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U.S.-China Trade Ties, JCPOA 2.0?, Sudanese Coup 2.0, Ecuador’s State of Emergency, and The Week in Review

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U.S.-China Trade Ties, JCPOA 2.0?, Sudanese Coup 2.0, Ecuador’s State of Emergency, and The Week in Review

U.S.-China trade ties. In a speech to the National Chicken Council, U.S. Trade Representative Katherine Tai described the U.S.-China trade relationship as a “pile of dry tinder” and said her goal was to “bring the temperature down so that [the U.S.] can have a sober relationship” with China. Vice Premier Liu He and U.S. Treasury Secretary Janet Yellen spoke on the phone in a meeting Xinhua described as “practical, candid, and constructive.”

What it means: Tai’s comments are a far cry from earlier this month, when Tai criticized China for failing to meet its Trump-era Phase 1 trade agreement purchase quotas and said the Biden administration would keep Trump’s tariffs on the books. The Liu-Yellen talks are also a positive development in the bilateral, indeed the only positive development between Beijing and Washington we can recall in the last 12 months. (Feel free to correct our memory if we overlooked one!)

JCPOA 2.0? Iran’s deputy foreign minister met with EU officials in Brussels and said Iran will resume negotiations to return to the Iran nuclear deal “before the end of November,” with an exact date to be announced “in the course of the next week.” According to Politico, two Western diplomatic officials confirmed the breakthrough.

What it means: We’re on record as predicting an eventual return to the JCPOA after much wailing and gnashing of teeth from both sides for the simple reason that both sides’ interests are served by rejoining. We don’t expect these negotiations to be easy or quick. The status of Iran’s missile program, which is not currently covered in the JCPOA itself, will be a major sticking point. Still, both sides have an interest in rejoining the deal, and in this case, we think interests will rule the day.

Sudanese coup 2.0. The Sudanese military dissolved civilian rule and took power in a military coup. Prime Minister Abdalla Hamdok had previously announced in September that his government had prevented a coup attempt in September led by “forces of darkness” linked to former President/Dictator Omar al-Bashir.

What it means: The World Bank, African Union, and the U.S. all suspended aid to Sudan. Defiant protests continue as demonstrators oppose the coup. The Sudanese military’s position is not ironclad, and we are concerned that a great deal more violence is to come.

Ecuador’s state of emergency. Ecuadorian President Guillermo Lasso declared a 60-day national emergency. In a national broadcast, Lasso said Ecuador has one major enemy: drug trafficking. Over the weekend, well-known Ecuadorian sprinter Alex Quiñónez was shot and killed in Guayaquil. Quiñónez’s murder seems to have struck a nerve, boiling over into anti-government protests this week. Aside from the increasing violence, the protesters are also mad that Lasso has not lowered gasoline prices.

What it means: As we noted in this week’s LatamPolitik newsletter, protests over high gasoline prices are precisely what ended the political career of Lasso’s predecessor, Lenin Moreno. Disturbingly, ​​Lasso has also taken to referring to protesters as “putschists” and “conspirators” – not the kind of rhetoric one expects in a country the U.S. just saluted for its commitment to democracy. For more, click here.

Honorable mention 

The European Court of Justice ordered Poland to pay the European Commission a fine of 1 million euros a day until Poland complies with a previous ECJ ruling to eliminate the Disciplinary Chamber of the Polish Supreme Court.

The general director of Mexico’s state-owned Petróleos Mexicanos (Pemex) said the Mexican federal government had agreed to “reduce the tax burden” for Pemex from 65 percent to 40 percent and take over debt repayments “from now on.”

Nigeria rolled out a digital currency (the “eNaira”), the first in sub-Saharan Africa.

Turkish President Recep Tayyip Erdogan threatened to expel ambassadors from the U.S. and 9 other Western countries.

The Banco Central do Brazil raised interest rates by 150 basis points to 7.75 percent.

The Bank of Japan trimmed its economic growth and inflation forecasts for the year through March 2022.

Taiwanese President Tsai Ing-wen confirmed in an interview that U.S. “personnel” are present on the island training the Taiwanese military.

France seized a British fishing boat (specifically a scallop dredger, for those of you who care!) it accused of fishing illegally in French waters.