What We're Watching Today, August 21, 2024

Overview

What We’re Watching Today is 1,621 words and a 10-minute read.

Global: Indian Port investments anticipate shifts in global trade

India has begun to build out its seaport and transportation sectors, trying to position the country as a viable option for global factory production.

Our Take: As political and economic risks have increased, many western businesses have begun to diversify their supply chains to reduce overdependence on China. India has emerged as an attractive manufacturing alternative. India has a large and cost effective labor force, with a developing digital and technological base particularly in the services sector, stable political system and strategic location. Historically, it has had a small manufacturing base. While it is developing transportation and logistical services, it will need to scale these up in order to support global import and export logistics, with more deep water ports capable of handling the largest of cargo ships. Such investments are costly and take years to develop. India is betting that the current geopolitical tensions shifting global trade are not transitory and that it can compete with other countries in Asia, such as Vietnam, Indonesia and the Philippines.

Read More: New York Times [paywall], Forbes [paywall], The Economist [paywall]

Europe: Ukrainian drone attack on Moscow largest ever

The Ukrainian military launched 45 drones over Russia, including 11 over the Moscow region, the largest attack on Moscow since the beginning of the Ukraine war.

Our Take: While the Russian military claimed it destroyed all the drones, drone warfare has emerged as an effective weapon for Ukraine to attack deep into Russian territory. Ukraine has successfully targeted weapons depots, defense production facilities, oil refineries and logistics centers. Ukraine does not need Western donor permission to use drones in cross border attacks because they are domestically manufactured. The attacks on Moscow appear designed to destroy any sense of invincibility in the Russian capital, distant from front lines, and to maintain the offensive in the war. The drone attacks inside Russia do not inflict sufficient damage to totally destroy targets, but cause costly repairs. To have a measurable impact on the course of the war, Ukraine would need to deploy greater destructive power against Russian military infrastructure, difficult for a small military give Russia’s strategic depth and strict restrictions on how it can use long range missiles provided by allies.

Middle East: Iran says it will hold off on Israeli retaliation during ceasefire negotiations

Iranian officials released a statement promising its promised response to Israeli strikes that killed Hamas leader Ismail Haniyeh “must be carefully calibrated to avoid any possible adverse impact that could potentially influence a prospective cease-fire,” signaling that a reprisal may not be imminent.

Our Take: Iran’s signal that they will hold off on retaliatory attacks for now is a positive for the US, Israel and other parties hoping to secure a ceasefire deal in what the US has characterized as potentially the last window to do so. The announcement shows that Iran is interested in at least limited de-escalation, although top officials still insist that the reprisal will come. Tehran’s decision to hold off for now may also reflect internal doubts about its ability to sustain a regional war. Regardless, hopes for the current ceasefire round are not high – Hamas is not officially participating, and Arab and Israeli news sources are reporting that central disagreements remain unresolved.

Read More: Washington Post [paywall], Institute for the Study of War

Americas: Mexican judges strike over planned reform

Mexican federal judges voted to strike Monday night in protest on President Obrador’s proposed judicial reform, which would make all judge positions elected rather than appointed – and replace every federal judge, including the Supreme Court, to start. The judges followed thousands of other court employees who voted to strike earlier in the day.

Our Take: While Obrador’s party has defended the plan as the only way to root out “corruption and privileges,” while critics say the change would all but eliminate Mexico’s system of checks and balances, destabilize the country’s political scene, and put judges with minimal training on the bench. The policy, which has been endorsed by President-elect Claudia Sheinbaum, has also been denounced by international observers. This strike, however, could potentially impact their decision-making, with Sheinbaum’s ascension in October a neat transition in which to modify the plans.

Read More: New York Times [paywall], Americas Quarterly, Georgetown Americas Institute

Asia-Pacific: Beijing’s recent talks with Jakarta and Seoul signal possible new diplomatic strategy

China’s recent “2+2” dialogues with Indonesia and South Korea focused on diplomacy and security matters indicate a more multifaceted strategy as countries in the region shift closer to the Quad, according to observers.

Our Take: By integrating defense and foreign policy discussions with its neighbors, Beijing aims to deepen strategic ties and shape the regional security landscape to align with its interests. Although Jakarta and Seoul are increasing cooperation with the Quad, they still hesitate to fully align with the US-led grouping, giving China the opportunity to use the 2+2 dialogues to influence policy moves. Nonetheless, tensions remain over China’s economic dominance and military assertiveness in the Asia-Pacific region, and its diplomatic assertiveness could drive countries closer to the Quad depending on how Beijing manages its approach.

Africa: Western African juntas pen letter to UN on Ukraine’s alleged rebel backing

The military governments in Burkina Faso, Mali, and Niger wrote a letter to the UN Security Council criticizing what they claimed was Ukraine’s support for rebel groups in western Africa’s Sahel region, according to Mali’s foreign ministry.

Our Take: The condemnation of Ukraine at the UN by the military juntas in Burkina Faso, Mali, and Niger underscores the deepening geopolitical complexities in West Africa, where Russia has been rapidly increasing its influence. Mali and Niger had previously cut ties with Ukraine in early August over Kyiv’s statement on fighting in northern Mali that killed Malian soldiers and mercenaries from Russia’s Wagner Group in late July, and along with pro-Russian sentiment in recent Nigerian protests, the letter to the UN demonstrates how tensions between Russia and the West are influencing political divides in West Africa. Further development of ties between Russia and its partners could further complicate efforts to reestablish political and economic cooperation in West Africa, which were negatively impacted by the juntas’ decision to leave a key regional bloc in January.

Trade and Compliance: US tariffs expected to continue, regardless of presidential outcome

The Wall Street Journal reports that both Vice President Kamala Harris and former President Donald Trump are likely to support further import tariffs if elected to office, reflecting the way in which trade, manufacturing, and the tools to bring them together play an important role in this year’s US presidential election.

Our Take: Trump, the Republican nominee, has voiced his plan to implement new tariffs, including a 10% duty across-the-board on imported goods and a 60% duty on goods from China. Harris, the Democratic nominee, has not yet indicated a plan that deviates from President Joe Biden’s policy of maintaining many Trump-era tariffs on China. Both nominees have declared support for protecting manufacturing jobs in key American industries and reducing dependence on Chinese exports in particular, though Trump’s support for across-the-board measures and relatively harsher posturing toward Beijing will likely distinguish his potential second term. Regardless of the US presidential election outcome, multinational corporations anticipate increased risks in sourcing from and operating out of China, and are already diversifying their operations, utilizing growing export economies in India, Southeast Asia, and Mexico.

Read More: Wall Street Journal [paywall], Council on Foreign Relations

Energy Transition: Per US Energy Department, household vehicles were parked 95% on a typical day in 2022

According to the Fact of the Week published by the US Department of Energy, household vehicles in Metropolitan Statistical Areas were driven an average between 61 and 68 minutes per day and were parked the rest of the time, giving plenty of time for EV charging.

Our Take: While interesting, this fact addresses only routine usage of a vehicle, to the grocery store and back, or the daily commute to the office. Academic research into EV owners’ concerns over charging paint an entirely different set of concerns – charging an EV when not at home. A new study by Harvard Business School, based on reviews of actual EV owners, reveals frustration with the state of charging infrastructure, including unreliability, erratic pricing, and lack of charging locations, i.e., charging deserts. The risk of denying that there are real and significant problems with charging infrastructure leads to a deep credibility gap for the technology, creating staunch critics among highly mobile Americans.