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US, S. Korea open biggest drills in years amid North threats
The United States and South Korea began their biggest combined military training in years Monday as they heighten their defense posture against the growing North Korean nuclear threat.
The drills could draw an angry response from North Korea, which has pushed its weapons testing activity to a record pace this year while repeatedly threatening conflicts with Seoul and Washington amid a prolonged stalemate in diplomacy.
The Ulchi Freedom Shield exercises will continue through Sept. 1 in South Korea and include field exercises involving aircraft, warships, tanks and potentially tens of thousands of troops.
While Washington and Seoul describe their exercises as defensive, North Korea portrays them as invasion rehearsals that justify its nuclear weapons and missiles development.
Cho Joong-hoon, a spokesperson of South Korea's Unification Ministry, which handles inter-Korean affairs, said the South hasn't immediately detected any unusual activities or signs from the North.
The United States and South Korea had canceled some of their regular drills and reduced others to computer simulations in recent years to create space for diplomacy with North Korea and because of COVID-19 concerns.
Ulchi Freedom Shield, which started along with a four-day South Korean civil defense training program led by government employees, will reportedly include simulated joint attacks, front-line reinforcements of arms and fuel, and removals of weapons of mass destruction.
The drills came after North Korea last week dismissed South Korean President Yoon Suk Yeol’s offer to exchange denuclearization steps and economic benefits, accusing Seoul of recycling proposals Pyongyang has long rejected.
Read: US, South Korea to begin expanded military drills next week
Kim Yo Jong, the increasingly powerful sister of North Korean leader Kim Jong Un, described Yoon’s proposal as foolish and stressed that the North has no intentions to barter away an arsenal her brother apparently sees as his strongest guarantee of survival.
She harshly criticized Yoon for continuing military exercises with the U.S. and also for Seoul's failure to stop South Korean civilian activists from flying anti-Pyongyang propaganda leaflets and other “dirty waste” across the border by balloon.
She also ridiculed U.S.-South Korean capabilities for monitoring the North’s missile activity, insisting Seoul wrongly identified the launch location of the North’s latest missile tests last Wednesday, hours before Yoon at a news conference urged Pyongyang to return to diplomacy.
Kim Yo Jong earlier this month warned of “deadly” retaliation against South Korea over a recent North Korean COVID-19 outbreak, which Pyongyang dubiously claims was caused by leaflets and other objects floated by southern activists. There are concerns that the threat portends a provocation which might include a nuclear or missile test or even border skirmishes, and that the North may try to raise tensions sometime around the allied drills.
In an interview with Associated Press Television last month, Choe Jin, deputy director of a think tank run by North Korea’s Foreign Ministry, said the United States and South Korea would face “unprecedented” security challenges if they don’t drop their hostile military pressure campaign against North Korea, including joint military drills.
Last week’s launches of two suspected cruise missiles extended a record pace in North Korean missile testing in 2022, which has involved more than 30 ballistic launches, including the country’s first demonstrations of intercontinental ballistic missiles in nearly five years.
North Korea’s heighted testing activity underscores its dual intent to advance its arsenal and force the United States to accept the idea of the North as a nuclear power so it can negotiate economic and security concessions from a position of strength, experts say.
Kim Jong Un could up the ante soon as there are indications that the North is preparing to conduct its first nuclear test since September 2017, when it claimed to have developed a thermonuclear weapon to fit on its ICBMs.
UN: US buying big Ukraine grain shipment for hungry regions
The United States is stepping up to buy about 150,000 metric tons of grain from Ukraine in the next few weeks for an upcoming shipment of food aid from ports no longer blockaded by war, the World Food Program chief has told The Associated Press.
The final destinations for the grain are not confirmed and discussions continue, David Beasley said. But the planned shipment, one of several the U.N. agency that fights hunger is pursuing, is more than six times the amount of grain that the first WFP-arranged ship from Ukraine is now carrying toward people in the Horn of Africa at risk of starvation.
Beasley spoke Friday from northern Kenya, which is deep in a drought that is withering the Horn of Africa region. He sat under a thorn tree among local women who told the AP that the last time it rained was in 2019.
Their bone-dry communities face yet another failed rainy season within weeks that could tip parts of the region, especially neighboring Somalia, into famine. Already, thousands of people have died. The World Food Program says 22 million people are hungry.
“I think there’s a high probability we’ll have a declaration of famine” in the coming weeks, Beasley said.
He called the situation facing the Horn of Africa a “perfect storm on top of a perfect storm, a tsunami on top of a tsunami” as the drought-prone region struggles to cope amid high food and fuel prices driven partly by the war in Ukraine.
The keenly awaited first aid ship from Ukraine is carrying 23,000 metric tons of grain, enough to feed 1.5 million people on full rations for a month, Beasley said. It is expected to dock in Djibouti on Aug. 26 or 27, and the wheat is supposed to be shipped overland to northern Ethiopia, where millions of people in the Tigray, Afar and Amhara regions have faced not only drought but deadly conflict.
Ukraine was the source of half the grain that WFP bought last year to feed 130 million hungry people. Russia and Ukraine signed agreements with the U.N. and the Turkish government last month to enable exports of Ukrainian grain for the first time since Russia’s invasion in February.
But the slow reopening of Ukraine's ports and the cautious movement of cargo ships across the mined Black Sea won't solve the global food security crisis, Beasley said. He warned that richer countries must do much more to keep grain and other assistance flowing to the hungriest parts of the world, and he named names.
Read: Ukraine grain shipments offer hope, not fix to food crisis
“With oil profits being so high right now — record-breaking profits, billions of dollars every week — ... the Gulf states need to help, need to step up and do it now,” Beasley said. “It’s inexcusable not to. Particularly since these are their neighbors, these are their brothers, their family.”
He asserted the World Food Program could save “millions of lives” with just one day of Gulf countries’ oil profits.
China needs to help as well, Beasley said.
“China’s the second-largest economy in the world, and we get diddly-squat from China,” or very little, he added.
Despite grain leaving Ukraine and hopes rising of global markets beginning to stabilize, the world’s most vulnerable people face a long, difficult recovery, the WFP chief said.
“Even if this drought ends, we’re talking about a global food crisis at least for another 12 months,” Beasley said. “But in terms of the poorest of the poor, it’s gonna take several years to come out of this."
Some of the world's poorest people without enough food are in northern Kenya, where animal carcasses are slowly stripped to the bone beneath an ungenerous sky. Millions of livestock, the source of families’ wealth and nutrition, have died in the drought. Many water pumps have gone dry. More and more thousands of children are malnourished.
“Don’t forget us,” resident Hasan Mohamud told Beasley. “Even the camels have disappeared. Even the donkeys have succumbed.”
With so many in need, aid that does arrive can disappear like a raindrop in the sand. Local women who qualified for WFP cash handouts described taking the 6,500 shillings (about $54) and sharing it among their neighbors — in one case, 10 households.
“The most interesting thing we hear is people saying, ‘We’re not the only ones,’” WFP program officer Felix Okech told the AP. “'We’re the ones who have been selected (for handouts), but there are many more like us.' So that is very humbling to hear.”
In a small crowd that had gathered to listen to stories of children too weak to stand and milk gone dry, one woman at the edge of the woven plastic mat spoke up. Sahara Abdilleh, 50, said she makes perhaps 1,000 shillings ($8.30) a week from gathering firewood, scouring a landscape that gives less and less back every day. Like Beasley, she was thinking globally.
“Is there any country, like Afghanistan or Ukraine, that is worse off than us?” she asked.
US to hold trade talks with Taiwan, island drills military
The U.S. government will hold trade talks with Taiwan in a sign of support for the island democracy that China claims as its own territory, prompting Beijing to warn Thursday it will take action if necessary to “safeguard its sovereignty.”
The announcement of trade talks comes after Beijing fired missiles into the sea to intimidate Taiwan after U.S. House Speaker Nancy Pelosi this month became the highest-ranking American official to visit the island in 25 years.
Chinese President Xi Jinping’s government criticized the planned talks as a violation of its stance that Taiwan has no right to foreign relations. It warned Washington not to encourage the island to try to make its de facto independence permanent, a step Beijing says would lead to war.
“China firmly opposes this,” Ministry of Commerce spokesperson Shu Jueting said. She called on Washington to “fully respect China’s core interests.”
Also Thursday, Taiwan’s military held a drill with missiles and cannons simulating a response to a Chinese missile attack.
Taiwan and China split in 1949 after a civil war and have no official relations but are bound by billions of dollars of trade and investment. The island never has been part of the People’s Republic of China, but the ruling Communist Party says it is obliged to unite with the mainland, by force if necessary.
President Joe Biden’s coordinator for the Indo-Pacific region, Kurt Campbell, said last week that trade talks would “deepen our ties with Taiwan” but stressed policy wasn’t changing. The United States has no diplomatic relations with Taiwan, its ninth-largest trading partner, but maintains extensive informal ties.
Read: US Congress members meet Taiwan leader amid China anger
The U.S. Trade Representative’s announcement of the talks made no mention of tension with Beijing but said “formal negotiations” would develop trade and regulatory ties, a step that would entail closer official interaction.
Being allowed to export more to the United States might help Taiwan blunt China’s efforts to use its status as the island’s biggest trading partner as political leverage. The mainland blocked imports of Taiwanese citrus and other food in retaliation for Pelosi’s Aug. 2 visit.
Taiwan’s Foreign Ministry expressed “high welcome” for the trade talks, which it said will lead to a “new page” in relations with the United States.
“As the situation across the Taiwan Strait has recently escalated, the U.S. government will continue to take concrete actions to maintain security and stability across the Taiwan Strait,” it said in a statement.
U.S.-Chinese relations are at their lowest level in decades amid disputes over trade, security, technology, and Beijing’s treatment of Muslim minorities and Hong Kong.
The U.S. Trade Representative said negotiations would be conducted under the auspices of Washington’s unofficial embassy, the American Institute in Taiwan.
“China always opposes any form of official exchanges between any country and the Taiwan region of China,” said Shu, the Chinese spokesperson. “China will take all necessary measures to resolutely safeguard its sovereignty.”
Washington says it takes no position on the status of China and Taiwan but wants their dispute settled peacefully. The U.S. government is obligated by federal law to see that the island has the means to defend itself.
“We will continue to take calm and resolute steps to uphold peace and stability in the face of Beijing’s ongoing efforts to undermine it, and to support Taiwan,” Campbell said during a conference call last Friday.
China takes more than twice as much of Taiwan’s exports as the United States, its No. 2 foreign market. Taiwan’s government says its companies have invested almost $200 billion in the mainland. Beijing says a 2020 census found some 158,000 Taiwanese entrepreneurs, professionals and others live on the mainland.
China’s ban on imports of citrus, fish and hundreds of other Taiwanese food products hurt rural areas seen as supporters of President Tsai Ing-wen, but those goods account for less than 0.5% of Taiwan’s exports to the mainland.
Beijing did nothing that might affect the flow of processor chips from Taiwan that are needed by Chinese factories that assemble the world’s smartphones and consumer electronics. The island is the world’s biggest chip supplier.
A second group of U.S. lawmakers led by Sen. Ed Markey, a Democrat from Massachusetts, arrived on Taiwan on Sunday and met with Tsai. Beijing announced a second round of military drills after their arrival.
Taiwan, with 23.6 million people, has launched its own military drills in response.
On Thursday, drills at Hualien Air Base on the east coast simulated a response to a Chinese missile attack. Military personnel practiced with Taiwanese-made Sky Bow 3 anti-aircraft missiles and 35mm anti-aircraft cannon but didn’t fire them.
“We didn’t panic” when China launched military drills, said air force Maj. Chen Teh-huan.
“Our usual training is to be on call 24 hours a day to prepare for missile launches,” Chen said. “We were ready.”
The U.S.-Taiwanese talks also will cover agriculture, labor, the environment, digital technology, the status of state-owned enterprises and “non-market policies,” the U.S. Trade Representative said.
Washington and Beijing are locked in a 3-year-old tariff war over many of the same issues.
They include China’s support for government companies that dominate many of its industries and complaints that Beijing steals foreign technology and limits access to an array of fields in violation of its market-opening commitments.
Then-President Donald Trump raised tariffs on Chinese goods in 2019 in response to complaints that its technology development tactics violate its free-trade commitments and threaten U.S. industrial leadership. Biden has left most of those tariff hikes in place.
US to hold trade talks with Taiwan in new show of support
The U.S. government plans talks with Taiwan on a wide-ranging trade treaty in a sign of support for the self-ruled island democracy claimed by China’s ruling Communist Party as part of its territory.
The announcement Thursday comes after Beijing held military drills that included firing missiles into the sea to intimidate Taiwan following this month’s visit by U.S. House Speaker Nancy Pelosi.
The U.S. Trade Representative’s office made no mention of tension with Beijing but said the “formal negotiations” were meant to enhance trade and regulatory cooperation, which would entail closer official interaction.
President Joe Biden’s coordinator for the Indo-Pacific region, Kurt Campbell, told reporters last week that trade talks would be part of efforts to “deepen our ties with Taiwan,” though he said U.S. policy wasn’t changing.
Taiwan and China split in 1949 after a civil war. The island never has been part of the People’s Republic of China, but the Communist Party says it is obliged to united politically with the mainland, by force if necessary.
The United States has no official relations with Taiwan but maintains extensive ties through its unofficial embassy, the American Institute in Taiwan.
Read: US Congress members meet Taiwan leader amid China anger
Chinese President Xi Jinping’s government says official contact with Taiwan such as Pelosi’s Aug. 2 one-day visit might embolden the island to try to make its decade-old de facto independence permanent, a step Beijing says would lead to war.
Washington says it takes no position on the status of China and Taiwan but wants their dispute settled peacefully. The U.S. government is obligated by federal law to see that the island has the means to defend itself.
“We will continue to take calm and resolute steps to uphold peace and stability in the face of Beijing’s ongoing efforts to undermine it, and to support Taiwan,” Campbell said during a conference call last Friday.
A second group of U.S. lawmakers led by Sen. Ed Markey, a Democrat from Massachusetts, arrived on Taiwan on Sunday and met with President Tsai Ing-wen. Beijing announced a second round of military drills following their arrival.
Beijing had no immediate reaction to the trade talks announcement.
The talks also will cover agriculture, labor, the environment, digital technology, the status of state-owned enterprises and “non-market policies,” the USTR said.
It gave no indication which officials would be involved but said talks would be held under the auspices of the American Institute and Taiwan’s informal embassy, the Taipei Economic and Cultural Representative Office in the United States.
U.S.-Chinese relations are their lowest level in decades amid disputes about security, technology, Beijing’s treatment of Muslim minorities and its crackdown in Hong Kong.
They are are locked in a 3-year-old tariff war over disputes in many of the areas mentioned in Thursday’s announcement. They include China’s support for government companies that dominate many of its industries and complaints Beijing steals foreign technology and hampers foreign competitors in an array of fields in violation of its market-opening commitments.
Then-President Donald Trump raised tariffs on Chinese goods in 2019 in response to complaints its technology development tactics violate its free-trade commitments and threaten U.S. industrial leadership. President Joe Biden has left most of those tariff hikes in place.
Taiwan, with 24 million people, is the ninth-largest U.S. trading partner and the 10th-largest U.S. export market, according to the USTR. The State Department describes it as a “key U.S. partner in the Indo-Pacific.”
Taiwan is the main global source of processor chips for smartphones, medical devices, autos and home appliances, as well as industrial components used by factories in China and other Asian countries..
China and US spar over climate on Twitter
The world's two biggest emitters of greenhouse gases are sparring on Twitter over climate policy, with China questioning whether the U.S. can deliver on the landmark climate legislation signed into law by President Joe Biden this week.
“You can bet America will meet our commitments,” U.S. Ambassador to China Nicholas Burns tweeted in response on Wednesday, using a national flag emoticon for “America." He called on China to resume suspended climate talks, writing: “We're ready."
The punchy exchange, part of a longer back and forth on Twitter, is emblematic of a broader worry: U.S.-China cooperation is widely considered vital to the success of global efforts to curb rising temperatures. With the breakdown in relations over Taiwan and other issues, some question whether the two sides can cooperate.
After Congress passed the climate bill last Friday, Burns took to Twitter over the weekend to say the U.S. was acting on climate change with its largest investment ever — and that China should follow.
On Tuesday night, China's Foreign Ministry responded with its own tweet: “Good to hear. But what matters is: Can the U.S. deliver?”
The verbal skirmish grew out of China's suspension of talks with the U.S. on climate and several other issues earlier this month as part of its protest over a visit to Taiwan by a senior American lawmaker, House Speaker Nancy Pelosi.
Climate has been one of the few areas of cooperation between the feuding countries. U.S. officials criticized China's move, with Secretary of State Antony Blinken saying it “doesn’t punish the United States — it punishes the world.”
Read:China sets sanctions on Taiwan figures to punish US, island
Asked to respond, Chinese Foreign Ministry spokesperson Zhao Lijian called on the U.S. last week to "deliver on its historical responsibilities and due obligations on climate change and stop looking around for excuses for its inaction.”
The ministry later tweeted some of his answer, and Burns responded four days later with his tweet on the U.S. climate bill. Using the acronym for the People's Republic of China, he ended with: “The PRC should follow+reconsider its suspension of climate cooperation with the U.S.”
China elaborated on its “Can the U.S. deliver?" message with a second tweet that suggested U.S. actions, including lifting sanctions imposed last year on solar industry exports from China's Xinjiang region because of allegations of forced labor.
The Twitter battle highlights a perception divide between the longstanding superpower that wants to lead and the rising power that no longer wants to feel bound to follow anyone else's direction.
The decision by former President Donald Trump to pull the U.S. out of the Paris climate accord — reversed by Biden after he took office last year — dealt a blow to American credibility on the issue.
A Chinese expert praised parts of the U.S. legislation but said it is overdue and not enough.
“Although there are some breakthrough achievements in the bill, I am afraid it can’t re-establish U.S. leadership on climate change,” said Teng Fei, a professor at Tsinghua University’s Institute of Energy Environment and Economy.
U.S. climate envoy John Kerry has been pressing China to set more ambitious climate goals. China has responded that its goals are realistic, given its development needs as a middle-income country, while the U.S. sets ambitious goals that it fails to achieve.
China's ruling Communist Party generally sets conservative targets at a national level, because it doesn't want its performance to fall short. Those targets are sometimes exceeded, though, in the eager pursuit of those goals by local officials.
“China should be able to do better than its national targets indicate,” said Cory Combs, a senior analyst with the Trivium China consultancy. “But of course, those local plans are all subject to failure and delays, so it’s impossible to tell quite what they’ll add up to.”
US, Indonesia, Australia hold drills amid China concerns
Soldiers from the U.S., Indonesia and Australia joined a live-fire drill on Friday, part of annual joint combat exercises on Sumatra island amid growing Chinese maritime activity in the Indo-Pacific region.
A total of more than 5,000 personnel from the U.S., Indonesia, Australia, Japan and Singapore are participating in this year’s exercises, making them the largest since they began in 2009.
The expanded drills are seen by China as a threat. Chinese state media have accused the U.S. of building an Indo-Pacific alliance similar to NATO to limit China’s growing military and diplomatic influence in the region.
The United Kingdom, Canada, France, India, Malaysia, South Korea, New Zealand, Papua New Guinea and East Timor also sent observers to the exercises, which began early this month.
The U.S. Indo-Pacific commander, Adm. John C. Aquilino Aquilino, said the 14 nations involved in the training are signaling their stronger ties as China grows increasingly assertive in claiming virtually the entire South China Sea and holds exercises threatening self-ruled Taiwan.
“The destabilizing actions by the People’s Republic of China as it applied to the threatening activities and actions against Taiwan is exactly what we are trying to avoid,” he said at a joint news conference with Indonesian military chief Gen. Andika Perkasa in Baturaja, a coastal town in South Sumatra province.
“We’ll continue to help deliver a free and open Indo-Pacific and be ready when we need to respond to any contingency,” Aquilino said.
Read: Taiwan says China military drills appear to simulate attack
Indonesia and China enjoy generally positive ties, but Jakarta has expressed concern about what it sees as Chinese encroachment in its exclusive economic zone in the South China Sea.
Despite its official position as a non-claimant state in the contested South China Sea, Indonesia has been “dragged along” in the territorial dispute since 2010 after China claimed part of Indonesia's exclusive economic zone in the northern region of the Natuna Islands, said Connie Rahakundini Bakrie, a security analyst at the University of Indonesia.
The edge of the exclusive economic zone overlaps with Beijing’s unilaterally declared “nine-dash line” demarking its claims in the South China Sea.
Increased activities by Chinese coast guard vessels and fishing boats in the area have unnerved Jakarta, prompting Indonesia's navy to conduct a large drill in July 2020 in waters around Natuna at the southern portion of the South China Sea.
Indonesia sees the current exercises with the U.S. as a deterrent in defense of the Natuna Islands, while for Washington, the drills are part of efforts to forge a united front against China’s military buildup in the South China Sea, Bakrie said.
"Indonesia wants to send the message that it is fully prepared for any high-intensity conflict in the South China Sea area,” she said.
The joint combat exercises end Sunday.
Gas prices dip just below $4 for the first time in 5 months in US
Gasoline prices dipped to just under the $4 mark for the first time in more than five months — good news for consumers who are struggling with high prices for many other essentials.
AAA said the US national average for a gallon of regular was $3.99 on Thursday.
Prices have dropped 15 cents in the past week and 68 cents in the last month, according to the auto club.
The shopping app GasBuddy reported that the national average was already down to $3.98 on Wednesday.
Also read: US inflation will likely stay high even as gas prices fall
Falling prices for gas, airline tickets and clothes are giving consumers a bit of relief, although inflation is still close to a four-decade high.
Oil prices began rising in mid-2020 as economies recovered from the initial shock of the pandemic. They rose again when the U.S. and allies announced sanctions against Russian oil over Russia's war against Ukraine.
Recently, however, oil prices have dropped on concern about slowing economic growth around the world. U.S. benchmark crude oil has recently dipped close to $90 a barrel from over $120 a barrel in June.
High prices also may be causing U.S. motorists to drive less. Gasoline demand in early August was down 3.3% from the same week last year after tracking more closely to 2021 numbers earlier in the summer.
Prices at the pump are likely to be a major issue heading into the mid-term elections in November.
Republicans blame President Joe Biden for the high gasoline prices, seizing on his decisions to cancel a permit for a major pipeline and suspend new oil and gas leases on federal lands.
Also read: Fuel, natural gas price hikes to have domino effect on economy: DCCI
Biden said over the weekend that a family with two cars is saving $100 a month because prices have dropped from their peak in mid-June.
“That's breathing room,” he tweeted. “And we're not letting up any time soon.”
Biden has also sparred with oil companies, accusing them of not producing as much oil and gasoline as they could while posting huge profits. “Exxon made more money than God this year,” he said in June.
Exxon said it has increased oil production. The CEO of Chevron said Biden was trying to vilify his industry.
The nationwide average for gas hasn't been under $4 since early March. Prices topped out at $5.02 a gallon on June 14, according to AAA. They declined slowly the rest of June, then began dropping more rapidly.
Motorists in California and Hawaii are still paying above $5, and other states in the West are paying close to that. The cheapest gas is in Texas and several other states in the South and Midwest.
A year ago, the nationwide average price was around $3.20 a gallon.
US lauds Bangladesh’s success in COVID-19 vaccination, ensuring food security
US Assistant Secretary for International Organization Affairs Ambassador Michele J. Sison has praised Bangladesh’s tremendous success in countrywide COVID-19 vaccination and ensuring food security.
She also praised Bangladesh’s contributions in peacekeeping operations (PKO), particularly women’s participation in the PKOs.
During her meeting with Foreign Secretary Masud Bin Momen on Monday, she also discussed the upcoming elections in the multilateral fora.
"The United States and Bangladesh share common interests on the most challenging global issues, and we will continue to collaborate closely," said the US Embassy on Tuesday as Sison wrapped up her visit.
Bangladesh receives more doses of Pfizer COVID-19 vaccine from US
The US government has donated another 1.5 million pediatric doses of Pfizer’s COVID-19 vaccine to Bangladesh via COVAX to help the government of Bangladesh expand vaccination coverage to protect children ages 5-11 for the very first time.
This delivery marks the second shipment of US-donated vaccines for young children this week and brings the total number of all US vaccine donations to over 75 million doses, said the US Embassy in Dhaka on Monday.
More than two-thirds of all international COVID-19 vaccine donations to Bangladesh have come from the United States and the American people.
Also read: Covid-19 vaccine consignment for kids arrive in Dhaka
The United States continues to work closely with Bangladesh to support every facet of the national COVID-19 vaccination campaign, according to the US Embassy.
This includes training to over 51,000 healthcare providers and other workers on safely administering vaccines to support Bangladesh’s COVID-19 vaccination roll out across 64 districts.
The United States has also donated 18 freezer vans, 750 freezer units, and 8,000 vaccine carriers and helped transport 57 million doses of vaccines to remote areas – for direct administration of 47 million vaccinations.
In Bangladesh, the United States has contributed more than $140 million in COVID-19 related development and humanitarian assistance, said the US Embassy.
Also read: Bangladesh gets another 4 mn doses of COVID-19 vaccine from US
Globally, the United States has donated $4 billion to support the COVAX effort, which includes support for ultra-cold chain storage, transportation, and safe handling of COVID-19 vaccines, making the United States the world’s largest donor for equitable global COVID-19 vaccine access.
How do we know when a recession has begun?
The U.S. economy has contracted for two straight quarters, intensifying fears that the nation is on the cusp of a recession — if not already in one — barely two years after the pandemic recession officially ended.
Six months of contraction is a long-held informal definition of a recession. Yet nothing is simple in the post-pandemic economy. Its direction has confounded Federal Reserve policymakers and many private economists since growth screeched to a halt in March 2020 as COVID-19 struck and 20 million Americans were suddenly thrown out of work.
One sector of the economy that has remained defiantly buoyant is the jobs market and on Friday, the Labor Department will release monthly employment data that most economists believe will show that hiring, too, has begun to cool.
That would be a sizeable shift in an era that may be remembered for having so many unfilled jobs that there were two available for every American who didn’t have one.
Even as the economy shrank over the first half of this year, employers added 2.7 million jobs — more than in most entire years before the pandemic struck. And the unemployment rate has sunk to 3.6%, near a half-century low. Robust hiring and exceedingly low unemployment aren’t consistent with a recession.
While most economists — and Fed Chair Jerome Powell — have said they don’t think the economy is in recession, many increasingly expect an economic downturn to begin later this year or next.
Either way, with inflation raging at its highest level in four decades, Americans’ purchasing power is eroding. The pain is being felt disproportionately by lower-income and Black and Hispanic households, many of whom are struggling to pay for higher-cost essentials like food, gas and rent. Compounding those pressures, the Fed is jacking up interest rates at the fastest pace since the early 1980s, thereby magnifying borrowing costs for homes and cars and credit card purchases.
Read: Inflation hits record 8.9% in euro area, but economy grows
As a result, regardless of whether a recession has officially begun, Americans have increasingly soured on the economy,
So how, exactly, do we know when an economy is in recession? Here are some answers to such questions:
WHO DECIDES WHEN A RECESSION HAS STARTED?
Recessions are officially declared by the obscure-sounding National Bureau of Economic Research, a group of economists whose Business Cycle Dating Committee defines a recession as “a significant decline in economic activity that is spread across the economy and lasts more than a few months.”
The committee considers trends in hiring as a key measure in determining recessions. It also assesses many other data points, including gauges of income, employment, inflation-adjusted spending, retail sales and factory output. It puts heavy weight on jobs and a gauge of inflation-adjusted income that excludes government support payments such as Social Security.
Yet the NBER typically doesn’t declare a recession until well after one has begun, sometimes for up to a year. Economists consider a half-point rise in the unemployment rate, averaged over several months, as the most historically reliable sign of a downturn.
DO TWO STRAIGHT QUARTERS OF ECONOMIC CONTRACTION EQUAL A RECESSION?
That’s a common rule of thumb, but it isn’t an official definition.
Still, in the past, it has been a useful measure. Michael Strain, an economist at the right-leaning American Enterprise Institute, notes that in each of the past 10 times that the economy shrank for two consecutive quarters, a recession has resulted.
Still, even Strain isn’t sure we’re in recession now. Like many economists, he notes that the underlying drivers of the economy — consumer spending, business investment, home purchases — all grew in the first quarter.
Overall gross domestic product — the broadest measure of the nation’s output — declined at a 1.6% annual rate from January through March because of one-off factors, including a sharp jump in imports and a post-holiday season drop in businesses’ inventories. Many economists expect that when GDP is revised later this year, the first quarter may even turn out to be positive.
“The basic story is that the economy is growing but still slowing, and that slowdown really accelerated in the second quarter,” Strain said.
DON’T A LOT OF PEOPLE THINK A RECESSION IS COMING?
Yes, because many people now feel more financially burdened. With wage gains trailing inflation for most people, higher prices for such essentials as gas, food, and rent have eroded Americans’ spending power,
This week, Walmart reported that higher gas and food costs have forced its shoppers to reduce their purchases of discretionary spending such as new clothing, a clear sign that consumer spending, a key driver of the economy, is weakening. The nation’s largest retailer, Walmart reduced its profit outlook and said it will have to discount more items like furniture and electronics.
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And the Fed’s rate hikes have caused average mortgage rates to double from a year ago, to 5.5%, causing a sharp fall in home sales and construction.
Higher rates will also likely weigh on businesses’ willingness to invest in new buildings, machinery and other equipment. If companies reduce spending and investment, they’ll also start to slow hiring. Rising caution among companies about spending freely could lead eventually to layoffs. If the economy were to lose jobs and the public were to grow more fearful, consumers would further reduce spending.
The Fed’s rapid rate hikes have raised the likelihood of recession in the next two years to nearly 50%, Goldman Sachs economists have said. And Bank of America economists now forecast a “mild” recession later this year, while Deutsche Bank expects a recession early next year.
WHAT ARE SOME SIGNS OF AN IMPENDING RECESSION?
The clearest signal that a recession is under way, economists say, would be a steady rise in job losses and a surge in unemployment. In the past, an increase in the unemployment rate of three-tenths of a percentage point, on average over the previous three months, has meant that a recession will soon follow.
Many economists monitor the number of people who seek unemployment benefits each week, which indicates whether layoffs are worsening. Weekly applications for jobless aid, averaged over the past four weeks, have risen for eight straight weeks to nearly 250,000, the highest level since last November. While that is a potentially concerning sign, it is still a low level historically.
ANY OTHER SIGNALS TO WATCH FOR?
Many economists also monitor changes in the interest payments, or yields, on different bonds for a recession signal known as an “inverted yield curve.” This occurs when the yield on the 10-year Treasury falls below the yield on a short-term Treasury, such as the 3-month T-bill. That is unusual. Normally, longer-term bonds pay investors a richer yield in exchange for tying up their money for a longer period.
Inverted yield curves generally mean that investors foresee a recession that will compel the Fed to slash rates. Inverted curves often predate recessions. Still, it can take 18 to 24 months for a downturn to arrive after the yield curve inverts.
For the past two weeks, the yield on the two-year Treasury has exceeded the 10-year yield, suggesting that markets expect a recession soon. Many analysts say, though, that comparing the 3-month yield to the 10-year has a better recession-forecasting track record. Those rates are not inverted now.
WILL THE FED KEEP RAISING RATES EVEN AS THE ECONOMY SLOWS?
The economy’s flashing signals — slowing growth with strong hiring — have put the Fed in a tough spot. Chair Jerome Powell is aiming for a “soft landing,” in which the economy weakens enough to slow hiring and wage growth without causing a recession and brings inflation back to the Fed’s 2% target.
But Powell has acknowledged that such an outcome has grown more difficult to achieve. Russia’s invasion of Ukraine and China’s COVID-19 lockdowns have driven up prices for energy food, and many manufactured parts in the U.S.
Powell has also indicated that if necessary, the Fed will keep raising rates even amid a weak economy if that’s what’s needed to tame inflation.
“Is there a risk that we would go too far?” Powell asked last month. “Certainly there’s a risk, but I wouldn’t agree that’s the biggest risk to the economy. The biggest mistake to make…would be to fail to restore price stability.”