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Balance of Power
Bloomberg

The list of retaliatory actions between the U.S. and China is growing so quickly it almost needs a spreadsheet to keep up.

But what might sanctions actually achieve? They're a blunt tool, even when focused on individuals or corporations, as are tariffs imposed on sectors of an economy.

The U.S. is seeking to pressure China to change course in several areas: its crackdown on the Uighur Muslim minority in western Xinjiang province, its tightening grip on freedoms in Hong Kong via a national security law, and its trade practices in shielding state-owned companies as well as telecoms giant Huawei.

China's penalties in turn aim to get Donald Trump's administration to back off.

For decades countries have deployed sanctions, but often to limited effect. They didn't stop Iran, for example, in its nuclear program. Or North Korea for that matter. They didn't make Russian President Vladimir Putin reverse on annexing Crimea.

Indeed the evidence is mostly that sanctions motivate a country to dig in further, even when the economy is ravaged. The penalties simply hurt ordinary people more than their leaders.

There is one area sanctions may actually work. The U.S. ban on Huawei sourcing microchips that use American technology is having a knock-on effect as the U.K. and France fret that Huawei will now have to use untrusted microchips, raising further the risk of having them in their 5G networks.

But overall, the penalties are unlikely to have much impact on either the U.S. or China. Each has too much at stake to back down.

Rosalind Mathieson

A demonstrator holds a smartphone screen reading "Yesterday Xinjiang, Today Hong Kong" while marching in Hong Kong on June 12.

Photographer: Roy Liu/Bloomberg

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Global Headlines

Back to school | The U.S. reversed a new policy on student visas after a high-profile confrontation with Harvard University, MIT and hundreds of other colleges, ending a standoff that could have sent thousands of students back to their home countries and left schools scrambling to plan for the fall. But questions remain about whether the government actually has abandoned its position or is just regrouping to fight another day.

  • Trump said he'll soon sign a merit-based immigration measure and would address "in a very Republican way" a program he has sought to end that shields 670,000 young undocumented immigrants from deportation.

Peachy keen | Trump is pushing to keep Georgia in his column with a trip today to the reliably Republican state, where Democrat Joe Biden has yet to push hard for votes that some Democrats believe are ripe for the taking. The visit comes after Trump used the White House as the backdrop for a lengthy attack on Biden's record.

  • Trump also said yesterday that more White people die at the hands of police than Black people, offering misleading data that's likely to further stoke racial tensions.
  • Former college football coach Tommy Tuberville defeated Jeff Sessions in his bid to return to the Senate, a contest that turned into a grudge match between Trump and his former attorney general.

Apple victory | Apple won a battle over a record $14.9 billion Irish tax bill — a blow to European Union antitrust chief Margrethe Vestager's crackdown on preferential deals to selected companies — with a court ruling that the arrangement wasn't illegal state aid. The decision, which comes as the EU seeks to bolster oversight of Silicon Valley tech giants, can be appealed at the bloc's highest court.

Election challenge | Belarus strongman Alexander Lukashenko is facing unusually vocal opposition to his bid for a sixth presidential term in Aug. 9 elections. Police detained at least 230 people during clashes with protesters yesterday, a rights group said. Opposition challenger Viktor Babariko's team is urging supporters to gather at the central election commission today after its rejection of his candidacy, even though his campaign collected more than four times the required number of signatures.

Atomic damage | An explosion at one of Iran's critical nuclear sites won't significantly set back its uranium enrichment program, but could collapse the remaining pillar of the 2015 accord meant to contain it — international monitoring. That's the assessment of past and present arms-control analysts, who've been tracking the fallout from the July 2 blast that destroyed a centrifuge workshop at the Natanz installation, Jonathan Tirone reports.
 

Damage caused by a fire at the Natanz uranium enrichment facility.

Photo source: Atomic Energy Organization of Iran

Bean counter | Behind the arguing over the EU's economic recovery plan is a key question: How much is it really going to cost to keep Italy in the euro? The answer, to a large extent, depends on a 53-year-old former communist who is fast becoming Italy's most powerful politician. Alessandra Migliaccio profiles Finance Minister Roberto Gualtieri, who has leeway over almost 700 billion euros and yet likes to check the numbers himself, line by line, on the calculator on his phone.

What to Watch

  • Justice Ruth Bader Ginsburg will be hospitalized for a few days after being admitted to treat a possible infection, the U.S. Supreme Court said, in the latest health scare for the 87-year-old liberal.
  • Voters in North Macedonia go to the polls today in an election that will decide whether Premier Zoran Zaev will get a chance to build on his success of bringing the Balkan country into NATO and setting out a path to EU integration.
  • Italian Prime Minister Giuseppe Conte's government set a course to nationalize controversial toll-road operator Autostrade per l'Italia SpA after all-night talks.

And finally ... A deadly day of hand-to-hand combat in a disputed area of the India-China border last month may accomplish what years of Pentagon and White House outreach has struggled to achieve: drawing the U.S. and India closer militarily. India has historically tried to balance its ties among global powers, but the clashes with China at 14,000 feet have exposed the potential longer-term risks of not having the U.S. more clearly behind it.

An Indian fighter jet flies over a mountain range in Ladakh on June 23.

Photographer: Tauseef MustafaAFP via Getty Images

 

 

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