The hits keep coming for Huawei. U.S. prosecutors have filed criminal charges against Chinese tech firm Huawei. Washington unsealed two indictments, one of which accuses CFO Meng Wanzhou, detained by Canadian authorities last month, and the company of selling U.S. technology to Iran, and another which accuses Huawei of stealing cellphone testing technology from T-Mobile. The director of the FBI said, “Huawei and its senior executives repeatedly refused to respect the laws of the United States and standard international business practices.” A spokesperson for China’s Foreign Ministry said the charges were unreasonable and politically motivated. The acting U.S. attorney general said the government would follow up with an extradition request for Meng by the Jan. 30 deadline.
China manages the trade war. Meanwhile, a Financial Times report indicates that the trade war with the U.S. will force Chinese chipmaker Fujian Jinhua to stop production by March. Additional reports suggest the Chinese government is preparing to complement its stimulus plans with roughly $370 billion worth of tax cuts and infrastructure spending, and putting pressure on banks to extend more credit. (On Friday, one of China’s four big state-owned banks became the first domestic lender to sell perpetual bonds after the Financial Stability and Development Committee approved them in December.) Washington and Beijing resume high-level trade talks tomorrow; China wants a deal but the U.S. isn’t making it easy for Beijing.
Sanctions for Venezuela. The United States has imposed sanctions on Venezuela’s state-owned oil firm PDVSA. At a White House news briefing, the U.S. treasury secretary said, “The path to sanctions relief for PDVSA is through the expeditious transfer of control to the interim president or a subsequent democratically elected government who is committed to taking concrete and meaningful actions to combat corruption.” In other words, the U.S. is doing everything it can short of military intervention to bring about a political transition in Venezuela. Venezuelan President Nicolas Maduro responded by calling the sanctions “criminal” and said he had directed the head of PDVSA to launch political and legal actions in U.S. and international courts. Opposition leader Juan Guaido, who has declared himself president, said he was beginning to take over Venezuelan state assets abroad and appoint boards of directors for PDVSA and CITGO, it’s U.S. subsidiary.
Who gets to make German cars? Volkswagen announced it signed a memorandum of understanding with the Ethiopian Investment Commission to allow Volkswagen to set up operations, including vehicle assembly facilities, in country. Volkswagen, meanwhile, announced it would cut about 500 jobs in Slovakia (that’s about 4 percent of its workforce there). We don’t want to make mountains out of molehills, but the slow reorientation of supply chains – away from both China and Eastern Europe – is the type of slow-moving story that is difficult to follow but monumentally important. Eastern European countries have leveraged their cheap and highly skilled labor to great success, especially in building German products, so their biggest threat lies not in Russia, their historical adversary, but in Germany, which will look for more cost-effective ways to manufacture its goods now that Eastern European wages are rising.
- Russian newspaper Kommersant and German news magazine Der Spiegel reported that two groups within the Syrian military, one backed by Russia and the other backed by Iran, exchanged fire Jan. 10. Authorities haven’t confirmed the story.
- Taiwan’s president said deploying surface-to-air missiles was a top priority for the Taiwanese military.
- Israeli Prime Minister Benjamin Netanyahu will meet with Russia’s special envoy for Syria and its deputy foreign minister in Jerusalem today.
- Palestinian Prime Minister Rami Hamdallah and the rest of the Palestinian government ministers have resigned.
- Brazilian President Jair Bolsonaro underwent successful intestinal surgery in Sao Paulo yesterday. Folha de Sao Paulo reported he will be in the hospital for up to 10 days.
- Russian President Vladimir Putin’s press secretary said Russia had sent “instructors” to Sudan “some time” ago to help “prepare Sudanese personnel.” This contradicts a statement made last week by a Russian foreign ministry spokesman, who said only private security firms were on the ground in Sudan.
- For the second time in as many months, Polish farmers have blocked roads to protest the government.
- The Democratic Republic of Congo’s parliament held its opening session with little event Monday. The country has been beset by public controversy over the results of recent elections.
- Venezuela devalued its currency by 35 percent to bring it in line with the dollar exchange rate on the black market.
- Japanese Prime Minister Shinzo Abe said he was willing to meet North Korean leader Kim Jong Un.