China Looks to Stronger EU Trade Ties Against Threat of US Tariffs

China bolstered ties with the European Union this week with more large markets in the pipeline to keep its exports healthy as the United States levies import tariffs, analysts say.

 

At the 20th China-EU leaders’ meeting Monday in Beijing, Chinese President Xi Jinping said his country stands ready to promote bilateral economic development. Premier Li Keqiang noted at the summit China had recently cut import tariffs on autos, medicine and consumer goods from the EU.

 

The 28-member European Union, including some of the world’s wealthiest countries, received $437 billion in exports with China last year, which accounted for 20 percent of the bloc’s total shipments from overseas.

 

Officials in Beijing have also pledged to ease trade friction with India this year.

 

“The EU is the second largest trading partner to China,” said Felix Yang, an analyst with the financial advisory firm Kapronasia in Shanghai. “While Trump’s tariffs hit the prospects of the Chinese economy, the EU is becoming a more important market for China.”

 

A reserve in case of trade war

 

China and the United States have headed toward what economists call a “trade war” for much of the year. U.S. President Donald Trump believes China trades unfairly, giving it a $375 billion trade surplus in 2017.

 

This month Trump approved import tariffs of 25 percent on more than 800 Chinese products. The taxes, already in effect, hit Chinese goods worth about $34 billion. Trump has threatened tariffs on goods worth another $450 billion, and China’s commerce ministry said it would make a “necessary counterattack.”

China counts the United States as its No. 1 trading partner, but major markets such as the EU, India and Southeast Asia are high on the list. The summit on Monday with EU leaders should help China solidify EU trade, economists say.

 

“You have to explore opportunities to grow your next largest set of trading partners, and this is where it’s really all about,” said Song Seng Wun, an economist with the private banking unit of CIMB in Singapore. “In case the trade fight with the U.S. were to escalate, it’s good your trading relationship with your remaining partners can improve and hopefully over time pick up some of the slack.”

 

China will need Europe to buy technology that the United States might sell if relations were better, said Liang Kuo-yuan, president of Taipei-based think tank Polaris Research Institute. The threat of a trade war now “slows” China’s acquisition of tech for R&D, he said.

 

“If they can’t develop their own, they would still look for Western technology,” Liang said. “At that point, the EU becomes a major source. If the route to Europe hasn’t been blocked, then the slowdown wouldn’t be so slow.”

 

The European Union will avoid a trade war, European Council President Donald Tusk said after the summit. But the bloc that has its own trade deficit with China advocates new global trade rules and World Trade Organization reforms.

 

Europe, like the United States, worries about China’s protection of technology and other intellectual property rights. In April the EU brought a case to the World Trade Organization against Chinese legislation that it said “undermines the intellectual property rights” of European companies.

The EU wants to “bravely and responsibly reform the rules-based international order,” Tusk was quoted saying on the EU’s website. “This is why I am calling on our Chinese hosts… to jointly start this process from a reform of the WTO.”

 

China voiced support for the WTO reforms at the Monday summit, the European side said in a statement.

 

India and Southeast Asia

 

China’s commerce minister said in April his country would keep working with India to ease trade differences caused by market access issues — resulting in a deficit for India.

Southeast Asia might be next for lighter treatment, Song said. China and the 10-member Association of Southeast Asian Nations are finishing talks on a 16-nation Regional Cooperation Economic Framework, a trade pact that some see as an antidote to the Trans Pacific Partnership deal that Trump exited in 2017.

 

Eventually other countries may join China in facing the United States as many expect trade problems, said Zhao Xijun, associate dean of the School of Finance at Renmin University of China. A tariff battle with China could spill into other parts of Asia, and Trump has rattled other countries with an “America First” policy that’s often regarded abroad as protectionist.

 

China’s trade ties with Japan, South Korea, India and Southeast Asia will “continuously be promoted,” Zhao said. Those countries link to the same supply chain with its own “rules” that cannot be broken by a single country, he said.

 

“It’s not such a simple matter,” Zhao said. “The supply chain has its own rules. It’s not something the American government can break because it says it wants to break it.”

EU Regulator Fines Google More Than $5 Billion

The European Union’s antitrust regulator fined Google a record $5 billion Wednesday for illegally exploiting the powerful market share position of its Android smartphone system.

The EU antitrust regulator concluded that Google, whose Android system operates more than 80 percent of the world’s smartphones, abused its dominant position to promote its own apps and services, especially the company’s search engine.

The regulator ordered Google to end the illegal practices within 90 days or face more penalties. Google can appeal the decision.

The decision was made Wednesday in a meeting in Brussels.

 

As US-Russia Interference Controversy Simmers, NATO Tries To Boost Cyber Defenses

Estonia was the one of the first countries to suffer a large-scale cyber-attack – and most experts say Russia was behind the 2007 strike. The Baltic country now hosts NATO’s Center of Excellence on cyber security, aimed at sharing best practices among members and allies. Japan has just joined the center, as it fears the 2020 Olympics in Tokyo could be targeted. Henry Ridgwell traveled to Tallinn and has this report.

As US-Russia Interference Row Simmers, NATO Boosts Cyber Defenses

As grids of lights flash red and sirens wail, teams of cyber-defense specialists snap into action as power networks and water-purification plants come under attack. They are the best in their field – and in this exercise, they are competing against one another.

Operation Locked Shields, a so-called live-fire cyber exercise, is hosted annually by NATO’s Cooperative Cyber Defense Center of Excellence or CCDCOE in Estonia, is aimed at testing members’ and allies’ abilities to see off the latest hacks, malware and cyber interference.

“It is about friendly competition. But what makes it the world’s biggest is first of all the number of nations who are contributing to it. We then bring the ‘crème de la crème’ of all nations together to match each other and also learn to cooperate with each other,” said Siim Alatalu, a senior researcher at the center.

Estonia was the one of the first countries to suffer a large-scale cyber-attack back in 2007 – and most experts say Russia was the culprit. The Baltic country is now at the forefront of NATO’s cyber-security efforts. In a sign of its growing global reputation, Japan has just joined the CCDCOE, hoping to glean valuable skills and information to help defend the upcoming 2020 Olympic Games from cyber-attacks.

While Operation Locked Shields is a practice run, the threat is very real, says Alatalu. “Everything is technology dependent. And therefore everything could be hacked.”

In the winters of 2015 and 2016, Ukraine suffered hacking attacks on its power network, shutting down systems for several hours. Kyiv blamed Russia – a charge Moscow denied.

As well as hacking, governments face the growing problem of disinformation: using the web to disrupt democracies. Analyst Ben Nimmo of the Atlantic Council’s Digital Forensic Research Lab spoke to VOA at last week’s NATO summit.

“If you look at the Russian interference operation in the U.S., as far as we know it started in April 2014 and it was still going in October 2017 when it shut down,” said Nimmo. “So they’ve had a three-and-a-half-year operation running, which included a reported 100 people, several thousand accounts on social media, over 50,000 bot accounts amplifying it. This was a big, big operation, which was then further amplified by state propaganda like RT [Russia Today] and Sputnik.”

So is NATO doing enough to counter these threats?

“They appreciate them more than they did two years ago and you can see that from the summit declaration itself. For the first time, it mentions disinformation as a specific threat and as part of a bigger picture of hybrid warfare,” said Nimmo.

Since 2014, NATO’s core principle of collective self-defense, Article 5, can be invoked in the event of a cyberattack on one member. The response could include sanctions, cyber responses, or even the use of conventional forces.

While that may seem a remote possibility, NATO’s Secretary-General has warned that a cyberattack could be as destructive as a conventional military strike.

Cute Robots Invade the Smithsonian

Known as the largest education, and research complex in the world, the Smithsonian Institution in Washington, DC is a collection of 19 museums that house more than 140 million unique items. It’s no wonder it’s been called “the nation’s attic.” But there’s a novel addition to the venerable complex — a smart new technology that interacts with visitors. VOA’s Carolyn Presutti introduces us to the Smithsonian’s newest resident.

Republican Senators Seek to Reassure US Allies After Trump Trip

President Donald Trump stunned many around the world with his refusal to criticize Russian President Vladimir Putin as he stood beside him in Helsinki Monday. This coming after Trump’s harsh criticism of close U.S. allies, including British Prime Minister Theresa May, German Chancellor Angela Merkel, the European Union and NATO. VOA’s Diplomatic Correspondent Cindy Saine reports from Washington.

Why is Facebook Keen on Robots? It’s Just the Future of AI

Facebook announced several new hires of top academics in the field of artificial intelligence Tuesday, among them a roboticist known for her work at Disney making animated figures move in more human-like ways.

 

The hires raise a big question — why is Facebook interested in robots, anyway?

 

It’s not as though the social media giant is suddenly interested in developing mechanical friends, although it does use robotic arms in some of its data centers. The answer is even more central to the problem of how AI systems work today.

 

Today, most successful AI systems have to be exposed to millions of data points labeled by humans — like, say, photos of cats — before they can learn to recognize patterns that people take for granted. Similarly, game-playing bots like Google’s computerized Go master AlphaGo Zero require tens of thousands of trials to learn the best moves from their failures.

 

Creating systems that require less data and have more common sense is a key goal for making AI smarter in the future.

 

“Clearly we’re missing something in terms of how humans can learn so fast,” Yann LeCun, Facebook’s chief AI scientist, said in a call with reporters last week. “So far the best ideas have come out of robotics.”

 

Among the people Facebook is hiring are Jessica Hodgins , the former Disney researcher; and Abhinav Gupta, her colleague at Carnegie Mellon University who is known for using robot arms to learn how to grasp things.

 

Pieter Abbeel, a roboticist at University of California, Berkeley and co-founder of the robot-training company Covariant.ai, says the robotics field has benefits and constraints that push progress in AI. For one, the real world is naturally complex, so robotic AI systems have to deal with unexpected, rare events. And real-world constraints like a lack of time and the cost of keeping machinery moving push researchers to solve difficult problems.

 

“Robotics forces you into many reality checks,” Abbeel said. “How good are these algorithms, really?”

 

There are other more abstract applications of learnings from robotics, says Berkeley AI professor Ken Goldberg. Just like teaching a robot to escape from a computerized maze, other robots change their behavior depending on whether actions they took got them closer to a goal. Such systems could even be adapted to serve ads, he said — which just happens to be the mainstay of Facebook’s business.

 

“It’s not a static decision, it’s a dynamic one,” Goldberg said.

In an interview, Hodgins expressed an interest in a wide range of robotics research, everything from building a “compelling humanoid robot” to creating a mechanical servant to “load and unload my dishwasher.”

 

While she acknowledged the need to imbue robots with more common sense and have them learn with fewer examples, she also said her work in animation could lead to a new form of sharing — one in which AI-powered tools could help one show off a work of pottery in 3-D, for example.

 

“One thing I hope we’ll be able to do is explore AI support for creativity,” she said.

 

For Facebook, planting a flag in the hot field also allows it to be competitive for AI talent emerging from universities, Facebook’s LeCun said.

 

Bart Selman, a Cornell computer science professor AI expert, said it’s a good idea for Facebook to broaden its reach in AI and take on projects that might not be directly related to the company’s business — something that’s a little more “exciting” — the way Google did with self-driving cars, for example.

 

This attracts not just attention, but students, too. The broader the research agenda, the better the labs become, he said.

Brazil’s Lula in Jail But Never Far From the Headlines

He’s tweeting about the politics of the day. He’s offered commentary on the World Cup. And he’s leading polls for October’s presidential election.

 

Yes, he’s still in jail.

 

Former Brazilian President Luiz Inacio Lula da Silva — universally known as Lula — has not faded from the headlines during his three months behind bars.

 

Instead, analysts say his public profile is part of a risky strategy to attract attention and voters to his Workers’ Party — even if the ex-president himself is not ultimately on the ballot.

 

“The more time the (Workers’ Party) spends doing this, the less time there will be for another candidate to gain name recognition, to travel the country as the candidate,” said Oliver Stuenkel, a professor of international relations at the Fundacao Getulio Vargas university in Sao Paulo.

 

The Workers’ Party publicly maintains there is no Plan B: They say da Silva’s conviction last year on corruption charges related to the country’s sprawling Car Wash investigation was unjust, and they intend to register his candidacy in August, despite a law that bars candidates who have had a conviction upheld. Jose Crispiniano, a spokesman for da Silva, contends the law allows candidates with pending appeals to run for office.

 

The Superior Electoral Tribunal will make the final decision and is considered unlikely to issue a ruling favorable to him.

 

In the meantime, though, da Silva seems to be everywhere.

Every few days, his aides post messages from him on his Twitter account.

 

In one recent tweet, for example, he questioned whether the government had “any notion of the suffering of a father or mother who can’t provide sustenance for his or her family.” In another, he criticized a government privatization plan as selling “the country in a liquidation sale, without a care for tomorrow.”

 

Lately, the account has promoted his Instagram profile and a new YouTube page, although his influence extends well beyond social media.

 

During the World Cup, he wrote commentaries that were read out on a TV station allied with his party. Supporters can also download a paper mask of his face from his website or learn from a video how to say “Lula” in sign language.

 

The media blitz appears to have two goals, said Vitor Oliveira, director of analysis at Pulso Publico, a political consulting firm. The first is the hope that keeping da Silva as the candidate for as long as possible will increase the chances that voters will throw their support to another candidate of da Silva’s choosing, if he is barred from running. The second is the bet that building excitement around da Silva could help in elections for the lower house of Congress, where voters can choose a party rather than a specific candidate.

 

Much of the fanfare may be preaching to the converted, and Crispiniano, the spokesman, notes that da Silva’s allies have no control over whether or how the Brazilian press covers the former president.

But last week, da Silva commanded the nation’s attention for an entire day as a judicial battle unfolded over whether he should be released from jail. The president of an appeals court finally stepped in and decided he should remain incarcerated after dramatic back-and-forth rulings issued by different judges.

 

That chaos may have further bolstered the Workers’ Party’s narrative that the judiciary is unfairly targeting da Silva, Oliveira said.

 

“The voter who is unsure … who maybe has sympathy with the Workers’ Party, with Lula, but who is not content, maybe you put a bug in this person’s ear,” said Oliveira. “This person is thinking about voting for the Workers’ Party again.”

 

Then again, the turmoil on display during the fight over whether to release da Silva could unintentionally push voters into the arms of far-right congressman Jair Bolsonaro, who is running in distant second and promises to clean house.

 

“There’s a sense that people are tired, this entire apparatus is broken, everybody just acts in their own self-interest,” said Stuenkel. He said that some voters might ultimately think: “‘Our country’s rudderless, we need someone who shows us how to get out of this very difficult situation.'”

 

For now, da Silva continues to be in the spotlight. After another judicial ruling last week that said he can’t give interviews from jail or record campaign material, his social media accounts posted a previously unreleased interview conducted before he was incarcerated and promised there were more to come.

US Announces Drug Charges Against Honduran Congressman

Federal authorities in New York filed charges against a Honduran congressman accused of being a member of a violent drug trafficking organization responsible for shipping loads of cocaine into the United States. 

Midence Oqueli Martinez Turcios helped the Cachiros drug gang import hundreds of kilograms of cocaine from Venezuela and Colombia, prosecutors said.

The shipments were then transported within Honduras to Guatemala where they were eventually exported to the U.S., often in coordination with Mexico’s Sinaloa Cartel. 

Turcios is a legislator in the National Congress of Honduras.

The charges, announced Tuesday, include conspiring to import cocaine into the U.S. and related weapons offenses involving the use and possession of machine guns and destructive devices. 

Prosecutors are seeking Martinez Turcios’ extradition from Honduras. Information on his lawyer was not immediately available.

Martinez Turcios allegedly received more than $1 million in bribes and other payments from the leaders of the Cachiros, which he used to enrich himself and fund his campaign activities and political operations, prosecutors said in a press release.

He also personally escorted some Cachiros cocaine shipments and participated in weapons training provided to paid Cachiros assassins recruited from the gang Mara Salvatrucha or MS-13. The congressman, prosecutors say, also participated in acts of violence perpetrated by members and associates of the Cachiros. 

The Honduran legislator is the second Honduran congressman to be charged in connection with U.S. investigations of politically connected drug trafficking in Honduras. Congressman Fredy Renan Najera Montoya was also charged in January 2018. 

The U.S. government also announced on Tuesday separate charges against three other associates of the Cachiros, including Arnaldo Urbina Soto, former mayor of the town of Yoro in Honduras. The other two associates are Carlos Fernando Urbina Soto and Miguel Angel Urbina Soto. 

Fashion Firms Upend Design Routine to Focus on Speed, Trends

Prototypes? Passe. Fashion company Betabrand saw that knitwear was a hot style in sneakers and wanted to quickly jump on the trend for dressier shoes. It put a poll up on its website asking shoppers what style they liked, and based on that had a shoe for sale online in just one week.

 

What web shoppers saw was a 3-D rendering — no actual shoe existed yet. Creating a traditional prototype, tweaking the design and making a sample would have taken six to nine months, and the company might have missed out on the interest in knit.

 

“The web attention span is short,” said Betabrand CEO Chris Lindland. “So if you can develop and create in a short time, you can be a real product-development machine.”

Shoppers looking at the shoe online could examine the peekaboo detail or check out how the sole was put together, as they would from photos of a real product. They don’t get the actual shoes instantaneously — they have to wait a few months. But the use of digital technology in designing and selling means hot trends are still getting to people far faster than under the old system.

 

“Retailers and brands who are embracing this are going to be winners of the future,” said David Bassuk, managing director of consulting group AlixPartners. “This is flipping the business model on its head.”

 

It’s a big cultural change for clothing makers. For decades, the process meant designers sketched ideas on paper, a design got approved, and the sketches went to a factory that created prototypes. Designers and product developers made tweaks and sent prototypes back and forth. Once a final version was approved, it was sent to the factory to be copied for mass production. Getting something from design to a store could take at least a year.

Now, some companies have designers sketching on high-resolution tablets with software that can email 3-D renderings of garments with specifications straight to factories, as better technology makes the images look real and the pressure to get shoppers new products swiftly intensifies. The goal is to reduce to six months or less the time it takes to get to store shelves.

 

Even chains like H&M, which once set the standard for speed by flying in frequent small batches, are realizing that’s not fast enough. H&M, which has seen sales slow, is starting to digitize certain areas of its manufacturing process.

 

For clothing makers and retailers, the shift means design decisions can happen closer to when the fashions actually hit the shelves or website. That means less guessing so stores aren’t stuck with piles of unsold clothes that need to be discounted.

 

The 3-D technology is used in just 2 percent of the overall supply networks, estimates Spencer Fung, group CEO of Li & Fung, which consults with more than 8,000 retailers including Betabrand and 15,000 suppliers globally. But he believes that will change as retailers begin prioritizing speed and realize that cutting down on design time and prototypes saves money.

 

“You can actually essentially create an entire collection before you even cut one garment,” said Whitney Cathcart, CEO of the Cathcart Technologies consulting firm. “So it reduces waste, it reduces lead times, it allows decision making in real time, so the entire process becomes more efficient.”

 

Fung imagines a scenario where a social media post with a celebrity in a red dress gets 500,000 “likes.” An alert goes to a retailer that this item is trending. Within hours, a digital sample of a similar dress is on its website. A factory can start to produce the dress in days.

 

“Consumers see it and they want it now,” says Michael Londrigan of fashion college LIM in New York. “How do you bring it to market so you don’t miss those dollars?”

 

Nicki Rector of the Sonoma Valley area in California bought a pair of Betabrand’s Western-style boots last summer based on the 3-D rendering.

 

“It looked real,” said Rector, who examined the images of the heel and the insoles. She didn’t worry about buying off a digital image, reasoning that if you’re buying online you can’t really know how something’s going to fit until you put it on your feet. She said knowing it was designed from customer input also helped make the wait OK.

 

Betabrand has sold 40,000 pairs of shoes priced from $128 to $168 over the past year, all from digital renderings, and plans to add 15 to 20 such projects this year.

At a Levi Strauss & Co. research and development facility in San Francisco, designers use programs that offer the look of a finished garment and let them make changes like adding pockets quickly, rather than requiring a new prototype. When they’re set, they can send a file to the factory for mass production. Using digital samples can shorten the design time to one week or less from an eight-week timeframe, Levi’s says.

 

Few companies are yet selling directly to shoppers off digital renderings like Betabrand, and are instead showing them to store buyers or to factories rather than using traditional samples.

 

Xcel Brands uses them for its own brand of women’s tops and for the company’s Judith Ripka jewelry line. The company, which also makes clothes for Isaac Mizrahi and Halston, will start using them for other brands within the year. CEO Robert D’Loren hopes to start putting 3-D samples on its website next year.

 

Tommy Hilfiger has an interactive touchscreen table where buyers can view every item in the collection and create custom orders. And Deckers Brands, the maker of Ugg boots, is using digital renderings of the classic boot in 10 colors, eliminating the need for 10 prototypes for store buyers. That helps reduce cost and increases speed.

 

Using digital designs also mean the exact specifications for different Levi’s design finishes can be uploaded to a machine that uses lasers to scrape away at jeans. No need to teach employees how to execute a designer’s vision, in a minute and a half the lasers have given the jeans the exact weathered look that took workers wielding pumice stones twenty minutes to half an hour.

 

“Thirty years ago, jeans were only available in three shades — rinse, stonewash and bleach,” said Bart Sights, head of the Levi’s Eureka lab. “Our company now designs 1,000 finishes per season.” Such a long lead time “pushes production and creation too far away.” Levi’s latest technology alleviates this issue, he said.