Aurelia Butler

BOCA CHICA, Texas (Reuters) – Elon Musk’s SpaceX made final preparations early on Monday to launch its powerful new Starship rocket system to space for the first time, on a brief but highly anticipated uncrewed test flight from the Gulf Coast of Texas.     The two-stage rocketship, standing taller than the Statue of Liberty at 394 feet (120 m) high, was due for blastoff from the SpaceX facility at Boca Chica, Texas, during a two-hour launch window that opens at 8 a.m. EDT (1200 GMT).     The test mission, whether or not its objectives are entirely met, represents a key milestone in SpaceX’s ambition of sending humans back to the moon and ultimately to Mars – also the central goal of a renewed NASA spaceflight program intended to integrate the Starship.But SpaceX faces enormous challenges in merely launching a spacecraft that would instantly become, if it successfully gets off the ground, the most powerful rocket on Earth.”Success is not what should be expected,” Musk told a private Twitter audience on Sunday night, saying the best-case scenario would provide crucial data about how the vehicle ascends to space and how it will fly back to Earth.    “Probably, tomorrow will not be successful, he said. “It’s just a very fundamentally difficult thing.”    Earlier on Sunday, the California-based company said on Twitter its launch teams were moving ahead with flight preparations, while keeping a close eye on potential wind-shear conditions in the forecast that could force a delay.     On Sunday night, Musk said, “it’s more likely” for the flight to be postponed than to launch on Monday. SpaceX has backup launch windows on Tuesday and Wednesday for roughly the same times.’LIKE A METEOR’Both the lower-stage Super Heavy booster rocket and the upper-stage Starship cruise vessel it will carry to space are designed as reusable components, capable of flying back to Earth for soft landings – a maneuver that has become routine for SpaceX’s smaller Falcon 9 rocket.But neither stage will be recovered for the expendable first test flight to space, expected to last no more than 90 minutes.Prototypes of the Starship cruise vessel have made five sub-space flights up to 6 miles (10 km) above Earth in recent years, but the Super Heavy booster has never left the ground. In February, SpaceX did a test-firing of the booster, igniting 31 of its 33 Raptor engines for roughly 10 seconds with the rocket bolted in place vertically atop a platform.The Federal Aviation Administration just last Friday granted a license for what would be the first test flight of the fully stacked rocket system, clearing a final regulatory hurdle for the long-awaited launch.If all goes as planned on Monday, all 33 Raptor engines will ignite simultaneously to loft the Starship on a flight that nearly completes a full orbit of the Earth before it re-enters the atmosphere and free-falls into the Pacific at supersonic speed about 60 miles (97 km) off the northern Hawaiian islands.After separating from the Starship, the Super Heavy booster is expected to execute the beginnings of a controlled return flight before plunging into the Gulf of Mexico.    Starship’s blazing re-entry over the Pacific will test its ability to aerodynamically steer itself using large flaps and for its heat shielding to withstand the intense friction generated as it plummets through the atmosphere.    “The ship will be coming in like a meteor,” Musk said. “This is the first step in a long journey that will require many flights.”Additional Super Heavy boosters were already on deck in Boca Chica for future test flights, he added.As designed, the Starship rocket is nearly two times more powerful than NASA’s own Space Launch System (SLS), which made its debut uncrewed flight to orbit in November, sending a NASA cruise vessel called Orion on a 10-day voyage around the moon and back. More

While Joe Biden was on a sentimental journey to Ireland, Xi Jinping was busy in Beijing. Following a high-profile visit by President Emmanuel Macron of France, the Chinese leader played host to President Luiz Inácio Lula da Silva of Brazil.The messaging to emerge from the Lula-Xi summit was congenial to China and disturbing to the US. Brazil’s leader said that his country wanted to work with China to “balance world politics” and accused America of “incentivising” the war in Ukraine. He also backed a longstanding Chinese goal of undermining the US dollar’s role in the world financial system, remarking: “Every night I ask myself why all countries have to base their trade on the dollar.”China has also made recent headway with its Middle East diplomacy. This month, the foreign ministers of Iran and Saudi Arabia met in Beijing, after China brokered a deal to restore diplomatic relations between the two powers.The preferred messages to the world from Xi and China are clear: “While America promotes war, China promotes peace. While China promotes trade, America imposes economic sanctions.”These developments are causing some concern in Washington. Larry Summers, the former US Treasury secretary, spoke last week of “troubling” signs that America was losing global influence. He added that someone from a developing country had told him: “What we get from China is an airport. What we get from America is a lecture.”A significant divergence in attitudes to the war in Ukraine is driving these shifts. Pratap Bhanu Mehta, an eminent Indian political scientist, points out that for a large part of the world, America’s reaction to the Russian invasion seems to be as problematic as the invasion itself. It is this constituency that China is appealing to.Viewed from the US and much of Europe, Vladimir Putin’s war is a unique event that requires a unique response. As they see it, this is a very unusual conflict since it is not about a boundary dispute or even regime change. It is a war of territorial acquisition. Such conflicts have been very rare since 1945. The attempted annexation of Kuwait in 1990 by Saddam Hussein of Iraq was another example — and it provoked a broad global response. A war of annexation, the US argues, is even more threatening when carried out by Russia — a nuclear-weapons state and a permanent member of the UN Security Council.In response to the Ukraine war, the US launched an effort to turn Russia into an economic and diplomatic outcast. Unprecedented economic sanctions were imposed and Russian foreign reserves were frozen.But the Russian economy has not suffered the catastrophic collapse that some predicted. In large part, this is because a substantial number of countries — including major economies, such as China, India and Brazil — have kept trading with Russia.For these countries, the Ukraine war may be regrettable — but it is a conflict to be managed by the pursuit of ceasefires and compromises. S Jaishankar, India’s foreign minister, gave pithy expression to the global south’s refusal to join in the ostracism of Russia, with a much-quoted complaint that Europe thinks that “Europe’s problems are the world’s problems, but that the world’s problems are not Europe’s problems”.The Indians and others argue that sanctions imposed on Russia have created new problems for the rest of the world. They point to the impact of the war on food and energy prices, and therefore on poor people around the world. Rich people in the global south are also getting nervous. Actions that were widely applauded in the west — such as the freezing of Russian foreign reserves and sanctions on the assets of Russian oligarchs — have sent a chilling message about the potential danger of keeping your assets in dollars.The US dollar, which has gained international credibility as a “safe haven” currency, now looks less safe to those who fear they might one day be on the wrong side of a geopolitical dispute with Washington. That particularly concerns traditional American allies, such as Saudi Arabia, that are also open to criticism on human rights or the use of military force.After Saudi Arabia’s de facto ruler, Mohammed bin Salman, was implicated in the brutal murder of the journalist Jamal Khashoggi, Biden called Saudi Arabia a pariah. Although the US president has attempted to mend fences with the crown prince, the Saudi has clearly neither forgiven nor forgotten his humiliation — and he is drawing closer to China.Concerns about potential US sanctions in the future have become even more pointed, given the rise in tensions between Washington and Beijing. What if the US ever tried to impose Russia-style financial sanctions on China? The dollar is the world’s most popular currency for trade. But China is the world’s largest trading nation.Rather than doing less trade with China, some countries are looking to do less trade in dollars. Russia has already moved in this direction for obvious reasons and Beijing is encouraging others — such as Saudi Arabia and Brazil — to use the yuan for bilateral trade.The US may be right that the war in Ukraine is a struggle of transcendent significance. But if it cannot persuade or browbeat the rest of the world into agreement, America’s own global position may be [email protected] More

WASHINGTON (Reuters) -Republican U.S. House Speaker Kevin McCarthy plans to make his case for cuts in federal spending to accompany a lifting of the government’s $31.4 trillion debt ceiling in a speech at the New York Stock Exchange on Monday.His speech comes as the federal government ticks closer to the moment sometime this summer when it will no longer be able to meet its financial obligations. Without action by the divided Congress, that would trigger a historic default that would shake the U.S. and world economies.President Joe Biden’s Democrats, who also control the Senate, have been at loggerheads with Republicans for months over next steps on the limit, with the White House insisting Congress lift the borrowing limit without conditions, as it did three times under Biden’s Republican predecessor, Donald Trump.McCarthy on Monday pushed back against Democratic arguments that his caucus was putting the U.S. economy in peril by refusing to act.”Make no mistake: the longer President Biden waits to be sensible, to find agreement, the more likely it becomes that his administration will bumble into the first default in our nation’s history,” McCarthy said on Twitter ahead of his speech, expected at 10 a.m. ET (1400 GMT).The Republicans who control the House of Representatives this week will try to unify around a proposal that would lift the limit to May 2024 — as the next presidential election campaign ramps up — in exchange for sharp spending cuts. Such a proposal is unlikely to win the Democratic support it would need to take effect.McCarthy leads a fractious caucus that holds a narrow 222-213 majority, including a sizeable contingent of hardline members who want sharp spending cuts and dismiss the risks of failure to act on the debt ceiling. So far House Republicans have not produced a proposed budget of their own, a move that Biden contends would be a necessary starting point for negotiations on spending.”I don’t know what we’re negotiating. I don’t know what they want,” Biden told reporters on Saturday.The White House last month proposed its own budget, which it said would cut the nation’s deficit by nearly $3 trillion over 10 years, though it relied on increases in taxes on businesses and the wealthy, rather than spending cuts, to do so.The nonpartisan Congressional Budget Office last month laid out a range of options to address the debt, which showed that higher tax collections would have significantly more impact than spending cuts.LIST OF OPTIONSRepublicans have been discussing spending cuts for programs ranging from homeland security and law enforcement to health, education and environmental initiatives. This could be done by freezing spending at 2022 levels or allowing annual increases of just 1% for a decade, which would not keep up with inflation or population growth and thus effectively cut funding.Such budgeting would not touch the main drivers of the debt Republicans complain about — the Social Security and Medicare retirement and healthcare programs that are projected to nearly double in cost over the next 10 years, according to the CBO.The closer Congress gets to the “X-date” when the federal government will no longer be able to pay its bills, the more nervous investors will become about the economic outlook. The last prolonged standoff over the debt ceiling, in 2011, led to a historic cut in the U.S. government’s credit rating, which rattled markets and raised borrowing costs.House Republicans are also mulling reforms to the debt ceiling, which has utterly failed at its intended purpose of restraining U.S. budget deficits.Currently, the debt limit is statutorily set at a specific dollar amount — now at $31.4 trillion — though Congress sometimes suspends the limit, meaning it does not apply for a set period of time. House Republicans now say they are looking at indexing the limit to gross domestic product. More

Hello from Brussels, or rather virtually from Geneva, with a special edition of Trade Secrets: an interview with Ngozi Okonjo-Iweala. Charted waters this week looks at the problem for China caused by Belt and Road bad loans.Keeping the container ship on trackWorld Trade Organization director-general Ngozi Okonjo-Iweala started our conversation by telling me she was sorry to miss Alan and has issued a standing invitation for him to head back to the shores of Lake Leman any time. Which is more than generous given he described his last trip as “dispiriting”. I am quoting Alan out of context, of course, so you should read his full write-up of the epic June 2022 ministerial.A lot has happened to the global economy in the year since MC12, but rather less in trade policymaking circles. Okonjo-Iweala is a dynamo who spent the ministerial up at all hours knocking heads together, hoping to at least keep the WTO show on the road until the next one in 2024.One can only imagine how frustrating life can be as the world’s top trade official. EU trade policy certainly moves as slowly as a container ship waiting for a slot at Long Beach. The battery of unilateral defence instruments is working its way through the legislative process. I have called house on my Valdis Dombrovskis bingo card several times. “Concrete deliverables” from the EU-US Trade and Technology Council, a “window of opportunity” for the Mercosur trade deal and a global “critical raw materials club” are conjured many times but have yet to appear.US trade representative Katherine Tai’s repeated references to parked disputes over Boeing/Airbus and steel tariffs (which may yet blow up again in October) hark back to the past rather than to the future.Anyway, it turns out the merchants of Genève (cousins of the gnomes of Zurich) have been busy on the most pressing issue of our day — how to better accommodate China in the global trading system.They are, along with the IMF and the World Bank, trying to add up the world’s industrial subsidies. The US and EU accuse China of providing soft loans and lossmaking pricing to allow their companies to seize market share and knock out the competition. Like Amazon, but with public rather than private money. However, it is hard to prove and therefore difficult to take measures against it sanctioned by the WTO.“To put together a database of this is not an easy thing,” said Okonjo-Iweala. However, there is no choice. “Just having a debate without anything on the table is very difficult. It’s nothing more than accusations,” the Nigerian added. Some tools, such as the Subsidies and Countervailing Measures agreement, “may not be fit for purpose”, Okonjo-Iweala said. But to change them you need evidence. (You also need consensus, I would add, which the WTO interprets as unanimity.) “I anticipate a very tough discussion. And that will not be easy, but we will . . . start that debate,” Okonjo-Iweala said. She was more hopeful on reforms to the rules on digital trade. A longstanding policy means ecommerce such as screening films and downloading software is free of customs duties.But some developing countries want to change this as more trade goes online since they believe they are missing out on revenue. The moratorium was rolled over at MC12 until MC13. The DG hopes to get close to an agreement on something more permanent by then.And more than 80 members have formed a plurilateral group to draw up rules, which others could join, which could be finalised within a year. The growth in digital trade is “phenomenal”, Okonjo-Iweala said, boosted by the lockdowns caused by Covid-19. From 2020-22 it has grown by a quarter to $3.8tn annually, or 13 per cent of all trade. Returning to the larger matter of goods trade, now worth $25tn, Okonjo-Iweala said that container shipping rates had dropped sharply and settled about 15 per cent above pre-pandemic levels. “Delivery times are returning to normal. So we think that supply chain issues are working themselves out,” she said. She ended with a warning about the possible fragmentation of world trade into two broad blocs — I would say a US dominated “western” one and a China-dominated “southern” one. The WTO has warned of a 5 per cent loss in gross domestic product if that happened. Now it is revising up to 8.7 per cent — the opportunity cost of failing to create economies of scale and concentrations of expertise in the future. “And if we look at emerging markets and developing countries, it’s even double-digit losses, 14 per cent. We cannot afford this. So that is why we are talking about fragmentation in trade as something we really need to avoid.”As Okonjo-Iweala said: “If you didn’t have the WTO it would be the Wild West.” The movies might be more exciting, but life would be worse.Charted watersChina’s Belt and Road Initiative has created an unfolding debt crisis for the world’s second-largest economy. The global financing scheme has made China the world’s largest bilateral creditor, but as the Financial Times’ global China editor James Kynge explains it has also become a millstone for Beijing as more than $78bn of debt has either been renegotiated or written off in the past 3 years.

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The chart is a warning sign of how risky much of this financing has become. But do not expect this to push Beijing to row back on a scheme that China’s president Xi Jinping branded the “project of the century” almost a decade ago. Besides, many countries still welcome the investment cash from China and are happy to accommodate the BRI framework to continue receiving this money. (Jonathan Moules)Trade linksWestern talk of reducing reliance on China’s economy is growing louder. Whether you call it de-risking or decoupling, James Crabtree argues it is delusional.Never mind China. The EU has domestic strife after Poland and Hungary, never its most collegiate members, decided to block imports of Ukrainian grain. Farmers have complained that the cereal destined for Africa has remained stuck in their countries, depressing prices. Trade is, of course, a Brussels competence. The IMF’s Africa head has called for extensive debt relief. Abebe Selassie told my colleagues Jonathan Wheatley and Aanu Adeoye that the continent needed “a Gleneagles-like moment”, referring to the G8 summit in Scotland in 2005 that led to the cancellation of $130bn of debt for dozens of poor countries.Peter Foster’s Brexit Briefing is once again a must read for the latest in how the UK is innovating (or at least performing handstands) in trade policymaking. Here he reveals how the Windsor framework to ensure goods can flow more smoothly from Great Britain to Northern Ireland could lead to new universal labelling requirements.Trade Secrets is edited by Jonathan Moules More