Good morning, and welcome to the Global Situation Report for Tuesday, 23 January 2024.
- PHILIPPINES BRINGING VIETNAM ON SIDE AGAINST CHINA: Next week, the President of the Philippine Islands (PI), Ferdinand Marcos Jr., will visit Hanoi, Vietnam, for a state visit where he will sign several treaties to enhance cooperation between the Philippines and Vietnam.
- A security-focused Memorandum of Understanding will give them channels for Coast Guard cooperation and solving any disputes in the South China Sea (SCS).
- An agriculture agreement will send Vietnamese rice to the Philippines, “even in a time of emergency,” according to Filipino Agriculture Secretary Francisco Tiu Laurel Jr.
Why It Matters: The Philippines is trying to bring on another ASEAN member to the anti-China coalition. The Coast Guard cooperation is meant to show that any territorial disputes between parties in the South China Sea can be resolved as both the PI and Vietnam have claims in the Sea and claims contested by China. The rice shipments set up a fiscal and moral responsibility for Vietnam to enter any conflict between China and the PI but will also likely drag them in any way, as inbound shipments of food would be legitimate military targets for China in a war. If the Philippines successfully brings Vietnam to its side, China’s Southern Theater Command will be under direct threat by Vietnam’s navy. This would spoil any war effort to fight in the SCS or blockade Taiwan. – J.V.
U.S. defense firms like Lockheed Martin and Raytheon recently reported an increase in foreign orders as tensions accelerate between China and the Southeast Asian countries. The companies also reported that ongoing supply chain disruptions are preventing the full delivery of some weapons systems. – H.B.
- MARCOS: INT’L CRIMINAL COURT IS A THREAT TO SOVEREIGNTY: On Tuesday, Filipino President Marcos ordered his government not to work with the International Criminal Court (ICC) on its investigation of the previous Duterte government’s war on drugs.
- “I do not recognize the jurisdiction of ICC in the Philippines. I consider it as a threat to our sovereignty,” Marcos told the press.
- The ICC is a Hague-based court focused on “genocide, war crimes, crimes against humanity, and the crime of aggression.” The United Nations can grant the ICC jurisdiction over an issue, according to the ICC website.
Why It Matters: Marcos is likely taking the first steps in refuting the global governance machine. The ICC is a relatively weak international organization that does not have the backing of the majority of the United Nations Security Council despite deriving authority from the United Nations. If the Philippines successfully rebukes the ICC, other nations at risk of investigation for human rights abuses, such as El Salvador and Israel, may follow suit, breaking the reputation of these global governance systems. – J.V.
- U.S.-CHINA TRADE SLOWS, TRUMP WOULD CURB TRADE & INVESTMENT: December 2023 data is not yet available, but at this pace, China’s annual exports to the U.S. were at the lowest levels since 2013 (except for 2020), and a second Donald Trump administration would likely re-accelerate the trade war.
- If re-elected, former President Trump is promising to impose 10% tariffs on all imports to the United States.
- Cross-border investment, also known as foreign direct investment (FDI), from China into the U.S. has decreased by about 30% since 2019, but U.S. FDI into China has increased by about 20% over the same time, according to U.S. Department of Commerce data from last year.
Why It Matters: Countries like Mexico and Vietnam would be the beneficiaries of a U.S.-Chinese trade and investment war. The U.S. and other Group of Seven (G7) large industrial nations plan to invest $600 billion in developing countries by 2027 to help them build infrastructure. In the meantime, while trade with China slows and other countries expand their production capacity, U.S. consumers will face higher prices on imported products during this transition period. – H.B.
THAT’S A WRAP: This does it for today’s edition. Thank you for reading. If you know folks who would also like to receive this email, would you please forward it to them? We appreciate you spreading the word. – M.S.