ITK Daily | April 22

Global Street Smarts.

Happy Saturday.

Here’s today’s ITK Daily.

To be ITK, know this:?

Japan steps up diplomacy to avoid 'losing' Global South to China: Kishida plots Africa tour ahead of G7 summit to compete for influence.?Nikkei

South Korea's Yoon to visit US next week for summit with Biden: Reuters reports South Korean President Yoon Suk Yeol will visit the United States next week for a summit with President Joe Biden as the allies grapple for ways to handle the challenge posed by North Korea's growing nuclear and missile arsenal.

White House recruits Edward Lee as state dinner guest chef?AP

Biden to meet Philippine President Marcos at White House as China tensions escalate: Straits Times reports United States President Joe Biden will welcome Philippine President Ferdinand Marcos Jr to the White House on May 1, with their meeting set against the backdrop of heightened tensions with China.

US to strike economic deal with Pacific islands to counter China: Nikkei reports Washington explores more military access as Beijing expands reach.

Biden’s course correction on China is smart and important?Fareed Zakaria

+ The United States and China have embarked on one of the most hair-raising experiments in international history. Both sides are now locked in a steady, escalating, geopolitical competition. And yet both are deeply economically intertwined. Can these two trends — geopolitical tension and economic engagement — continue, or will one of them give?

+ The effort here, using national security adviser Jake Sullivan’s metaphor, is to build a “small yard” of critical technologies guarded by a “high fence” around it (as opposed to coming up with a long list of technologies that would be hard to seal off from China). But the challenge will be to see whether all these efforts, and the hostile rhetoric that surrounds them, will scare off American businesses from dealing with China altogether.

+ The Republican primaries promise to be a festival of China-bashing.?

+ Wisconsin Rep. Mike Gallagher’s China committee has already announced that it is going to investigate companies doing business in China, which means any CEO with exposure to that market could be subpoenaed and grilled.

+ And don’t forget that China has domestic politics as well. Xi Jinping’s tough line against the United States is popular in a country that is quite nationalist.

+ The war in Ukraine has hurt Europe by raising its energy costs while benefiting the United States, which is the world’s top producer of hydrocarbons and which sells many at low cost.

+ European companies are shifting investment to the United States, lured in part by the Inflation Reduction Act’s generous subsidies. A German CEO said to me recently, “You cannot expect us to forgo cheap Russian energy as well as the Chinese market. That would be suicide for Europe.”

+ The last time two major world powers tried to manage a relationship of economic interdependence and rising geopolitical rivalry was Britain and Germany in the period from the 1880s to 1914. That experiment ended very badly, with a war that destroyed much of the industrialized world. Both sides should try to ensure we do better this time.

China pumps $7bn into upgrading chip supply chain: Nikkei reports government and industry work together amid US tech export restrictions.

Italy minister confirms delegation visited Taiwan for chip talks?Bloomberg

How business-friendly Hong Kong became a hub of Russian chip trade: Ease of setting up companies makes dodging sanctions easier, experts say.?Nikkei

Indonesia’s ruling party declares Central Java Governor Ganjar as presidential candidate for 2024 election: Straits Times reports the announcement by PDI-P chairman Megawati Soekarnoputri on Friday paves the way for Southeast Asia’s largest democracy to have a three-way presidential race that will be held concurrently with the legislative election on Feb 14, 2024.

India now has to face strategic consequence of Myanmar's isolation: Signs suggest China has leveraged influence to put spy station on a remote island.?Brahma Chellaney

WP: Nations plan Sudan evacuations amid calls for Eid holiday cease-fire

No reprieve in Sudan, even for holiday, as general rejects cease-fire calls: NYT reports gunfights in the capital, Khartoum, continued for a seventh day, despite pleas for a pause as the Muslim-majority nation marked the end of the holy month of Ramadan.

AP: US to begin training Ukrainian troops on Abrams tank

The National: Ukraine's Leopard 2 tanks to be serviced in Poland

Ukraine’s soldiers face lack of firepower to stop Russian onslaught: Kyiv is at risk of losing control of its air space unless the West answers the desperate plea for more weapons.?The Times

A Russian spy in Paris: Bulat Yanborisov, rally organizer and high-flying Kremlin agent: Bulat Yanborisov is not just the director of the Silk Way Rally. Documents obtained by Der Spiegel, The Insider, and Le Monde show that the Russian living in Paris is, in fact, a high-level Kremlin agent.?Le Monde

Ukraine wants recognition and reparations for Russian 'ecocide': Le Monde reports in addition to the war's appalling human toll, there has been colossal environmental damage, which will have long-term health and humanitarian consequences.

Macron promotes an unlikely 'peace summit' for Ukraine: The French president is putting this idea forward with his foreign counterparts at the risk of causing more misunderstandings, and while Kyiv is focusing on its counter-offensive against Russian occupiers.?Le Monde

Germany opens new inquiry into 1972 Olympic massacre of Israeli team: Eleven Israelis ended up dead after they were taken hostage by Palestinian militants.?The National

How bullying became Westminster’s latest culture war: Resignation of Dominic Raab may yet be a watershed moment for those working in SW1.?Politico

‘I’m the Führer, the king’: Inside Boris Johnson’s chaotic world: In July 2019, Boris Johnson, our new prime minister, caused the first of many stirs when he appointed Dominic Cummings as his special adviser. Cummings came to be seen as the power behind the throne. But there was another pretender to that title: Carrie Symonds.?The Times

Miller High Life cans destroyed in Europe over ‘champagne of beers’ logo: French protections prohibit the use of ‘Champagne’ on drinks made outside of the region.?WSJ

I'm calling it... Time to go back to "freedom fries."

+ Molson Coors Beverage Co., the company behind the brand, said it doesn’t import Miller High Life to the European Union and doesn’t know how the cans got there or why they were heading to Germany.?

+ “Of course, we respect local restrictions around the word ‘champagne,’ but we remain proud of Miller High Life, its nickname and its Milwaukee, Wisconsin, provenance,” the company said. “We invite our friends in Europe to the US any time to toast the High Life together.”

WP: Thieves steal nearly $15M in gold, other cargo in Toronto airport heist

Was Pearson heist an ‘inside job?’ Questions swirl with CAN$20M in gold, goods stolen?Global News

Biden preparing to announce reelection campaign next week: WP reports aides are looking to release a video on Tuesday declaring the president’s bid to return to the White House.

Announce on a Tuesday, so...

You can finalize the video on Friday.

Send an embargoed copy of the video and text to reporters on Saturday.

Line up surrogate speakers on Sunday.

Review plan and final tweaks on Monday.

Go live on Tuesday.

That's proper political communications.

AP: Haley vs. Scott: From South Carolina allies to 2024 rivals

Trump leads DeSantis in test of GOP presidential field: WSJ reports Donald Trump has gained command of the GOP presidential nomination race, with the former president building support across most parts of the primary electorate as the Florida governor has struggled on the national stage.

Bloomberg: Between rounds of golf, Trump’s searching for the perfect DeSantis diss

+ Former president’s lax pace so far has concerned some allies.

+ Trump team trying to dig up dirt on Florida governor and wife.

Donald Trump’s nasty Ron DeSantis nicknames, ranked?Margaret Hartmann

Ron DeSantis is flaming out – and Trump is on course for a Republican coronation: The Florida governor’s flaws are glaringly apparent. Right now, it’s hard to see the nominee as anyone other than Trump.?Lloyd Green

Is DeSantis just not dumb enough for Republicans??The perils of a true-believing conservative intellectual in a Trumpy party.?Jonathan Chait

Washington’s angriest progressive is winning over conservatives – and baffling old allies: The activist who breathed new life into the antitrust movement wants support from the other side. But it could cost him.?Politico

The future history of nuclear fusion?Bloomberg

US begins planning for 6G wireless communications: Biden administration aims to reassert US leadership in telecom, an area where China has made gains.?WSJ

Microsoft president warns China becoming close rival of ChatGPT: Nikkei reports AI innovation can be used to defend democracies, Brad Smith says.

Is artificial intelligence advancing too quickly? What AI leaders at Google say?60 Minutes

Will Apple take a big bite out of the banks??The tech giant’s ventures into financial services signal greater ambitions to take on Wall Street.?FT

+ "This will take five to 10 years, but by then we’ll think of Apple in the same vein as Citi, JPMorgan and Wells Fargo"

+ If the buyer and the merchant are both using iPhones or iPads to process payments, that gives Apple the capability to create a closed-circuit that doesn’t require banking partners or networks run by Visa and Mastercard.

+ "As more and more people use Apple Pay . . . then the leverage moves into Apple’s camp and they can make other plays that aren’t so dependent on the banks.”

+ “The more information you have about a consumer, the better lending decisions you can make.” And Apple “is sitting on a mountain of data.”

Shein plans 100,000 new Brazil jobs as part of regional build-up?Bloomberg

+ Retailer to invest $148 million across 2,000 manufacturers.

+ Fast-fashion giant’s strategy is to leverage ‘global scale.’

Tiffany enters Vietnam as world's richest man expands LVMH Asia: Nikkei reports crazy rich Asians top sales for French luxury group that also owns Dior, Moet.

Lyft to cut at least 1,200 jobs in new round of layoffs: WSJ reports the latest cuts could impact 30% or more of the ride-sharing company’s more than 4,000 employees.

New Toyota chief Koji Sato wants to drive Asia’s green transformation: Straits Times reports Toyota Motor, the world’s biggest automaker, and Japan’s most valuable company by market capitalization, has been dismissed by analysts as a laggard in the development of battery electric vehicles (BEVs). But president and chief executive Koji Sato has stressed that there are multiple pathways to the company’s ultimate goal of achieving net-zero carbon emissions by 2050.

Buy now and save! Price war over electric cars erupts in China.?The intense competition among the country’s huge number of start-up carmakers has unsettled what had been a pillar of the economy in the last few years.?NYT

+ A cutthroat price war has erupted in the world’s largest automobile market.

+ China’s car sales fell 13 percent in the first three months of 2023. Sales of traditional automobiles plunged, while growth in electric vehicles slowed, according to the China Passenger Car Association.

+ China is the leading market for electric cars, and more were sold there last year than in the rest of the world. Foreign automakers see an urgent need to gain a foothold in China to develop the know-how and manufacturing scale necessary to compete globally.

+ It is possible that an average to high-end electric vehicle in China could sell for around $7,000 in 10 years. The average price for an electric car in China is already significantly lower than in the rest of the world, around $35,000 compared with $60,000 in Europe and $70,000 in the United States.

Bloomberg: Tesla is still struggling to lure buyers after price cuts. That's an ominous sign for the economy

+ Results from Ally, AutoNation, Lithia, and Autoliv add to concerns.

+ Auto demand and pricing offer indications of consumer weakness.

Tesla abandons Mercedes battle to take on the likes of Ford?Bloomberg

+ “Tesla is not only sacrificing its EV margins to achieve its volume ambitions. To some extent, it is also placing the goodwill and brand equity that it has built up on the altar too,” Daniel Roeska, Bernstein’s European auto analyst, wrote in a report Thursday. “This is most important in the premium end of the market, where brand perception and social status are the crux of sales.”

Tesla triggers new electric car price war: Le Monde reports the American carmaker lowered the prices of its cheapest models. This is the second time this year, and it is starting to pose a major problem for competitors.

Bloomberg: Canada matched Biden subsidies to win Volkswagen battery plant

+ Industry minister reveals the cost of wooing German automaker.

+ Government also in talks on aid for proposed Stellantis plant.

Will Ottawa’s $13bn Volkswagen deal be worth it? Trudeau, Ford defend plans?Global News

Canada pledges Can$13.2bn subsidies for VW battery plant?AFP

China is back, bringing profit and perplexity for Western business: Post-COVID reopening will complicate corporate efforts to reduce reliance on Asia’s biggest economy.?Anne-Sylvaine Chassany

+ Xi Jinping’s China is bouncing back and making overtures to Western business. While breathing new life into multinationals’ top lines, it is also bringing a fresh quandary: whether to invest in the world’s second-largest economy as geopolitical tensions over the fate of Taiwan intensify.

+ There is an “elephant in the room,” as UniCredit economist Erik Nielsen noted in a post-IMF spring meetings briefing: rising geopolitical tensions between China and the West are bringing “the most profound change in a generation in economic policy thinking, and policy priorities.”

+ “In the US,” he wrote, “it’s all about containing China. In Europe, it’s partly a softer version of the same. This means that if (or when?) US-China relations deteriorate further in this tit-for-tat, leading to further protectionist measures including export bans and sanctions, European businesses will most likely be caught between the two parties.”

+ Sven Behrendt, a partner at Berlin Global Advisors, said the corporate world is in a strange moment “when post-pandemic hedonism meets geopolitical risk.”

+ Volkswagen, which owns Porsche, this week announced a plan to invest €1bn to build an innovation center in China. This came after a decision last year to spend €2.4bn on a venture with Chinese chip designer Horizon Robotics. Not exactly a sign of prudence regarding a country that an increasing number of policymakers consider the biggest threat to the West.

Sprite is so popular that Pepsi launched a new lemon-lime war: PepsiCo is hoping Starry will do what the just-retired Sierra Mist couldn’t: unseat Coca-Cola’s dominant citrus brand.?Bloomberg

+?Coca-Cola’s brands control 70% of the $49 billion in annual soda fountain sales in the US.

+?Parents with kids in tow at venues such as stadiums and theaters are more likely to go for a caffeine-free lemon-lime brand than a cola or a caffeinated citrus soda such as Mountain Dew or Coke’s Mello Yello. “Lemon-lime allows for a bit of indulgence without the double whammy of sugar and caffeine,” says Duane Stanford, publisher of Beverage Digest.

A rallying cry or a rant? ‘Pity City’ CEO comments show perils of video meetings: Viral criticism of leaked speeches highlight how tough it is to light a fire under employees in the hybrid workplace.?WSJ

CEOs are throwing tantrums about productivity and return-to-office plans: Have you wondered why there’s been a spate of CEOs losing their minds over worker productivity or employees not wanting to come back to the office??FC

The duo turning old Milan into a snapshot of contemporary design: From a former panettone factory to a disused slaughterhouse — Alcova’s vision breathes new life into old spaces.?FT

The hard-fought journey from East Africa to an award-winning Detroit restaurant: Hamissi Mamba, a refugee from Burundi, knew little of American culture when he arrived eight years ago and learned English watching the “Peppa Pig” cartoon. But he opened his dream restaurant, and the accolades have rolled in.?NYT

+ Hamissi Mamba and his wife, Nadia Nijimbere, refugees from Burundi, opened their Detroit restaurant, Baobab Fare, in February 2021.?

+ In November 2021, the popular food website Eater named Baobab Fare one of the 11 best new restaurants in the country. In February 2022, they earned their first semifinalist nomination from the James Beard Foundation for best chef in the Great Lakes region.

Hollywood’s newest stars? Nike, BlackBerry, and Cheetos.?A new spate of films stars, not people but consumer products.?NYT Mag

+ Something Slovenian philosopher Slavoj Zizek imagined about Nike. If such a company were to outsource production to overseas contractors, design to design firms, advertising to ad agencies and distribution to retailers, what would be left? “Nike would be nothing ‘in itself,’” Zizek wrote. “Nothing other than the pure brand mark ‘Nike,’ an empty sign.”

+ Still: All these brand films, and all the reviews of them, seem to acknowledge the same point. The day-to-day texture of our lives, they suggest, may be dictated less by brave explorers or crusading lawyers and more by people with office jobs who make products and then make us want to buy them — people whose decisions shape our habits, our choices, our sense of ourselves.

Four Detroit Lions players have been suspended for violating the NFL's sports gambling policy, the team confirmed with FOX 2 Detroit Friday.

NFL suspends five players for sports gambling: WSJ reports the suspensions, including four Detroit Lions, are the biggest crackdown yet since betting on sports became widely legal across the US.

"We're gonna bite a kneecap off"

Being a Detroit Lions fan is not for amateurs.

Deion Sanders launches college football’s loudest and most extreme makeover: Coach Prime is attempting an extreme overhaul at Colorado. Excitement is sky high for a team that won a single game last year.?WSJ

Enjoy the ride + plan accordingly.

-Marc?

Marc A. Ross | Chief Communications Strategist @ Caracal

Caracal produces ITK Daily.

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