
The U.S. Message To Australia And Japan
Colby's initiative aimed to signal regional unity in the U.S. effort to preserve the status quo between Taiwan and the mainland. It also carried a practical appeal: encouraging U.S. allies to strengthen their defense capabilities.
Burden-sharing remains a perennial challenge in alliances, driven by the natural temptation for partners to save on defense expenditures and, relatively speaking, benefit from the U.S. defense budget. Partners tend to underinvest in their own defense, relying on the U.S. security umbrella.
Here lies the paradox: neither Japan nor Australia can independently defend Taiwan. Only the United States possesses the military capacity—and therefore the credibility—to deter the People's Republic of China. Only the U.S. can impose long-term costs on China.
Whether Australia or Japan increases or decreases its defense spending, the sole indispensable component of deterrence remains U.S. credibility.
Japan knows this. Australia knows this. The U.S. knows this. Most importantly, China knows this.
So why would Japan or Australia seek to strengthen their security commitments to Taiwan when doing so offers no meaningful advantage to Taiwan but risks provoking China?
While Colby's outreach stirred debate in both countries, officials reiterated their positions of not formalizing any commitment to a hypothetical conflict. Australian Prime Minister Anthony Albanese stated that Australia would not commit troops in advance to any conflict. That ambiguity reflects a desire to maintain strategic flexibility and avoid premature entanglement in a potential war.
This conversation unfolds at a moment when the Trump administration is challenging or reshaping long-held positions and procedures in the Asia-Pacific and beyond. As Trump imposes higher tariffs on both Australia and Japan, the U.S. signals a shift away from its traditional role in alliance leadership and regional problem-solving—making itself a less attractive partner by reducing predictability and increasing the cost of engagement.
Much of what the U.S. is attempting in its trade relationship with Australia is viewed as unnecessary, counterproductive, or even in bad faith. The U.S. has a Free Trade Agreement with Australia that eliminates tariffs on nearly all bilateral trade. In fact, the U.S. currently enjoys a trade surplus with Australia—one of Trump's stated trade goals.
Rather than leading with a call for increased commitment to Taiwan, the U.S. could have pursued a less controversial approach: encouraging Japan and Australia to expand joint military exercises, enhance maritime surveillance, or simply boost defense spending without direct reference to China. By centering its request on Taiwan, the U.S. chose the approach least likely to elicit a positive response from its allies.
The Trump administration's outreach to Japan and Australia appears to have resulted in diminished confidence in the U.S. and reduced credibility regarding Taiwan. The paradox is that the U.S. may still see incremental increases in both countries' defense budgets in the coming years—but driven by concern about the U.S., not concern about China.
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4 hours ago
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Trump tariffs live updates: Trade partners grow restless; retail earnings to put tariffs' impact in focus; Trump says semiconductor tariffs coming soon
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US trade partners still waiting on Trump to seal their 'deals' US trade partners that worked out exemptions to President Trump's tariffs — like the UK's deal to reduce tariffs on its steel to zero — are still waiting for the agreements to be finalized months later, Bloomberg reports, and are growing frustrated. Read more here. US trade partners that worked out exemptions to President Trump's tariffs — like the UK's deal to reduce tariffs on its steel to zero — are still waiting for the agreements to be finalized months later, Bloomberg reports, and are growing frustrated. Read more here. Candidates at Iowa State Fair hear from voters about Trump tariffs (Bloomberg) — Republican Representative Zach Nunn is making an Iowa State Fair video about President Donald Trump's tax law, shot on a John Deere tractor under the blazing August sun. In it, Nunn, one of the nation's most vulnerable incumbents, talks to constituent Sarah Curry about how the expanded child tax credit will help with the cost of one child's speech therapy. Nunn is also planning to use the state fair as the backdrop for more videos selling the bill's provisions temporarily cutting taxes on tips and overtime. Economic issues — namely, Trump's tax package and his tariff war with countries that buy much of Iowa's agricultural products — will be front and center in Nunn's race, and he's eager to get a jumpstart defining the issues. So, too, are Democrats, who see Iowa's two swing districts as must-wins in their push to take back the House majority. Democrat Jennifer Konfrst, who is working to unseat Nunn, said she approaches Iowans at the fair asking them what keeps them up at night and the answer is usually 'costs.' Read more here. 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Democrat Jennifer Konfrst, who is working to unseat Nunn, said she approaches Iowans at the fair asking them what keeps them up at night and the answer is usually 'costs.' Read more here. Tariffs' impact on Walmart, other retailers' earnings about to come into focus Several major retailers will report earnings this week, which may give a first glimpse into how President Trump's tariffs have affected their bottom lines. The list includes Walmart (WMT), Target (TGT), Home Depot (HD), Lowe's Companies (LOW) TJ Maxx parent TJX Companies (TJX) and Ross Stores (ROST). The Trump administration has urged retailers not to raise prices for consumers to offset the tariffs' impact, with a particular focus on Walmart, The Street reminds us: Read more here. Several major retailers will report earnings this week, which may give a first glimpse into how President Trump's tariffs have affected their bottom lines. The list includes Walmart (WMT), Target (TGT), Home Depot (HD), Lowe's Companies (LOW) TJ Maxx parent TJX Companies (TJX) and Ross Stores (ROST). The Trump administration has urged retailers not to raise prices for consumers to offset the tariffs' impact, with a particular focus on Walmart, The Street reminds us: Read more here. Trump's trade war not likely to cause recession, Moody's economist says Economist Justin Begley of Moody's Analytics tells USA Today that President Trump's economic policies won't cause a recession or stagflation, but will likely slow growth and push up inflation. The economy isn't in stagflation yet, Begley said, "but it's edging that way," he adds: Read more here. Economist Justin Begley of Moody's Analytics tells USA Today that President Trump's economic policies won't cause a recession or stagflation, but will likely slow growth and push up inflation. The economy isn't in stagflation yet, Begley said, "but it's edging that way," he adds: Read more here. Commerce department applies 50% steel, aluminum tariffs to more products (Reuters) -The Trump administration widened the reach of its 50% tariffs on steel and aluminum imports by adding hundreds of derivative products to the list of goods subject to the levies. In a Federal Register notice late on Friday, the Commerce Department said the Bureau of Industry and Security was adding 407 product codes to the Harmonized Tariff Schedule of the United States that identify the goods to be hit with the additional duties on the steel and aluminum content of those products. The non-steel and non-aluminum content will be subject to the tariff rates President Donald Trump has imposed on the goods originating from specific countries, the notice said. The levies on the goods on the expanded list go into effect on August 18. Read more here. (Reuters) -The Trump administration widened the reach of its 50% tariffs on steel and aluminum imports by adding hundreds of derivative products to the list of goods subject to the levies. In a Federal Register notice late on Friday, the Commerce Department said the Bureau of Industry and Security was adding 407 product codes to the Harmonized Tariff Schedule of the United States that identify the goods to be hit with the additional duties on the steel and aluminum content of those products. The non-steel and non-aluminum content will be subject to the tariff rates President Donald Trump has imposed on the goods originating from specific countries, the notice said. The levies on the goods on the expanded list go into effect on August 18. Read more here. Consumers' inflation expectations rise amid Trump tariffs Inflation expectations rose from July to August, indicating that consumers remain uncertain about President Trump's trade policies. Year-ahead inflation expectations increased to 4.9% from 4.5% last month, according to the University of Michigan's survey of consumers. Long-run inflation expectations also rose to 3.9% in August from 3.4% in July. "Overall, consumers are no longer bracing for the worst-case scenario for the economy feared in April when reciprocal tariffs were announced and then paused," Joanne Hsu, the university's Surveys of Consumers director, wrote. "However, consumers continue to expect both inflation and unemployment to deteriorate in the future." Consumer sentiment also deteriorated month over month, falling for the first time in four months. The University of Michigan's Consumer Sentiment Index fell to 58.6 from 61.7 a month ago. Read more here. Inflation expectations rose from July to August, indicating that consumers remain uncertain about President Trump's trade policies. Year-ahead inflation expectations increased to 4.9% from 4.5% last month, according to the University of Michigan's survey of consumers. Long-run inflation expectations also rose to 3.9% in August from 3.4% in July. "Overall, consumers are no longer bracing for the worst-case scenario for the economy feared in April when reciprocal tariffs were announced and then paused," Joanne Hsu, the university's Surveys of Consumers director, wrote. "However, consumers continue to expect both inflation and unemployment to deteriorate in the future." Consumer sentiment also deteriorated month over month, falling for the first time in four months. The University of Michigan's Consumer Sentiment Index fell to 58.6 from 61.7 a month ago. Read more here. US import prices rebound in July on higher consumer goods costs US import prices rebounded in July in the latest sign that inflation is set to pick up because of tariffs. Reuters reports: Read more here. US import prices rebounded in July in the latest sign that inflation is set to pick up because of tariffs. Reuters reports: Read more here. Trump says semiconductor tariffs could reach 300% President Trump said Friday he is planning on unveiling tariffs on semiconductor imports over the next two weeks, hinting that those duties could reach as high as 300%. From Bloomberg: Read more here. President Trump said Friday he is planning on unveiling tariffs on semiconductor imports over the next two weeks, hinting that those duties could reach as high as 300%. From Bloomberg: Read more here. Applied Materials' shares sink on weak China demand, tariff risks Shares in Applied Materials (AMAT) sank 14% before the bell on Friday after the chip equipment maker issued weak fourth-quarter forecasts on sluggish China demand, fueling concerns over tariff-related risks. Reuters reports: Read more here. Shares in Applied Materials (AMAT) sank 14% before the bell on Friday after the chip equipment maker issued weak fourth-quarter forecasts on sluggish China demand, fueling concerns over tariff-related risks. Reuters reports: Read more here. China's economy lags in July under pressure from tariffs and a weak property market China's economy lagged in July as factory output and retails sales slowed and house prices dropped, according to data released on Friday. President Trump's tariffs have added to uncertainty on exports and are looming over the world's second-largest economy. Concerns linger despite Trump extending a pause in sharp hikes in import duties for 90 days, beginning Monday, following a 90-day pause that began in May. AP reports: Read more here. China's economy lagged in July as factory output and retails sales slowed and house prices dropped, according to data released on Friday. President Trump's tariffs have added to uncertainty on exports and are looming over the world's second-largest economy. Concerns linger despite Trump extending a pause in sharp hikes in import duties for 90 days, beginning Monday, following a 90-day pause that began in May. AP reports: Read more here. Taiwan lifts 2025 growth forecast, defying US tariff worries Bloomberg News reports: Read more here. Bloomberg News reports: Read more here. These tariffs are bananas An interesting spot from this week's inflation data: Prices for the reliable, potassium-heavy banana have jumped to their highest price ever recorded. Banana prices peaked around $0.64 per pound in the post-COVID inflation wave and then went on a slow downward trajectory. That is, until April 2025, when President Trump announced his first wave of sweeping tariffs. Prices are now hovering near $0.66 per pound. As the Yale Budget Lab chief Ernie Tedeschi noted on X, the average tariff rate on banana imports went from virtually nothing to very much something as Trump imposed tariffs on most US trading partners. That's nuts! An interesting spot from this week's inflation data: Prices for the reliable, potassium-heavy banana have jumped to their highest price ever recorded. Banana prices peaked around $0.64 per pound in the post-COVID inflation wave and then went on a slow downward trajectory. That is, until April 2025, when President Trump announced his first wave of sweeping tariffs. Prices are now hovering near $0.66 per pound. As the Yale Budget Lab chief Ernie Tedeschi noted on X, the average tariff rate on banana imports went from virtually nothing to very much something as Trump imposed tariffs on most US trading partners. That's nuts! Tapestry forecasts annual profit below estimates on tariff pain Tapestry (TPR) stock fell 8% before the bell on Thursday after the Coach handbag maker forecast annual profit below estimates. The company cited higher costs due to tariffs that have hit its margins. Reuters reports: Read more here. Tapestry (TPR) stock fell 8% before the bell on Thursday after the Coach handbag maker forecast annual profit below estimates. The company cited higher costs due to tariffs that have hit its margins. Reuters reports: Read more here. Tariff confusion drives record volume at Los Angeles Port (Bloomberg) — The Port of Los Angeles said it handled the highest container volume in its 117-year history last month, as uncertainty over President Donald Trump's tariffs drives shippers to front-load cargoes. Already the busiest port in the country, LA moved more than 1 million twenty-foot equivalent units (TEUs) in July, an 8.5% increase from a year ago, the operator said on Wednesday. That includes containers entering and exiting its terminals, with loaded imports rising by a similar percentage to nearly 544,000 TEUs. The total volume handled was 14.2% higher than in June. Read more here. (Bloomberg) — The Port of Los Angeles said it handled the highest container volume in its 117-year history last month, as uncertainty over President Donald Trump's tariffs drives shippers to front-load cargoes. Already the busiest port in the country, LA moved more than 1 million twenty-foot equivalent units (TEUs) in July, an 8.5% increase from a year ago, the operator said on Wednesday. That includes containers entering and exiting its terminals, with loaded imports rising by a similar percentage to nearly 544,000 TEUs. The total volume handled was 14.2% higher than in June. Read more here. Pharma tariffs are likely weeks away, Reuters reports US tariffs on pharmaceutical imports are coming but not imminent, Reuters reported Wednesday, citing unnamed sources. Trump has previously warned duties on the drug industry could reach as much as 250%. Reuters reports: Read more here. US tariffs on pharmaceutical imports are coming but not imminent, Reuters reported Wednesday, citing unnamed sources. Trump has previously warned duties on the drug industry could reach as much as 250%. Reuters reports: Read more here. Brazil's Lula announces $5.5 billion in credits for exporters hit by US tariffs Brazilinan President Luiz Inácio Lula da Silva has announced a plan that includes $5 billion in credit to help local exporters handle tariffs . Associated Press reports: Read more here. Brazilinan President Luiz Inácio Lula da Silva has announced a plan that includes $5 billion in credit to help local exporters handle tariffs . Associated Press reports: Read more here. Swiss say tariffs could raise costs for US F-35A jets The original price of the 36 fighter jets Switzerland is buying from the United States could go up by more than $1 billion due to the impacts of tariffs. Reuters reports: Read more from Reuters here. The original price of the 36 fighter jets Switzerland is buying from the United States could go up by more than $1 billion due to the impacts of tariffs. Reuters reports: Read more from Reuters here. AI boom could help manufacturers adapt to global tariff landscape Mark Bendeich of Reuters details how the confluence of supply chain disruption from Trump's tariff policy and the rise of AI software solutions is leading to increased innovation among manufacturers. Richard Howells, SAP vice president and supply chain specialist, emphasized that the uncertainty surrouding Trump's trade policy is driving the technology push. "That's how it was during the financial crisis, Brexit and COVID," Howells stated. "And it's what we're seeing now." 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Yahoo
4 hours ago
- Yahoo
European leaders to join Ukraine's Zelenskyy for meeting with Trump
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'It's a power struggle and a position of strength that might work with Trump,' he said. Special U.S. envoy Steve Witkoff said Sunday that Putin agreed at the meeting in Alaska with Trump to allow the U.S. and European allies to offer Ukraine a security guarantee resembling NATO's collective defense mandate as part of an eventual deal to end the 3 1/2-year war. European Commission President Ursula von der Leyen, speaking at a news conference in Brussels with Zelenskyy, said 'we welcome President Trump's willingness to contribute to Article 5-like security guarantees for Ukraine. And the 'Coalition of the willing' -- including the European Union -- is ready to do its share.' Von der Leyen was joined Sunday by French President Emmanuel Macron, British Prime Minister Keir Starmer, German Chancellor Friedrich Merz and Finnish President Alexander Stubb in saying they will take part in Monday's talks at the White House, as will secretary-general of the NATO military alliance, Mark Rutte. The European leaders' demonstration of support could help ease concerns in Kyiv and in other European capitals that Ukraine risks being railroaded into a peace deal that Trump says he wants to broker with Russia. Neil Melvin, director of international security at the London-based Royal United Services Institute, said European leaders are trying to 'shape this fast-evolving agenda.' After the Alaska summit, the idea of a ceasefire appears all-but-abandoned, with the narrative shifting toward Putin's agenda of ensuring Ukraine does not join NATO or even the EU. U.S. Secretary of State Marco Rubio said on NBC's 'Meet the Press' on Sunday that a possible ceasefire is 'not off the table' but that the best way to end the war would be through a 'full peace deal.' Putin has implied that he sees Europe as a hindrance to negotiations. He has also resisted meeting Zelenskyy in person, saying that such a meeting can only take place once the groundwork for a peace deal has been laid. Speaking to the press after his meeting with Trump, the Russian leader raised the idea that Kyiv and other European capitals could 'create obstacles' to derail potential progress with 'behind-the-scenes intrigue.' For now, Zelenskyy offers the Europeans the 'only way' to get into the discussions about the future of Ukraine and European security, says RUSI's Melvin. However, the sheer number of European leaders potentially in attendance means the group will have to be 'mindful' not to give 'contradictory' messages, Melvin said. 'The risk is they look heavy-handed and are ganging up on Trump,' he added. 'Trump won't want to be put in a corner.' Although details remain hazy on what Article 5-like security guarantees from the U.S. and Europe would entail for Ukraine, it could mirror NATO membership terms, in which an attack on one member of the alliance is seen as an attack on all. In remarks made on CNN's 'State of the Union,' Witkoff said Friday's meeting with Trump was the first time Putin has been had heard to agree to such an arrangement. Zelenskyy continues to stress the importance of both U.S. and European involvement in any negotiations. 'A security guarantee is a strong army. Only Ukraine can provide that. Only Europe can finance this army, and weapons for this army can be provided by our domestic production and European production. But there are certain things that are in short supply and are only available in the United States,' he said at the press conference Sunday alongside Von der Leyen. Zelenskyy also pushed back against Trump's assertion — which aligned with Putin's preference — that the two sides should negotiate a complete end to the war, rather than first securing a ceasefire. Zelenskyy said a ceasefire would provide breathing room to review Putin's demands. 'It's impossible to do this under the pressure of weapons,' he said. 'Putin does not want to stop the killing, but he must do it.' — Leicester reported from Le Pecq, France. Associated Press writers Pan Pylas in London, and Katie Marie Davies in Manchester, England, contributed to this report. Samya Kullab And John Leicester, The Associated Press
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4 hours ago
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Putin agreed to 'robust' security guarantees for Ukraine, says US envoy
Donald Trump's special envoy said Russia had agreed to allow the US and Europe to give Ukraine "robust" security guarantees as part of a potential peace deal. Steve Witkoff told CNN it was agreed at the Alaska summit that the US and Europe could "effectively offer Article 5-like language to cover a security guarantee", referring to Nato's principle that an attack on one member is an attack on all. Putin has long opposed Ukraine joining Nato, and Witkoff said the arrangement could be an alternative if the Ukrainians "can live with it". Ukraine's President Volodymyr Zelensky described the US's security guarantee offer as "historic" ahead of talks with Trump and European leaders on Monday. Speaking ahead of his visit to Washington DC, Zelensky said any guarantee "must really be very practical, delivering protection on land, in the air, and at sea, and must be developed with Europe's participation". Meanwhile, following a meeting on Sunday of the "coalition of the willing" - a group of nations including the UK, France and Germany that have pledged to protect peace in Ukraine once it is achieved - a No10 spokesman said leaders had commended Trump's "commitment" to providing security guarantees. The leaders also "re-emphasised the readiness to deploy a reassurance force once hostilities have ceased, and to help secure Ukraine's skies and seas and regenerate Ukraine's armed forces", the spokesman added. UK Prime Minister Sir Keir Starmer, French President Emmanuel Macron, Chancellor Friedrich Merz of Germany, European Commission President Ursula von der Leyen and Nato Secretary-General Mark Rutte are set to join Zelensky in Washington on Monday. Macron said the group would challenge Trump on how far he was willing to go in terms of security guarantees. "If we're not strong today, we'll pay dearly tomorrow," he said, adding the group's plan was to "present a united front". Witkoff also told CNN on Sunday that Russia had made "some concessions at the table" about territory, noting Donetsk would be part of an "important discussion" on Monday. It comes after Putin reportedly presented Trump with a peace offer in Alaska on Friday that would require Ukraine withdrawing from the Donetsk region of the Donbas, in return for Russia freezing the front lines in Zaporizhzhia and Kherson. The BBC's US partner CBS cited diplomatic sources as saying that European officials were concerned Trump may try to press Zelensky to agree to the terms. Russia claims the Donbas as Russian territory, controlling most of Luhansk and about 70% of Donetsk. It also illegally annexed the Crimean peninsula in 2014, eight years before launching its full-scale invasion of Ukraine. Zelensky on Tuesday said Ukraine would reject any Russian proposal to give up the Donbas region, warning it could be used as a springboard for future attacks. He has also pointed to the country's constitution, which requires a referendum before a change in its territory. Monday's White House meeting will be Zelensky's first since an acrimonious public exchange in the Oval Office in February, when Trump told him to be more "thankful" for US support and accused him of "gambling with World War Three". Zelensky was then told to leave the White House. He appeared to reconcile with Trump in April, in what the White House described as a "very productive" 15-minute meeting before they attended Pope Francis's funeral. Ukraine has also signed a minerals deal that gave the US a financial stake in the country, and Kyiv made it clear they were willing to pay for US arms. But there will have been concern in Kyiv and other European capitals following the Trump-Putin meeting on Friday. The Russian president, who is facing an International Criminal Court arrest warrant for alleged war crimes in Ukraine, stepped off his jet and onto a red carpet to be warmly received by Trump, who later said they had a "fantastic relationship". Russia complicating end to war, says Zelensky, as Trump pursues peace deal 'The world is behaving irrationally' - Putin's warm welcome gets cold reaction in Ukraine How the Trump-Putin summit unfolded... in under 2 minutes