Connect with us

Diplomacy

Is international free trade coming to an end?

Published

on

Where in the world is “free trade” really free? The European Union, and maybe China… The number of countries that feel bound to the World Trade Organization (WTO) rules, especially considering the last “protective” measures of the USA, does not go beyond the fingers of one hand.

The Inflation Reduction Act (IRA), signed by Joe Biden, seems to be a continuation of Donald Trump’s “America First” policy to many. The law provides government support for the transition from seemingly innocent fossil fuels to green energy. It is no secret that the role of states in the transition to renewable energy should increase. It does not seem possible to make progress in such a large infrastructure transformation without public intervention.

In the IRA, the issue that bothers EU in particular is government incentives for electric cars. In addition to financial support to automotive companies producing in the United States, tax breaks are also foreseen for consumers. The summary is that an electric Ford, GM or Tesla may cost $7,500 less under this law than an electric Volkswagen or Hyundai, depending on where and how it is produced. Let’s also say that in the IRA, Canada and Mexico are granted exemptions.

South Korea and Japan are also concerned

Of course, this is not just about the EU. Japan and South Korea also have world-renowned automotive companies that produce electric vehicles. These countries also think that the US’s new industrial policy is a violation of international trade rules.

The Japanese government said in a note to the US Treasury Department in early November that the IRA would challenge the competitiveness of Japanese automotive companies in the North American market. Tokyo warned its interlocutor that the new law could deter Japanese manufacturers from making new investments in the United States, which could lead to unemployment in the United States.

The CEO of the Japanese huge company Nissan said the IRA must be given some time before its entry into force. Nissan has a factory in Canton, Mississippi, but according to the CEO, the number of these factories could increase with the IRA. Nissan expects its electric models to account for 40 percent of US sales by 2030.

The South Korean government also said that the implementation of the IRA should be given a minimum of three years. Seoul has also reported that the IRA may violate the free trade agreement signed between the United States and South Korea. Companies like South Korean Hyundai and Kia are expected to increase their investment in the US.

Speaking to Axios, a South Korean official said that the issue almost led to a diplomatic crisis. The United States and South Korea have discussed the issue twice at the presidential level, but it seems unlikely that the Biden administration will make any changes to the law.

South Korea thinks that they cannot meet every request from the USA, for example, they cannot unite against China. Some officials think that US-Japan-South Korea-Taiwan co-operation on the semiconductors issue would have been easier to move forward without the IRA.

Along with the IRA, it is stated that Hyundai Ioniq 5, Kia EV6, Subaru Solterra and Toyota bZ4X models are not impossible to compete in the USA market. Rivian Automotive, Hyundai Motor and Kia Corp recently suggested to the US that the pressure on them could be reduced by arranging “commercial clean cars” regulation for the IRA.

US barrier to chip trade angers Netherlands

Yet another trade that the Biden administration is trying to block with IRA is the chip trade.

The US has recently imposed tight barriers to the sale of advanced chip and chip-making equipment. Dutch and Japanese companies are among the leading companies in this regard.

The United States has not yet reached an agreement with these countries on banning the sale of chips. But it is reported that Dutch chip makers will resist moving out of the Chinese market.

The Netherlands-based ASML is one of the largest suppliers to the global semiconductor industry. A Dutch official told Bloomberg last month that they would protect their own economic interests when it comes to selling chip equipment to China.

Dutch officials have emphasized that the United States should not expect its own countries to unquestionably comply with Washington’s restrictions on China.

Despite this, the Netherlands refuses to sell extremely ultraviolet lithography machines to China under US’ pressure. But ASML continues to sell less advanced chip-making systems to China.

US pressure on ASML and Japanese firm Tokyo Electron continues. ASML told its staff in the US to stop doing business with Chinese customers as a result of a new regulation that came into force in the US in October.

Dutch Foreign Trade and Development Co-operation Minister Liesje Schreinemacher insisted last week that his government’s “national security interests are really important”.

Dutch Economy Minister Micky Adriaansens told the Financial Times last week that his country was “very positive” about relations with China and emphasized that Europe and the Netherlands “should have their own strategies” for controlling exports to China.

Macron’s visit and concern in Europe

“Joe Biden wants to strengthen the American economy – to the detriment of Europe,” wrote the German newspaper Die Zeit, while the French economic newspaper Les Echos cited “America First, Europe Last.”

The fact that French President Emmanuel Macron was greeted like a king in Washington last week does not seem to have solved the problem. US President Joe Biden admitted there may be flaws in the IRA, but then mentioned the negotiations of the US-EU trade delegations.

Describing the IRA as “super aggressive” during a closed-door meeting with US senators, Macron invited the EU to adopt its own “Europe First” law before heading to the US. French Economy and Finance Minister Bruno Le Maire also suggested that the United States was pursuing a Chinese-style industrial policy.

In a statement with Mr Biden, Macron said it was now time for Europe to “synchronise” itself with US’ steps. This word is thought to refer to the EU’s own state incentives.

French authorities are concerned that European companies, whose operational costs have already risen due to inflation, will start to migrate investment to North America. But Stefano Sannino, secretary-general of the EU’s Foreign Relations Service, who was in Washington for the visit, argued that a scenario in which the United States on one side, and the EU on the other, started to provide incentives would not be “rational”.

At the same time, Denis Redonnet, the EU’s trade chief, said they could report the IRA to the WTO. European Commissioner for the Internal Market Thierry Breton also announced that he will not attend the EU-US Trade and Technology Council meetings later this week. Breton argued that the meetings were insufficient to address the concerns of Europe’s industry and labour ministers, noting instead that Europe would focus on the urgent need to protect the competitiveness of its industrial infrastructure.

EU officials are considering negotiating a free trade agreement between the EU and the United States as another option. However, the fact that this process takes too long and the bureaucratic procedures reduce the possibility of this option.

Meanwhile, Italian automotive companies are more concerned about the entry of Chinese electric cars into the European market than the IRA, according to the Italian newspaper La Stampa. The Germans fear the IRA more than the Chinese.

Czech Trade Minister Jozef Síkela reminded in November that the People’s Republic of China would be the winner of the EU-US trade wars.

Giga factory investments multiply in the US

We can say that the fears of Germans and the French are coming true. While Europeans are worried about the US “sucking up” investment in Europe, alarm bells are ringing in battery production.

Until recently, Europe’s production of lithium-ion batteries was a league ahead of the United States. But with the rise in energy prices and the IRA, the picture seems to have changed.

Since the day the IRA was announced, there has been a 35 percent increase in capacity in the United States. That’s 17 percent in Europe. Despite all this, Europe is still far ahead of the United States in terms of capacity. In 2031, Europe’s annual production capacity is estimated to be 1,186.2GWh, and the US 957.6GWh.

The Turkish company Kontrolmatik announced that it is considering increasing the size of the giga factory in the United States, while Norway-based FREYR announced that it will accelerate its plans in the United States. In Europe, there are reports that such plans have been delayed.

Towards a European protectionism

“The new ambitious industrial policy from our competitors requires a structural response,” said European Commission President Ursula von der Leyen, delivering the message that the EU will start playing by the rules: “Europe will always do what is right for Europe.”

According to Estonian Entrepreneurship Minister Kristjan Järvan, the EU has always supported free trade, and this was a good thing, but “non-democratic forces” were now using free trade against the EU.

Trying to balance the trade wars between the US and China for a long time, Brussels may now start to change its attitude towards friendly fire as Joe Biden jumps on the “protectionist” train. Von der Leyen’s speech Sunday also suggested that the EU should reconsider its own state subsidies.

“There is a risk that the IRA will lead to unfair competition, close markets, and dismantle the same critical supply chains that have already been challenged by COVID-19,” Leyen said, bringing up the possibility that manufacturers will move from Europe to the US.

The fear of subsidies in the EU’s ultra-liberal and pro-free trade departments is at a heightened level. European Commissioner for Trade Valdis Dombrovskis, among them, argued that the subsidy race would be “expensive and inefficient”. EU competition chief Margrethe Vestager said no one wants a subsidy war.

However, the genie has definitely came out of the bottle. If EU takes a step towards government incentive, it will be the last nail to be put in the coffin of international free trade, which hasn’t been really practiced for a long time.

Diplomacy

Iran rejects Turkish foreign minister’s comparison of regional policy to Israel

Published

on

Iranian Foreign Ministry Spokesperson Esmaeil Baghaei strongly criticized Turkish Foreign Minister Hakan Fidan’s recent statements comparing Iran’s regional actions to those of Israel, calling the comparison “astonishing and incorrect” during his weekly press conference.

In a comprehensive briefing on Monday, Baghaei addressed a wide range of foreign policy developments and regional security matters, including relations with Türkiye, the current state of diplomatic understandings with the United States, and Iran’s nuclear program.

“Hakan Fidan’s comparison is astonishing and incorrect”

When asked about Fidan’s assertions regarding Iran and his comparison of Iranian actions to those of the Israeli government, Baghaei sharply rejected the assessment.

“It is astonishing that a figure of Mr. Fidan’s standing would make such an unwarranted comparison,” Baghaei said. “He knows very well that the Israeli regime is expansionist by nature and seeks to harm the entire region, including Türkiye. How they arrived at such a bizarre comparison remains a major question for us.”

Baghaei asserted that Iran maintains no proxy forces in the region and argued that Israel represents the only true proxy entity in the Middle East. “We ask our Turkish friends to align their analyses with existing realities and to avoid repeating analyses that serve the exploitative interests of the Israeli regime,” the spokesperson added.

The remarks follow recent statements by Fidan, in which he addressed the ongoing conflict involving Hezbollah and Hamas, describing them as Iranian proxies in the region.

“We need to return to a situation where the sovereignty and territorial integrity of every nation is fully recognized,” Fidan had stated. “Iran has long claimed to pursue a preventive security policy by maintaining proxies in these countries, just as the Israelis occupy the rest of the region as part of their own security.”

“The Islamabad Agreement has entered a crisis phase”

Responding to a question regarding the status of the Islamabad Agreement, Baghaei stated: “There is no doubt that this agreement has entered a crisis phase.”

While emphasizing that Iran approaches all negotiations with seriousness and precision, and fulfills its commitments in good faith once an agreement is reached, Baghaei accused the opposing party of failing to honor its pledges.

“They were so eager to breach the agreement that they did not even allow the one-month period specified in Article 5 regarding the Strait of Hormuz to run its course. They began backsliding from the very first days,” Baghaei said. “Looking at the 14 articles of the memorandum of understanding, the Americans dismantled different components of the agreement within this short timeframe. We have maintained from the beginning that it is a matter of ‘commitment for commitment.’ As long as the other party fulfills its obligations, we will remain committed to ours.”

“We reject the IAEA’s request to access damaged facilities”

Asked about the request by International Atomic Energy Agency (IAEA) Director General Rafael Grossi for inspectors to return to Iran and visit damaged nuclear facilities, Baghaei delivered a flat rejection, stating that the request would not be granted.

Addressing separate reports regarding satellite imagery of nuclear facility reconstruction, Baghaei noted that he had not yet seen the satellite images in question and therefore declined to comment.

“We will not allow the Strait of Hormuz to be threatened by the US”

Commenting on maritime security in the Strait of Hormuz and allegations that the United States is providing military escorts to 20 vessels, Baghaei reiterated Iran’s opposition to the presence of extra-regional forces.

Baghaei stated that regional security can only be achieved without foreign intervention, through consultative mechanisms among regional countries. He added that the US military presence is a source of insecurity in the region.

“We will not allow the Strait of Hormuz to become an area of threat against Iran’s interests,” the spokesperson said. “We made genuine efforts to ensure navigation security, but the US was the party that undermined the process. The claims regarding vessel escorts demonstrate that the US is continuing its interventionist and aggressive policies in the region.”

Regarding the interpretation of Article 5 of the memorandum of understanding, Baghaei stated that the text is clear and leaves no room for interpretation.

He noted that provisions designating the management of the strait to Iran, in consultation with Oman, were included in the text to protect Iranian interests. He added that the US is attempting to establish parallel routes by provoking regional countries, which he warned causes environmental issues and jeopardizes maritime safety.

“The declaration by the three European countries is null and void”

Referring to a joint declaration issued by France, Germany, and the United Kingdom, Baghaei dismissed the statement as entirely invalid, accusing the European nations of attempting to distort facts.

He stated that the actions of the US and Israel are the source of instability and harm in both the region and the wider world, adding that such declarations do not contribute to any resolution.

Addressing claims made by the French Foreign Minister, Baghaei added that French officials should cease attempting to assume roles in matters that do not concern them.

“We have not conditioned cooperation with Afghanistan on recognition”

Baghaei provided details on a recent visit to Afghanistan by Alireza Jalalzadeh, the Deputy Foreign Minister for Consular Affairs, noting that discussions were conducted within the framework of consular affairs and people-to-people relations.

Highlighting that Iran shares a border of more than 900 kilometers with Afghanistan, hosts a large number of Afghan migrants, and maintains extensive commercial ties, Baghaei said: “We have not conditioned the official recognition of the Afghan administration on the cooperation necessary for the interests of both countries. The recognition process is a legal procedure, and a decision on this matter will be made when the time comes.”

“We do not make decisions on behalf of Lebanon”

Rejecting allegations that Iran is interfering in the internal affairs of Lebanon and Oman, Baghaei said: “We do not make decisions on behalf of anyone. The inclusion of Lebanon’s name in the memorandum of understanding demonstrates Iran’s sense of responsibility toward maintaining international security. In the first article of the text, we emphasized the need to end the war on all fronts, including Lebanon. This is not a matter of decision-making; the decision belongs to the Lebanese people.”

Addressing international pressure regarding the disarmament of Hezbollah, Baghaei stated that the Lebanese people are best positioned to understand the value of the resistance’s weapons in protecting their sovereignty, and that any decision on the matter rests solely with them.

“Trump’s claims are false”

Baghaei denied claims made by former US President Donald Trump regarding Iran’s conduct during nuclear negotiations.

“Lying has become a behavioral pattern and an addiction for the US,” Baghaei said. “The talks held in Muscat on Saturday focused exclusively on the Strait of Hormuz. We attempted to establish a mechanism to ensure the safe passage of vessels through Omani mediation, but this outcome was not reached due to pressure exerted on Oman.”

He added that alleged assassination plots against Trump were never a subject of negotiation.

“The death of Lindsey Graham will not grieve free people”

When asked to comment on the death of US Senator Lindsey Graham, Baghaei remarked:

“The Angel of Death is just. One cannot expect the peoples of the region to mourn a figure who built his life philosophy on aggression, war, and terror, and who boasted of being the greatest supporter of genocide. The death of this aggressive senator will not grieve the heart of any free person.”

Continue Reading

Diplomacy

NATO leadership sees no evidence of Russian preparations for attack on Baltics by 2030

Published

on

The military and political leadership of NATO sees no evidence that Russia is preparing for a potential attack on the Baltic states by 2030, according to a report by The Times, citing a senior alliance source.

“I see absolutely no sign that Russia is interested in engaging in any conflict with NATO,” the high-ranking source told the newspaper. The official added that they had no intention of speculating on the date of a potential conflict, as some other officials within the alliance have done.

The Times noted that rhetoric suggesting an open military conflict between NATO and Russia could begin in 2030 is primarily being used to mobilize the resources of the alliance’s member states. The report stated that this framing aims to encourage members to meet a defense spending target set at 5% of their gross domestic product (GDP) by 2035. Speaking to the newspaper on the sidelines of the NATO summit in Ankara, Martin O’Donnell, spokesperson for the Supreme Headquarters Allied Powers Europe (SHAPE), said that allies currently have a “window of opportunity” to build up the capabilities already agreed upon.

Kremlin Spokesperson Dmitry Peskov has previously stated that the militarization of Europe would require Russia to take additional measures to guarantee its national security.

As the implications of these developments continue to play out in the military arena, Lithuanian President Gitanas Nauseda announced on July 9 that NATO leadership has converted the mandate of the Baltic air policing mission from air patrol to a combat footing.

The day before this decision, leaders attending the NATO summit in Ankara pointed to the “long-term threat Russia poses to Euro-Atlantic security and stability” in a joint declaration.

NATO has repeatedly expressed concerns over a potential conflict with Russia. NATO Secretary General Mark Rutte has urged member states not to be “naive” about threats coming from Russia and to increase their defense spending. Similarly, the commander of the German Army, Christian Freuding, asserted on June 12 that his country must “be ready for a Russian attack” by 2029 or sooner, stating, “We must be ready for war.”

In contrast, Russian Deputy Foreign Minister Aleksandr Grushko claimed in a June 22 interview with the Izvestia newspaper that NATO and the European Union are preparing for a military conflict with Russia on the horizon of 2030. Grushko noted that from a military perspective, there is now little difference between NATO and the EU regarding aggressive ambitions toward Moscow, and that their main objective is to inflict a strategic defeat on Russia.

The Moscow administration has repeatedly emphasized that it has no intention of attacking Europe. Russian President Vladimir Putin has stated that there are no geopolitical, economic, or military reasons to fight the alliance. Nevertheless, Putin has also stated that “all NATO countries are virtually at war with Russia.”

Last year, representatives of NATO countries approved a declaration agreeing to raise military spending to 5% of GDP by 2035. Under this target, 3.5% of spending is projected to go directly to the military budget, while 1.5% is to be allocated indirectly to defense through cybersecurity and the modernization of highways.

Continue Reading

Diplomacy

Zelenskyy announces sweeping Ukrainian cabinet shakeup as Prime Minister Sviridenko resigns

Published

on

Ukrainian President Volodymyr Zelenskyy has announced a sweeping structural overhaul of the government, confirming that a new prime minister will soon take office.

Following the announcement, the Ukrainian leader held a series of meetings over a two-and-a-half-hour period with potential candidates positioned to succeed Yulia Sviridenko as prime minister.

“Political strategy is changing”

Writing on his Telegram channel, Zelenskyy announced that the structure of the cabinet of ministers will change and that Sviridenko, who is stepping down from her post, will be assigned to a new role.

The Ukrainian president stated that the country is renewing its political strategy. Under the new approach, specific individuals with extensive experience will be put in charge of each priority foreign policy direction to implement agreements reached at the leadership level and to meet the expectations of the Ukrainian people.

Approximately one hour after Zelenskyy’s statement, Sviridenko confirmed her departure from the post of Prime Minister of Ukraine via a message on social media.

Thanking the president for his high valuation of her work, Sviridenko stated that she and Zelenskyy had discussed future steps.

Sviridenko began her career in the Ukrainian government in 2019 as Deputy Minister of Economy. Between 2020 and 2021, she served as deputy head of the presidential office, during which time she participated in negotiations regarding the Donbas.

In November 2021, she assumed control of economic management as First Deputy Prime Minister. In the spring of 2025, she signed a resource agreement with the US on behalf of Ukraine.

Zelenksyy proposed that Sviridenko lead the government in July 2025, and the Verkhovna Rada, Ukraine’s parliament, approved her candidacy with 262 votes in a session held on July 17, 2025.

Prior to Sviridenko, Denys Shmyhal had led the cabinet since March 2020. He currently serves as the Minister of Energy.

Priority targets of the new cabinet established

Zelenskyy outlined the primary areas of focus for the renewed government, listing relations with the US—specifically licensing agreements for the production of Patriot systems and security cooperation—as top priorities.

Other core objectives include the European anti-ballistic missile project, the European Union accession process, relations with neighboring states—particularly Poland and Hungary—cooperation with the Middle East, the Gulf countries, and China, as well as relations with international organizations.

The Ukrainian leader also stressed the need to strengthen operations along the front lines and border regions, increase weapons supplies, complete winter preparations, accelerate the transformation of state-owned enterprises, and implement agreements reached with partners regarding the reconstruction of Ukraine.

Who could succeed Sviridenko as prime minister?

The last major reshuffle in the Ukrainian government took place a year ago, with Sviridenko assuming the premiership in July 2025.

Under Ukrainian law, the candidate for prime minister must be proposed by the majority coalition in the Verkhovna Rada.

Once appointed, the prime minister submits the majority of the cabinet members to parliament for approval.

Russian President Vladimir Putin previously stated that the only legitimate power in Ukraine is the Verkhovna Rada. According to Putin’s assessment, the only authority qualified to participate in peace talks is the speaker of the Ukrainian parliament, asserting that Zelenskyy lacks legitimacy and therefore has no authority to sign any document.

According to a report by the Ukrainska Pravda newspaper, citing sources familiar with the matter, potential candidates being considered for the premiership include:

  • Sergiy Koretskyy, Chairman of the Board of Naftogaz and Director of Ukrnafta
  • Denys Shmyhal, Minister of Energy
  • Mykhailo Fedorov, Minister of Defense
  • Ihor Terekhov, Mayor of Kharkiv

Zelenskyy announced that he met with all of these officials, as well as Ukrainian Interior Minister Ihor Klymenko, during the day.

Sources familiar with the matter who spoke to RBC-Ukraine stated that the president’s decision to renew the government came as a surprise to many. The sources informing the publication also put forward Koretskyy’s name for the premiership.

Sources speaking to Bloomberg also pointed to Koretskyy alongside Shmyhal. The agency reported that both Koretskyy and Shmyhal possess extensive experience in the energy sector, which partially explains their candidacy to succeed Sviridenko.

Meanwhile, Verkhovna Rada Deputy Yaroslav Zheleznyak reported that the parliamentary vote on the prime minister’s resignation could take place on July 13 or 14.

Zheleznyak stated that following this vote, the entire government will function in an interim capacity, with Shmyhal temporarily leading the administration in his capacity as deputy prime minister.

According to information shared by Zheleznyak, Sviridenko will become Ukraine’s new ambassador to the US. The Financial Times also reported, citing two sources, that the outgoing prime minister will be appointed to this post.

Zelenskyy stated that he had offered Sviridenko the opportunity to head a new and important direction in relations with a key partner, though he did not share specific details regarding which country or organization this would involve.

Subsequently, a report by the Interfax-Ukraine agency, citing sources, stated that Olga Stefanishyna, who currently serves as Ukraine’s Ambassador to the US, wishes to end her diplomatic service due to personal reasons.

Stefanishyna has held the post for less than a year, with Zelenskyy having signed the decree for her appointment in August 2025.

Continue Reading

MOST READ

Turkey