🌍 Xi weighs his next move as Biden slaps more tariffs

IN TODAY’S EDITION

Hi Intriguer. Military and business schools alike have long touted the teachings of Sun Tzu: a Chinese general, strategist, philosopher, and one of the OG war influencers. His seminal work, The Art of War, is believed to have influenced Mao Zedong’s views on fighting guerrilla wars, which further shaped communist insurgencies around the world.

One of the many nuggets of wisdom contained in the text is “知己知彼,百战不殆”, which translates to “know the enemy and know yourself, and you will never be defeated in a hundred battles”.

As today’s lead story explores, President Xi Jinping seems to be taking that to heart as he thinks through the latest round of US tariffs, the upcoming US elections, and how China’s own strengths and weaknesses might fare ahead.

THE HEADLINES

US Gaza aid pier now operational.
The first shipment of urgent humanitarian aid arrived in Gaza via the new US-built pier earlier today (Friday). US officials hope to scale it up to facilitate 150 truckloads a day (the daily pre-war average was 500). Israeli restrictions at border crossings and heavy fighting have limited deliveries of food and other supplies.

China announces new support for ailing property market. 
Beijing has eased mortgage rules and pushed local governments to transform empty properties into affordable housing. The policies are China’s strongest yet to lift its sagging property market, and they come just as home prices recorded their steepest drop in a decade last month.

Arab League calls for UN peacekeeping mission in Gaza.
Leaders at this year’s Arab League summit in Bahrain have called for the UN to establish a peacekeeping mission in Gaza and the West Bank until a two-state solution is established. In an initial response, the UN said “there first has to be peace to keep”.

Reddit strikes content deal with OpenAI.
Shares in Reddit, a threads-based social media platform, jumped by over 10% yesterday after the company announced it had struck a content deal with OpenAI. OpenAI will gain access to Reddit’s content while also bringing some AI-enhanced features to the platform. OpenAI has struck similar deals with several others recently, including the Financial Times and Associated Press.

Dutch parties arrive at governing agreement after six months. 
The Netherlands looks poised to have a new coalition government after six months of deadlock. If confirmed, it’ll include the party of firebrand Geert Wilders, which won the most votes in November’s election. He’s had to soften his policies on Islam and leaving the EU, plus relinquish hopes of becoming prime minister, in order for other parties to join the coalition. It’s still likely to have implications for EU policies around migration and EU enlargement.

TOP STORY

INTRIGUE’S TAKE

What things are on Xi’s mind as he weighs a response, we hear you say?

• Timing: Xi knows his decision to retaliate (or not) will become a US campaign issue one way or another, so he’ll be mindful to either a) not feed that cycle, b) work it to his advantage, and/or c) keep some leverage to respond to whoever’s in the White House next year.

• Vulnerability: There are wrinkles (see below) but China sells more to the US than vice versa, leaving Xi more vulnerable on aggregate; even more so given Xi’s determination to revive China’s economy by selling more to the world, which gets trickier in an escalatory cycle of tariffs.

• Spectators: Xi will also ponder how his next move plays elsewhere, particularly in Europe, his second-largest customer. The EU is openly divided on how to deal with China, and that in turn opens up gaps between the EU and US. Xi won’t want to unify others against him.

We also promised wrinkles, so here are three: First, the US is still fighting inflation. Second, US manufacturing output is about a third the size of China’s. And third, US dependence on China is still quite deep in some areas (including various critical minerals).

So all this to say that, yes, there are reasons Xi might hold fire for now (and former Chinese trade officials are reportedly urging exactly that). But yes, there are also targeted ways he can – and might – still poke back.

Also worth noting:

• A bonus fourth wrinkle: the US still depends on China for various inputs that are critical to the US energy transition.

• The White House noted in this week’s announcement that China’s EV exports grew globally by 70% between 2022 and 2023.

• Back in 2019, Biden condemned Trump’s tariffs on China. We mention this, dear Intriguer, not to wade into politics, but to highlight how relatively bipartisan this issue has now become.

THIS WEEKEND: INTERNATIONAL INTRIGUE SPECIAL EDITION

Nearly a billion people are now heading to the polls in India. What does this mean for everyone else?

This Sunday, we’re releasing an exclusive special edition with two seasoned India watchers, James Crabtree and Ravi Agrawal.

Want in? Simply share Intrigue with two friends using your unique referral code below!

MEANWHILE, ELSEWHERE…

1. 🇰🇷 South Korea: A court has backed government plans to drastically increase the number of admissions to medical school. This has become a political issue, as some doctors have been protesting the changes for months, with critics alleging they’re worried about more competition lowering their incomes.

2. 🇪🇺 EU: The EU has launched a second investigation into Meta due to the potentially “addictive” nature of the Facebook and Instagram algorithms on children. The probe comes after EU authorities opened an investigation last month into whether the tech giant is doing enough to combat disinformation.

3. 🇮🇳 India: The British food watchdog has announced it’s increasing scrutiny on all spice imports from India after high levels of a cancer-causing substance were found in blends from two major Indian spice makers. The US, New Zealand, Singapore and Australia have all already opened investigations into the case. 

4. 🇺🇸 US: Authorities have charged two brothers with allegedly stealing $25M worth of cryptocurrency in 12 seconds. The duo, graduates of the prestigious MIT, allegedly engineered a first-of-its-kind wire fraud scheme to gain access to pending crypto transactions. 

5. 🇹🇩 Chad: The country’s top court has rejected an opposition petition to cancel the results of the May 6 presidential election that delivered a win to military ruler Mahamat Déby. The country’s prime minister, who came in second, alleged there were irregularities in the vote.

EXTRA INTRIGUE

In honour of Norwegian National Day (May 17), here are some recommendations if you find yourself in 🇳🇴 Oslo this weekend

Buy: While you might not have time to go get a custom Bunad dress made, you can get yourself a tea cloth that lays out all the regional fashion styles worn on May 17th. By the end of the weekend, you might just be able to tell if someone is from Svalbard or Trondheim.

Eat: Opened in 1874, the Grand Café is a wise choice for any theatre fanatics, as word on the street is the legendary 19th Century playwright Henrik Ibsen ate lunch there daily.

Explore: Or, skip the above and do as the locals do: pack your lunch pail with a homemade sandwich and head to Frogner park for some fresh air.

BUS STOP OF THE DAY

We’ve been fortunate to live, work, and study all around the world and, in our humble experience, it’s often the daily things that really stick with you: the local store, the friendly neighbour, and yes, even the bus stops.

That’s why we loved this compilation of the world’s most beautiful bus stops. This one near South Korea’s Jeju airport is famous for its views of the sea and the planes above. With a view like that, just don’t end up missing the bus.

FRIDAY PULSE CHECK

Congratulations, you’ve made it through another week! As we plan for more in-person Intrigue events this year, we’d love to get your thoughts on a few things…