ICJ defines what countries are expected to do to cut emissions
The world's top court has delivered its opinion on climate change, defining what countries are legally expected to do to cut emissions and fix the damage. Lawyers for Climate Action executive director Jessica Palairet spoke to Ingrid Hipkiss.
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RNZ News
2 days ago
- RNZ News
How Trump used America's leverage to get what he wanted in trade war
By Phil Mattingly , CNN President Donald Trump's first term featured sweeping tariff threats that were inevitably met with resistance within Trump's advisors and moderated before ever reaching the implementation point. Photo: Evelyn Hockstein/Reuters via CNN Newsource Analysis - In the end, President Donald Trump got exactly what he wanted. The 120 days since Trump's Rose Garden "Liberation Day" announcement rocked financial markets weren't exactly pretty. From Washington to Wall Street and across foreign capitals far and wide, seemingly every day featured a disorienting burst of TACOs (trades based on the notion that "Trump Always Chickens Out") and turbulence, theatre and threats, carveouts and looming fear of an imminent rupture to the backbone of 70 years of global commerce. Even today, an explicit declaration of victory would seem short-sighted in the face of economic data that has presented steady stream of contradictory signals and warning signs that in many ways mirror the disorienting nature of a trade policy without modern historical precedent. The executive authority Trump triggered to underpin a wide swath of his tariffs faces an acute risk in court. Trump's tariff approach remains deeply unpopular in public polling. But as the world approached Trump's August 1 "reciprocal" tariff deadline, Trump and his economic advisers share an unmistakable sense of vindication. Bilateral deals with major trading partners have rolled in over the last week. The average effective tariff rate on imports to the US sits at its highest level in nearly a century. Tariff revenue is soaring. Financial markets have settled, and stocks have bounced consistently around record highs in recent weeks. Predictions of soaring inflation haven't come to fruition. The broader US economy has remained remarkably resilient through it all. There's no hedging from a West Wing keenly aware of their distinctly minority position on the efficacy of Trump's tariffs over the course of the last four months. "Maybe the losers and haters were really just losers and haters," a senior White House official said. For all the volatility in the weeks after Trump's April 2 "reciprocal" tariff announcement, Trump and his economic advisers held firm in the belief that they'd reach this point. It was a position that ran counter to just about every mainstream economist, was an anathema to the national security and economic pillars of the post-World War II era and cemented the long-running - but no less stunning - ideological evolution on tariffs within the Republican Party that Trump launched with his first presidential campaign. But at its core was a concept that had been a consistent throughline of an otherwise chaotic economic timeline: leverage. That leverage came from the singular importance of the US market to the global economy. Trump's personal belief in the utility of tariffs - and willingness to let them go into place and then, if necessary, escalate to shut down any retaliatory efforts - only served to enhance that reality. "The dynamic starts to shift pretty dramatically when you realise your counterpart is willing to shoot the hostage," an EU official told CNN after Trump clinched an agreement with the bloc. The Wall Street vs Trade Warrior construct that defined Trump's first economic team was rife with bureaucratic knife fights, profanity-laced shouting matches and, on more than one occasion, aides on the verge of physical altercation. Traders work on the floor of the New York Stock Exchange in New York City on July 8. Photo: Michael M. Santiago/Getty Imagesvia CNN Newsource From the outside, the 2.0 version of Trump's team had initially been viewed in a similar manner, with former hedge fund manager and Treasury Secretary Scott Bessent and National Economic Council Director Kevin Hassett in the "Wall Street" camp and top trade adviser Peter Navarro, Commerce Secretary Howard Lutnick and Stephen Miller, the deputy chief of staff for policy, filling the "trade warrior" roster. While there have been differences on strategy and scale, that simply perception never meshed with reality behind the scenes. Most importantly, unlike in Trump's first term, when advisers like Gary Cohn and Steve Mnuchin made overt efforts to limit the president's tariff impulses, the president's advisers this time have all been explicit that they aren't there to chart their own path. Trump decides, and they execute, whether it was their preferred option or not, White House officials say. Trump's first term featured sweeping tariff threats that were inevitably met with resistance within Trump's own advisers and moderated before ever reaching the implementation point. But Trump did launch a trade war with China, which marked a significant tariff escalation that ran counter to decades of free trade consensus. The results were panned by mainstream economists who saw limited benefit. Trump and his pro-tariff advisers took an entirely different set of lessons away from the effort - lessons that laid the groundwork for a dramatically more expansive tariff approach in a second term tied directly to the leverage provided by the US market. Stephen Miran walked to the lectern to deliver remarks at a Washington think tank during a moment of global market chaos. Five days after "Liberation Day", stocks were in the midst of their worst three-day percentage drop since the onset of the Covid Pandemic five years prior. The bond market was sending unnerving signs about faith in US stability. Miran, the chairman of the White House Council of Economic Advisers, didn't portray any similar anxiety as he began remarks outlining Trump's view that the global trading system had put the US at a disadvantage and didn't adequately account for the benefit derived from the security and stability provided by US. Quite the opposite. "Most economists and some investors dismiss tariffs as counterproductive at best and devastatingly harmful at worst," Miran said to the audience. "They're wrong." Miran viewed the speech as an opportunity to explain a strategy White House officials thought was deeply misunderstood outside of the building. "What was going through my mind is that these things were really poorly understood and that people don't understand what's going on," Miran said in an interview this week with CNN. "There's a tendency to think that history began yesterday-that the status quo ante is inherently fair and any attempt to disrupt it is unfair. But that's simply not true." Miran used his remarks to lay out the economic case for why White House officials insisted there would be limited retaliation to Trump's sweeping tariffs and US consumers wouldn't bear the burden of the increased costs they would impose. Steep US trade deficits, Miran said, underscored the limited options trading partners had when it came to the US market. That would limit retaliation and incentivise exporters to either eat the cost of the tariffs as the US benefited from spiking tariff revenues or strike a deal with Trump. "They failed to appreciate the amount of leverage that the United States has," Miran told CNN of the widespread fear of a retaliatory spiral that would grip the global economy and short-circuit any trade agreements. "They just failed to appreciate that. President Trump knows, and he understands, the amount of leverage that the United States has and knows how to use that leverage in ways that nobody else could." That leverage would form the basis of the steady stream of trade agreements Trump has announced in the lead up to the deadline. But it didn't start that way. As the shock of Liberation Day gave way to grappling with the reality, Trump's top trade negotiators - Bessent, Lutnick and US Trade Representative Jamieson Greer - were flooded with proposals from countries around the world. Those proposals, however, weren't drafted anywhere near a level that would pass muster with Trump, officials said. Instead, after Trump paused the tariffs on April 9 to allow for negotiations, several large trading partners approached their US counterparts with a belief that a combination of retaliatory threats and general tariff reductions would force the White House to change course. "At the time they didn't think that we were serious, and they thought that just by threatening to retaliate that they would get us to back off," Miran said. "They weren't serious about negotiating to get to a real deal. Given the extent to which he loves tariffs, getting the President to agree to a deal wasn't going to be some easy thing." Trump's recognition of that dynamic often drove new tariff threats that arrived seemingly out of nowhere at all hours on his Truth Social account. A similar tactic was deployed to brush back companies who made the mistake of publicly acknowledging potential price increases. The strategy had a deep impact on C-Suites around the country, according to interviews with more than a dozen corporate executives and lobbyists. "It becomes a business decision," one executive told CNN. "The cost benefit of putting a target on your back with this particular administration simply doesn't net out in your favour." Still, several executives warned that price increases were nearly inevitable in the months ahead and on earnings calls and inside the economic data there have already been signs that hikes are hitting the most exposed products. Wall Street, however, has in many ways moved on from the initial weeks spent on a perpetual hair trigger. "He kind of beat everyone into submission," one bank executive told CNN. "I guess everyone came to terms with a reality of much higher tariffs, but not as high as they could've been, and just decided to call it a win and move on. It's kind of wild when you think about it." The same could be said for the months of trade negotiations that are steadily coming to conclusion. Trump didn't clinch 90 deals and 90 days - the often-repeated line from Navarro in the immediate aftermath of the April tariff pause. But he was often the reason why, officials say, noting that at several points Trump's negotiating team brought draft agreements to him for his sign off, only to be sent back to the table. Hints of that dynamic, which played out behind closed doors, were apparent as Trump's advisers repeatedly insisted over a period of months that deals were imminent. "We all believed it when we said it - we weren't lying," Miran said when asked about the public comments. "The reality is the president makes all the big decisions and he's taken these offers and taken them further anyone would have predicted." The recent announcements, in rapid succession, have managed to maintain a significant tariff on all imports in the roughly 15 percent range while including concessions on market access for US producers and commitments of hundreds of billions of dollars in purchases of US goods or for Trump's own use as investments to address US supply chain vulnerabilities. The structure and priorities within each deal underscored the degree to which Trump has been personally involved in nearly every aspect of any final agreement, right down to using a sharpie to cross off the proposed investment number from Japan that he wanted to be $100 billion higher. Japanese negotiators, who were seated across from Trump in the Oval Office, accepted the terms. Trump's advisers acknowledge their ability to avoid the litany of worst-case scenarios didn't happen in a vacuum. US consumers continued to spend. Trump's cornerstone legislative agenda priority - a sweeping tax cut package - was signed into law removing another huge uncertainty from the US economy. The one country that did retaliate - China - remains the most significant economic challenge and risk as talks between the world's two largest economies continue and are based almost entirely upon avoiding a new round rapid escalation. Federal Reserve Chair Jerome Powell once again reiterated his view this week that the impact of Trump's tariffs are still too difficult to assess with certainty and have only just now begun to filter down toward consumers - something that is expected to happen with more regularity in the months ahead. Trump, however, has declared victory - and his top economist believes the same. "The One Big Beautiful Bill is passed, and the trade deals are settling," Miran said. "The uncertainty concerning many is resolving. I think we're setting up for a much, much stronger second half of the year." - CNN
NZ Herald
2 days ago
- NZ Herald
Offshore oil ban repeal: Coalition seeks consensus amid opposition
However, in a statement on Thursday, Jones said the ban was 'ill-fated' and 'has exacerbated shortages in our domestic gas supply by obliterating new investment in the exploration and development needed to meet our future gas needs'. 'New Zealanders are bearing the brunt of this constrained gas supply, and energy security concerns are impacting investor sentiment ... we are seeing businesses in the regions closing as a result with Kiwis losing their jobs, and we're importing hundreds of tonnes of Indonesian coal to meet peak energy demand. 'This legislation is just one of many actions we are taking to get the right settings in place to resuscitate sector confidence, shore up energy supply, and protect electricity affordability.' He was absent from Parliament on Thursday, leaving the main Government speech to the National Party's Simon Watts – the Minister for Energy and Climate Change. Watts said the opposition's argument that reversing the ban would not yield new gas for a decade was 'a distraction'. 'The immediate signal that this bill sends to investors is critical now. It encourages immediate investment in long-term exploration and in maximising production from our existing fields, which can deliver benefits far sooner. 'New Zealand is committed to a clean-energy transition and meeting our emissions targets. We have committed to deliver net zero by 2050, including by doubling renewable electricity, and removing consenting barriers. Natural gas remains critical to our energy security. Without gas, we would need to either rely on more coal, which results in around twice the carbon dioxide emissions than natural gas, or face energy insecurity and higher prices.' His Labour Party counterpart Megan Woods, however, said the evidence showed record investment in existing fields after 2018. Labour MP Megan Woods has slammed the Government's offshore exploration push. Photo / Mark Mitchell 'For this Government to claim that it had a chilling effect on investment is simply wrong. What we had was those offshore oil and gas operators looking for every last bit they could eke out of the existing fields, and it is not there. 'Then we had Shane Jones saying that this will open up opportunities off the East Coast of the South Island. Well, news flash: billions of dollars have been spent looking for that particular El Dorado ... this Government is going to give $200 million to offshore companies to go and have a look again where they've already decided there are not commercial finds available.' She pointed to official analysis showing reversing the ban would add 14.2 million tonnes of emissions, and 'a bit that should have been redacted from the regulatory impact statement' showing it could affect trade. 'Let me read from that: 'Legally privileged: Ministry of Foreign Affairs and Trade assessed that reversing the 2018 ban would likely be inconsistent with the obligations in several of New Zealand's free-trade agreements' – so farmers need to be worried, our access to the EU and the UK are being put at risk.' The Green Party spokesman for just transitions, Steve Abel, was also sceptical the oil industry could be attracted back. He was part of the Oil-Free Seas Flotilla in 2011 that harried Petrobras' surveying ship for 42 days, welcomed to the area by a 500-strong haka 'said by Te Whānau-a-Apanui, the iwi greeting us, to be the biggest haka since James Cook had arrived in that part of the country – I'm hoping we were more worthy of it than he was', Abel said. The Green Party's Steve Abel says the 2018 ban simply sealed the fate of an oil industry already in decline. Photo / Marty Melville He listed off a series of oil companies that exited New Zealand before the ban came into place: Exxon Mobil abandoning its southern oil and gas hunt in November 2010 after three years, Petrobras in December 2012, Texan driller Anadarko exiting its permit on the North Island's west coast in May 2014, Statoil quitting its Northland permit in October 2016, and Shell selling its remaining assets to OMV in March 2018. He said the ban was the 'final nail in the coffin of an industry that was already declaring its own demise in this country, because they came, they prospected, they found nothing, and they found nothing but overwhelming public opposition from the people of this country'. Echelon Resources – the company formerly known as New Zealand Oil and Gas, last month told RNZ the best wells are typically drilled first, so new drilling will be more difficult and expensive. Its managing director, Andrew Jeffries, said other countries had more political consensus, making New Zealand an even more unattractive option for investment. Act Party MP Simon Court said the repeal would restore certainty, credibility and confidence, but called on Labour not to reimpose the ban if it won power. 'Today marks the end of an era – a really bad one. It marks the end of a six-year reign of economic vandalism and energy illiteracy by the previous New Zealand Labour Government. 'Even the Honourable Shane Jones said at the time – bless his soul – that ending oil and gas exploration 'is the only scenario'. When he stood at that podium, I was shocked, but I'm pleased that minister has come to his senses – but profoundly disappointed that the Labour Party still has not.' Court's leader, David Seymour, said it was 'very possible that they won't find the gas, but the impediment to people getting cheaper energy should not be our own Government, and that's why I say if New Zealand First can change their mind then Labour should be able to do that too'.
RNZ News
2 days ago
- RNZ News
Scientists urge coalition not to weaken methane target
The group has written to Climate Change Minister Simon Watts setting out the legal and trade consequences of a lower methane target. Photo: RNZ / Samuel Rillstone Climate scientists have urged the Climate Change Minister to not weaken the country's methane target, after a landmark ruling out of the United Nations' highest court. Last week, the International Court of Justice (ICJ) found countries can be held responsible for paying reparations for damage caused by their greenhouse gases. At the time, Lawyers for Climate Action said the ruling put further pressure on the government's climate plans, including any changes to the biogenic methane target. The group has now written to Simon Watts, cc'ing the prime minister, foreign affairs minister and trade minister, setting out the legal and trade consequences of a lower target. In the letter, they say reducing the target would breach New Zealand's obligations under the Paris Agreement, as well as its free trade agreements with the United Kingdom and the European Union. They maintain it's "highly arguable" local agricultural exporters would have an unfair advantage over European producers if New Zealand lowered its methane target, putting around $635 million of export revenue at risk. They also say a lower target would see New Zealand join the likes of Russia and the United States in being one of the few countries to weaken its emissions reduction targets since the Paris Agreement was signed in 2016. "Any such decision could have significant reputational, trade, and economic consequences for New Zealand, as our major trading partners continue to push forward on their Paris Agreement commitments," the letter says. Asked if the government planned on reducing the methane target, Watts said Cabinet hadn't made any decisions and he'd have more to say about it "soon". "Our methane target must be scientifically based and practical, ensuring we don't shut down kiwi farms," he said. Lawyers for Climate Action chief executive Jessica Palairet said the EU had the ability to take trade sanctions against New Zealand if it thought it had breached its climate commitments. "That's why this matters so much and the reason we wrote last week is because for the first time, we had authorised guidance from the world's top court on what it might mean for a party to effectively implement Paris, what it might mean to take an action that materially affects the object and purpose of Paris. "We're concerned that a weakening of New Zealand's methane targets would do just that and expose New Zealand to the risk of trade sanctions." Palairet said an earlier letter , in which 26 international climate change scientists accused the government of "ignoring scientific evidence", showed the strength of concern felt in her community. "It underscores the level of international concern and concern from the scientific community and how worrying this decision is. This isn't a decision that's being made on the basis of science. "It's a decision that's being made on the basis of politics to try and weaken New Zealand's ambition on methane in the face of international independent scientists advising the government not to do this." Greens co-leader Chlöe Swarbrick Photo: RNZ / Mark Papalii The Green Party has been critical of the National-ACT coalition agreement to review what a methane target based on a "no additional warming" principle would look like. Co-leader Chlöe Swarbrick said the fact the government would not rule out weakening the country's methane target after this review was "deeply concerning". "We said at the time that they were setting up a smoke screen for downgrading climate ambition and unfortunately given the minister's lack of ability to rule things out it is pretty clear that they are intending to downgrade our climate ambitions. "If they were to downgrade our biological gasses target that would mean either that they are downgrading ambition as a whole or that they are expecting all of the rest of the economy and households to pick up the slack." Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
