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Pakistan

America, China and ‘Absolutely Not’

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“Absolutely not” are the two words that have remained talk of the town in terms of relations between Pakistan and the United States in the past few days.

Imran Yaqub Khan Profile Imran Yaqub Khan

How will the relations between the two countries go after the withdrawal of US forces from Afghanistan? These two words are much significant in the backdrop of Pak-US relations.

What the US is thinking after quitting Afghanistan? What will be its priorities in the region? An important statement of US President Joe Biden carries much significance in this perspective. When he was asked by a reporter regarding the US policy towards Afghanistan last Saturday, the US president said “Ask me something else and positive”. This means now the US regime isn’t only winding up its 20-year military expeditions in Afghanistan, but is also not even ready to discuss Afghanistan. But side by side the instability and violence is being feared in Afghanistan.

The Taliban are increasing their influence in various districts after the ‘silent’ departure of US forces. Where does Pakistan stand in this fast-changing environment? What our political and military leadership is thinking about it? Prime Minister Imran Khan gave a detailed visit to Gwadar- the port city of Balochistan- on Monday last and the most important thing during his trip was his speech in which he (Imran Khan) highlighted three points in a clear tone.

“India is the biggest loser in Afghanistan. The Indian regime wants to enhance its influence in Afghanistan after the withdrawal of US forces so that an important country in the region could become its ally to create further difficulties for Pakistan. However the premier seemed optimistic that India isn’t getting “desired’ results while being staying in India. He further said in his speech that the Biden administration is perplexed over current situation in Afghanistan. If President Biden’s statement has to be kept in mind the situation is the same as depicted by the premier. The way the US emptied the biggest airbase of Bigram overnight is an indication that, “we are leaving and you deal the situation on your own”.

Third important point in the PM’s speech was a hint to resume negotiations with the disgruntled elements in Balochistan and declare Gwadar a focal point of Pakistan in future. The talks with miscreants mean to bring peace to Balochistan. The ‘absolute’ peace means more economic activities, and opportunities for businesses and jobs. Eventually Balochistan will start competing with other provinces. The Gwadar’s importance carries much weight in this context. Gwadar’s development and peace in Balochistan are equally important for both Pakistan and China.

Where Prime Minister Imran Khan said “absolutely not” to the US there he has taken principled stand during his interviews and statements that Pakistan will side with China. According to him, the US and the western countries could not create rife in the Sino-Pak bond even by pressuring through certain means. In this scenario, Gwadar is once again in news and any progress on CPEC simply means China wants to promote trade activities in the region and ultimately China’s influence would grow further. China is ready to play its important role in Afghanistan after the US departure. With the advancement of the Taliban a question arises if they (Taliban) are capable of bridging the gap of balance of power in Afghanistan? Another question comes to minds what role China can play in Afghanistan especially when the Chinese government follows the policy of non-interference.

China is ready to cooperate with the Taliban in case violence grows in the war-torn country and disturb Afghan border with China. China is already in contact with the Taliban in this regard. The international media is keeping an eye on what China is thinking about it and what is its next move? Recent news published in the Financial Times quoted an Indian official as having said China after extending cooperation to the Taliban wants to rebuild the destroyed infrastructure in Afghanistan. As Pakistan is the most important ally in the region, China will use Pakistan for funding to the Taliban in this regard.

Another diplomat claimed in the same story that China would extend help to the Taliban on Pakistan’s request. China in return would require that Taliban discontinue their relations with the militants group- China calls it Eastern Turkistan Islamic Movement- present along the Chinese border with Afghanistan. According to the United Nations’ Security Council the group has 3,500 fighters and some of them are present in Afghanistan close to China’s border. The UN and the US enlisted the movement in the list of terrorist organizations in 2002, but last year the US had removed it from the said list.

China blames the movement for committing anti-state activities in Sinkiang province and has already stressed upon the Central Asian Republics (CARs) like Tajikistan, Uzbekistan, Turkmenistan, and Kazakhstan to act against the militant group. In May this year the Chinese Foreign Minister had made it clear to the foreign ministers of CARs to act against three-pronged powers of extremists, terrorists and separatists.

The major objective behind this action is to protect the Silk Route (that China says is their belt and Road initiative). The project envisioned by Chinese president Xi Jinping aims to build infrastructure in countries and creating Chinese influence over there.

According to analysts, by ensuring stability in Afghanistan China wishes to protect Belt and Road Initiative projects in Pakistan and CARs and aims to open corridors of investments in Afghanistan. China has always adopted cautious approach towards sending its army outside, but it can become the part of peace-keeping missions in Afghanistan if resolutions of the United Nations are implemented.

Instability in Afghanistan and rise of extremism are disturbing factors for China as for as situation in Sinkiang is concerned. Keeping in view its economic interests, it will be difficult for China to keep itself aloof of the political and security situation in the region. The US is leaving Afghanistan with mere promises of continuing with air assistance. Here another question arises if stable Afghanistan is crucial for China, is isn’t the same for the US?  

 

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Technology

Senate passes TikTok ban bill, sending it to President Biden’s desk

President Joe Biden has agreed to sign the bill once passed by both chambers, which will give China-based. ByteDance up to a year to sell TikTok or face an effective ban.

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A bill that would force China-based company ByteDance to sell TikTok — or else face a US ban of the platform — is all but certain to become law after the Senate passed a foreign aid package including the measure.

It now heads to President Joe Biden, who already committed to signing the TikTok legislation should it make it through both chambers of Congress. The House passed the foreign aid package that includes the TikTok bill on Saturday.

Once signed by the president, ByteDance would have up to a year to complete a sale of TikTok or face an effective ban for the platform in the US. The bill gives ByteDance an initial nine months and gives the president discretion to extend it another three should there be progress toward a deal. Still, legal challenges could possibly delay enforcement.

The Senate vote came together due to clever political maneuvering in the House, which has now twice voted to pass the TikTok legislation. The first time, House lawmakers overwhelmingly voted in favor of the bill when brought as a standalone measure with a shorter divestment timeframe of six months. But key Senate leaders remained noncommittal about its future in that chamber.

By packaging it in the high-priority foreign aid package, the House effectively forced the Senate to take up the TikTok issue earlier than they might have otherwise. Extending the timeline for a deal to happen also secured more support in the Senate. The bill passed 79–18.

Lawmakers and intelligence officials are concerned that TikTok’s ownership by a China-based company could endanger the data of its US users. That’s mostly due to a Chinese national security law that can compel companies based there to hand over internal information. TikTok itself is based in Singapore, and the company says it doesn’t store US information in China. Some lawmakers have also worried that the Chinese government could influence what types of messages US users see and felt that TikTok’s campaign to mobilize users to call Congress to oppose the bill only validated those fears.

“Congress is not acting to punish ByteDance, TikTok or any other individual company,” Senate Commerce Committee Chair Maria Cantwell (D-WA) said on the Senate floor ahead of the vote. “Congress is acting to prevent foreign adversaries from conducting espionage, surveillance, maligned operations, harming vulnerable Americans, our servicemen and women, and our U.S. government personnel.”

“The truth is, these Chinese companies at the end of the day, they don’t owe their obligation to their customers, or their shareholders, but they owe it to the PRC government,” Senate Intelligence Committee Chair Mark Warner (D-VA) said. “In the context of social media platforms used by nearly half of Americans, it’s not hard to imagine how a platform that facilitates so much commerce, political discourse, and social debate could be covertly manipulated to serve the goals of an authoritarian regime, one with a long track record of censorship, transnational repression, and promotion of disinformation.”

Warner added that TikTok’s earlier proposed solution to concerns around its data governance, Project Texas, were inadequate. “Project Texas would still allow TikTok’s algorithm, source code, and development activities to remain in China,” Warner said. “They would remain so under ByteDance control and subject to Chinese government exploitation.”

“Many Americans, particularly young Americans, are rightfully skeptical. At the end of the day, they’ve not seen what Congress has seen.”

But he also addressed the concerns of many young Americans who use TikTok and fear this legislation means it will go away. “I want to make clear to all Americans, this is not an effort to take your voice away,” Warner said. “Many Americans, particularly young Americans, are rightfully skeptical. At the end of the day, they’ve not seen what Congress has seen. They’ve not been in the classified briefings that Congress has held, which have delved more deeply into some of the threats posed by foreign control of TikTok.”

“But what they have seen, beyond even this bill, is Congress’ failure to enact meaningful consumer protections on big tech, and may cynically view this as a diversion, or worse, a concession to U.S. social media platforms,” Warner continued. “To those young Americans, I want to say we hear your concern. And we hope that TikTok will continue under new ownership, American or otherwise.”

“I will sign this bill into law and address the American people as soon as it reaches my desk tomorrow so we can begin sending weapons and equipment to Ukraine this week,” President Biden said in an official statement released shortly after passage in the Senate.

According to Bloomberg, TikTok previously told employees that if the law is passed, the company will challenge it in court.

Update, April 23rd: The article has been updated with an official White House statement.

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Pakistan

Govt institutes paying employees for doing nothing: CJP

Qazi Faez said that those are posted on government jobs who are not qualified.

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Islamabad: Chief Justice of Pakistan (CJP) Qazi Faez Isa Thursday remarked during the hearing of the case in the Supreme Court Karachi Registry that the government institutions are feeding the employees and paying them for doing no work.

A bench headed by Chief Justice Qazi Faez Isa comprising Justice Jamal Khan Mandukhel and Justice Naeem Akhtar Afghan heard the petition against the dismissal of contract employees of Hyderabad Development Authority at the Supreme Court Karachi Registry.

The Supreme Court expressed its displeasure over not getting a satisfactory response from the counsel for the petitioners.

Qazi Faez Isa said: “We will see what the government departments are doing, what the government institutions are doing? Only the employees are being fed, only people are being hired in government jobs, employees are being given salaries, the government has no resources to do anything”.

He stated that they are only said to be serving, they are recruiting three times as many employees for each post. Those are posted on government jobs who are not qualified. The burden of illegal recruitment is on the public of Sindh.

Petitioner Advocate Malik Naeem stated that the recruitments were done under the package of the President and the Governor, the government itself started the project and later sent back the employees.

On this, Justice Qazi said that we should not run the government, they should run the government themselves. They have flouted the law in the name of authority, what authority do the president and the governor have? Did they have their own money? We will not allow the Constitution to be flouted. How did the president get the power to distribute money to whoever he wants?

The Chief Justice inquired when it happened and who did it? On which the petitioner's lawyer said that the recruitment package was received during the tenure of General Musharraf.

Qazi Faez Isa said that if the foundation of something is wrong then this is what happens. What the people of province are getting? Roads, water, electricity or what? Will ytheyou continue to pay all the money in salaries?

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Regional

Trump’s team keeps promising to increase inflation

Voters trust Donald Trump to handle inflation better than Joe Biden, according to the polls. Yet Trump and his advisers have put forward a variety of policies that would actually increase consumer prices, from dollar devaluation to 10 percent tariffs to mass …

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Donald Trump is currently leading the 2024 presidential race, in no small part because voters trust him to combat inflation. This is a bit strange since Trump has for months now been advertising plans to drastically increase consumer prices.

Over the weekend, an NBC News poll found Trump leading Biden nationally by a 46 to 44 percent margin. Yet on the question of which candidate would better handle inflation and the cost of living, the Republican led the Democrat by a whopping 22 points.

Trump’s landslide lead on price management is significant, since inflation was the poll’s single most commonly cited “critical issue” facing the United States.

Unfortunately, Trump does not actually have a bulletproof plan for making Big Macs cheap again. To the contrary, the Republican and his advisers have developed an economic agenda that amounts to a recipe for turbocharging inflation.

The claim that Trump’s policies would increase prices does not rest on a debatable interpretation of their indirect effects. Rather, some of the president’s proposals would directly increase American consumers’ costs by design. Here is a quick primer on the likely GOP nominee’s four-point plan for making your life less affordable:

Step 1: Reduce the value of the U.S. dollar

In the years since the Covid crisis, inflation has plagued consumers all across the wealthy world. Americans, though, have one advantage over their peers abroad: Their nation’s currency is relatively strong.

The US economy is growing at nearly twice the pace of other major rich countries without suffering substantially higher inflation. Nevertheless, the Federal Reserve has kept America’s interest rates elevated. Taken together, these two realities increase demand for the dollar: Foreign investors want to place their capital in countries that are growing fast and/or that are offering high, low-risk returns on their sovereign debt. America is currently doing both. Thus, many investors abroad are swapping their local currencies for greenbacks, thereby bidding up the dollar’s value.

As a result, Americans’ paychecks are going a bit farther, as a strong dollar makes imported goods cheaper for them.

But Trump’s advisers want to change this. According to Politico, the former president’s policy aides are “ actively debating ways to devalue the U.S. dollar if he’s elected to a second term.”

Their rationale is not hard to understand. Although a strong dollar is good for US consumers, it’s not great for US exporters, as it renders their goods more expensive to potential customers abroad. And since Trump and his former trade representative, Robert Lighthizer, have long sought to boost American manufacturing and shrink the trade deficit, they’re prepared to privilege the interests of the nation’s producers over those of its consumers.

Lighthizer reportedly hopes to coerce other nations into strengthening the value of their currencies by threatening to impose tariffs on their exports if they don’t comply. Trump’s advisers are also mulling ways to weaken the dollar without foreign cooperation, according to Politico.

Reasonable people can disagree about whether the US dollar is currently too strong. Plenty of analysts on both the right and left believe that America has a national interest in sustaining and growing its domestic production capacities. And all else being equal, a strong dollar does hurt American manufacturing. On the other hand, only about 8.6 percent of US workers are employed in the manufacturing sector, which suggests that a large majority of Americans have a stronger immediate interest in affordable imports than competitive exports.

Further, there’s reason to believe that the Trump team’s plans would backfire, as many foreign governments would retaliate against tariffs and dollar devaluation by imposing duties on US-made goods and seeking to weaken their own currencies.

Yet even if one supports Lighthizer’s priorities and proposals, an inescapable fact remains: A plan to devalue the dollar is — quite literally — a plan to make products more expensive for American consumers.

And this isn’t the Trump team’s only proposal for directly increasing your household’s costs.

Step 2: Apply a 10 percent tariff on all foreign imports

To further boost American manufacturing, Trump and his aides are considering the imposition of a 10 percent tariff on all foreign imports. In practice, this would almost certainly mean that US consumers would pay roughly 10 percent more on all the foreign-made cars, electronics, toys, and other goods that they purchase.

In theory, it is possible for the burdens of a tariff to fall entirely on foreign producers rather than domestic consumers. If a tariff applies only to raw commodities (such as soybeans or wheat) produced in a single country, then exporters in that country might slash their prices in response. This is because lots of countries export raw commodities, so a targeted producer would likely lose market share in the US unless they offset the impact of the tariff with a price cut. In that scenario, American consumers wouldn’t pay much higher prices for imports, but the targeted foreign producer would be forced to accept smaller profit margins.

This is not how a universal tariff would work. Americans import a lot more than raw commodities. And the country cannot currently produce all the goods and production inputs that the economy requires, let alone produce them as cheaply as foreign firms do. Producers of specialty products such as advanced semiconductors will know that American consumers have nowhere else to turn. They therefore will feel little pressure to cut their prices. According to multiple studies, when Trump imposed tariffs on specialty Chinese goods such as silk embroidery, US consumers paid roughly 100 percent of the costs.

Meanwhile, sheltered from foreign competition by tariffs, US manufacturers would be able to raise their prices considerably without risking a loss of customers. The result of all this would be a dramatic increase in consumer prices.

This said, precisely because Trump’s universal tariff would function as a 10 percent sales tax on all foreign goods, it would somewhat reduce consumer demand. Make products less affordable for Americans and they will be forced to buy fewer of them. As consumers reduce their purchases, inflation could theoretically slow.

But don’t worry, Trump’s comprehensive (if unintentional) plan for juicing inflation accounts for this possibility.

Step 3: Enact massive, deficit-financed tax cuts

The Republican Party’s number one fiscal priority in 2025 will be extending the Trump tax cuts. Many provisions of the former president’s 2017 tax package are set to expire at the end of next year. Merely preserving those policies will increase the federal deficit by $3.3 trillion over the next decade, according to the Committee for a Responsible Federal Budget (CRFB).

But Trump is not satisfied with merely maintaining America’s current tax rates. Rather, his team hopes to further reduce the corporate rate from 21 percent to as low as 15 percent. That would further swell the deficit by $522 billion, under conventional assumptions, according to the Tax Foundation, a conservative think tank.

The president also hopes to enact a large middle-class tax cut, according to a recent report from Reuters. Specifically, Trump and his advisers are considering a cut to the federal payroll tax and/or a reduction in marginal income tax rates for middle-class households. Since the scale of these cuts has not been specified, it is impossible to say how much they would cost in fiscal terms. Since America’s middle class is large, any substantial reduction in its tax burden would be very expensive in fiscal terms.

At first brush, a middle-class tax cut might seem like it would make life more affordable for Americans, at least in the short term. This would be true if such a policy came with no risk of triggering a resurgence of inflation, but unfortunately, it would entail precisely that hazard.

If you increase Americans’ post-tax incomes by hundreds of billions of dollars, they will suddenly be able to dramatically boost their purchases of goods and services. If the economy’s capacity to produce goods and services does not increase at the same pace, then demand will outrun supply and consumers will bid up prices.

Theoretically, Republicans could enact non-inflationary, multitrillion-dollar tax cuts without sparking inflation, but this would require offsetting the fiscal impacts of tax cuts with spending reductions.

The combination of extending the 2017 tax cuts and slashing the corporate rate to 15 percent would cost nearly $4 trillion in foregone revenue. Tacking on a large middle-class tax cut could easily bring that sum total north of $6 trillion. During both the Trump and George W. Bush presidencies, congressional Republicans ultimately didn’t have the stomach to enact spending cuts anywhere near that large.

Critically, offsetting the inflationary impact of tax cuts in 2025 and 2026 would require slashing spending immediately, not years down the line. Republicans have no appetite for cutting Medicare and Social Security benefits for existing beneficiaries. And coming up with $6 trillion in spending reductions without tackling entitlements would require gutting all manner of popular social programs.

The path of least resistance would therefore be to deficit-finance the bulk of Trump’s tax cuts. This would likely lead to faster price growth and more interest rate hikes from the Federal Reserve.

Granted, if Republicans somehow found a way to rapidly increase the US economy’s productive capacity, then their tax cuts would be less inflationary and the typical American might come out ahead (at least, until the consequences of gutting future funding for Medicare and Social Security caught up with them).

But Trump’s team plans to do the opposite. The final plank in their pro-inflation agenda involves abruptly shrinking the supply side of the US economy.

Step 4: Shrink the American labor force

As the New York Times reported in November, Trump and former White House adviser Stephen Miller have hatched plans to deport millions of undocumented immigrants during his second term in office, even without Congress’s cooperation.

Currently, due process rights constrain the government’s ability to deport undocumented immigrants en masse. But Miller and Trump believe they can scale back those rights under existing executive authorities. They intend to make all undocumented immigrants who’ve been in the country for less than two years subject to expedited removal. In other words, the government would be empowered to remove such immigrants without first giving them an opportunity to challenge their deportations at a legal hearing.

Current law makes it more difficult to summarily expel longtime US residents, but Trump’s team thinks it can force millions of them out of the country anyway. First, they would scale up raids of workplaces and other areas where undocumented immigrants are believed to be present. Then, they would condemn the captured immigrants to indefinite detention in federal camps. These detainees would still have the right to contest their deportations in court but they would need to wait out that often years-long legal process in confinement. Miller reportedly bets that most will choose to leave the country instead of tolerating de facto incarceration.

In my estimation, there are strong moral reasons to oppose these policies. But even Americans who have no empathy for their undocumented compatriots have economic incentives to oppose mass deportation.

As scholars at the Brookings Institution noted last fall, the upsurge in immigration since the pandemic is one major reason why the US managed to bring inflation down without suffering a recession: Foreign-born workers increased the economy’s productive capacity, helping supply to catch up with rising consumer demand.

Conversely, if America abruptly deported all undocumented workers, labor shortages would devastate myriad industries, from housing to agriculture to the care economy, and prices would soar.

Some Americans might consider such labor shortages beneficial. After all, when labor is scarce, workers can demand higher wages. But there are more undocumented workers in the United States than unemployed ones. Purging America of the former would not leave the US with the same economy with higher wages for the native-born. Rather, it would leave the country with a smaller economy, where millions of existing jobs simply would not get done. When you slash the agricultural labor force, food gets scarce and thus expensive. The same principle holds for construction, hospitality, leisure, or health care.

Put all of this together and you have a recipe for making the inflation rate 9 percent again: Slash the dollar’s value, insulate US producers from competition, juice demand with tax cuts, and then throttle supply with mass deportation, and prices are bound to soar.

Unfortunately, Trump’s proposals and their economic consequences appear to be largely lost on the American electorate, possibly because neither have attracted much media attention. If that does not change between now and November, the country could pay a heavy price.

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