbock said when the Fox host asked her about how she sees the future of the conflict going. Then she offered the following: “If Putin were to win this war, what sign would that be for other dictators in the world, like Xi, like the Chinese president? Therefore, Ukraine has to win this war.”
German Foreign Minister Annalena Baerbock calls Chinese President Xi Jinping a DICTATOR on live news.
Germany’s top imports are from China. Talk about vassal shooting it’s own foot to please thy master.
Certainly this is very risky rhetoric given China accounts for the bulk of all imports into Germany.
And Politiconotes Baerbock’s comments came on “the heels of recent trade tensions between Beijing and Brussels, after European Commission President Ursula von der Leyen this week said the EU executive would launch an investigation into Chinese electric vehicle subsidies.”
Baerbock’s “dictator” label for Xi also comes as she’s in the United States meeting with Biden administration officials, so perhaps she’s looking to present herself as “tough” – also imitating Biden’s own dictator quip applied to Xi from this past summer when he was discussing the ‘spy balloon’ shootdown. China’s foreign ministry had not responded as of late Friday.
But it’s not as if Berlin is exactly in the driver’s seat when it comes to China-Germany ties…
On Friday Baerbock met with her US counterpart Secretary of State Antony Blinken at the White House. Blinken said in a press conference afterward that the US and Germany are converging on their approaches to China.
“We also discussed our common approaches to China, and we very much welcome Germany’s China strategy. It is very coincident with our own,” Blinken told reporters. “I think it reflects something that we’ve seen around the world, both in Europe, in Asia, as well as in the United States, which is a growing convergence in our approaches to China.”
He then emphasized while alongside the German FM, “Both of us, among other things, share the goal when it comes to our economic relationships of de-risking, not decoupling.”
Turkish President Recep Tayyip Erdogan said on Saturday that Ankara could “part ways” with the EU if necessary, following the release of a European Parliament report rejecting the possibility of Turkey joining the EU soon.
The report instead suggested the EU explore “a parallel and realistic framework,” such as a customs union, to determine its ties with Ankara. “The EU is trying to break away from Turkiye,” Erdogan told reporters. “We will make our evaluations against these developments and if necessary, we can part ways with the EU.”
Turkey’s Foreign Ministry said the European Parliament report contained unfounded allegations and prejudices and took “a shallow and non-visionary” approach to the country’s ties with the EU.
Visa liberalization, which would give Turkish citizens visa-free travel to the bloc for long periods, is a significant reason Turkey wishes to join the EU. Many Turkish citizens work in EU states, most notably Germany, and EU membership for Turkey would free them of the difficult bureaucratic process needed to obtain visas.
The European Parliament report follows renewed Turkish efforts to join the EU. Earlier this summer, President Erdogan sought to link Turkey’s EU accession to approving Sweden’s bid to join NATO.
However, EU officials balked at linking the two issues, citing human rights abuses and the deterioration of the rule of law in Turkiye under Erdogan. “We have recently seen a renewed interest from the Turkish government in reviving the EU accession process,” said the lead lawmaker on the file, Spanish Socialist Nacho Sánchez Amor, upon adopting the report on Wednesday.
“This will not happen because of geopolitical bargaining, but only when the Turkish authorities show real interest in stopping the continuing backsliding in fundamental freedoms and rule of law in the country,” Sánchez Amor said.
EU officials accuse Erdogan of stifling the media and imprisoning dissidents, including during a crackdown after a failed coup in 2016, which Erdogan blamed on the Gulen Movement. Turkey’s occupation of parts of EU-member Cyprus has also led EU officials to criticize Erdogan.
In 2018, the European Council said in a statement that negotiations for Turkey to join the EU “have come to a standstill.”
Not so long ago, following French President Emmanuel Macron’s Beijing visit, many in the U.S. reacted to his expressed desire to avoid confrontation with China with indignation, labeling the leader a fool and a puppet.
Evidently, the backlash didn’t phase Macron. He doubled-down, saying that “being an ally does not mean being a vassal… [or] mean that we don’t have the right to think for ourselves.” When it comes to responding to fluctuating China-U.S. tensions, Macron believes that for Europe no response is the best response.
And as much as some Americans might wish he was wrong, he is not.
Macron is not witless. He is making a case that prioritizes his country’s tangible interests, not the U.S.’s. These include focusing on his region, avoiding conflict with a major global power, and remaining a relevant actor in world affairs.
Critics like The Spectator World’s John Pietro may label Macron’s call for European strategic autonomy “fantastical” and “unpopular,” but reality is not on their side.
In fact, Macron’s view is very popular. According to the European Council on Foreign Relations, close to three-quarters of Europeans believe that the Continent should pursue increased independence vis-à-vis American military power. Additionally, the report shows that majorities in all surveyed countries believe that Europe should remain neutral in any conflict between China and the U.S. over Taiwan.
Josep Borrell, High Representative of the European Union for Foreign Affairs and Security Policy, has repeatedly advocated for strategic autonomy too, as he publicly emphasizes his desire to strengthen relations between China and the EU.
Three years ago, for instance, Borrell made the case for the framework exalted by Macron. “[T]he world has changed. It is difficult to claim to be a ‘political union’ able to act as a ‘global player’ […] without being ‘autonomous,’” Borrell explains. “[T]he weight of Europe in the world is shrinking,” he acknowledges, claiming that “[t]he next two decades are going to be crucial because China will use them to become the first global power.” With this in mind, the EU official concludes that “traditional alliances remain essential” but insufficient, and relations between countries will become “more transactional” as the power balance shifts.
Borrell looks at the changing world, and sees an opportunity to build a relationship with a powerful China, just like Macron does. For him, as for most Europeans, Russia poses a far more perilous threat than China. Much to some American neoconservatives’ disappointment, he sees no value in taking strong stances against China.
If the U.S. were to publicly and strongly reject Europe’s openness to China, Borrell may reconsider. But that has not happened. Hence, with precaution and measured language, Borrell and Europe writ large will likely continue to dance with both China and the U.S.
With eyes on Russia, it may seem like Europe and the U.S. have a phenomenal bond. When it comes to China though, that bond is not quite clear. So, while Americans’ gut reaction to Macron’s philosophy might be indignation, still, the U.S. must take Macron’s signals and framework seriously. Pretending he’s a lunatic simply won’t cut it.
Juan P. Villasmil is a foreign policy specialist. His work has been featured on The Wilson Center’s New Security Beat, The National Interest, RealClearWorld, and others. He is also a Young Voices contributor.
