Zelenskyy’s Diplomatic Drive, Japan’s New Leader, U.S. and Canadian Tariffs on China’s EVs, and More

MCMAHON:
In the coming week, Ukraine intensifies efforts to get a military boost. Japan's ruling party chooses a new prime minister. And, the U.S. and Canada impose 100 percent tariffs on Chinese electric vehicles. It's September 26th, 2024 in time for The World Next Week. I'm Bob McMahon.

ROBBINS:
And I'm Carla Anne Robbins.

MCMAHON:
Carla, let's kick off with Ukrainian President Volodymyr Zelenskyy's visit to United States. Quite a visit already. He appeared just the other day at the UN General Assembly's high-level debate, where he spoke about the need for what he called global action, and warned the country leaders assembled there of Russia's potential to create a nuclear catastrophe, specifically referencing their plans to attack nuclear power plants. He also made stops around the country, including to an ammunition plant in Scranton, Pennsylvania. He's due to meet, as we're taping this podcast, today with President Biden and Vice President Kamala Harris, to discuss what he has been calling his victory peace plan. Carla, is any of this going to add up to a bit of difference?

ROBBINS:
Zelenskyy's certainly rolling the dice big time with this visit. We don't know exactly what is in this plan. He's presenting to Biden and Harris today, but we have a pretty good idea of what Zelenskyy says Ukraine needs to force Russia to the negotiating table, and that's the premise of this big ask: a specific list of weapons, which he wants delivered before the end of the year—that's the big thing here; he wants, once again, permission to shoot missiles deep inside Russian territory; and they're saying a clear path with a date perhaps for a NATO membership.

And before his meeting with Zelenskyy, the White House announced a new $8 billion package of aid for Ukraine, including the first shipment of precision-guided glide bombs called the Joint Standoff Weapon, and that does have a range of up to eighty-one miles, and that would be a major step up in capabilities, and they committed additional air defense and training, but we haven't had any word on the other things that Zelenskyy is asking for. These are huge asks, and they're not new asks, especially any further NATO commitment. Everyone knows Biden couldn't do that himself, and permission to hit deep inside Russia, up until now, it doesn't look like it's something Biden wants to give. Every time Zelenskyy's talked about these things, they've either been delayed or deflected.

I think what's new is the urgency of the ask and all the attention Zelenskyy is drawn to his pitch, and part of that, I think, is a measure of the difficulty his troops are facing in the battlefield: Russian troops are getting closer to that city of Pokrovsk we've talked about before, this major Ukrainian logistics hub, which supports military operations in eastern Ukraine; and Russian strikes, which are pummeling Ukraine's energy infrastructure, they're going to have a very, very cold winter. And part of that is a big fear of what's going to happen if Trump wins the election.

Zelenskyy's tried really hard not to criticize the former president directly, even after Trump refused to say whether he wants Ukraine to win. You remember that in the debate. He wanted to get this new package, which he considers absolutely essential to force Russia to the table, "While all the officials who want victory for Ukraine are still in official positions," and so we know what all of that means. So Trump meanwhile, has blown off Zelenskyy's request to meet, at least so far, and present his plan, and Trump is apparently furious that Zelenskyy, in an interview with the New Yorker questioned Trump's claim that he could end the war in a day.
And in the last few days, the former president has begun regularly attacking the Ukrainian on the stump, accusing him of making little nasty aspersions about me, calling Zelenskyy the "greatest salesman," implying that he's ripping off the U.S. for billions of dollars, suggesting all that money's being wasted. He used words like obliterated to describe Ukraine, and he's claiming that they're using young children and old men to fight. One quote that I found particularly extraordinary, he said, "Those buildings are down, those cities are gone, they're gone, and we continue to give billions of dollars to a man who refuses to make a deal."

So Trump is close to right about one thing, Zelenskyy is certainly a great showman, and he's clearly hoping that this big pitch is going to help Biden overcome his own doubts. So while he's upping the pressure in Biden, he's also upping the pressure on himself, and we have to think about the impact at home, both politically and on the battlefield. If he comes home, it won't be completely empty-handed. He did get this new $8 billion commitment, but as part of this big push, Zelenskyy gave a raft of interviews, and a writer for the New Yorker asked him, "What would happen if Biden says no to his victory plan?" And Zelenskyy didn't have much of an answer. All he could say was, "That's a horrible thought," and then he oscillated between criticizing and praising Biden. And then, his bottom line was, "We would end up with a very long war and impossible, exhausting situation that would kill a tremendous number of people."

MCMAHON:
Yes, and apropos the timing of this visit, which is in the final weeks of the heated U.S. presidential campaign, there was a visit that I mentioned at the outset to Scranton, Pennsylvania to an ammunition plant, which has seemed to generate a great deal of controversy among Republicans, among Republican lawmakers. Speaker of the House is now said to be not going to meet with Zelenskyy and has spoken very critically of that visit to the ammunition plant, where reportedly there were at least two Democratic politicians next to Zelenskyy as he was making his comments about the important-

ROBBINS:
When he toured the plant, he was accompanied by Pennsylvania Governor Josh Shapiro, with Senator Casey, and with the local congressmen, all Democrats.

MCMAHON:
And so this seems to be adding another element to the difficulties Ukraine may face politically in the U.S., actually even regardless of what happens on the presidential race, if Congress continues to be divided between Republicans and Democrats.

ROBBINS:
So Johnson sent this letter to Zelenskyy. He's demanding the resignation of the Ukrainian ambassador to the U.S., who organized this visit. Really, it was great optics for Zelenskyy. He thanked the workers who were there. I don't know whether or not they tried to get a Republican member of Congress to show up, but at the end of the day, he's trying everything he can do to get the American public to understand what he needs, and these artillery shells are really important, thanking the workers was great television, and the suggestion that he's "intervening" in the American campaign in a swing state...Outrage, outrage, outrage. To my mind, Johnson's just following what Trump is saying on the campaign trail. There's even a group of senators who are calling for an investigation of whether any taxpayer dollars were used for this Zelenskyy's trip.

This is really faux outrage, and I really have to defer to Thom Tillis, who actually was responding to complaints they're also making because Zelenskyy's been quite dismissive of Vance's really dismissive attitude towards Zelenskyy and the war in Ukraine. And Tillis said...Keep in mind that Thom Tillis is a Republican senator from North Carolina, another swing state. Tillis said, "President Zelenskyy is trying to do everything he can to secure the support for sustained, successful effort against Putin. And my guess is, if we were in similar circumstances, we do the same thing."

MCMAHON:
So if anyone thinks that foreign policy does not play a role in the U.S. presidential race, well, look no further than the events of this week, but there's certainly other things that are going to come up. And by the way, said VP candidate Vance will be debating next week among the week ahead, things to be aware of.

ROBBINS:
Reasonable people can have a debate about what American interests are. I think there's no doubt for anyone who listens to this podcast, where I stand, and I suspect you stand, Bob, on the importance of this fight in Ukraine, but this isn't a reasonable debate. This is a debate about, "Who are you supporting in a swing state because you went to an ammunition plan in Scranton, Pennsylvania?" And it all looks really quite silly in the face of the future of Ukraine, and really, the future of NATO and the Western alliance.

MCMAHON:
We should point out that another very hot front is getting hotter in the Middle East, as a consequence of the United States, and that's the Israeli campaigning against Hezbollah, now reaching its worst stage since the 2006 war between the two sides. As we were taping this podcast, there seemed to be a proposal being considered for a cease-fire, but it's not clear whether or not we're going to be coming back to tape this podcast with that full-fledged war or with that somehow stalled.

ROBBINS:
Yeah, and Prime Minister Netanyahu is on his way to the United States right now, had delayed his arrival, and give a speech in front of the UN General Assembly right now. I think it's going to be on Friday, and I don't know who else is going to be meeting with him. We're hearing very mixed things out of Israel. The Americans and the French have been scrambling to get a cease-fire proposal out. Israelis are sending messages. Not only are they not interested in a cease-fire, but there's some suggestions from the Army chief of staff that they're preparing potentially a ground invasion. I think we're in this very fluid situation. We don't know exactly what is happening. We'll have to listen very closely to what Netanyahu has to say, and let's just hope this doesn't get even further into the American campaign. We all know that it has been already deeply politicized, and let's hope that that cease-fire proposal moves forward and that we can get back on track on some sort of cease-fire for hostages deal on Gaza. We'll just have to watch this.

Bob, let's move our conversation to Japan. Tomorrow, September 27, Japan's ruling party, the Liberal Democratic Party or the LDP will elect a new leader. And since they hold the parliamentary majority—it seems like they always hold the majority—whoever is chosen will be the new prime minister until general elections. And in August, Prime Minister Kishida Fumio, announced that he would not run for re-election. He has called for a "fresh face" to lead after the LDP's year of scandals, and so far, not very successful efforts to revive Japan's stagnant economy. Who do you think this new face is going to be, and is it going to really make a difference?

MCMAHON:
Well, the party has, it looks like what looks to be its largest ever roster of candidates to choose that face from, Carla, and I should note our colleague, Sheila Smith has profiled the nine candidates, including two women—which is a rarity in Japanese politics—on the Asia Unbound blog at CFR.org. As you said, it's an LDP vote. This is the party that, by far, the dominant post-war party in Japan. So it's not a nationwide vote of Japanese, it's vote of LDP members, a little bit more than a million. For those counting, it's about less than 1 percent of the country's eligible voters, but this group will be selecting the person to lead the country ahead of the next general election, which would be a year away, and so it's an important step, and it's happening, as you say, at a time of stagnant economy, a party really mired in scandal, a fundraising scandal that just got worse and worse over the year, and Kishida, Fumio could not seem to transcend that. And so it was clear to him that polling was at almost a record lows for his popularity, and so he's moved ahead to call these elections. In October 1st, we will have a new leader and a new cabinet for Japan.

It's important on all sorts of fronts, in part because while he might've been mired in scandal and economic problems, Kishida did quite well in terms of navigating foreign policy for Japan. He was very important in steering the country closer in its alliance with the United States and shoring up relations with South Korea, which had been just pretty abysmal for many years due to the legacy of Japan's colonization of Korea, the early part of the twentieth century up through World War II. And so he had done a lot to kind of shore up its power to beef up the country's armed forces, and now, we're looking at a race between a number of people who might bring something different to the table on that front.

So a fresh face, back to your original question, could be in the form of the person who could be the youngest post-war leader, Koizumi Shinjiro. And if that name sounds familiar, he's the son of Koizumi Junichiro, who was prime minister from 2001 to 2006, and he was known to be a reformer. Koizumi might still be a little bit too young. He's a little bit certainly less known quantity on foreign policy issues, and has spoken in language of reform, but it's not clear whether or not he has enough juice to actually get the full LDP behind him or not, or whether he helps support. He's among the top three polling right now, the latest polls that have been held in the country.

Another of those top three is a woman, Takaichi Sanae. She would be the first-ever woman leader of Japan and has kind of fashioned herself as a bit of an "Iron Lady" and very much a nationalist and strong on defense, and she would continue to move to shore up the country's military by all accounts.

The other candidate to keep an eye on is an older candidate, Ishiba Shigeru, who's making his fifth try for the leadership of the LDP. He is seen as a bit of a maverick, at the same time, could be someone who picks all the right boxes for Japanese people who seem to be kind of disgusted with the status quo in the country. He's a bit of a populist, he's done a lot of door-to-door campaigning in the country, he seems to be very well-known, and has, of the three, has polled what looks to be the highest and the latest round of major polls coming in.

So keep an eye out for those three candidates. And again, two of them, Koizumi Shinjiro, Takaichi Sanae would be first-time ever leaders in terms of youth or gender.

ROBBINS:
Is it all about the economy for the Japanese? Is that what they're going to be choosing their leader on, who's most likely to revive the stagnant economy, or do these debates over, how strong should the military be? Should we change the Constitution about the Self-Defense Force? How much does that fit into it? And how much does the sort of the broader question, things like North Korea...How deeply should we be enmeshed in the U.S. alliance against China? Where do all these issues that we talk about actually fit into their debates?

MCMAHON:
Well, if it was a general election, I think the economy would certainly be front and center among the issues. Again, the scandal is playing out at a time when inflation was raising serious concerns. As you mentioned at the outset, this sort of stagnant nature of the economy is a real concern to Japanese. So Koizumi is talking, for example, about encouraging competition among industries that seem to be sort of set in stone in the country and trying to spur economic development and revive the country's economy, while at the same time, anybody who steps in is going to be mindful of inflation. But I think when you're talking about the LDP, the party in power and the direction that Abe Shinzo has taken it in terms of beefing up its military in this increasingly dangerous neighborhood, I think you're going to find that that is a paramount issue for this party in power, while at the same, time trying to pick somebody who does bring a new set of dynamism to the country.

Whether the Ishiba Shigeru, the older of the three main candidates, fits that bill, it's hard to see. It could be this combination of his sort of populist flair, shall we say, as well as his seniority that wins the day for him. Maybe that's why he's continues to poll higher, but I wouldn't count on Koizumi Shinjiro as well. And again, his father had a well-known legacy as a reformer. I think he was also dubbed kind of the Elvis among some foreign policy leaders because of his charismatic nature as well. So not clear exactly what's the zeitgeist is among Japanese LDP, but I do think it's this balance of continuing to move the country in this sort of strong defense mode while trying to move it beyond scandal and steadying the ship economically.
Carla, I'm going to keep the conversation economically focused, but talk about tariffs.

ROBBINS:
Oh, good.

MCMAHON:
Certainly getting a ton of attention in the U.S.

ROBBINS:
Yay, tariffs.

MCMAHON:
And whenever you mention tariffs, you can't seem to not mention China in the same conversation, and that's certainly the case with our next topic. In the coming days, both the United States and Canada will impose 100 percent tariffs on Chinese electric vehicles. There are also other tariffs on things like batteries, and steel, and critical minerals, and the European Union is considering imposing tariffs on Chinese electric vehicles as well, although it has postponed that decision. China has spoken out unsurprisingly against these tariffs, calling them "discriminatory" and "protectionist." The United States, at the same time, have been pushing for cleaner cars to cut back on tailpipe pollution and a surfeit of Chinese vehicles that are already ready to go, and by many accounts, are function very well, could solve that problem, but it's entering into a bit of both politics and concern about Chinese dumping, perhaps. So what's going on here?

ROBBINS:
First of all, we don't actually import any Chinese vehicles, and I think the government would like to keep it that way, and the auto industry would like to keep it that way. It isn't that they're against Chinese vehicles. What they are opposing is what they say are China's unfair trade practices, and there's no doubt that the Chinese commit intellectual property theft, forced technology transfer, no doubt they have high government subsidies and dumping. And the U.S. government, and we've heard this certainly much more since the pandemic, but they're determined to reduce our dependency on Chinese supply chains and critical industries, but in things like autos as well, and to develop our own industries, so which...Shall we say our own subsidies and now, tariff walls. There's been a big change in political attitudes toward tariffs generally, both here and among our allies, driven in good part, but not completely by the rise of China and its unfair trade practices.

I know I'm dating myself here, but in...I don't know if you remember this, when 1993, when Al Gore debated Ross Perot, and was a big champion of tariffs on NAFTA, he gave him a framed picture of the authors of the 1930 Smoot-Hawley Tariff Act, which was widely blamed for helping trigger the depression. Tariffs were considered a terrible, terrible thing. And even in 2016, when Trump ran for president, most "mainstream" Republicans and Democrats still believed that free trade was far, far better policy. And you mentioned tariffs, people immediately went to, "Oh my God, you're going to open a trade war."

These days, the debate has shifted from, "Are we for or against tariffs?," to one over, "Who should we be targeting with tariffs, and at what levels?" Former President Trump has prominently seen 60 percent across the board tariffs on Chinese imports, sometimes higher, and 10 to 20 percent tariffs on all other imports. Vice President Harris calls tariffs a "Trump sales tax," but she also says she's going to protect American industry from unfair Chinese competition and shows no sign so far of committing to lifting the tariffs President Biden is adopting. So these tariffs, which are about to go in effect, and they're phased, some now, some a year from now, which cover about $18 billion in products, or 4 percent of imports from China, are a significant departure for Biden, who has until now sought to, I think the term they use is de-risk rather than de-couple economic ties and the strategic competition by constraining or banning high-tech exports.

We talked a lot about this. We weren't going to sell them chips, but there wasn't a lot of talk about tariffs until recently. And these tariffs on EVs, and steel, they're not things that we buy a lot from China. Some of these other things, we do. And we add on top of this, that on Monday of this week, the U.S. Department of Commerce introduced a new policy to ban Chinese and Russian hardware and software from on-road vehicles. They're describing that as sort of, "We don't want them to use the technology to spy as well." The goal here, ultimately, I think really is a mixture of protecting supply chains, but also really, to allow our own industry to develop. And I think you could call this protectionism, but I think you could also make the supply chain argument for it.

Is it going to change the Chinese behavior on the things we don't want them to do? So far, no sign, and we're certainly not the only ones doing it. As you said, Canada, they're going to put this 100 percent tariff on EVs, and while the EU has delayed a vote because of internal disagreements, they have a much stronger, immediate reason to do it. EU Commission has recommended tariffs from anywhere from 17 percent to 38 percent, and they've seen an enormous growth of Chinese cars in their market, and they're really afraid of massive dumping that could take place. So there's a great debate inside the EU because they're afraid of retaliatory tariffs on pork, and on cognac, and on things of that sort, but they've seen a great growth in the market there. As of June, Chinese EV automakers held 12.4 percent of the market, up from 10 percent just a year earlier. So they want to protect the market, but they also want to sell their cars in China. So there's a debate there, but ultimately, it really is about developing our own EVs as well, and perhaps trying to get the Chinese to behave better when it comes to trade.

MCMAHON:
Yeah, it's a particularly thorny dilemma, let's say, for the reasons you laid out, and also, again, getting back to the little bit of a climate discussion, let's take a step back for a moment. These Chinese cars, these aren't Yugos that are being brought in at $4,000 a pop and people are gobbling them up, and then they break down. These are considered to be highly efficient, definitely lower priced, and there's a real concern that they could quickly dominate. And as Xi Jinping ramps up, continues to double down in his China manufacturing policy, there's a real concern that they would just flood the zone with these, and European economy, as in the U.S. economy, carmakers matter a great deal with the whole industry. The U.S. is also struggling with its own move to electric vehicles in the first place, so I think you're seeing more hybrids being produced. The country's still having problems with creating an infrastructure for electric vehicles, and there's no real serious plan in place to get rid of the gas station network around the United States.

So there's a whole set of things going on here, and it does get back to this concern about China, this concern about moving too quickly in this direction, but also just giving up an entire industry. And then, on top of it is, as you said, this use of tariffs, which is, on the one hand, in a piecemeal way, you could understand the rationale, but the concern, and the concern that a lot of economists have is that it just keeps building, and it becomes tit for tat, and China could turn around on U.S. agricultural products, for example, and that would have a huge impact because U.S. sells a lot of, let's say, soybean and corn to China. So it's a tricky moment. We'll see how they all handle it in the midst of a political season.
Did we say it's a political season? It's a political season.

ROBBINS:
Has that come up? There are a lot of...I hate to say this...There are a lot of trade-offs when it comes to tariffs.

MCMAHON:
Yes.

ROBBINS:
And despite what President Trump regularly claims, foreign countries do not pay the price for tariffs. Importers do, and they almost always pass the price on to consumers. And there's a new paper from Peterson Institute for International Economics, and says that Trump's proposed 10 percent across-the-board tariffs and 60 percent tariff on imports for China, they estimate, would cost the average American household around $1,700 a year. There are economists who debate sort of the potential inflationary effects of that, and there's a serious concern, of course, about a wider trade war. That's Al Gore and the Smoot-Hawley frame picture. I mean, Perot slammed it down when he gave it to him. I'm not sure it really worked as a device. But, there's historical concerns there that you could really potentially set off a trade war, and especially at a time when the World Trade Organization doesn't work; there is no appeals process, thanks in part to the United States.

And then, where we started. This is the climate trade-offs. These Chinese EVs, as you said, they seem to work, and we're also talking about batteries and other clean energy products, and they're really competitive in price and in quality. And there is this thing. I mean, if you don't let them in, it's going to take a longer time for us to produce these things. We will get to a point of more sufficiency, not complete self-sufficiency, but you don't do it now and you slow down the transition to a greener economy and to a greener environment, and so there's a lot of trade-offs here, which then raises the question, is this good economics? Is it sound trade policy? And how much of this, of course, is politics as well? It's probably all of the above and probably not great for the environment.

Bob, it's time to discuss our audience figure of the week. And this is a figure that listeners vote on every Tuesday and Wednesday @cfr_org's Instagram Story, and they exist to frustrate me. This week, Bob, our audience selected "Marxist Dissanayake's Sri Lankan Presidency." Who is this president?

MCMAHON:
So Anura Dissanayake, also known by the acronym AKD, and that's what we'll use so we don't butcher it going forward, he's a compelling figure. He emerged somewhat surprisingly at the forefront of the presidential vote in the country. He's fifty-five years old, and he survived the country's really violent past few decades of conflict, of internal conflict. And actually, after an insurrection that began in the late 1980s, he actually went underground to avoid further government crackdown. He has apologized for what he called armed conflict, which "should not have happened," and he entered electoral politics and has emerged again as this figure to try to bring the country out of a severe economic funk, and that's even too light a term to describe what's going on in Sri Lanka. It's in really rough shape economically.

It also matters, and maybe this is also driving some of the audience voting for the figure of the week, because of its place in between India and China and their battle for influence in the region. It's located near one of the busiest global shipping routes. It has a $10 billion debt to China and other creditor nations that has been trying to restructure, and it has been moving forward with an IMF deal to restructure that, but countries that are in this position typically are in really weak shape and are kind of over a barrel.

So it's an important time. He's called elections for mid-November. His party has barely any representatives in parliament. It's going to be interesting to see whether his ascension to the presidency then brings along a tide of parliamentary support or how he's going to actually govern and move this country forward.

ROBBINS:
So what makes him a Marxist?

MCMAHON:
Well, I guess he would say he has supported a socialist platform through the years, although he's talked about more sort of pragmatic economic issues in recent years, but it's something that's kind of unique to this region of the world, where you have candidates, like in places like Nepal, for example, as well as Sri Lanka, where they espouse a more socialist form of government and have spoken out against the capitalist way of running things. I don't know really much beyond that, Carla, and I think you might see him move away from that claim, even though it's the one that he's been labeled with as he moves forward and tries to consolidate a new leadership in Sri Lanka.

But I think we're looking at an anti-corruption candidate who's going to try to both be pragmatic on the business front, try to carefully navigate the China-India relationship, and get the country back on some sort of a rational footing, and maybe also a more stable social situation, because as I said, it has been through some really turbulent times.

ROBBINS:
Well, I think the term, Marxist is sort of quaint. In fact, I think we probably hear it more often in American politics thrown around as an epithet. And the reality out there, I don't think there are a lot of Marxists outside of...I'm not sure there are a lot of Marxists even in communist countries these days, but that's a conversation for a philosophy class.

MCMAHON:
No. I mean, if you study the Chinese Communist Party, it'd be very interesting to see who are true believers versus who are enthralled to the power of the Communist party structure. But that is a discussion for another day, Carla, maybe in your political science class.

And that's our look at the world next week. Here's some other stories to keep an eye on: Mark Rutte, the former prime minister of the Netherlands, takes office as NATO's new secretary general; democracy activists mark the tenth anniversary of Hong Kong's "Umbrella Movement"; and listen to your favorite podcast, because Monday is International Podcast Day.

ROBBINS:
Please subscribe to The World Next Week on Apple Podcasts, Spotify, YouTube, or your favorite podcast platform, and leave us a review while you're at it. We appreciate the feedback. If you'd like to reach out, please email us at [email protected]. The publications mentioned in this episode, as well as the transcript of our conversation are listed on the podcast page for The World Next Week on CFR.org. And please note that opinions expressed on The World Next Week are solely those of the host, not of CFR, which takes no institutional positions on matters of policy.

Today's program was produced by Ester Fang with Director of Podcasting Gabrielle Sierra. Special thanks to Molly McAnany, who's seated across from me. Hi, Molly, and, of course, to Helena Kopans-Johnson and Kenadee Mangus for their research assistance, and our theme music is provided by Markus Zakaria.

This is Carla Robbins saying so long, and remember, early voting has already begun in Virginia, South Dakota, and Minnesota, and check the requirements for your state, and if you haven't registered to vote, there's still time in most states.

MCMAHON:
And this is Bob McMahon saying goodbye, and be healthy out there.