The week begins with the US making trade demands of allies. Reuters reports that the White House may push allies to reject all Chinese AI initiatives or face exclusion from US-led projects.
Canada-US trade talks also continue ahead of Wednesday’s (19 August) tariff deadline, after which a number of Canadian goods will face 50% tariffs.
The week will also see climate questions raised of the Burnham administration as wildfires continue to burn across the UK.
Canada and US negotiate under Trump tariff threat
This coming Wednesday could see the introduction of a 50% US tariff rate on Canadian goods imports.
This follows Trump’s announcement last month to introduce levies in response to Canada’s “unequal treatment” of US goods like alcohol, dairy and cars.
Trade talks between the two nations have been ongoing to reach a consensus that prevents the 50% rate coming into effect. However, some Canadian negotiators are not optimistic that such a deal can be reached in time, according to the Canadian Broadcast Corporation, with objections from some provinces threatening to undermine talks.
Canada is aiming not only to avert the 50% rate but also reduce the sectoral tariffs on steel and aluminum that have hampered Canadian industry.
The US wants to secure the sale of US alcohol into Canada, following a ban by some Canadian provinces in response to trade tensions.
It will also need concessions on the other two goods Trump specified in July – dairy and automotives – with US Trade Representative Jamieson Greer telling reporters last Friday (14 August):
“Those things have to be resolved, because that's the legal basis for those other tariffs.
“The Canadians have come in and they want to have a conversation about it, and we're having those conversations.”
Contributing to the tensions, a Canadian petition to expel the US ambassador Pete Hoekstra has gained 170,000 signatures. It only needed 500 to be discussed in Canada’s House of Commons.
US AI demands
Amid a growing AI race with China, the US is reportedly seeking to make its allies choose sides.
Last year the Pax Silica initiative was launched by Washington in a bid to secure AI supply chains. The non-legally binding framework has over 20 signatories, including the UK, EU, Japan and South Korea.
In a letter to signatories of the ‘AI Opportunity Statement’ signed by many Pax Silica members in June and seen by Reuters, the US warns allies they’ll be excluded from US-led initiatives if they sign up to Chinese equivalent efforts.
“To be part of everything is to be part of nothing. Signature of the Pax Silica Declaration is not merely a membership subscription, but a commitment”, the letter reads.
Although not mentioning China explicitly, it adds:
“[Membership] cannot be held alongside membership in duplicative initiatives whose expectations conflict with our own.”
The US State Department refused to comment on the document and Reuters said the progress of the draft and whether it would be subject to further amendments could not be determined.
Burnham faces tough environmental questions
Politico reports that new prime minister, Andy Burnham, is set to have a week of planned policy announcements on issues like homelessness and transport disrupted by questions over climate.
Wildfires continue to spark across the country, with Burnham deploying the country’s emergency national alert of Friday to warn the populous not to increase risk through careless “human activity”.
As the wildfires have taken place during a record summer of heatwaves, questions surrounding the possible rowback of several climate policies are anticipated.
On Friday, Burnham said he would consider accelerating fossil fuel use to pay for the green transition, while a number of reports have suggested the government will curb the mandates on electric vehicle from 80% of all new cars by 2030 to just half.
The Telegraph also reports that Burnham could seek to approve one of two North Sea oil and gas sites that have been under consultation – Jackdaw.
Approved by the previous conservative administration, the Jackdaw and Rosebank oil fields faced subsequent legal challenges in Scotland.
While industry argues that the projects will provide significant energy security and be a source of jobs, climate concerns have been raised about the impacts of drilling and C02 emissions.
More dates in the diary
- Monday: South Korean Independence Day
- Tuesday: Labour market statistics from the UK, Germany and Switzerland
- Wednesday: Global Economic Outlook presented at the World Economic Forum’s International Business Council (IBC) meeting in Geneva
- Thursday: UK GCSE Results Day
- Friday: S&P Global flash purchasing managers’ index data for Australia, Eurozone, France, Germany, India, Japan, UK and US
- Saturday: Freedom 250 Grand Prix in Washington DC
- Sunday: Kazakhstan snap parliamentary election
