ITK Daily | May 19

Global Street Smarts.

Happy Friday.

Here’s today’s ITK Daily.

To be ITK, know this:?

Appetite for geopolitical risk management is growing: Consultancies are offering access to former top military and government officials to provide guidance on volatile events.?FT

Preach.

Joe Biden’s global vision is too timid and pessimistic: The president underestimates America’s strengths and misunderstands how it acquired them.?Economist

We need ‘guardrails’ to regulate AI, Rishi Sunak says at G7 summit?The Times

Joe Biden won’t apologize for Hiroshima bombing on G7 visit: The Times reports the US president puts focus on the future as he pays respects to 140,000 killed by an atomic bomb.

AFP: US to unveil 'significant' new Russia sanctions at G7

G7 to discuss Russian diamond exports and China concerns: DW reports Russia sanctions focusing on its $5 billion diamond industry are on the agenda as the seven leading democratic economies come together in Hiroshima, Japan. China's economic influence is also up for discussion.

China fears threaten to shatter G7 unity: The threat of China invading Taiwan is dividing allies at the Hiroshima summit.?Politico

Relations with China set to dominate G7 talks in Japan: Leaders from the US, Germany, France, the UK, Italy, Japan, and Canada will meet in the Japanese city on Friday, seeking to clarify the rules of the game about their relations with China.?Le Monde

Can the G7 take a united stance on China??Experts say they are skeptical about the group's ability to come up with a coordinated response to China's expanding economic power and military might.?DW

As the US attends the G7, China hosts a summit of its own: Xi Jinping of China is meeting with leaders of five countries in Central Asia, a region crucial to his geopolitical ambitions.?NYT

AFP: China’s Xi hails ‘new era’ of ties with Central Asia

China puts spymaster in charge of US corporate crackdown: Investigations into due-diligence firms show how state-security clique is gaining more control over economic policy.?WSJ

Biden invites Papua New Guinea leader to DC after canceling Pacific island visit: NBC News reports the president pulled the plug on his planned visit to the nation because of the ongoing stalemate in Washington over the debt ceiling.

Bloomberg: US, Taiwan agree on trade initiative in bid for closer ties

+ Deal covers customs facilitation, regulation, and anti-corruption.

+ Move clouds prospects for Chinese official’s visit next week.

To avert war with China, the US must prioritize Taiwan over Ukraine?Elbridge A. Colby + Alex Velez-Green

Japan’s new military might is rising in a factory in Hiroshima: As the country rearms, the city of peace once again becomes a defense hub.?Bloomberg

Japan can’t pass the buck anymore?Jennifer Lind

+ Lind is an expert on Japan and East Asian security.

Chip companies pour $14bn into Japan, seeking stable supply chain: Kishida calls for more investment in a bid to boost region's economic security.?Nikkei

UK cements defense ties with Japan by signing Hiroshima Accord: Carrier deployment, expanding drills and chip collaboration highlight new pact.?Nikkei

+ Rishi Sunak in Japan for G7 summit, hails new deal with Japan on defense and semiconductors.

Asia's internet cable projects delayed by South China Sea tensions: Telcos and tech giants look to bypass region as Beijing presses territorial claims.?Nikkei

Pentagon overestimated value of weapons for Ukraine by $3bn: FT reports clerical error could affect when US funding for war with Russia runs out.

Ukraine could join ranks of ‘frozen’ conflicts, US officials say: How Ukraine could become the next South Korea.?Politico

+ “Once you get past few months or a year, these wars tend to last years,” said Benjamin Jensen of the Center for Strategic and International Studies, who has analyzed the historical data. “Even with the most wildly successful Ukraine counteroffensive, you could still be seeing yourself fighting this time next year.”

The latest flash point among Ukraine’s allies is whether to send F-16s: NYT reports the United States is resisting a European push for the powerful fighters. But will it relent, as it did before with tanks, rocket launchers, and air defense missiles?

A moment of truth for Russia's Wagner Group in Bakhmut: The Russian mercenary force Wagner Group has propped up autocrats from Mali to Syria in recent years. In Bakhmut, however, it now finds itself in the bloody spotlight of the war in Ukraine. Leader Yevgeny Prigozhin has long enjoyed Putin's support – but for how much longer??Der Spiegel

South Africa tries to ignore arrest warrant for Putin: The Times reports South Africa is preparing to welcome President Putin despite an international arrest warrant against him, in the latest sign of Pretoria’s deepening ties to Moscow.

Boris said Macron was ‘Putin’s lickspittle’ and a ‘c**t,’ ex-aide claims: British PM’s former comms boss says Johnson threatened an ‘orgy of frog bashing.’?Politico

The National Conservatives are a glimpse of the Tories’ grim future: It is perfectly plausible that Suella Braverman or another NatCon candidate will be the next Tory leader.?David Gauke

The debt ceiling crisis is distracting Biden from his geopolitical agenda: Cutting the Asia-Pacific trip short to avert domestic catastrophe underlines the US president’s foreign policy weaknesses.?Alan Beattie

Bloomberg:?McCarthy, Schumer eye debt-limit votes ahead of June 1 deadline

Congress could vote on debt ceiling bill next week, Kevin McCarthy says: FT reports the House Speaker can ‘see the path’ to reach an agreement and avoid a potential national default.

Bloomberg: Trump bashes ‘pro-China’ Biden even as US stance has hardened

CBS News: DeSantis to launch presidential campaign next week, sources say

The Times: Ron DeSantis set to announce candidacy for 2024 US presidential election

‘Biden and me’: DeSantis privately tells donors Trump can’t win: In a phone call with top donors, the Florida governor took his most direct shots yet at Donald Trump. He is expected to officially enter the presidential race next week.?NYT

The DeSantis project?Time

+ “It’s the relentless pursuit of conservative policies that have made Floridians’ lives better and led to a majority of registered Republicans. It’s the result of policies and governing.”

LAT: Disney cancels plan to move 2,000 workers to Florida amid DeSantis fight

Disney pulls plug on $1 billion development in Florida: NYT reports a new office complex, and relocation of a division from California, would have created more than 2,000 jobs but was scuttled as the company and Gov. Ron DeSantis continue to feud.

Bloomberg: Disney will outlast DeSantis in Florida, Orlando mayor says

+ Sen. John Cornyn (R-TX) “has joined the anyone-but-Trump caucus, becoming the most prominent Texas Republican to shun the former president’s 2024 comeback bid,” the Dallas Morning News reports.

Pete Buttigieg loves God, beer, and his electric Mustang: Sure, the US secretary of transportation has thoughts on building bridges. But infrastructure occupies just a sliver of his voluminous mind.?Wired

+ VH: "I slowly became aware that his cabinet job requires only a modest portion of his cognitive powers."

+ PB: "The lived reality of the younger generations is that they are experiencing climate issues not as a theoretical possibility but as a clear and present danger. These are generations that have experienced the reality that disparities, including racial disparities, left alone, will only compound. They won’t cure of their own gravitational tendency."

+ PB: "As we careen toward the second quarter of the century, suddenly industrial policy sounds less retro and more like a response to the times."

?

US Supreme Court rules Warhol image violated photo copyright: Le Monde reports the decision has significant implications for the art market around whether a derivative work is a mere copy or fully transformative.

Axios: Congressional lawmakers want to save AM radio in cars from extinction

Montana bans TikTok for all residents: It’s the first state to officially ban the app over national security concerns with its China-based owner.?Politico

TikTok and free speech groups appear poised for legal fight over Montana ban: Under the law, TikTok would be fined for operating the app, and Google and Apple would be fined for allowing people to download TikTok through their app stores.?NYT

TikTok Montana ban sows chaos for creators who vow to quit: Locals wonder, "Why Montana?", a sparsely populated state.?Bloomberg

Montana’s TikTok ban is unconstitutional twice over: There are free speech and foreign policy implications in the state’s decision to bar the Chinese social media app. Noah Feldman

+ Montana’s ban on TikTok marks an important landmark in the regulation of social media: This is the first time a state has issued an all-out ban on an app. The ban will certainly end up in court, as did President Donald Trump’s efforts to ban TikTok nationwide.

+ Challengers will say that the Montana ban infringes on First Amendment rights by limiting free expression. It also puts the state in the middle of a foreign policy issue that is ordinarily the preserve of the federal government.

+ In crafting the law, Montana went out of its way to punish not the end user, but Apple and Google if they continue to make the app?available for download within the state.

+ To have any chance of justifying these free-speech restrictions, Montana will have to assert in court, as its governor has already done, that the ban is serving the compelling interest of protecting users from having their data collected by the Chinese government.

+ It should be obvious that we don’t want 50 state legislatures each trying to take the lead in shaping the US-China relationship.

+ Montana’s ban is set to take effect Jan. 1. But I doubt Montanans will actually have to stop scrolling then.

WSJ: Sam Zell, legendary real-estate investor, dies at 81

ESPN plans to stream flagship channel, eyeing cable-TV demise: WSJ reports ESPN is laying the groundwork to sell its channel directly to cord-cutters and has begun talks with sports leagues and cable partners.

Bloomberg: ESPN signs Pat McAfee to host his show on multiple channels

Disney is closing its $5,000 Star Wars hotel: WP reports the Galactic Starcruiser hotel and experience will close in September.

BT?is to cut between 40,000 and 55,000 jobs by the end of the decade as the telecoms company comes to the end of its ￡15 billion new broadband build and takes advantage of artificial intelligence.

OpenAI launches ChatGPT on Apple’s app store: FT reports the Microsoft-backed company pushes forward with plans to expand AI chatbot to a wider consumer audience.

China surpasses Japan as world's top auto exporter: Nikkei reports Tesla EVs and Russian deliveries drive the industry into the lead.?

Shein, the fast-fashion giant, has reportedly raised $2 billion in new financing, but cut its valuation by about a third, to $66 billion.

The off-peak rider is the future of the subway?Alissa Walker

+?“Because of reduced daily commuting, many cities are working to expand midday and evening service in order to capture more ridership and provide service that is useful for a different mix of trips,” says Matthew Dickens, director of policy development and research for the American Public Transportation Association.

+ According to the “Round the Clock is the New Rush Hour” report by the City Comptroller’s Office. The 2021 report found that 61 percent of those New York City jobs are located in Brooklyn, Queens, and the Bronx — boroughs that don’t have the same level of off-peak service that’s always been more standard in Manhattan.

+ Public-transit ridership nationwide is estimated to stabilize right around where New York City is now, at 75 percent of pre-pandemic ridership, meaning most agencies will have to choose between increasing fares, finding new sources of revenue, or making major service cuts.

AFP: ‘Indy’ mania grips Cannes for Harrison Ford’s last crack of the whip

AP: ‘Indiana Jones’ swings into Cannes Film Festival; Harrison Ford honored before joyous festivalgoers

AFP: Nadal pulls out of French Open, set to end career in 2024

What Man Utd’s new owner really wants: For thrill-seeking plutocrats, nothing offers an ego trip like football.?Simon Kuper

+ In 1989, the businessman Michael Knighton bid ￡20mn for Manchester United. At the time it was the highest price ever offered for an English football club.?

+ Rich men are still drawn to football by motives that are generally misunderstood, sometimes even by the rich men themselves. These people are less rational than they like to imagine.

+ Most owners soon discover that that’s the choice they face. They can chase either trophies or profits, but not both.

+ “Two things are different from AirAsia,” he said. “One is I can control almost everything in AirAsia. You can do whatever you want in football, but it’s up to 11 guys on the pitch at the end of the day, right? The second thing is you have a very vocal bunch of shareholders — called fans. Everyone has an opinion. The plans get thrown out of the window when you start losing. The excitement when you win a football game is unbelievable. The downside is that when you lose, you want to kill yourself.”

+ Weirdly, when billionaires tire of football and sell their clubs, they often make money anyway. The club turns out to be like a Picasso on your wall. It doesn’t throw off quarterly profits, but it does typically gain value over time. Best of all, when you show it to friends, they get so jealous that some go out and buy one of their own.

Enjoy the ride + plan accordingly.

-Marc?

Marc A. Ross | Chief Communications Strategist @ Caracal

Caracal produces ITK Daily.

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