US green deregulation push could snag after November

Significance A change to the rule could aid the coal industry, a political and economic priority of the Trump administration. The move follows mid-September’s Global Action Summit in San Francisco, which gathered some 4,500 local and state leaders and environmental activists from around the planet. A report, ‘Fulfilling America’s Pledge’, released ahead of the summit projected that the United States will miss the Paris Climate Accord targets. Meanwhile, shortly before the summit, Governor Jerry Brown signed an order for California to attain carbon neutrality by 2045. Impacts State green policy imbalances will make some states more appealing for industry (and bring differing business compliance costs). While a state could have more lax environmental laws, consumers may demand businesses work to higher standards. More relaxed environmental regulations could benefit the administration’s efforts to bolster US industry under ‘America First’.

Subject US relations with North and South Korea under the incoming Trump administration. Significance The period of transition to Donald Trump's presidency in the United States has displayed neglect and misunderstanding of Korean peninsula affairs, adding to risks for the region as it approaches a period of significant strategic challenge. Impacts Until Trump's team enunciates policy on the Koreas, responses to events will be unprepared and reactive. Trump's policy will influence presidential elections in South Korea, where left-of-centre candidates question the value of the US alliance. The Trump administration’s policy and communication via Twitter heightens risk of misunderstanding within the region.


Subject China's options for retaliating against US firms during trade tensions. Significance US President Donald Trump tweeted yesterday that he is working with China's President Xi Jinping to get China's telecoms giant, ZTE, "back in business, fast" -- even though it was penal US sanctions that forced the company to announce last week that it was stopping operations. The Trump administration is divided on whether its objective in threatening imports tariffs on Chinese goods worth 50 billion dollars, effective May 22, is to strike a deal to cut China's trade surplus with the United States or to change China's industrial practices. Impacts Compliance costs will rise even if trade tensions subside. Investors in industries that China sees as strategic (eg, semiconductors and integrated circuits) may face unwritten screening rules. Investors in automobile, aircraft and shipping manufacturing and finance may find new opportunities to enter the market.


Subject Outlook for Thai-US-China relations. Significance Chatchai Thipsunaree, Thailand’s permanent secretary in the Ministry of Transport, confirmed on May 17 that construction of the long-awaited Thai-China high-speed railway will begin this year. The project reflects the growing momentum in Thailand’s relations with China, and refiguring of ties with the United States. Impacts Trump administration officials see less strategic imperative in the US-Thailand alliance than previous administrations. China’s growing presence in South-east Asia, particularly on the Mekong, will trigger resistance from affected populations in Thailand. Thai officials will allow Chinese infrastructure projects to proceed despite local protests.


Significance Separately, five Republican senators, led by Florida's Marco Rubio, wrote to House Speaker Nancy Pelosi on February 7, requesting she invite Taiwan's President Tsai Ing-wen to address a joint Congress session. Impacts The proposed US-Taiwan free trade agreement is presently unlikely to advance. The Trump administration might be more willing than others to defend Taiwan, but relations with China will take priorty. Taiwan is exporting its political divisions to the United States; the main opposition Kuomintang will open a Washington office this year.


Significance Though the United States and South Sudan have a long history, the surprise election of Donald Trump could shift Washington’s posture towards Juba. The deepening crisis there has soured a a once-close relationship. Impacts US Africa policy may be determined in large part by Trump’s personnel picks for senior Africa posts. As observers warn of possible genocide, a US government in transition will find itself ill-prepared to respond. The proposed 4,000-strong Regional Protection Force may find less support from the new administration. US humanitarian funding levels should remain high despite potential policy changes.


Significance The preferential US trade programme faces renewal or lapse by December 31. South-east Asia’s economies are structured to take advantage of the GSP and many of the products exported to the United States under GSP (such as light manufactures and seafood) are important for South-east Asia’s supply chains. Impacts Vietnam may make another application for inclusion in the US GSP programme. The more authoritarian South-east Asian countries could find it easier to gain US GSP preferences under Trump. The Trump administration could use the GSP as a bargaining chip in trade negotiations or renegotiations.


Significance The Trump administration wants to tackle homelessness in the United States. With many of those homeless people in California -- and given the administration’s push to tackle homelessness in California specifically -- the issue came up during the visit, with comments from Trump, Los Angeles Mayor Eric Garcetti (who called for cooperation) and others. Impacts States and cities are likely to make greater use of local bond issuances to fund tackling homelessness. Homelessness will feature in the Democratic Party’s primary campaigns next year. Tackling homelessness will require handling the problem’s ancillary drivers, such as drug addiction. Any local or national economic downturns will likely be followed by a rise in homelessness.


Subject The US decision to sell advanced F-16 fighter jets to Taiwan. Significance The Trump administration has authorised the sale to Taiwan of 66 advanced F-16 fighter jets, the most coveted item among Taipei's wish-list of arms purchases from the United States. Taiwan has sought the purchase of advanced fighter aircraft for years, but the White House under both George W Bush and Barack Obama agreed only to upgrades for Taiwan's existing F-16 fleet. The total price is estimated to reach about 8 billion dollars. Impacts The arms sale will provide a boost in confidence for Taiwan, which has been falling behind China in defence capabilities. US-Taiwan cooperation will increase, despite Washington not formally recognising Taiwan as a sovereign nation. Taipei will seek dialogue with Beijing, but will be rebuffed at least until after the 2020 elections. Any sanctions China imposes because of the arms sale will probably be folded into future trade negotiations with Washington.


Subject The outlook for US alliances. Significance There has been criticism in the United States and Afghanistan of the Trump administration's deal with the Taliban, done without Kabul's involvement, which foresees a full withdrawal of US forces within 14 months. In a context in which state power is diffusing, non-traditional threats are emerging and rivalry between economic partners is increasing, there is dissatisfaction in Washington and allied capitals about the terms of existing alliance relations. Impacts Washington will continue to press NATO to spend at least 2% of GDP on defence and to buy US arms. The Trump administration is unlikely to accede to many demands for alliance renegotiation. US security allies are unlikely to get preferential trade deals with Trump in the White House.


Significance In the short term, it strengthened the party chairman and Palestinian president, Mahmoud Abbas. Abbas prevented his major rival, Mohammad Dahlan, and his supporters from attending. He was unanimously re-elected, and at least 16 of the 18 seats on the Central Committee also went to Abbas loyalists. Despite expectations, there were no efforts to bring in new blood or name a deputy to succeed the 81-year-old Abbas. Impacts Reactions to an incoming Trump administration in the United States could undermine the Israeli-Palestinian peace process. If the US Embassy relocates to Jerusalem, the Palestinian reaction will be violent. While the situation remains frozen, both Hamas and Fatah will lose further popular support. Competition among potential successors to Abbas will intensify.


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