June 12 update: U.S.-China trade framework, African conflicts and Gaza diplomacy

Off Leash update 12 June

CHINA •Following two days of trade talks in London, the U.S. and China agreed on a framework for a longer-term detente in their trade war that would extend the temporary reciprocal tariff reprieve agreed last month. •The sticking point that kept last month's trade talks from reaching a lasting truce was China's refusal to lift export controls on rare earth minerals. U.S. officials seem content that the new framework resolves that impasse, but it's unclear whether it also addresses reciprocal non-tariff measures the U.S. imposed in response (such as curbs on Chinese student enrollment in U.S. universities). •The framework that came out of this week's summit will now be escalated to Presidents Trump and Xi for their approval.

ECONOMY •A possible imminent U.S.-China trade deal wasn't factored into the World Bank's revised economic forecast released yesterday. That forecast predicted a decline in global economic growth from 2.8% in 2024 to 2.3% in 2025 - and a decline in U.S. economic growth forecast from 2.8% to 1.4% - due to trade wars like the one the U.S.-China framework aims to resolve.

DRC •A new draft of a U.S. proposal for a Rwanda-DRC peace deal reportedly demands that Rwanda fully withdraw its troops from eastern DRC as a precondition for a ceasefire. •Rwanda's Pres. Kagame implausibly denies sending troops into DRC, but will nonetheless probably resist orders to withdraw them because he maintains they're necessary to counter vague threats from Hutu militias.

SUDAN •Sudan's paramilitary Rapid Support Forces (RSF) claimed it captured the strategic "triangle" region bordering Egypt and Libya. •The military - which has been fighting the RSF since April 2023 - seemed to corroborate the RSF's claim when it acknowledged that it retreated from the triangle region "as part of defensive arrangements to repel aggression." •Unverified local reports claimed that fighters loyal to Libya's eastern commander, Khalifa Haftar, crossed the border to help the RSF capture the triangle region. If confirmed, it would be the first known instance of Libyan meddling in Sudan's civil war.

PAKISTAN •Likely jolted by last month's dust-up with India, Pakistan's military announced plans to boost its military spending by 20% to $9 billion for the fiscal year starting July 1. •That's a sharp increase - especially in the context of a 7% decrease in overall government spending for the next fiscal year. Parliament must still approve the budget.

GAZA •In a letter to France's Pres. Macron and Saudi Arabia's Crown Prince MBS, Palestinian Authority (PA) President Mahmoud Abbas condemned Hamas's Oct. 7 attacks and called on Hamas to cede control of Gaza and release all hostages. •Abbas also promised various reforms to the PA, including new presidential elections to be held within a year. He has made and broken the same promise several times in the 29 years since the last presidential poll. •Abbas is hoping to meet Macron's conditions for recognizing Palestinian statehood as early as next week, and wants to position his PA to lead a potential new Palestinian nation. •Israel vehemently opposes Palestinian statehood, and has grown increasingly irritated with France for entertaining the idea. Prime Minister Netanyahu recently accused Pres. Macron of leading "a crusade against the Jewish state" by supporting Palestinian statehood. •Separately, five countries - Australia, Canada, New Zealand, Norway, and the UK - slapped sanctions on two far-right Israeli ministers - interior minister Itamar Ben-Gvir and finance minister Bezalel Smotrich - for stoking settler violence in the West Bank and encouraging the expulsion of Palestinians from Gaza.

1/2