signals

British Chancellor Rachel Reeves signals that tax rises are coming

British Chancellor of the Exchequer Rachel Reeves delivers a rare pre-budget speech Tuesday at her official residence at No. 9 Downing Street, London, in which she suggested tax hikes were unavoidable. Photo by Andy Rain/Pool/EPA

Nov. 4 (UPI) — British Chancellor Rachel Reeves signaled Tuesday that she was likely to raise taxes on ordinary people in her upcoming budget this month in spite of an election pledge by the Labour government it would not do so.

In a speech in Downing Street, Reeves said she would make “the choices necessary” to ensure the foundation of the economy was sufficiently strong for the government to deliver on its mandate to protect the NHS, get down the national debt and rebuild the economy.

Notably, she did not repeat the manifesto pledge the party ran on in the 2024 general election, in which it swept to power to leave untouched the three main taxes — income tax, National Insurance and VAT.

Instead, seeking to explain her actions in advance of her watershed budget, which she will deliver to Parliament on Nov. 26, she said people needed to “understand the circumstances we are facing” and that everyone needed to do their bit to rectify the situation.

“As I take my decisions on both tax and spend I will do what is necessary to protect families from high inflation and interest rates, to protect our public services from a return to austerity and to ensure that the economy that we hand down to future generations is secure, with debt under control.

“If we are to build the future of Britain together, we will all have to contribute to that effort. Each of us must do our bit for the security of our country and the brightness of its future.”

Reeves dangled the prospect of rewards down the line, stating that getting it right now would yield more resilient public finances with the headroom to withstand global shocks, which in turn would provide businesses with the confidence to invest.

She said that would in turn leave the government with more leeway to act when necessary, investing in infrastructure and industry to build a stronger economy and get down the cost of government debt, spending less on interest and more and schools and the NHS.

Reeves is betting on the budget, her second, to win the endorsement of the market for her management of the country’s finances by showing she can stick to the fiscal rules she set for herself in October 2024.

Those rules state she must balance spending with revenue — within a plus or minus margin of 0.5% of GDP — within five years, meaning no borrowing for everyday spending from the 2029-30 financial year onward. In addition, the ratio of government debt to GDP must begin falling within the same timeframe.

To do that, however, she must demonstrate how she plans to plug a fiscal hole of as much as $40 billion and boost lackluster economic growth.

The only options to close the gap and balance the books are a return to austerity — which the government has categorically ruled out — or boost the amount of money flowing into government coffers.

Reeves raised some taxes on business in her first budget in November 2024 and to come back for more after promising she would not do so, particulary when it comes to raising the basic rate of income tax — currently 20% — is very high risk, politically.

It hasn’t been done for 50 years and it didn’t work out well for then-Labour government with the country plunged into a currency crisis and forced to seek a bailout loan from the IMF.

Reeves mostly laid blame at the feet of the previous Conservative administration’s policies, including Brexit, austerity and cuts to infrastructure spending, all of which she said had led to falling productivity.

She also cited high inflation globally and economic uncertainty created by the trade tariffs imposed by U.S. President Donald Trump in recent months.

Conservative shadow chancellor, Mel Stride, said it was now certain tax hikes for families and businesses were on the way.

He said that if Reeves proceeded to go back on her word, she should quit.

Daisy Cooper, Treasury spokesperson for the Liberal Democrats, said the government could no longer dodge responsibility.

“It’s clear that this budget will be a bitter pill to swallow as the government seems to have run out of excuses,” she said.

Source link

In Chicago, an immense show of force signals a sharp escalation in White House immigration crackdown

The music begins low and ominous, with the video showing searchlights skimming along a Chicago apartment building and heavily armed immigration agents storming inside. Guns are drawn. Unmarked cars fill the streets. Agents rappel from a Black Hawk helicopter.

But quickly the soundtrack grows more stirring and the video — edited into a series of dramatic shots and released by the Department of Homeland Security days after the Sept. 30 raid — shows agents leading away shirtless men, their hands zip-tied behind their backs.

Authorities said they were targeting the Venezuelan gang Tren de Aragua, though they also said only two of the 27 immigrants arrested were gang members. They gave few details on the arrests.

But the apartments of dozens of U.S. citizens were targeted, residents said, and at least a half-dozen Americans were held for hours.

The immense show of force signaled a sharp escalation in the White House’s immigration crackdown and amplified tensions in a city already on edge.

“To every criminal illegal alien: Darkness is no longer your ally,” Homeland Security said in a social media post accompanying the video, which racked up more than 6.4 million views. “We will find you.”

But Tony Wilson, a third-floor resident born and raised on Chicago’s South Side, sees only horror in what happened.

“It was like we were under attack,” Wilson said days after the raid, speaking through the hole where his door knob used to be. Agents had used a grinder to cut out the deadbolt, and he still couldn’t close the door properly, let alone lock it. So he had barricaded himself inside, blocking the door with furniture.

“I didn’t even hear them knock or nothing,” said Wilson, a 58-year-old U.S. citizen on disability.

Dreams and decay

The raid was executed in the heart of South Shore, an overwhelmingly Black neighborhood on Lake Michigan that has long been a tangle of middle-class dreams, urban decay and gentrification.

It’s a place where teams of drug dealers troll for customers outside ornate lakeside apartment buildings. It has some of the city’s best vegan restaurants but also takeout places where the catfish fillets are ordered through bullet-proof glass.

It has well-paid professors from the University of Chicago but is also where one-third of households scrape by on less than $25,000 a year.

The apartment building where the raid occurred has long been troubled. Five stories tall and built in the 1950s, residents said it was often strewn with garbage, the elevators rarely worked and crime was a constant worry. Things had grown more chaotic after dozens of Venezuelan migrants arrived in the past few years, residents said. While no residents said they felt threatened by the migrants, many described a rise in noise and hallway trash.

Owned by out-of-state investors, the building hasn’t passed an inspection in three years, with problems ranging from missing smoke detectors to the stench of urine to filthy stairways. Repeated calls to a lead investor in the limited liability company that owns the building, a Wisconsin resident named Trinity Flood, were not returned. Attempts to reach representatives through realtors and lawyers were also unsuccessful.

Crime fears spiked in June when a Venezuelan man was shot in the head “execution-style,” the Department of Homeland Security said in a statement. Another Venezuelan was charged in the death.

Days after the raid, the doors to dozens of the building’s 130 apartments hung open. Nearly all those apartments had been ransacked. Windows were broken, doors smashed, and clothes and diapers littered the floors. In one apartment, a white tuxedo jacket hung in the closet next to a room knee-deep in broken furniture, piles of clothing and plastic bags. In another, water dripping from the ceiling puddled next to a refrigerator lying on its side. Some kitchens swarmed with insects.

Wilson said a trio of men in body armor had zip-tied his hands and forced him outside with dozens of other people, most Latino. After being held for two hours he was told he could leave.

“It was terrible, man,” he said. He’d barely left the apartment in days.

A city under siege?

Chicago, the White House says, is under siege.

Gang members and immigrants in the U.S. illegally swarm the city and crime is rampant, President Trump insists. National Guard soldiers are needed to protect government facilities from raging left-wing protesters.

“Chicago is the worst and most dangerous city in the World,” he posted on Truth Social.

The reality is far less dramatic. Violence is rare at protests, though angry confrontations are increasingly common, particularly outside a federal immigration center in suburban Broadview. And while crime is a serious problem, the city’s murder rate has dropped by roughly half since the 1990s.

Those realities have not stopped the Trump administration.

What started in early September with some arrests in Latino neighborhoods, part of a crackdown dubbed “Operation Midway Blitz,” has surged across Chicago. There are increasing patrols by masked, armed agents; detentions of U.S. citizens and immigrants with legal status; a fatal shooting; a protesting pastor shot in the head with a pepper ball outside the Broadview facility, his arms raised in supplication.

By early October, authorities said more than 1,000 immigrants had been arrested across the area.

The raids have shaken Chicago.

“We have a rogue, reckless group of heavily armed, masked individuals roaming throughout our city,” Mayor Brandon Johnson said after the Sept. 30 raid. “The Trump administration is seeking to destabilize our city and promote chaos.”

To Trump’s critics, the crackdown is a calculated effort to stir anger in a city and state run by some of his most outspoken Democratic opponents. Out-of-control protests would reinforce Trump’s tough-on-crime image, they say, while embarrassing Johnson and Illinois Gov. JB Pritzker, seen as a possible Democratic presidential contender.

So the South Shore raid, ready-made for social media with its displays of military hardware and agents armed for combat, was seen as wildly out of proportion.

“This was a crazy-looking military response they put together for their reality show,” said LaVonte Stewart, who runs a South Shore sports program to steer young people away from violence. “It’s not like there are roving bands of Venezuelan teenagers out there.”

Officials insist it was no reality show.

The operation, led by U.S. Customs and Border Protection, was based on months of intelligence gathering, according to a U.S. official who was not authorized to discuss the matter publicly. The building’s landlord told authorities that Venezuelans in about 30 units were squatters and had threatened other tenants, the official said, adding that the building’s size necessitated the show of force. Immigration agencies declined further comment.

Even before the “Midway Blitz,” Trump’s election had whipsawed through Chicago’s Latino communities.

Stewart said Venezuelan children began disappearing from his programs months ago, though it’s often unclear if they moved, returned to Venezuela or are just staying home.

“I had 35 kids in my program from Venezuela,” he said. “Now there’s none.”

A wave of migrant newcomers

The raid echoed through South Shore, pinballing through memories of the surge in violence during the 1990s drug wars as well as economic divides and the sometimes uncomfortable relations between Black residents and the wave of more than 50,000 immigrants, most Latino, who began arriving in 2022, often bused from southern border states.

Chicago spent more than $300 million on housing and other services for the immigrants, fueling widespread resentment in South Shore and other Black neighborhoods where the newcomers were settled.

“They felt like these new arrivals received better treatment than people who were already part of the community,” said Kenneth Phelps, pastor at the Concord Missionary Baptist Church in Woodlawn, a largely Black neighborhood.

It didn’t matter that many migrants were crowded into small apartments, and most simply wanted to work. The message to residents, he said, was that the newcomers mattered more than they did.

Phelps tried to fight that perception, creating programs to help new arrivals and inviting them to his church. But that stirred more anger, including in his own congregation.

“I even had people leave the church,” he said.

In South Shore it’s easy to hear the bitterness, even though the neighborhood’s remaining migrants are a nearly invisible presence.

“They took everyone’s jobs!” said Rita Lopez, who manages neighborhood apartment buildings and recently stopped by the scene of the raid.

“The government gave all the money to them — and not to the Chicagoans,” she said.

Changing demographics and generations of suspicion

Over more than a century, South Shore has drawn waves of Irish, Jewish and then Black arrivals for its lakeside location, affordable bungalows and early 20th-century apartment buildings.

Each wave viewed the next with suspicion, in many ways mirroring how Black South Shore residents saw the migrant influx.

Former first lady Michelle Obama’s parents moved to South Shore when it was still mostly white, and she watched it change. A neighborhood that was 96% white in 1950 was 96% Black by 1980.

“We were doing everything we were supposed to do — and better,” she said in 2019. “But when we moved in, white families moved out.”

But suspicion also came from South Shore’s Black middle-class, which watched nervously as many housing projects began closing in the 1990s, creating an influx of poorer residents.

“This has always been a complex community,” Stewart said of those years.

“You can live on a block here that’s super-clean, with really nice houses, then go one block away and there’s broken glass, trash everywhere and shootings,” he said. “It’s the weirdest thing and it’s been this way for 30 years.”

Sullivan writes for the Associated Press. AP reporters Aisha I. Jefferson in Chicago, Elliot Spagat in San Diego and Claudia Lauer in Philadelphia contributed to this report.

Source link

Nvidia’s $6.3 Billion Deal With CoreWeave Signals Something Big for Shareholders of Both Companies

These two AI players have a particularly close relationship.

Nvidia (NVDA 3.52%) has built an artificial intelligence (AI) empire thanks to the dominance of its AI chips and its expansion into a wide variety of other related offerings. But the company isn’t isolating itself, and instead, has looked to work with others — even much smaller players — in this AI boom. One company in particular has become a key Nvidia ally, and that’s CoreWeave (CRWV 0.39%).

CoreWeave launched an initial public offering in March, and the stock has since surged about 195%, buoyed by the company’s soaring sales — and its relationship with Nvidia. The AI chip giant held a 7% stake in CoreWeave as of the end of the second quarter, and CoreWeave makes up 91% of Nvidia’s investment portfolio. And CoreWeave’s business relies heavily on Nvidia as the company’s specialty is the following: It rents out Nvidia’s high-powered graphics processing units (GPUs) to customers through its cloud platform.

Now, Nvidia’s latest move — a $6.3 billion deal with CoreWeave — signals something big for shareholders of both companies. Let’s take a closer look.

Two investors sitting on a couch study something on a laptop.

Image source: Getty Images.

A 1,300% gain

First, though, a quick summary of the businesses of Nvidia and CoreWeave. As mentioned, Nvidia is the AI chip leader, with its GPUs and related products delivering record revenue and earnings over the past few years. Nvidia’s chips offer the highest performance on the market, so tech giants, prioritizing AI success, have rushed to get in on these essential tools. All of this has helped Nvidia stock climb 1,300% over the past five years — and pushed market value past $4 trillion to make Nvidia the world’s biggest company.

CoreWeave, as mentioned, offers customers access to Nvidia compute through its cloud platform. Customers may rent GPUs by the hour or for the long term, and this offers them great flexibility. CoreWeave holds about 250,000 GPUs across 32 data centers and has been the first to make Nvidia’s latest innovations generally available. All of this has translated into outsized revenue growth, with sales tripling in the latest quarter. CoreWeave clearly depends on Nvidia’s success as demand for Nvidia GPUs power its revenue higher — if demand were to decline, not only would Nvidia suffer, but so would CoreWeave.

And this brings me to the latest deal between the two companies. Nvidia signed a $6.3 billion order with CoreWeave, ensuring that the chip leader will buy any cloud capacity that CoreWeave is unable to sell to customers. The deal, extending a 2023 agreement, covers the period through April 13, 2032.

Eliminating a risk

This order signals something different — but significant — for both companies and their shareholders. For CoreWeave, this removes the big risk of the company being stuck with excess capacity. Though the future of AI spending looks bright, any dip in spending, even over a short period, could be costly for the company. So, Nvidia’s agreement to potentially step in means that if any drop in demand happens, it won’t hurt CoreWeave’s sales. As a result, shareholders may breathe a sigh of relief, and cautious investors who have worried about this risk may consider getting in on CoreWeave.

As for Nvidia, this move suggests the company truly is confident about the demand for AI capacity over the next several years. It’s unlikely the tech giant would agree to such a deal if it saw a major slowdown on the horizon. This reinforces Nvidia’s prediction a few weeks ago that AI infrastructure spending may reach $4 trillion by the end of the decade. Nvidia has said in the past that its customers offer it visibility about their upcoming needs — so the chip designer has a good idea of how the demand situation will evolve.

All of this means this latest deal between Nvidia and CoreWeave is fantastic news for shareholders of both companies — for CoreWeave, the agreement lowers risk, and for Nvidia, the agreement confirms that demand for AI is going strong.

Considering this, both of these companies make great AI stocks to buy and hold onto as this AI growth story develops.

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

Source link

Hyundai ICE raid in Georgia leaves Asian executives shaken by Trump’s mixed signals

The immigration raid that snatched up hundreds of South Koreans last week sent a disconcerting message to companies in South Korea and elsewhere: America wants your investment, but don’t expect special treatment.

Images of employees being shackled and detained like criminals have outraged many South Koreans. The fallout is already being felt in delays to some big investment projects, auto industry executives and analysts said. Some predicted that it could also make some companies think twice about investing in the U.S. at all.

“Companies cannot afford to not be more cautious about investing in the U.S. in the future,” said Lee Ho-guen, an auto industry expert at Daeduk University, “In the long run, especially if things get worse, this could make car companies turn away from the U.S. market and more toward other places like Latin America, Europe or the Middle East.”

The raid last week, in which more than 300 South Korean nationals were detained, targeted a factory site in Ellabell, Ga,. owned by HL-GA Battery Company, a joint venture between Hyundai and South Korean battery-maker LG Energy Solutions to supply batteries for EVs. The Georgia factory is also expected to supply batteries for Kia, which is part of the Hyundai Motor Group. Kia has spent hundreds of millions of dollars on its factory in West Point, Ga.

“This situation highlights the competing policy priorities of the Trump administration and has many in Asia scratching their heads, asking, ‘Which is more important to America? Immigration raids or attracting high-quality foreign investment?” said Tami Overby, former president of the American Chamber of Commerce in Korea. “Images of hundreds of Korean workers being treated like criminals are playing all over Asia and don’t match President Trump’s vision to bring high-quality, advanced manufacturing back to America.”

Demonstrators in Seoul, one wearing a Trump mask, hold signs.

A protester wears a mask of President Trump at a rally Tuesday in Seoul protesting the detention of South Korean workers in Georgia. The signs call for “immediate releases and Trump apology.”

(Ahn Young-joon / Associated Press)

South Korea is one of the U.S.’ biggest trading partners, with the two countries exchanging $242.5 billion in goods and services last year. The U.S. is the leading destination for South Korea’s overseas investments, receiving $26 billion last year, according to South Korea’s Finance Ministry.

Trump is banking on ambitious projects like the one raided in Georgia to revive American manufacturing.

Hyundai is one of the South Korean companies with the largest commitments to the U.S. It has invested around $20 billion since entering the market in the 1980s. It sold 836,802 cars in the U.S. last year.

California is one of its largest markets, with more than 70 dealerships.

Earlier this year, the company announced an additional $26 billion to build a new steel mill in Louisiana and upgrade its existing auto plants.

Hyundai’s expansion plans were part of the $150-billion pledge South Korea made last month to help convince President Trump to set tariffs on Korean products at 15% instead of the 25% he had earlier announced.

Samsung Electronics announced that it would invest $37 billion to construct a semiconductor factory in Texas. Similarly large sums are expected from South Korean shipbuilders.

Analysts and executives say the recent raid is making companies feel exposed, all the more so because U.S. officials have indicated that more crackdowns are coming.

“We’re going to do more worksite enforcement operations,” White House border advisor Tom Homan said on Sunday. “No one hires an illegal alien out of the goodness of their heart. They hire them because they can work them harder, pay them less, undercut the competition that hires U.S. citizen employees.”

Many South Korean companies have banned all work-related travel to the U.S. or are recalling personnel already there, according to local media reports. Construction work on at least 22 U.S. factory sites has reportedly been halted.

The newspaper Korea Economic Daily reported on Monday that 10 out of the 14 companies it contacted said they were considering adjusting their projects in the U.S. due to the Georgia raids.

It is a significant problem for the big planned projects, analysts say. South Korean companies involved in U.S. manufacturing projects say they need to bring their own engineering teams to get the factories up and running, but obtaining proper work visas for them is difficult and time-consuming. The option often used to get around this problem is an illegal shortcut like using the Electronic System for Travel Authorization, a non-work permit that allows tourists to stay in the country for up to 90 days.

Unlike countries such as Singapore or Mexico, South Korea doesn’t have a deal with Washington that guarantees work visas for specialized workers.

“The U.S. keeps calling for more investments into the country. But no matter how many people we end up hiring locally later, there is no way around bringing in South Korean experts to get things off the ground,” said a manager at a subcontractor for LG Energy Solution, who asked not to be named. But now we can no longer use ESTAs like we did in the past.”

Trump pointed to the problem on Truth Social, posting that he will try to make it easier for South Korean companies to bring in the people they need, but reminding them to “please respect our Nation’s Immigration Laws.”

“Your Investments are welcome, and we encourage you to LEGALLY bring your very smart people … and we will make it quickly and legally possible for you to do so,” the post said.

Sydney Seiler, senior advisor and Korea chair at the Washington-based Center for Strategic and International Studies, said that the timing of the raids was an “irritant” but that South Korean companies would eventually adjust.

“Rectifying that is a challenge for all involved, the companies, the embassies who issue visas, etc.,” Seiler said, adding that the raids will make other companies be more careful in the future.

Source link

Anthropic’s $1.5-billion settlement signals new era for AI and artists

Chatbot builder Anthropic agreed to pay $1.5 billion to authors in a landmark copyright settlement that could redefine how artificial intelligence companies compensate creators.

The San Francisco-based startup is ready to pay authors and publishers to settle a lawsuit that accused the company of illegally using their work to train its chatbot.

Anthropic developed an AI assistant named Claude that can generate text, images, code and more. Writers, artists and other creative professionals have raised concerns that Anthropic and other tech companies are using their work to train their AI systems without their permission and not fairly compensating them.

As part of the settlement, which the judge still needs to be approve, Anthropic agreed to pay authors $3,000 per work for an estimated 500,000 books. It’s the largest settlement known for a copyright case, signaling to other tech companies facing copyright infringement allegations that they might have to pay rights holders eventually as well.

Meta and OpenAI, the maker of ChatGPT, have also been sued over alleged copyright infringement. Walt Disney Co. and Universal Pictures have sued AI company Midjourney, which the studios allege trained its image generation models on their copyrighted materials.

“It will provide meaningful compensation for each class work and sets a precedent requiring AI companies to pay copyright owners,” said Justin Nelson, a lawyer for the authors, in a statement. “This settlement sends a powerful message to AI companies and creators alike that taking copyrighted works from these pirate websites is wrong.”

Last year, authors Andrea Bartz, Charles Graeber and Kirk Wallace Johnson sued Anthropic, alleging that the company committed “large-scale theft” and trained its chatbot on pirated copies of copyrighted books.

U.S. District Judge William Alsup of San Francisco ruled in June that Anthropic’s use of the books to train the AI models constituted “fair use,” so it wasn’t illegal. But the judge also ruled that the startup had improperly downloaded millions of books through online libraries.

Fair use is a legal doctrine in U.S. copyright law that allows for the limited use of copyrighted materials without permission in certain cases, such as teaching, criticism and news reporting. AI companies have pointed to that doctrine as a defense when sued over alleged copyright violations.

Anthropic, founded by former OpenAI employees and backed by Amazon, pirated at least 7 million books from Books3, Library Genesis and Pirate Library Mirror, online libraries containing unauthorized copies of copyrighted books, to train its software, according to the judge.

It also bought millions of print copies in bulk and stripped the books’ bindings, cut their pages and scanned them into digital and machine-readable forms, which Alsup found to be in the bounds of fair use, according to the judge’s ruling.

In a subsequent order, Alsup pointed to potential damages for the copyright owners of books downloaded from the shadow libraries LibGen and PiLiMi by Anthropic.

Although the award was massive and unprecedented, it could have been much worse, according to some calculations. If Anthropic were charged a maximum penalty for each of the millions of works it used to train its AI, the bill could have been more than $1 trillion, some calculations suggest.

Anthropic disagreed with the ruling and didn’t admit wrongdoing.

“Today’s settlement, if approved, will resolve the plaintiffs’ remaining legacy claims,” said Aparna Sridhar, deputy general counsel for Anthropic, in a statement. “We remain committed to developing safe AI systems that help people and organizations extend their capabilities, advance scientific discovery, and solve complex problems.”

The Anthropic dispute with authors is one of many cases where artists and other content creators are challenging the companies behind generative AI to compensate for the use of online content to train their AI systems.

Training involves feeding enormous quantities of data — including social media posts, photos, music, computer code, video and more — to train AI bots to discern patterns of language, images, sound and conversation that they can mimic.

Some tech companies have prevailed in copyright lawsuits filed against them.

In June, a judge dismissed a lawsuit authors filed against Facebook parent company Meta, which also developed an AI assistant, alleging that the company stole their work to train its AI systems. U.S. District Judge Vince Chhabria noted that the lawsuit was tossed because the plaintiffs “made the wrong arguments,” but the ruling didn’t “stand for the proposition that Meta’s use of copyrighted materials to train its language models is lawful.”

Trade groups representing publishers praised the Anthropic settlement on Friday, noting it sends a big signal to tech companies that are developing powerful artificial intelligence tools.

“Beyond the monetary terms, the proposed settlement provides enormous value in sending the message that Artificial Intelligence companies cannot unlawfully acquire content from shadow libraries or other pirate sources as the building blocks for their models,” said Maria Pallante, president and chief executive of the Association of American Publishers in a statement.

The Associated Press contributed to this report.

Source link

China navy power on show in Pacific, signals ability to ‘contest’ US access | South China Sea News

Kuala Lumpur, Malaysia When four Chinese vessels joined with Russian ships earlier this month in joint naval drills in the Sea of Japan, few eyebrows were raised.

Moscow and Beijing have been reinforcing their military partnership in recent years as they seek to counterbalance what they see as the United States-led global order.

But what did raise eyebrows among defence analysts and regional governments had occurred several weeks earlier when China sent its aircraft carriers into the Pacific together for the first time.

Maritime expert and former United States Air Force Colonel Ray Powell described the “simultaneous deployment” of China’s two aircraft carriers east of the Philippines as a “historic” moment as the country races to realise Chinese President Xi Jinping’s ambition of having a world-class navy by 2035.

“No nation except the US has operated dual carrier groups at such distances since [World War II],” said Powell, director of SeaLight, a maritime transparency project of the Gordian Knot Center at Stanford University.

“While it will take years for China’s still-nascent carrier capabilities to approach that of America’s, this wasn’t just a training exercise – it was China demonstrating it can now contest and even deny US access to crucial sea lanes,” Powell told Al Jazeera.

China’s state-run news agency Xinhua described the exercise by the aircraft carriers as a “far-sea combat-oriented training”, and the state-affiliated Global Times reported that China was soon poised to enter the “three-aircraft-carrier era”, when its Fujian carrier enters service later this year.

East Asia is a ‘home game’ for China

China currently has two operational aircraft carriers – the Liaoning and Shandong – and the Fujian is undergoing sea trials.

While the Chinese navy operates the world’s largest naval fleet with more than 370 ships compared with the US’s 251 active ships in commission, Beijing still lacks the global logistics network and advanced nuclear submarine technology required of a truly mature blue water force, Powell said.

Beijing’s three aircraft carriers run on diesel compared with Washington’s 11 carriers, all of which are nuclear powered.

But “gaps” in naval capabilities are closing between the US and China.

“[China] fully intends to close these gaps and is applying tremendous resources toward that end, and with its rapidly improving technical prowess and vastly superior shipbuilding capacity, it has demonstrated its potential to get there,” Powell said.

Beijing’s more immediate focus is not directed towards competing with the US globally, Powell added.

Rather, China is focused on changing the balance of power and convincing its allies and adversaries to accept China’s dominance within its chosen sphere of influence in East Asia.

The second option, if ever necessary, is to defeat them.

“East Asia is a ‘home game’ for China – a place where it can augment its small carrier force through its far larger land-based air and rocket forces – including so-called [aircraft] ‘carrier killer’ missile systems that can strike targets up to 4,000km [2,485 miles] away,” Powell said.

Regionally, while the Philippines engages in increasingly frequent high seas confrontations with the Chinese coastguard, it is Japan that is watching China’s naval build-up with concern, experts said.

Japan’s Defence Minister Gen Nakatani said in June – after confirming that China’s two carriers had operated simultaneously in the Pacific for the first time – that Beijing apparently aims “to advance its operational capability of the distant sea and airspace”.

With the US increasingly perceived as becoming more inward-looking under President Donald Trump, Japan is considered a growing force in the contested maritime terrain in the Asia Pacific region amid what Tokyo has called “the most severe and complex security environment since the end of World War II”.

‘Preparation for a more uncertain future’

Even before Trump’s second stint as US president, Japan had embarked on the most pivotal shift in post-World War II military spending.

Tokyo’s defence spending and related costs are expected to total 9.9 trillion yen (about $67bn) for fiscal year 2025, equivalent to 1.8 percent of Japan’s gross domestic product (GDP), and the government has committed to raising spending on defence to 2 percent of GDP by 2027, according to Japanese media reports.

“[Japan’s] naval capacity is growing steadily, not just in support of the US alliance but in quiet preparation for a more uncertain future – perhaps even one in which America withdraws from the Pacific,” said Mike Burke, lecturer at Tokyo-based Meiji University.

Collin Koh, senior fellow at the Singapore-based Institute of Defence and Strategic Studies (IDSS), also said that China’s growing military might, assertiveness and proclivity to resort to coercive behaviour have “aggravated Japan’s threat perception”.

But Japan alone cannot guarantee security in such a regional hotspot as the South China Sea, said Burke.

Instead, Tokyo’s goal is to check Beijing’s growing power through a Japanese presence and building partnerships with other regional players.

This year alone so far, Japan has deployed two naval fleets to “realise” what Japanese officials describe as a free and open Asia Pacific region. The first fleet was deployed from January 4 to May 10 and docked in 12 countries, including Malaysia, Singapore, the Philippines, Saudi Arabia, Bahrain and Oman.

The second was deployed on April 21 and is ongoing until November, with port calls in some 23 countries, as well as roles in multilateral military exercises.

Sailors stand aboard the Kokuryu submarine of the Japanese Maritime Self-Defense Force (JMSDF) during its fleet review at Sagami Bay, off Yokosuka, south of Tokyo October 15, 2015. REUTERS/Thomas Peter
Sailors stand on board the Kokuryu submarine of the Japanese Maritime Self-Defence Force during its fleet review at Sagami Bay, off Yokosuka, south of Tokyo, in 2015 [File: Thomas Peter/Reuters]

Japan aims to build trust with other allies, Burke said, noting that Japan has worked on its soft power by funding radar systems, investing in civil infrastructure from ports to rail networks in Southeast Asia, and supporting maritime domain awareness initiatives in the region.

Noriyuki Shikata, Japan’s ambassador to Malaysia, described Tokyo’s approach as a strength at home and reinforcing collaboration abroad with “like-minded countries and others with whom Japan cooperates”, in order to uphold and realise a free and open international order.

“Japan has been strengthening its defence capabilities to the point at which Japan can take the primary responsibility for dealing with invasions against Japan, and disrupt and defeat such threats while obtaining the support of its [US] ally and other security partners,” the ambassador told Al Jazeera.

Zachary Abuza, professor of Southeast Asia studies and security at Washington, DC-based National War College, said the Japan Maritime Self-Defence Force (JMSDF) is a world-class navy that is focused on building the highest level of capabilities.

Abuza also described Japan’s submarine force as “exceptional”, while it is also building up its capabilities, including more high-end antiship missiles.

“All of these developments should give the Chinese some pause,” Abuza told Al Jazeera in a recent interview.

“That said, they [the Japanese] are nervous about Trump’s commitment to treaty obligations, and you can see the Japan Self-Defence Force is trying to strengthen its strategic autonomy,” he said.

‘Chinese assertiveness could result in an accident’

Geng Shuang, charge d’affaires of China’s permanent mission to the United Nations, said earlier this year that China was committed to working with the “countries concerned” to address conflicting claims in the South China Sea through peaceful dialogue.

He also lambasted the threat posed by the US navy’s freedom of navigation operations in the contested sea.

“The United States, under the banner of freedom of navigation, has frequently sent its military vessels to the South China Sea to flex its muscles and openly stir up confrontation between regional countries,” Geng was quoted as saying by Xinhua.

China claims almost all of the South China Sea, a vast area spanning approximately 3.6 million square kilometres (1.38 million square miles) that is rich in hydrocarbons and one of the world’s major shipping routes.

Vietnam, the Philippines, Taiwan, Malaysia and Brunei are claimants to various parts of the sea.

Ralph Cossa, chairman of the Honolulu-based Pacific Forum research institute, said “the challenge to freedom of navigation is a global one”.

But the challenges posed are particularly worrying when it comes to the rival superpowers China and the US.

“I don’t think anyone wants a direct conflict or is looking to start a fight,” Cossa said.

“But I worry that Chinese assertiveness could result in an accident that it would prove difficult for either side to walk away or back down from,” Cossa said.

Speaking on the sidelines of the Institute of Strategic and International Studies’ Asia Pacific Roundtable 2025 summit in Kuala Lumpur earlier this year, Do Thanh Hai, deputy director-general at Vietnam’s East Sea Institute Diplomatic Academy, said no one will emerge unscathed from an incident in the disputed region.

“Any disruption in the South China Sea will affect all,” he told Al Jazeera.

Source link

Iran doubles down as US signals Israel could strike during nuclear talks | News

Tehran, Iran – Iranian authorities have remained defiant amid concerns that Israel could launch an attack on Iran as the global nuclear watchdog adopts another Western-led censure resolution.

Even as Oman confirmed on Thursday that it will host a sixth round of talks on Sunday between Iran and the United States over Tehran’s nuclear programme, reports by outlets such as The New York Times, quoting officials in the US and Europe, warned that Israel is “ready” to attack Iran, even without military backing from Washington. Israel has long threatened to attack Iran’s nuclear sites.

The administration of US President Donald Trump also carried out a partial evacuation of embassy staff in Iraq and dependants of US personnel across the Middle East in a sign of escalating tension in the region.

“I don’t want to say imminent, but it looks like it’s something that could very well happen,” said Trump at a White House event on Thursday, commenting on the likelihood of an Israeli strike.

“We will not give in to America’s coercion and bullying,” Iranian President Masoud Pezeshkian said in a televised speech in the western city of Ilam on Thursday, pointing out that Iran resisted eight years of invasion in the 1980s by neighbouring Iraq, which was backed by many foreign powers.

Hossein Salami, commander-in-chief of the Islamic Revolutionary Guard Corps (IRGC), told state television that if Israel attacks, it would be met with a “history-making” response that would go far beyond Iran’s two rounds of retaliatory strikes on Israel last year.

He said Iran is not “defenceless and encircled” like Gaza, where the Israeli military has killed more than 55,000 Palestinians since October 7, 2023.

Speaking to a crowd in Tehran, IRGC Quds Force commander Esmail Qaani said Iran’s armed forces have made significant strides in improving their attacking capabilities in the months since the previous missile barrages launched against Israel.

“If they think the axis of resistance and Iran have been weakened and then boast based on that, it is all a dream,” said the commander, who leads the external force of the IRGC, which is tasked with expanding Iran’s regional influence.

Mohammad Bagheri, chief of staff of the Iranian armed forces, announced on Thursday that he has given the order to launch more military exercises after a series of large-scale drills were held across Iran earlier this year. An array of missiles and drones, warships, special forces and even underground missile bases featured in those drills.

On Wednesday, Defence Minister Aziz Nasirzadeh reiterated that all US military bases in countries across the region are legitimate targets if conflict breaks out with the US.

He said Iran had successfully launched an unnamed ballistic missile last week with a 2,000kg (4,410lb) warhead and promised casualties “on the other side will be greater and would force the US to leave the region”.

Iran to build third enrichment site

After days of deliberation, the board of the International Atomic Energy Agency (IAEA) on Thursday passed a resolution to censure Iran over its advancing nuclear programme and several outstanding cases involving unexplained nuclear materials found at Iranian sites.

The resolution was put forward in Vienna by the US along with France, Germany and the United Kingdom, the three European nations who are still party to Iran’s 2015 nuclear deal with world powers, which Trump unilaterally abandoned in 2018.

The global nuclear watchdog has adopted several Western-led censure resolutions against Iran over the past few years, but the one on Thursday was the most serious in nearly two decades because it alleges Iran is not complying with its nuclear nonproliferation obligations.

Iran’s Ministry of Foreign Affairs branded the accusation “completely baseless and fabricated” and said Western powers are using the international body as a tool for exerting political pressure.

Tehran’s response was also significant. The Atomic Energy Organization of Iran and the Foreign Ministry jointly announced that the country would build its third uranium enrichment site at a “secure” location.

They added that first-generation centrifuges will be replaced with sixth-generation machines at the Fordow enrichment plant, which will considerably boost Iran’s ability to create highly enriched uranium.

INTERACTIVE-Iran-nuclear-and-military-facilities-1749739103

The Natanz and Fordow facilities, both built deep underground to protect them against bunker-buster munitions used by the US and Israel, are currently the only facilities enriching uranium in Iran. They are both under heavy supervision by the IAEA.

Iran is now enriching uranium up to 60 percent and maintains that its nuclear programme is strictly peaceful and has civilian uses, such as power generation and the manufacture of radiopharmaceuticals. Uranium must be at 90 percent purity to build nuclear weapons.

‘Zero’ enrichment demand looms over talks

Iran and the US are once again heading to Muscat even as they still disagree over enrichment, the key issue for any potential agreement.

The 2015 nuclear deal allowed Iran to enrich uranium up to 3.67 percent under IAEA monitoring, but Trump, who now says he is less confident about a deal with Iran, has insisted on “zero” enrichment taking place inside Iran.

Tehran, which this week rejected another US proposal that included zero enrichment, is slated to offer a counterproposal soon to try to advance the negotiations.

Ideas for a nuclear consortium that includes Iran’s neighbours to bolster trust have so far failed to provide any breakthrough.

Israeli Strategic Affairs Minister Ron Dermer and Mossad chief David Barnea are expected to meet with US envoy Steve Witkoff on Friday before he heads to the Omani capital for the latest round of talks.

Tehran leans on national sentiment

In Tehran’s Vanak Square, authorities this week installed a huge sculpture of Arash Kamangir (Arash the Archer), a hero in Iranian mythology.

The story of Arash involved the hero putting his life in danger by climbing Mount Damavand – the highest peak in Iran at 5,609 metres (18,402ft) and a symbol of national pride – to use his archery skills to set Iran’s borders. In the story, his arrow flies for days before setting Iran’s boundaries with Turan, a historical region in Central Asia.

The story is one that evokes a sense of national pride among all Iranians. When images of the sculpture went viral on social media, some Iranians praised the move while others criticised it as an attempt to tap nationalist sentiment at a time when Iran may be attacked.

Translation: A 15-metre-high [50ft-high] sculpture of Arash Kamangir was installed at Tehran’s Vanak Square today.

But even with the spectre of war seeming to loom over Iran again, markets in the country have remained relatively stable in recent weeks as they anticipate the results of negotiations with the US.

The Iranian rial changed hands in Tehran for about 840,000 per US dollar on Thursday, having only slightly dipped compared with the days before and its news of more military and political pressure on Iran.

“Most people I’ve spoken to here are following the news of the talks with the US and Israel’s threats very closely, but there’s no panic,” a 36-year-old vendor at Tehran’s Grand Bazaar told Al Jazeera, asking to remain anonymous.

After years of stringent sanctions, along with local mismanagement, Iran has been facing consistently high inflation. It currently stands above 30 percent. Iranians are also cut off from international payment networks and banned from most international services due to the sanctions.

“Nobody wants a war,” the vendor said. “We have enough problems as is. I really hope they reach a deal.”



Source link