Global Street Smarts.
Happy Wednesday.
Here’s today’s ITK Daily.
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ITK Radio | Aimee Carter | Cultivating Strategic Partnerships
On this episode of ITK Radio, a conversation with Aimee Carter.
Aimee is the vice president of development and engagement at the Alliance for Health Policy.
She leads efforts to advance the financial foundation and multistakeholder relationships of the Alliance.
Working with the president & CEO, she stewards current partnerships, cultivates new relationships and resources, and ensures engagement across stakeholders and communications platforms.
She has more than 20 years of experience in corporate and international affairs and leading business development and engagement across many issue areas. Previously, Aimee led development and membership at Business Roundtable and the Council on Foreign Relations and international outreach at AARP.
Listen or watch here.
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India’s Modi sees unprecedented trust with US, touts New Delhi’s leadership role: In Wall Street Journal interview, prime minister calls for overhaul of global institutions. WSJ
+ Indian Prime Minister Narendra Modi said ties between New Delhi and Washington are stronger and deeper than ever as India moves to secure what he sees as its rightful place on the world stage at a moment of geopolitical turmoil.
+ “There is an unprecedented trust” between the leaders of the US and India, Modi said in an interview ahead of his first official state visit to Washington after nine years in office. He hailed growing defense cooperation between the two countries as “an important pillar of our partnership,” which he said extends to trade, technology and energy.
+ Modi’s message was that—from India’s role in global politics to its contributions to the world economy—the country’s time has come. He sought to portray New Delhi as the natural leader of the global South, in sync with and able to give voice to developing countries’ long-neglected aspirations.
+ “India deserves a much higher, deeper and wider profile and a role.”
+ “Let me be clear that we do not see India as supplanting any country. We see this process as India gaining its rightful position in the world,” Modi said. “The world today is more interconnected and interdependent than ever before. To create resilience, there should be more diversification in supply chains.”
+ Modi signaled India’s desire to be on the U.N. Security Council, pointing to India’s role as a contributor of troops for peacekeeping operations around the world. “There has to be an evaluation of the current membership” of the council “and the world should be asked if it wants India to be there.”
+ “I am the first prime minister to be born in free India,” Modi said. “And that’s why my thought process, my conduct, what I say and do, is inspired and influenced by my country’s attributes and traditions. I derive my strength from it.”
India-US defense deals in focus as Modi visits Washington: Indian PM's trip expected to yield new pacts on drones, jet fighter engines. Nikkei
As Modi visits White House, India’s reliance on Russian arms constrains him WP
+ India’s long-standing reliance on Russia for military equipment and technology constrains New Delhi’s ability to line up with the West in confronting Russia over its war in Ukraine. To Washington’s disappointment, India has not condemned the invasion.
+ Robust military trade between the countries dates back to the 1960s, and Russian equipment now makes up about 85 percent of the Indian arsenal, according to a team led by Sameer Lalwani, a senior expert at the US Institute of Peace.
+ India, the largest importer of weapons in the world, obtained 45 percent of its equipment from Russia in the five years through 2022, down from nearly two-thirds from the five years prior, according to the Stockholm International Peace Research Institute.
+ American supplies still represent only 1 percent of the Indian army’s equipment and just about 4 percent of that of the Indian navy and air force, Lalwani said. From 2018 through 2022, according to SIPRI, the estimated value of Russian weapons sold to India was four times that of American weapons.
What’s the matter with Modi? Biden world grits its teeth for PM visit: The White House will host its third state dinner for India’s prime minister and crucial global partner. Politico
+ President Joe Biden will roll out the glitziest of welcomes for India’s Prime Minister Narendra Modi this week.
+ It will be a nod to New Delhi’s rise that masks the complications it brings, including what critics charge is an administration’s prioritization of traditional geopolitics over human rights.
+ Though he leads the world’s largest democracy, Modi has ruled as an autocratic-leaning Hindu nationalist whose government has overseen a crackdown on everyone from journalists to political opposition leaders as part of a larger targeting of Indian Muslims.
+ “The United States needs India as a strategic partner to balance against China both in South Asia and in the Indo-Pacific and India needs the United States as it develops a more prosperous and green future,” said Caroline Grey of the Eurasia Group, a foreign affairs think tank. “US-India relations have never been better, which might come as a surprise given India’s reluctance to impose sanctions on Russia after its invasion of Ukraine. In fact, the war in Ukraine likely reminded the Biden administration of the importance of India to its interests.”
+ The showiest moment will be a state dinner on Thursday, an honor normally reserved for close allies. So far, only French President Emmanuel Macron and South Korean leader Yoon Suk Yeol have been feted by the Biden administration in such an extravagant fashion.
+ Modi was among the first leaders with whom Biden held a virtual meeting. Biden elevated the Quad and he spent time with Modi on the sidelines of the G-7 in Japan last month. National Security Adviser Jake Sullivan was in India in recent days to finalize the details of the summit, which White House aides preview will include new economic agreements, climate commitments, and deals on semiconductors and other technologies.
Dozens of US lawmakers urge Biden to raise rights issues with Modi -letter: Reuters reports Dozens of US President Joe Biden's fellow Democrats urged him on Tuesday to raise human rights issues with Indian Prime Minister Narendra Modi during his visit to Washington this week, according to a letter sent to Biden.
Beijing plans a new training facility in Cuba, raising prospect of Chinese troops on America’s doorstep: WSJ reports the Biden administration scrambles to forestall China’s ambitions in the Caribbean.
China negotiating with Havana about joint military training facility in Cuba: Politico reports it’s unclear if Beijing and Havana have already struck a deal, or when one would be completed.
Blinken visit reveals chasm in how US and China perceive rivalry: Xi Jinping and nationalistic Chinese see recent US actions as an effort to contain another superpower rather than compete with it — and they’re pushing back. NYT
+ An austere greeting on the airport tarmac in Beijing sans a red carpet.
+ A stone-faced handshake from China’s top foreign policy official.
+ A seat looking up at the Chinese leader, Xi Jinping, perched at the head of a long table.
+ Casting China as a strong and responsible power willing to lower tensions with a belligerent United States may help mask the less politically palatable reasons Beijing wants to re-engage with Washington, analysts say.
+ “The optics of Xi Jinping lecturing to a subordinate American secretary of state from the head of a boardroom table plays well to a domestic audience that China is a global power that not only demands, but receives, respect from other great powers,” said Drew Thompson, a visiting senior research fellow at the Lee Kuan Yew School of Public Policy in Singapore.
Democrat, Republican team to limit Chinese purchase of US farmland: NBC News reports Sens. Ernst and Stabenow said they are responding to a possible threat to the US food supply and to keep China from buying farmland near military installations.
US-funded scientist among three Chinese researchers who fell ill amid early COVID-19 outbreak: Identification of three who worked at Wuhan Institute of Virology fuels suspicion for proponents of lab-leak theory. WSJ
+ The Federal Bureau of Investigation has assessed with moderate confidence that a lab leak was the most likely origin of the virus and the Energy Department came to a similar conclusion with low confidence. Four other US intelligence agencies assess with low confidence that the virus arose naturally, while the Central Intelligence Agency has been agnostic.
+ The US intelligence community is planning to declassify more information regarding its search for Covid’s origins as soon as this week, under a law that Congress passed and President Biden signed in March. It couldn’t be determined if the declassified intelligence would include the names of the researchers, and representatives for the director of national intelligence declined to comment.
+ November 2019 is roughly when many epidemiologists and virologists think SARS-CoV-2, the virus behind the COVID-19 pandemic, first began circulating around Wuhan, a city in central China. China has said that the first confirmed case was a man who fell ill on Dec. 8, 2019.
EU looks to ban companies from making sensitive tech in China: Brussels moves to create new powers to clamp down on companies outsourcing key supply chains to autocratic countries. Politico
+ The EU on Tuesday revealed plans to prevent European companies from making sensitive technologies such as supercomputers, artificial intelligence and advanced microchips in countries like China.
+ The document also develops ideas from last month’s G7 summit, where “de-risking” from China was a major point of discussion. Japan already has an such a strategy, but von der Leyen stressed “Europe becomes the first major economy to set out a strategy on economic security.”
+ The EU executive will finalize the new initiative by the end of the year, but it is not yet decided whether that will be a legislative proposal or more a stepping stone towards a concrete instrument by the next Commission, which will be formed after elections to the European Parliament in a year’s time.
Europe unveils 'de-risking' strategy but states divided on China: The proposal to defend technologies like AI, chips likely to face fierce debate. Nikkei
+ The European Commission on Tuesday outlined a "de-risking" strategy designed to develop a resilient economy that is less reliant on China in critical technologies, as European Union member states remain divided on how to approach relations with Beijing.
+ China is Germany's biggest trading partner. Berlin had a trade deficit of 80 billion euros (around $87 billion) with the country last year, the largest figure since 1990.
China and Germany: A balancing act: DW reports the latest round of high-level government consultations in Berlin were friendly in tone but tough in substance. Germany needs China, but also wants to minimize its dependency.
Why Berlin will slam the brakes on France’s car war with China: Germany is far more exposed than France to counter-attacks by Beijing in the Chinese market. Politico
+ When it comes to fighting off China’s electric vehicle invasion, Europe’s carmaking superpowers are split straight along the Rhine.
+ Germany’s big three automakers — Volkswagen, BMW and Mercedes-Benz — see the prospect of antagonizing Beijing with an all-out trade war over clean cars as an unthinkable nightmare, while executives at their partially French state-owned rivals Renault and Stellantis have much to gain from pulling up the drawbridges and protecting domestic industry with tariffs.
+ At present, Chinese brands such as BYD, Great Wall, XPeng and Nio make up just a small fraction of European car sales, their footprint is growing as they launch in national markets, build brand recognition and sign bulk deals with rental companies.
+ Chinese brands are a bigger problem for Renault and Stellantis — a Dutch-headquartered company with French roots in which the French government has a small indirect stake — because they are more heavily exposed to the European mass market than Germany's globe-trotting majors — which generally target the premium consumer.
+ "Regulation in Europe ensures that electric cars built in Europe are about 40 percent more expensive than comparable vehicles made in China," Stellantis' CEO Carlos Tavares told Automobilwoche in Las Vegas earlier this year.
+ For the Germans, it's all about what happens inside China. Sales in the Chinese market are critical for all of Germany’s automakers, but for VW it’s what makes it one of the largest car producers in the world.
+ VW has long called China its "second home market," with some 40 percent of VW’s global car sales in China last year, up from 31 percent a decade ago, according to data from the Center for Automotive Management (CAM) in Cologne. Both BMW and Mercedes-Benz have similarly big stakes.
+ China still holds a 76 percent share of all global battery production capacity, according to a European Court of Auditors study out Monday, and its companies are building battery cell plants across Europe, including in Germany. “Unbundling from China is an illusion and also not desirable.”
UK warned against being ‘overly reliant’ on Chinese EV batteries: Badenoch speaks out as deal between Tata and China’s Envision for Britain’s second big factory expected soon. FT
US lawmakers to press auto CEOs over China supply chains: Four US lawmakers will travel to Detroit Tuesday to press the chief executives of Ford Motor Co. and General Motors Co. to cut their supply chains’ reliance on China, especially in electric-vehicle batteries. Bloomberg
Asia’s new resource competition: Australia is leading an effort to break China’s critical-minerals monopoly. Economist
+ Just as oil was weaponized by its suppliers in the 1970s, so China’s dominance in the supply and processing of critical minerals could prove threatening.
+ China supplies nearly 90% of processed rare-earth elements.
Labour party outlines vision for UK foreign policy overhaul: Shadow minister David Lammy announces measures aimed at protecting supply chains and improving EU relations. FT
+ A Labour government would convene a new business advisory council to engage on foreign policy under the party’s plans to place economics at the heart of UK diplomacy, David Lammy announced on Tuesday afternoon.
+ Lammy added that under Labour, British diplomats would be tasked with “helping to create the conditions for growth, navigating this new geopolitical and geoeconomic context, driving forward the energy transition.”
Stop trying to rationalize Western populism: Unlike the Eastern kind, of the likes of Viktor Orbán, it is not about very much. Janan Ganesh
Enlargement’s back on the political agenda: As Russia’s invasion of Ukraine has given both EU and NATO enlargement a new lease of life, Europe’s political dynamic is changing. Nathalie Tocci
+ It’s unlikely that Ukraine’s NATO membership will be green-lit in Vilnius this summer, and even if EU accession talks are opened with Kyiv and Chișinău by the end of the year, the road to membership will remain long. However, as the intolerable cost of non-enlargement becomes clear, a strategic shift is happening in Europe.
Italy and France will support Ukraine for 'as long as necessary,' says PM Meloni on Paris visit: AFP reports French President Emmanuel Macron and Italian Prime Minister Giorgia Meloni vowed to work more closely together as they met on Tuesday in Paris for talks aimed at patching up ties.
Germany sees 'more aggressive' Russian spy activity: DW reports the domestic intelligence agency has warned that Russia's spy operations are expected to increase in Germany. The agency noted that far-right movements are harnessing opposition to military support for Ukraine.
NATO’s largest-ever aerial wargame has Russia, China in mind: German-led exercise simulates mass deployment in skies across Europe in response to an attack. WSJ
+ NATO is conducting the largest air force exercise in its history in the skies above Europe in wargames that allied commanders say are producing valuable lessons for deterring potential Russian and Chinese aggression.
+ The Germany-led exercises involve around 250 aircraft—including strategic bombers and more than 10,000 troops from members of the North Atlantic Treaty Organization as well as Japan and Sweden—simulating a response to an attack from an adversary resembling Russia.
“I’m aware that I’m living through an extraordinary moment in history”: US Ambassador Jane Hartley talks the special relationship and how her life compares to The Diplomat: Since US Ambassador Jane Hartley arrived in London last summer, she’s met two monarchs, three prime ministers and had a hit Netflix drama echo her every move. But what does it really take to manage UK/US relations? British Vogue
African countries are fed up with being marginalized in global institutions: They will be pushing hard for change at a big global pow-wow this week. Economist
+ Africa’s large presence at the Summit for a New Global Financial Pact reflects a fear that the continent is being short-changed as priorities shift towards helping Ukraine and dealing with climate change.
+ That is feeding a deeper anger—that the continent has too little say in global institutions such as the World Bank, imf and un, and that some of the proposed reforms could again leave Africa out in the cold.
Let's debate: Fox News announced that Bret Baier and Martha MacCallum will co-moderate the Aug. 23 GOP presidential primary debate in Milwaukee.
DeSantis raises cash in California and pokes at governor: NYT reports the Florida governor made a fund-raising stop in Sacramento not far from the home of Gov. Gavin Newsom. The two are in the midst of a mutually beneficial feud.
AP: Inside the deepening rivalry between Florida Gov. Ron DeSantis and California Gov. Gavin Newsom
LAT: Biden to meet with experts about the dangers of AI on visit to San Francisco
From ChatGPT to executive orders: Inside the White House’s urgent push to regulate AI CNN
+ By next month, leading AI companies like Google, Microsoft and OpenAI are expected to announce privacy and safety commitments crafted in coordination with the White House, according to a senior administration official, who said the federal government will employ “appropriate methods to ensure companies live up to these commitments.”
+ This summer, the Office of Management and Budget is also expected to release long-awaited guidance for federal agencies on the use and procurement of AI technologies, leveraging the federal government’s status as a large client to shape the industry.
+ National security adviser Jake Sullivan and his team are also developing policies to respond to the cybersecurity risks associated with AI and coordinating with the G7 to establish international norms around AI.
+ White House officials aren’t starting from scratch, building instead on their 73-page Blueprint for an AI Bill of Rights released in October, which officials have called a foundation for the administration’s approach to AI policy. Officials are also leaning on the risk management framework released earlier this year by the Department of Commerce’s National Institute of Standards and Technology.
WP: From Dylan to Bieber, catalog sales are the megadeals taking over music
WP: AI music will be eligible for a Grammy, but only if a human helps
Wall Street sours on America’s downtowns: The pessimism from investors who bet on office buildings and mass transit can be seen in market signals that are flashing red. WSJ
+ Wall Street is betting against America’s downtowns.
+ “The suburbs are going to be one of the big winners in this, and the potential losers could be the large cities that have depended on people coming back and forth to work."
+ “Over the next 10 years, we’re gradually going to come to grips with this, and the stuff will slowly reprice,” said Stijn Van Nieuwerburgh, a Columbia Business School professor.
+ He and colleagues at Columbia and New York University estimate that the value of office property across US cities is 38% lower than before the pandemic, equaling a loss of about $500 billion.
+ Office-building property taxes make up about 10% of revenue in major cities, according to a calculation by Green Street, a real-estate analytics firm.
+ It projects “a dire picture for future city budgets with high levels of remote work.” Older Northeastern, Midwestern and California cities with high debt loads and pension liabilities already were facing budget struggles, a contrast with sprawling metropolises in South and West states.
Return to office enters the desperation phase: The next stage of getting workers back at their desks includes incentives like $10 to the charity of their choice — and consequences like poor performance evaluations if they don’t make the trek in. NYT
+ These new policies come as business leaders accept that hybrid work is a permanent reality, with just over a quarter of full workdays in the country now done at home, and offices still at half their prepandemic occupancy.
Honda, Ford join push to set rules for blockchain 'battery passport': Nikkei reports the auto industry prepares for EU requirements to record supply chain info.
Brands wanted to cut out stores. Not anymore. Nike and others are selling through traditional retailers they once shunned. WSJ
+ “Wholesale is profitable from day one. E-commerce takes longer. Some digital brands never reach profitability because they spend so much money on marketing to acquire customers.”
+ “Beating customers over the head with marketing is far less efficient than shipping a crate of shoes to Nordstrom,” said Tom Nikic, an analyst with Wedbush Securities.
+ “The cost of acquiring customers has been the big whoops,” Nikic added. “All these brands kept selling more stuff and losing more money.”
+ There are downsides to wholesale. The department store or other traditional retailer—not the brand—owns the data on what people are buying. The limited information makes it harder for brands to react to hits and duds.
+ “To scale a business, you have to meet customers where they want to shop. In a lot of cases, customers still want to shop at department stores that carry multiple brands.”
Prince Harry and Meghan’s Spotify split Bindu Bansinath
Rome to open ancient square where Julius Caesar was killed: According to tradition, he died in the capital's central Largo Argentina square - home to the remains of four temples. They are all currently below street level and up until recently, could only be viewed from behind barriers close to a busy road junction. Reuters
On Cape Cod, it’s the question of the summer: Why are so many vacation rentals empty? Have the sharks and the traffic, and Airbnb’s tyrannical departure instructions finally scared off visitors? Or are there suddenly too many listings? Boston Globe
+ The Cape Cod & Islands Association of Realtors is reporting an occupancy rate that’s 20 percent lower this season than last, and everyone’s wondering what’s going on.
+ The vacancies can be attributed to dropping demand. Or rising supply. Or both.
+ Ryan Castle, CEO of the real estate association, sees three main culprits: a pullback from the “revenge travel” trend that saw surges in spending by people making up for trips lost to the pandemic; a dollar that’s stronger now than pre-pandemic, making Italy more attractive than the Sagamore Bridge; and listings that have finally gotten just too expensive.
‘Quiet luxury’ finds a loud debate: The stealth-wealth fashion trend that propelled $1,500 sweaters and cashmere ball caps meets some fatigue among buyers. Jacob Gallagher
Your brain has tricked you into thinking everything is worse Adam Mastroianni
+ Two well-established psychological phenomena could combine to produce this illusion of moral decline.
+ First, there’s biased exposure: People predominantly encounter and pay attention to negative information about others — mischief and misdeeds make the news and dominate our conversations.
+ Second, there’s biased memory: The negativity of negative information fades faster than the positivity of positive information. Getting dumped, for instance, hurts in the moment, but as you rationalize, reframe, and distance yourself from the memory, the sting fades.
+ When you put these two cognitive mechanisms together, you can create an illusion of decline.
+ People exempt their own social circles from decline.
+ People believe that moral decline began only after they arrived on Earth.
WP: French police search Paris 2024 Olympics offices amid corruption probe
Politico: Police raid Paris 2024 Olympics HQ in corruption probe
NBA Draft prodigy Wembanyama set for commercial bonanza: AFP reports Victor Wembanyama is only 19 and has not played a minute in an NBA jersey, but the French teenager is poised to land an array of lucrative deals likely to make him one of the most commercially successful athletes in history.
Enjoy the ride + plan accordingly.
-Marc
Marc A. Ross | Chief Communications Strategist @ Caracal
Caracal produces ITK Daily.
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