Stellantis and LG Energy Solution have suspended work on a $5bn electric vehicle (EV) battery factory in Canada as they call for government funding comparable to the funding given to Volkswagen. The Canadian automotive plant in St. Thomas has been given $13bn from Ottawa over 10 years. Finance Minister and Deputy Prime Minister Chrystia Freeland said the government expressed an openness to boosting subsidies for Stellantis and LG to near the levels afforded to VW. The factory was planned to have a capacity of 40GWh a year, with production starting in 2023. LG Energy Solution is a unit of LG Chem that makes EV battery cells, while Stellantis is a company created by France's PSA and U.S. group Fiat Chrysler.
The US government's showdown with Republicans over the country's debt ceiling threatens the global economy and raises concerns among policymakers over the US' efforts to counter China. Republicans are seeking spending cuts over a decade whereas Democrats prefer smaller spending cuts in defense and social programs over a shorter period. Senior White House economics adviser Shalanda Young said the debt ceiling situation was a "test of what works in this world" and has raised concerns that the US would default on its US$31.4tn borrowing limit.
Special counsel John Durham has concluded the investigation into how US government officials conducted their investigations regarding possible coordination between Donald Trump’s presidential campaign and Russian interference in the US election. Much was made of Durham's four-year-long investigation, with Democrats largely dismissing the investigation as politically motivated. Durham’s probe criticised the FBI for relying on raw intelligence in its investigation, but his criticisms echoed a similarly tasked 2019 report by the Justice Department's inspector-general. Durham’s report did not result in any significant criminal charges, but did criticise bias among FBI agents. Durham did however recommend a new position be created at the FBI to help vet politically sensitive investigations. As of December 2022, the investigation had already cost taxpayers over $6.5m. Democrats criticised Durham's report, with Rep. Jerrold Nadler (D-N.Y.) describing it as a "political rehashing of what the Justice Department Inspector General already made public in 2019."
The US federal government has once again hit its debt ceiling, leading to a renewal of the high-stakes politicking approach to finance by both parties that downgrades the country's credit and threatens the perceived reliability of US Treasury bonds in the global market. The manoeuvre is often used opportunistically by opponents of the party in power, while Republicans have also begun to demand policy concessions in exchange for raising the ceiling. Economist Veronique de Rugy argues there is a beneficial side to the debt ceiling, suggesting in the recent Ezra Klein podcast that it can be used for deficit reduction and as a negotiating window. However, the current situation is creating uncertainty in the market and putting investment on hold at a particularly fragile moment as Covid-19 lockdowns ease in the US.
Raising the debt ceiling merely allows the government to spend money that it has already approved spending. Opponents of the ceiling argue the subsequent requirement for congressional approval rewards obstructionism rather than meaningful, transparent economic discussion. They argue that it puts the US’s savings into the pockets of those who would typically lend to the country, notably China, Japan and some European banks, to whose benefit it is to accumulate holdings of US Treasury bonds.
The risk in the ceaseless debt-ceiling debate, in which so much is predetermined by fixed standing positions, is that long-standing assumptions about the global financial system are at risk of being overlooked or deliberately ignored. Currently the stalemate is in a stalemate, as it is not yet clear what domestic policy Republican lawmakers will use the debt-ceiling impasse to attempt to drive through.
The US states of Kentucky and Pennsylvania held primary elections on Tuesday with big implications for November’s midterm elections. In Kentucky, Democratic Governor Andy Beshear is up for re-election and is facing several Republican challengers, including a protégé of Senate Minority Leader Mitch McConnell. Meanwhile, Pennsylvania saw a state House special election take place, which would determine whether the chamber stays in Democratic hands, as well as a mayoral race in heavily Democratic Philadelphia. Voters also chose nominees to run for several other non-national level offices.
US President, Joe Biden, has cancelled visits to Papua New Guinea and Australia to return to the US early. The trip has been cut short due to ongoing urgent discussions between White House officials and Congress over how to counter the government's deficit and avoid a potential economic disaster. Without reinforced support, officials estimate that the US government will not have the funds to pay its expenses, should the debt ceiling not be raised, by Jun 1.
The United States Department of the Treasury has warned that it could run out of funds to cover the country’s bills by June 1, heightening fears over the threat of a possible US default. Republican lawmakers are looking to cut social program spending, such as food assistance, in order to raise spending limits. Democrats have said that the situation is particularly galling as the same Republican lawmakers raised spending limits with little resistance when their party was in power. A default in US debt would stump the global economy; leading experts to call for a solution.
Justice Department special counsel John Durham has released a 306-page report criticising the FBI for launching an investigation into whether Donald Trump’s presidential campaign conspired with Russia to influence the 2016 national election. Durham claimed that the FBI began the investigation without any evidence which directly incriminated members of the campaign, and that specialists who were never consulted would have advised that there was no basis for the action. Durham also says that the FBI failed to verify allegations contained in a Democratic Party-financed dossier compiled by former British spy Christopher Steele. The investigation resulted in only one conviction, and Durham did not suggest that political bias played any part in the FBI’s behaviour. The FBI said it has taken corrective measures prevent a similar situation arising.
President Biden vetoed legislation on Tuesday that would have reinstated tariffs on solar panels from Chinese companies in Southeast Asia that had been found to be imported into the United States in violation of trade rules. The Senate narrowly passed the resolution this month, with several key Democrats supporting the measure, in a sharp rebuke to Mr. Biden. The administration, however, has argued that buying solar panels from China in the short term is necessary to make good on the president’s efforts to mitigate climate change.
Canadian federal government has introduced legislation to make it harder for repeat violent offenders to be released on bail. This changes comes just four years after the governing Liberals made it easier to obtain bail, and is in response to concerns raised by premiers after the killing of a police officer in Ontario and a number of violent attacks. The biggest change in Bill C-48 would put the onus on certain accused people to show why they should be granted bail, rather than require the prosecution to justify why they shouldn’t. Known as a reverse onus, the measure already applies to certain firearms offences.
Ontario's Financial Accountability Office has warned that the effect of the province's CAD$10-a-day childcare project will be limited without sufficient spaces and staffing. The warning came as a report examined the likely impact on the labour market of the federal childcare programme. While it saw potential for the initiative to improve female participation in employment and reduce the gender wage gap, it noted staffing issues and long waiting lists in Ontario, where just 39.3% of under-6s were in childcare by 2022, the lowest level of any province in Canada.
The CEO of AI firm OpenAI, Sam Altman, has called for the creation of a licensing body for the world's most powerful AI algorithms. Speaking at a hearing of the US Senate this week, Altman said that, as AI became more advanced, people were understandably anxious about its power and how it could change human lives. He recommended that a new agency should ensure compliance with safety standards for use of AI, including its ability to generate misleading and false statements. The proposed agency could license the most powerful AI systems and withdraw that licence where any risks were identified.
The Republican Party is clashing with US corporate America as conservatives rally around social issues. Companies have been caught up in the culture wars before, but legislative moves targeting firms represent a new frontier for Republicans who are traditionally allied with big business on matters such as lower taxes and light regulation. Dozens of US states are considering proposals aimed at stopping governments from doing business with financial firms that consider environmental, social and governance (ESG) factors when making investments, moves that have cost BlackRock more than $4bn in customer funds. However, the financial impact of the conservative backlash has been limited so far.
The Republican-controlled Senate of North Carolina voted to override the Democratic governor's veto of a bill banning most abortions after 12 weeks of pregnancy with only this veto needing to be overridden to make the policy law. This move comes as lawmakers debate laws to limit or restrict access to abortion in many southern states. Abortion is either banned or severely restricted in many southern states, with nine states throughout the US banning abortions throughout the entire pregnancy. If the recent bills proposed in the Carolinas, Florida and Virginia become law, it is seen as "just devastating for abortion access in the South," said Jamie Lockhart, executive director of Planned Parenthood Advocates of Virginia. The limitations would make the Carolinas two of the few states left that still have relatively easy access to abortions that did not undergo significant restrictions.
Tuesday saw an array of primary elections take place across the US, including for governors and mayors that will have spillover effects for the 2024 presidential elections. Among the early takeaways were that Republicans in Kentucky have chosen Daniel Cameron as their candidate for governor in November, after he bested a field of 12 contenders. Cameron, the state's first Black attorney general, also received an endorsement from former President Donald Trump. Other takeaways were that Pennsylvania Democrats retained their first majority in the state's house in 12 years in a recent special election outside Philadelphia, and Cherelle Parker is likely to be Philadelphia's first female mayor after the recent primary. Elsewhere, elections in Florida and Colorado saw Republicans lose their seats to Democrats and independents, respectively. Finally, in nationally significant developments, election deniers failed to gain traction in Kentucky, and Parker distinguished herself for proposing a tough-on-crime approach in Philadelphia.
President Biden is engaging with Republicans and Democrats in Congress to resolve the ongoing stand-off over the US' debt ceiling. The current limit of $31.4tn has been reached, and the Treasury Department is currently suspending investments in some federal pension funds while borrowing from investors to maintain the limit. The Treasury has warned it might stop borrowing altogether and rely entirely on tax receipts to pay its bills from 1 June. Global financial markets would be affected should the US default, potentially leading to a recession and job losses, while there are calls to eliminate the limit.
California Senator Dianne Feinstein has denied claims that she was absent from the Senate following months of recovery from shingles. Although Feinstein had missed 10 weeks of voting due to her illness, she returned last week and cast a vote on the floor. Feinstein's office said she would continue to operate on a reduced schedule while continuing her recovery. Feinstein has faced criticisms from colleagues regarding her cognitive abilities. Despite calls for her resignation, she denies that she has ever been absent and did not take the role of Senate President Pro Tempore earlier this year.
Thailand's pro-democracy opposition has won a tight election, likely shutting the door on military rule under incumbent Prime Minister Prayut Chan-o-cha. With tallies of all votes cast counted, state television said the main opposition Pheu Thai party won the popular vote with 8.4 million votes, while the pro-army Palang Pracha Rath won 7.9 million votes. The results of the poll for the 500-seat parliament were expected to be a close call meaning weeks of negotiation and uncertainty of the formation of a workable coalition government are expected. The prime minister oversees a sharp decline in exports and rising public debt. The army had ruled the Southeast Asian country since 2014, when they ousted the civilian government.
Democrats and the majority of voters believe that President Joe Biden, who will turn 81 in November, should not run for a second term. However, those questioning Biden's age must consider that the vice-president - Kamala Harris - could also attract scrutiny when she runs. Democrats and much of the “mainstream” media are working off an invisible memo that tells them to avoid talking about Biden's age, however this cannot last. Biden must now elevate Harris's role to become a bigger factor next year and focus on key issues that will appeal to voters.
Former city councilor and state legislator Cherelle Parker secured a convincing victory in the Democratic mayoral primary in Philadelphia, setting her on course to make history as the city's first female mayor if she wins the general election in November. Parker has positioned herself as a tough-talking candidate on crime, advocating for more police on the streets, but is also aiming to empower the community in decision making, saying policy solutions should come "from the ground up". It's thought that Parker, who is Black and won the support of the city's influential Black establishment, is well placed to win in November, given that about seven in 10 votes in Philadelphia are Democrats. Her Republican opponent, former City Council member David Oh, ran unopposed and automatically became the party's candidate.
