Biden and Xi discuss Taiwan, AI and fentanyl in a push to return to regular leader talks

U.S. President Joe Biden and Chinese President Xi Jinping discussed Taiwan, artificial intelligence and security issues on Tuesday in a call meant to demonstrate a return to regular leader-to-leader dialogue between the two powers.

The call, described by the White House as “candid and constructive,” was the leaders’ first conversation since their November summit in California produced renewed ties between the two nations’ militaries and a promise of enhanced cooperation on stemming the flow of deadly fentanyl and its precursors from China.

Also read | China tells U.S. will ‘never compromise’ on Taiwan

Mr. Xi told Mr. Biden that the two countries should adhere to the bottom line of “no clash, no confrontation” as one of the principles for this year.

“We should prioritize stability, not provoke troubles, not cross lines but maintain the overall stability of China-U.S. relations,” Mr. Xi said, according to China Central Television, the state broadcaster.

The roughly 105 minute call kicks off several weeks of high-level engagements between the two countries, with Treasury Secretary Janet Yellen set to travel to China on Thursday and Secretary of State Antony Blinken to follow in the weeks ahead.

Mr. Biden has pressed for sustained interactions at all levels of government, believing it is key to keeping competition between the two massive economies and nuclear-armed powers from escalating to direct conflict. While in-person summits take place perhaps once a year, officials said, both Washington and Beijing recognise the value of more frequent engagements between the leaders.

The two leaders discussed Taiwan ahead of next month’s inauguration of Lai Ching-te, the island’s President-elect, who has vowed to safeguard its de-facto independence from China and further align it with other democracies. Mr. Biden reaffirmed the United States’ longstanding “One China” policy and reiterated that the U.S. opposes any coercive means to bring Taiwan under Beijing’s control. China considers Taiwan a domestic matter and has vigorously protested U.S. support for the island.

Taiwan remains the “first red line not to be crossed,” Mr. Xi told Mr. Biden, and emphasised that Beijing will not tolerate separatist activities by Taiwan’s independence forces as well as “exterior indulgence and support,” which alluded to Washington’s support for the island.

Mr. Biden also raised concerns about China’s operations in the South China Sea, including efforts last month to impede the Philippines, which the U.S. is treaty-obligated to defend, from resupplying its forces on the disputed Second Thomas Shoal.

Next week, Mr. Biden will host Philippines President Ferdinand Marcos Jr. and Japanese Prime Minister Fumio Kishida at the White House for a joint summit where China’s influence in the region was set to be top of the agenda.

Mr. Biden, in the call with Mr. Xi, pressed China to do more to meet its commitments to halt the flow of illegal narcotics and to schedule additional precursor chemicals to prevent their export. The pledge was made at the leaders’ summit held in Woodside, California, last year on the margins of the Asia-Pacific Economic Cooperation meeting.

At the November summit, Biden and Xi also agreed that their governments would hold formal talks on the promises and risks of advanced artificial intelligence, which are set to take place in the coming weeks. The pair touched on the issue on Tuesday just two weeks after China and the U.S. joined more than 120 other nations in backing a resolution at the United Nations calling for global safeguards around the emerging technology.

Mr. Biden, in the call, reinforced warnings to Mr. Xi against interfering in the 2024 elections in the U.S. as well as against continued malicious cyberattacks against critical American infrastructure.

He also raised concerns about human rights in China, including Hong Kong’s new restrictive national security law and its treatment of minority groups, and he raised the plight of Americans detained in or barred from leaving China.

The Democratic president also pressed China over its defense relationship with Russia, which is seeking to rebuild its industrial base as it presses forward with its invasion of Ukraine. And he called on Beijing to wield its influence over North Korea to rein in the isolated and erratic nuclear power.

As the leaders of the world’s two largest economies, Mr. Biden also raised concerns over China’s “unfair economic practices,” National Security Council spokesman John Kirby said, and reasserted that the U.S. would take steps to preserve its security and economic interests, including by continuing to limit the transfer of some advanced technology to China.

Mr. Xi complained that the U.S. has taken more measures to suppress China’s economy, trade and technology in the past several months and that the list of sanctioned Chinese companies has become ever longer, which is “not de-risking but creating risks,” according to the broadcaster.

Yun Sun, director of the China program at Stimson Center, said the call “does reflect the mutual desire to keep the relationship stable” while the men reiterated their longstanding positions on issues of concern.

The call came ahead of Yellen’s visit to Guangzhou and Beijing for a week of bilateral meetings on the subject with finance leaders from the world’s second largest economy — including Vice Premier He Lifeng, Chinese Central Bank Gov. Pan Gongsheng, former Vice Premier Liu He, American businesses and local leaders.

An advisory for the upcoming trip states that Ms. Yellen “will advocate for American workers and businesses to ensure they are treated fairly, including by pressing Chinese counterparts on unfair trade practices.”

It follows Mr. Xi’s meeting in Beijing with U.S. business leaders last week, when he emphasized the mutually beneficial economic ties between the two countries and urged people-to-people exchange to maintain the relationship.

Mr. Xi told the Americans that the two countries have stayed communicative and “made progress” on issues such as trade, anti-narcotics and climate change since he met with Mr. Biden in November. Last week’s high-profile meeting was seen as Beijing’s effort to stabilize bilateral relations.

Ahead of her trip to China, Ms. Yellen last week said that Beijing is flooding the market with green energy that “distorts global prices.” She said she intends to share her beliefs with her counterparts that Beijing’s increased production of solar energy, electric vehicles and lithium-ion batteries poses risks to productivity and growth to the global economy.

U.S. lawmakers’ renewed angst over Chinese ownership of the popular social media app TikTok has generated new legislation that would ban TikTok if its China-based owner ByteDance doesn’t sell its stakes in the platform within six months of the bill’s enactment.

As chair of the Committee on Foreign Investment in the U.S., which reviews foreign ownership of firms in the U.S., Ms. Yellen has ample leeway to determine how the company could remain operating in the U.S.

Meanwhile, China’s leaders have set a goal of 5% economic growth this year despite a slowdown exacerbated by troubles in the property sector and the lingering effects of strict anti-virus measures during the COVID-19 pandemic that disrupted travel, logistics, manufacturing and other industries.

China is the dominant player in batteries for electric vehicles and has a rapidly expanding auto industry that could challenge the world’s established carmakers as it goes global.

The U.S. last year outlined plans to limit EV buyers from claiming tax credits if they purchase cars containing battery materials from China and other countries that are considered hostile to the United States. Separately, the Department of Commerce launched an investigation into the potential national security risks posed by Chinese car exports to the U.S.

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Baltimore bridge collapse | U.S. President Joe Biden approves $60mn aid; Governor Wes Moore warns of ‘very long road ahead’ for recovery

The largest crane on the Eastern Seaboard was being transported to Baltimore so crews on March 29 can begin removing the wreckage of a collapsed highway bridge that has halted a search for four workers still missing days after the disaster and blocked the city’s vital port from operating.

Maryland Gov. Wes Moore said the crane, which was arriving by barge and can lift up to 1,000 tons, will be one of at least two used to clear the channel of the twisted metal and concrete remains of the Francis Scott Key Bridge, and the cargo ship that hit it this week.

“The best minds in the world” are working on the plans for removal, Moore said. The U.S. Army Corps of Engineers for the Baltimore District told the governor that it and the Navy were mobilizing major resources from around the country at record speed to clear the channel.

“This is not just about Maryland,” Mr. Moore said. “This is about the nation’s economy. The port handles more cars and more farm equipment than any other port in America.”

Mr. Moore warned of a “very long road ahead” to recover from the loss of Baltimore’s Francis Scott Key Bridge as the Biden administration approved $60 million in immediate federal aid after the deadly collapse.

“Meanwhile the U.S. Army Corps of Engineers was moving the largest crane on the Eastern Seaboard to help remove the wreckage of the bridge,” Mr. Moore said, so work to clear the channel and reopen the key shipping route can begin. The machine, which can lift up to 1,000 tonnes, was expected to arrive on Thursday evening, and U.S. Sen. Chris Van Hollen said a second crane with a 400-tonne capacity could arrive on Saturday.

“The State is “deeply grateful” for the federal funds and support,” Mr. Moore said at an evening news conference.

Mr. Moore promised on Thursday that “the best minds in the world” were working on plans to clear the debris, move the cargo ship that rammed into the bridge from the channel, recover the bodies of the four remaining workers presumed dead and investigate what went wrong.

“Government is working hand in hand with industry to investigate the area, including the wreck, and remove the ship,” said Mr. Moore, a Democrat, who said the quick aid is needed to “lay the foundation for a rapid recovery.” President Joe Biden has pledged the federal government would pay the full cost of rebuilding the bridge.

“This work is not going to take hours. This work is not going to take days. This work is not going to take weeks,” Mr. Moore said. “We have a very long road ahead of us.”

Van Hollen said 32 members of the Army Corps of Engineers are surveying the scene of the collapse and 38 Navy contractors are working on the salvage operation.

The devastation left behind after the powerless cargo ship struck a support pillar on Tuesday is extensive. Divers recovered the bodies of two men from a pickup truck in the Patapsco River near the bridge’s middle span on Wednesday, but officials said they have to start clearing the wreckage before anyone could reach the bodies of four other missing workers.

Crew of cargo ship that lost power and collided with bridge in Baltimore, U.S. are all Indian

State police have said that based on sonar scans, the vehicles appear to be encased in a “superstructure” of concrete and other debris.

National Transportation Safety Board officials boarded the ship, the Dali, to recover information from its electronics and paperwork and to interview the captain and crew members. Investigators shared a preliminary timeline of events before the crash, which federal and state officials have said appeared to be an accident.

“The best minds in the world are coming together to collect the information that we need to move forward with speed and safety in our response to this collapse,” Mr. Moore said on March 28.

Of the 21 crew members on the ship, 20 are from India, Randhir Jaiswal, the nation’s Foreign Ministry spokesperson, told reporters. One was slightly injured and needed stitches, but “all are in good shape and good health,” Mr. Jaiswal said.

“The victims, who were part of a construction crew fixing potholes on the bridge, were from Mexico, Guatemala, Honduras and El Salvador,” he said. “At least eight people initially went into the water when the ship struck the bridge column, and two of them were rescued Tuesday,” officials said.

The crash caused the bridge to break and fall into the water within seconds. Authorities had just enough time to stop vehicle traffic, but didn’t get a chance to alert the construction crew.

During the Baltimore Orioles’ opening day game on Thursday, Sgt. Paul Pastorek, Cpl. Jeremy Herbert and Officer Garry Kirts of the Maryland Transportation Authority were honoured for their actions in halting bridge traffic and preventing further loss of life.

The three said in a statement that they were “proud to carry out our duties as officers of this state to save the lives that we could.”

The Dali, which is managed by Synergy Marine Group, was headed from Baltimore to Sri Lanka. It is owned by Grace Ocean Private Limited and was chartered by Danish shipping giant Maersk. Synergy extended sympathies to the victims’ families in a statement on Thursday.

“We deeply regret this incident and the problems it has caused for the people of Baltimore and the region’s economy that relies on this vitally important port,” Synergy said, noting that it would continue to cooperate with investigators.

Scott Cowan, president of the International Longshoremen’s Association Local 333, said the union is scrambling to help its roughly 2,400 members whose jobs are at risk of drying up until shipping can resume in the Port of Baltimore. “If there’s no ships, there’s no work,” he said. “We’re doing everything we can.”

“The huge vessel, nearly as long as the Eiffel Tower is tall, was carrying nearly 4,700 shipping containers, 56 of them with hazardous materials inside. Fourteen of those were destroyed,” officials said. However, industrial hygienists who evaluated the contents identified them as perfumes and soaps, according to the Key Bridge Joint Information Center.

“There was no immediate threat to the environment,” the centre said. About 21 gallons (80 litres) of oil from a bow thruster on the ship is believed to have caused a sheen in the waterway, Coast Guard Rear Adm. Shannon Gilreath said on Thursday.

Booms were placed to prevent any spreading, and state environmental officials were sampling the water. At the moment there are also cargo containers hanging dangerously off the side of the ship, Gilreath said, adding, “We’re trying to keep our first responders … as safe as possible.”

Divers sent to work beneath the bridge debris and container ship will encounter challenging conditions, including limited visibility and moving currents, according to officials and expert observers.

“Debris can be dangerous, especially when you can’t see what’s right in front of you,” said Donald Gibbons, an instructor with the Eastern Atlantic States Carpenters Technical Centers.

The sudden loss of a highway that carries 30,000 vehicles a day and the port disruption will affect not only thousands of dockworkers and commuters but also U.S. consumers, who are likely to feel the impact of shipping delays.

The governors of New York and New Jersey offered to take on cargo shipments that have been disrupted, to try to minimise supply chain problems.

Transportation Secretary Pete Buttigieg, who met on Thursday with supply chain officials, has said the Biden administration was focussed on reopening the port and rebuilding the bridge, but he did not put a timeline on those efforts. From 1960 to 2015, there were 35 major bridge collapses worldwide due to ship or barge collisions, according to the World Association for Waterborne Transport Infrastructure.

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Explained | The U.S. student loan crisis and Joe Biden’s new cancellation plan

The story so far: United States President Joe Biden has already released a new plan to cancel billions in student loan debt after the conservative majority Supreme Court of the U.S. (SCOTUS) in a 6-3 decision on June 30 blocked his ambitious plan to cancel $430 billion in debt.

Although Mr. Biden has said the alternative plan is consistent with the Supreme Court ruling, it could still face a legal challenge, while the fate of millions of American borrowers — who may have to start repaying their loans once a pause on repayment lifts — hangs in the balance.

How big is the U.S. student loan debt?

As per the latest Federal Reserve figures, more than 45 million Americans owe a total of $1.77 trillion in student debt to the U.S. government. As per the Congressional Research Service (CRS), approximately 63% of the U.S. population over the age of 25 has at some time enrolled in some level of higher education and roughly 17% of the country’s population aged 18 or above has federal student loans. Meanwhile, the median student loan debt is just above $17,000.

Research by the nonprofit College Board suggests that over the past three decades, the cost of higher education has risen sharply in the U.S., doubling at private four-year colleges and universities and rising even further at public four-year schools. Between 2006 and 2019, the outstanding balance of student loans has nearly quadrupled.

In the U.S., the federal government is the primary source of student loans, running several loan programmes to help students and their families finance higher education.

These loans are authorised under Title IV of the Higher Education Act of 1965 (HEA). Under primary loan programmes, the U.S. government makes loans using federal capital, meaning funds from the U.S. Treasury Department, after which the outstanding loans become assets of the federal government.

What are repayment options for borrowers?

Once a student borrows a federal loan, they enter into a contractual obligation to repay the loan with interest. They can sign up for specific repayment plans, with repayment periods spanning a decade or more. Under a standard 10-year repayment plan, a borrower has to make 120 equal payments of principal and interest spread over a decade.

Then there are Income-driven repayment (IDR) plans, the kind that President Biden wanted to alter in order to cancel student debt. Such plans cap the monthly payment installments at a share of the borrower’s discretionary income, say 10%- 15%; extend the repayment period over a span of 20 or 25 years, and forgive or write off any unpaid principal and interest remaining after that period.

What was Mr. Biden’s original student debt cancellation plan?

The plan, announced in August 2022, was supposed to cancel $10,000 in federal student loan debt for those making less than $125,000 a year or households making less than $250,000. The recipients of the government’s Pell Grant, who usually need more financial assistance, were to get an additional $10,000 worth of their debt forgiven.

College students qualified if their loans were disbursed before July 1. The plan made 43 million borrowers eligible for some debt forgiveness, with 20 million possibly having their debt erased entirely, according to the Biden administration.

The White House said 26 million people had applied for debt relief, and 16 million people already had their relief approved. As per the Congressional Budget Office, the program would cost about $400 billion over the next three decades.

The Education Department also proposed to improve the existing income-driven plan mentioned above, capping monthly payments for undergraduate loans at 5% of a borrower’s discretionary income, down from the current 10%. The administration claimed that the plan would mean lowering of the average annual student loan payment by more than $1,000 for both current and future borrowers.

Why did the plan run into trouble?

There were two legal challenges to the plan which landed in the Supreme Court—one involving six Republican-led States and the other filed by two students.

In the case filed by the students, they argued, among other things, that the Biden administration didn’t go through the proper process in enacting the plan. Texas-based U.S. District Judge Mark Pittman, appointed by former President Donald Trump, opined that Mr. Biden overstepped his authority. To cancel the debt, the Biden government relied on the Higher Education Relief Opportunities for Students Act, commonly known as the HEROES Act, which was enacted in the aftermath of the 9/11 attack and allows the Secretary of Education to waive or modify terms of federal student loans during times of war or national emergency. The White House cited the COVID-19 pandemic as a national emergency.

The ruling, however, argued that the HEROES Act did not accord the Secretary the authority for mass debt cancellation. The judge said it only granted flexibility during national emergencies, adding that it was unclear whether debt cancellation was a necessary response to the COVID-19 pandemic, which Mr. Biden had by then declared as over.

As for the suit by the six States— Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina— a lower court dismissed it, ruling that the States could not challenge the programme as they were unable to show that they wereharmed by it.

However, the case went to a panel in the U.S. Court of Appeals for the 8th Circuit, where all judges Republican President appointees, which put the programme on hold the next day. After this, the Supreme Court agreed to weigh in.

On June 30, SCOTUS held that the administration needs Congress’ endorsement before undertaking such a costly programme. The majority rejected arguments that the bipartisan 2003 HEROES Act gave Mr. Biden the power he claimed.

“Six States sued, arguing that the HEROES Act does not authorize the loan cancellation plan. We agree,” Chief Justice John Roberts wrote for the court.

Justice Elena Kagan dissented, joined by the court’s two other liberal judges, writing that the majority of the court “overrides the combined judgment of the Legislative and Executive Branches, with the consequence of eliminating loan forgiveness for 43 million Americans.”

What is the Biden administration’s new plan and what’s next for borrowers?

The president announced on the day of the Court ruling that the Education Secretary had initiated a new rulemaking process for the alternative plan, this time using the Secretary’s authority under the Higher Education Act, 1965, the law governing most federal student loan programmes, as mentioned above.

“I’m announcing today a new path consistent with today’s ruling to provide student debt relief to as many borrowers as possible as quickly as possible,” Biden said. “We will ground this new approach in a different law than my original plan, with the so-called Higher Education Ac,” the President said. The plan is also going to take longer as the actual process of negotiated rule making could take as far as fall this year.

While the President contends the new path is consistent with the Court’s opinion, legal scrutiny could be expected. Meanwhile, advocate and legal scholar Luke Herrine, an assistant professor of law at the University of Alabama, wrote in a 2019 paper that the “compromise and settlement” authority, a clause in the HEA, empowers the Secretary of Education with the broad authority to “compromise, waive, or release’’ federal student debt.

Instead of the current Revised Pay as You Earn (REPAYE) plan, the income-driven plan Mr. Biden’s original programme sought to alter, the administration has proposed the new Saving on a Valuable Education (SAVE) plan. “This income-driven repayment plan will cut borrowers’ monthly payments in half, allow many borrowers to make $0 monthly payments, and save all other borrowers at least $1,000 per year,” says the factsheet on the plan. 

The specifics remain the same— requiring borrowers to pay half the current share of discretionary income at 5%. Instead of forgiving loan balances after 20 years of annual payments, this plan also forgivesoutstanding principal after 10 years. Additionally, the plan seeks to raise the amount of income that is considered non-discretionary and therefore is protected from repayment. As for borrowers currently facing uncertainty, the President says they will be able to enroll for SAVE later this summer, “before any monthly payments are due.” Borrowers who sign up or are already signed up for the REPAYE plan will be automatically enrolled.

Mr. Biden also announced an alternative to the pause on student loan repayments scheduled to restart at the end of the summer: a temporary 12-month “on-ramp” for repayment, from October 1, 2023 to September 30, 2024, during which missed loan payments will not harm borrowers’ credit and the threat of default will be temporarily removed.

What are the arguments for and against broad loan cancellation?

Numerous federal student loan repayment and forgiveness programmes providing targeted relief to individuals in certain circumstances currently exist. However, proposals for broader-scale student loan debt relief—including cancellation of all or a portion of federal student loan debt—have gained considerable attention in recent years.

As the cost of education increases while wages stagnate, it has become harder for students to pay off their loans. Studies also point out how federal grants and scholarships have not kept pace with the increasing cost of education and attendance.

President Biden has explained the need for loan cancellation by arguing that higher education “should be a ticket to a middle-class life, but for too many, the cost of borrowing for college is a lifelong burden that deprives them of that opportunity.” A White House factsheet notes that middle-class American borrowers struggle with high monthly payments and “ballooning balances that make it harder for them to build wealth, like buying homes, putting away money for retirement, and starting small businesses.”

CRS Research also points to the composition of borrowers, of which “black students were more likely to borrow Title IV” HEA loans for undergraduate and graduate education “relative to any other racial or ethnic subgroup”. It also finds that certain groups of borrowers (Black, American Indian, and lower-income borrowers) have made less progress in paying down the original principal of debt when compared with other borrowers.

The government also noted how student debt burden falls disproportionately on Black borrowers. “Twenty years after first enrolling in school, the typical Black borrower who started college in the 1995-96 school year still owed 95% of their original student debt,” the White House factsheet on student debt reads.

On the other hand, critics of broad-based cancellation of loans point out how one-time loan cancellation may fail to address the underlying causes of crushing loan debt. One major cause is the skyrocketing cost of education and the need for an overhaul of the system. Another factor flagged by studies is the increasing availability and utilization of loan repayment plans that allow borrowers to make monthly payments lower than the interest accruing on their loans, meaning negative amortization ​​which may result in a larger outstanding loan balance over time.

Analysts have highlighted that policies providing across-the-board loan cancellation may result in higher-income households receiving more cancellation benefits compared to lower-income households when the total dollar amounts cancelled or the savings in annual debt service payments are looked at. Besides, large cancellation plans may also significantly impact federal budgets and debt.

(With inputs from Reuters, Associated Press)

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