US-China Trade: Kowtowing To Reality

Plus: Can free rides reverse the scary decline of public transportation? ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

July 10, 2023

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TOGETHER WITH

Good morning.

If you need a quick bite in Delhi, you can still order the McAloo Tikki burger. Just don’t expect to find any tomato on it.

Due to surging prices, McDonald’s has stopped using tomatoes at many of its locations in northern and eastern India. Delayed monsoons, heavy rains, and heat waves shook the tomato harvest, and the price of the juicy, red fruit (or is it a vegetable?) has risen nearly 500% this summer. Ray Kroc, the late McDonald’s founder and a famous stickler for uniform methods of preparation, is flipping in his grave.

Morning Brief

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It’s Yellen’s turn in Beijing.

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Bad weather is ruining summer plans everywhere.

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US cities court freeriders.

Policy

Yellen Takes Her Turn on Chinese Charm Offensive

Washington and Beijing may be at loggerheads, but at least they’re talking.

Treasury Secretary Janet Yellen visited Beijing this past weekend in the latest attempt to ease mounting tensions between the US and China. She focused on bettering communication between the two countries, growing trade, and how China and America should lead a global climate-change strategy.

Warm Welcome

Secretary of State Antony Blinken visited China just last month, and shortly before him it was Assistant Secretary of State for East Asian and Pacific Affairs Daniel Kritenbrink. Treasury officials told The Wall Street Journal that Yellen wasn’t expected to achieve a breakthrough — she was there to move the chains toward regular dialogue, and it looks like she did just that.

Dennis Wilder, a former CIA expert on China, told the Financial Times that Chinese leaders “clearly see Secretary Yellen as one of the more pragmatic, and less political, senior officials in the Biden administration.” The state-owned Xinhua News Agency described Yellen’s talks with Premier Li Qiang, Vice Premier He Lifeng, and economic experts as “constructive.” The CCP-run Global Times quoted Li as telling Yellen that “China-US ties can see rainbows after a round of wind and rain.”

Let’s hope that good vibes last, given the risks that could muck it all up:

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The two countries are significant trade partners, but the US also seems to be playing both sides. Yellen has said there is “ample room” for US and Chinese companies to boost trade and investment, but the White House also is looking to restrict interactions with Chinese businesses it deems a military risk. The US also has been cozying up with India to reduce economic reliance on China.

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Despite tit-for-tat sanctions, China’s unfettered military expansion in the South China Seas, and the US shooting down alleged weather balloons, bilateral trade between the two superpowers sits at an all-time high, totaling $691 billion last year. Yellen said the end goal is for the two countries to work together and that the US isn’t pursuing a “winner take all” fight. That might be good news for China, which faces a post-pandemic malaise of low consumer spending, a poor property market, and slowing private investment.

A Little Too Warm: Yellen met with climate-finance leaders and suggested China support efforts like the Green Climate Fund and the Climate Investment Funds to address the effects of climate change on developing countries. When it comes to carbon, the US and China are filth and filthier: the US emits roughly 6 million metric tons of carbon dioxide each year while China is responsible for nearly double that. Together, both countries account for about 40% of all greenhouse emissions.

– Griffin Kelly

Climate

Extreme Weather Bakes the South, Soaks the Northeast

(Photo credit: Kyler Boone/Unsplash)

Some summer plans are cemented in stone, come rain or shine. And there’ll be copious amounts of both.

Energy grids in Mexico and the Southwestern US will be tested this week amid a heat wave expected to bring near-record temperatures. Meanwhile, a massive rainstorm in the Northeast is flooding streets and ruining travel plans. So much for summer fun.

Feeling Hot, Hot, Hot

The world’s average temperature hit its highest level in recorded history last Monday, around 63 degrees Fahrenheit, according to data from the University of Maine’s Climate Reanalyzer. Then another record was set on Tuesday. Then again on Thursday. Now, the El Niño hot-weather pattern — an event we see every 3 to 7 years that climate scientists say is exacerbated by human-induced climate change — is set to bear down on large swaths of the Southwest. That’s prompted excessive heat warnings across parts of Arizona and Southern California; in Phoenix, temperatures might top 114 degrees.

That’s in addition to a flood watch and a severe thunderstorm watch issued for some 50 million and 33 million people, respectively, in the Northeast — from North Carolina all the way up to New Hampshire. Some regions can expect as much as 5 inches of rainfall.

The extreme weather events are set to challenge critical infrastructures in both regions:

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Over 40% of departing flights out of New York’s LaGuardia Airport were canceled on Sunday, according to flight tracker FlightAware, as well as over 150 canceled flights at Newark and more than 100 at JFK.

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The Electric Reliability Council of Texas already issued a call for consumers to conserve energy late last month as the heatwave first rode in, with power use hitting an all-time recorded high on June 27. During a heatwave last summer, Californians averted rolling blackouts following a statewide call to conserve energy.

Hot Streak: Relief isn’t on the way: Computer projections of weather patterns in the next 16 days “do not show an end to this heat wave,” according to the National Weather Service. “This should go down as one of the longest, if not the longest duration heat wave.” Time to call your friends with a swimming pool. Unless you live in rain-soaked New York, of course.

– Brian Boyle

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Transportation

Denver, New York Launch Free Transit Pilot Programs

Remote work is obviously no friend of public transportation, but what if your commute were at least free?

This summer, New York City and Boston are piloting zero-fare ridership on select public transit routes. Meanwhile, cities like Denver, Kansas City, and Raleigh are piloting programs to eliminate public transit fares altogether. It’s something of a nationwide push, according to a recent CNN analysis.

Come On and Take a Free Ride

Public transit usage has, unsurprisingly, plummeted in the wake of the pandemic and the increase in remote work. Ridership is still at about only 70% of pre-pandemic levels, according to the American Public Transit Association. Car traffic, perhaps correspondingly, has only gotten worse. The typical US driver spent about 51 hours in congested traffic in 2022, about 15 more hours than in 2021, according to mobility analytics firm Inrix (though these figures, too, remain below pre-pandemic norms).

Roughly 35 US transit agencies have already gone the zero-fare route, according to the APTA. In Boston, ridership on three reduced-fare bus routes increased 35% year-over-year. This summer, the city is eliminating fares on three routes, while New York will end fares across five bus routes. But advocates say eliminating fees may not necessarily be the right track for boosting ridership:

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In a survey of riders from low-income households in eight major metropolitan areas, transit advocacy group TransitCenter found that frequency, reliability, safety, and crowding all ranked as higher priorities for riders than costs.

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Eliminating fares also cuts out potential revenue that’s likely crucial for improving service — taxes only account for around two-thirds of most agencies’ budgets. Washington D.C., for example, delayed a planned system-wide fare-elimination system this summer due to a budget shortfall.

“What we don’t want is to trim transit service because of zero-fare,” Richard Jarrold, deputy CEO of the Kansas City Area Transportation Authority, told CNN. “We already don’t have enough service, and we don’t want to cut it.”

Snail’s Pace: Speaking of endangered public services, the US Postal Service on Sunday raised the price of first-class mail stamps by 3 cents to 66 cents, in order to offset a rise in operating expenses. The announcement was made, we’re assuming, via email.

– Brian Boyle

Extra Upside

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The genius will see you now: Want a new Apple Vision Pro headset? You’ll need to make an in-person appointment.

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No school, no work: Fewer teens getting summer jobs this year, projection says.

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Just For Fun

Be kind, rewind.

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Disclaimer

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