Bloomberg - Evening Briefing - Yellen makes nice

The US and China’s tit-for-tat technology war added another chapter this week when Beijing imposed restrictions on exporting two key metals that are crucial to the semiconductor, telecommunications and electric-vehicle industries. China is battling for technological dominance in everything from quantum computing to artificial intelligence to chip manufacturing. The US has taken increasingly aggressive measures, including blacklists and export controls, to keep it from gaining the upper hand in those sectors. The metals curb was announced just before US Treasury Secretary Janet Yellen traveled to China with the goal of finding areas of common ground as the two countries diverge on issues from Taiwan to trade. During a meeting with Chinese Premier Li Qiang, Yellen said competition between the world’s biggest economies is not a “winner-take-all” race. 

Li struck a note of optimism, telling Yellen he believed bilateral ties would eventually see a “rainbow.” But China’s export licensing system on the two metals, gallium and germanium, highlight the country’s global production dominance. Also, the move might backfire. If Beijing does use these new rules to restrict shipments of the two metals, prices would likely rise and make it more economical to boost output in Japan, Canada, the US or elsewhere. That could worsen China’s current economic doldrums. While the struggling Chinese economy gives the US some leverage, “Chinese leaders must understand that they are likely to benefit even more than the US would from an easing of tensions,” Minxin Pei writes in Bloomberg Opinion.

For at least the first half of the year, the global economy has seemed covered in Teflon. It’s endured shocks from rate hikes by central banks around the world, banking turmoil and a standoff on the US debt ceiling. And while the US economy may be cooling and inflation slowing, another mixed picture of labor data suggest the Federal Reserve, as expected, will hike rates later this month. Canada, in its own fight against inflation, has a new concern: A dockworker strike is crippling West Coast trade, threatening the economy.

US President Joe Biden will travel next week to a NATO summit in Vilnius, Lithuania, at a key moment for the war in Ukraine and western allies backing Kyiv’s defense against Russian aggression. High on the agenda is overcoming Turkish opposition to Sweden’s membership. On the ground, new data show that Ukraine has caught up with Russia in terms of tanks and is gaining ground in other heavy weapons. Ukrainian President Volodymyr Zelensky reinforced a warning that Russia may be planning to sabotage the Zaporizhzhia nuclear power plant. And fallen mercenary boss Yevgeny Prigozhin has left exile in Belarus and is in St. Petersburg or Moscow, Belarusian President Alexander Lukashenko said.

Rescuers work in a apartment building partially destroyed by Russian missiles in the western Ukrainian city of Lviv. At least six people were reported killed. Photographer: Yuriy Dyachyshyn/AFP

Mark Zuckerberg and Elon Musk’s promised cage match may never happen, but the battle between their social media companies ramped up this week when Meta rolled out Threads, an app designed to rival Twitter.  Zuckerberg posted his first tweet in more than a decade, an apparent jibe at Musk. On Threads, he was more direct, saying Twitter “hasn’t nailed” hosting a public conversation with more than 1 billion voices. While many features of the apps are similar, for the first time since Musk’s takeover of Twitter, “the app is at imminent risk of losing its status as the watercooler of the internet,” writes Dave Lee in Bloomberg Opinion.

The world reached a record on July 3, but not of the enviable variety. It was the hottest day ever, as climate change raises temperatures and extreme weather tests the limits of the human body. New York City’s air worsened again this week, but not because of Canadian wildfires. This time the cause was Fourth of July fireworks combined with sizzling weather. In the city of Ahmedabad in India’s west, new measures to help residents and workers stay safe and deal with extreme heat have become a blueprint for other cities in developing countries.

After more than two decades, Richard Branson’s Son Bunyola in Mallorca has finally opened its doors to guests as one of the most anticipated new hotels of the year. The 26 rooms start at $1,050 a night in high season, a relative bargain among Branson’s hotels. It may sound like a joke—and was one in And Just Like That—but pricey handbags get their own seats in fancy restaurants these days. Sharks are suspected to have bitten five people swimming off Long Island over the extended Fourth of July weekend.

Son Bunyola  Source: Bloomberg

• NATO members meet in Europe in the wake of Russia’s rebellion.
• Major Wall Street banks report earnings amid possible rule changes.
• US inflation figures, with June CPI expected to rise 3.1% year over year.
• France marks Bastille Day, cleans up after worst riots in two decades.
• India’s Modi visits France; Indian spacecraft to launch moon mission.

The drive to reboot US manufacturing and claim leadership in strategic technologies is about to run up against a shortfall in trained workers. Challenges include how to pitch manufacturing as a career to digital-age teenagers and tailor trade schools to the needs of business. It’s an area where, after decades of de-industrialization, the US lags behind powerhouse manufacturing nations like Germany.

Kentrell Marshall, a student at an automotive service industry program inside the Nissan Training Facility in Smyrna, Tennessee.  Photographer: Houston Cofield

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