European Union can’t afford to antagonize Russia

The geopolitical standoff over Ukraine increasingly risks triggering economic pain, with the European Union (EU) having a lot more to lose than the United States.

As the threat of Russian military action against Ukraine looms, economists are beginning to tot up the potential economic losses if President Vladimir Putin decides to invade and other governments respond with sanctions. Russia has repeatedly denied such allegations.

Russia ranks the fifth-biggest trade partner of European Union and its top energy supplier, as against this United States barely makes the top 30, according to an analysis by Ben Holland and Anya Andrianova. Russia also draws in money from European household names such as Ikea and Volkswagen.

That leaves EU officials nervous about imposing sanctions on Russia as they worry those as well as an outright war could choke off natural gas supplies in the middle of winter when these are needed the most.

“European energy prices are a major concern,” Tim Ash, Senior Emerging Market Strategist at Bluebay Asset Management, told Bloomberg Television. He said Putin wants the EU “terrified about gas this winter and being cold. He doesn’t want them to do anything if he goes into Ukraine.”

Bloomberg Economics’ model of the euro zone reckons the hit from higher energy prices could be as much as 1% of gross domestic product.

Meantime, JPMorgan Chase economists drew eyeballs on Friday as they detailed what would happen if a skirmish between Ukraine and Russia helped lift oil to US$150/barrel this quarter. They estimated such a shock would be enough to drive global growth down to 0.9% in the first half of this year and worldwide inflation to surge above 7%.

Gas is a particularly sensitive matter now, with Russia holding back supplies for the past few months. Prices have tripled, boosting the cost of electricity across the continent. It’s the main reason Europe is suffering a bigger energy shock than the United States.

“Were sanctions to be placed on Russia’s energy exports or were Russia to use gas exports as a tool for leverage, European natural gas prices would probably soar,” said Capital Economics analyst William Jackson. “We think they would far exceed the peak reached last year.”

 

 

Supply Chain Delays Worsen in United States

While a growing number of Los Angeles-bound cargo ships are now biding time off the coast of Mexico, the supply chain crisis progressed this week as consumers found empty shelves in stores across the United States.

“There’s a big population of ships off the coast of Mexico,” Kip Louttit, Director of the Marine Exchange, told The Epoch Times. “If you look at the Pacific, it kind of makes sense to go down there. The weather is better the further south you go.”

The number of ships waiting to deliver goods in Los Angeles has jumped about 12% since October 2021, when President Joe Biden announced the ports would be opened around-the-clock to ease congestion.

The marine exchange reported 190 ships of all types were waiting in line to dock at the Los Angeles and Long Beach ports on January 19, 2022. In mid-October, the number was about 170.

It also takes about two months longer to deliver goods from Asia to the Pacific Coast now than in 2019, before the pandemic, according to Flexport, a San Francisco-based freight-forwarding company.

In early January this year, Flexport found that westbound shipments from Asia took an average of 110 days, a 65-day increase and a new record high.

Meanwhile, consumers continued to express frustration across social media with supply shortages. Photos of empty meat sections at a Tennessee Walmart have been shared, as well as empty shelves in Ohio, Missouri and around the country.

Retail shortages are widespread, Geoff Freeman, President and CEO Consumer Brands Association, a retail advocacy group, told the Associated Press earlier this month.

According to Freeman, typically US grocery stores have 5 to 10 percent of their items out of stock. Now, that rate is around 15 percent.

According to a recent poll, by the Consumer Brands Association and Morning Consult, 70% of respondents said they experienced shortages at grocery stores in December last year.

But Biden told reporters January 19, 2022 that the supply chain crisis did not occur during the holidays last year.

Empty shelves and a shortage of car parts, electronic chips and certain food products are becoming commonplace among businesses of all sizes in California, according to California Retailers Association President and CEO Rachel Michelin.

“It’s not getting as much attention as we were getting before, but there are still challenges,” Michelin told The Epoch Times. “I would say that on the supply chain side, it’s not getting any better.”

Michelin said small businesses continue to be especially vulnerable, not only because of the supply chain crisis, but also increased crime that is being reported nationwide and the ongoing disruption of COVID-19. “It is layer, upon layer, upon layer,” she said.

As a result, customers will likely have to start paying even higher prices for goods in addition to the current 7% inflation rate, she said.

Meanwhile, officials have not yet been able to predict when the shipping backlog will ease.

Flexport reported earlier this month that the increased demand for goods in the US is expected to stay and fixes by the Biden Administration have not panned out.

“Despite attempts in October last year by the Biden administration to unclog US West Coast ports there is still evidence that logistics networks remain congested, and will remain so, potentially for at least another year”, Flexport reported.

  

Russia offered Iran interim nuclear deal

Iran was offered an interim nuclear agreement by Russia with the knowledge of the United States. Citing numerous former and current US officials, NBC reported that Iran rejected Russia's interim proposal, which was reportedly given the go-ahead by the Biden administration.

One draft of Russia's proposed interim agreement would have seen the Islamic Republic forced to stop enriching uranium up to 60%. In addition, Iran would have had to dispose of its existing stockpile of enriched uranium.

In exchange, certain sanctions would have been lifted that meant Iran could have gained access to billions of dollars frozen in foreign bank accounts, including South Korea, where the US permitted to pay damages owed to an Iranian company in a move seen as a trust-building step.

However, Iran rejected Russia's proposal and the US distanced itself from Russia's attempts at an interim agreement, according to the report.

Earlier, the Islamic Republic denied a report it had reached a two-year interim agreement with world powers. An interim arrangement is not under serious discussion, NBC reported, citing a senior Biden administration official.

"Though we cannot speak for any discussions that may have taken place between Russia and Iran, at this stage we are certain that no such interim arrangement is being seriously discussed," the official reportedly said.

Russia's attempt at reaching an interim deal with Iran comes a day after Foreign Minister Sergei Lavrov spoke with his American counterpart Antony Blinken, when the latter warned that talks with Iran have reached "a decisive moment."

Blinken said that, while the window of opportunity to return to the Joint Comprehensive Plan of Action (JCPOA) still exists, Iran's nuclear advancements would foil any return to the accord if a fresh pact was not reached in the coming weeks.

Other voices around the negotiation table seem more optimistic, with a European Union official saying on Friday that the Vienna talks are moving in the right direction and a final agreement may be within reach. Indirect talks between Iran and the United States on reviving the deal resumed almost two months ago

NATO members scramble to support Ukraine amid Russian threat

The threat of a Russian invasion of Ukraine has sent NATO countries scrambling to provide military support to Kyiv. In recent weeks, Spain, France, Estonia, the United Kingdom and the United States among others have provided varying kinds of military support to Ukraine in anticipation of Russian aggression.  

NATO is under no treaty’s obligation to defend Ukraine because the ex-Soviet country is not a member of the alliance, but the group has made clear that it stands with Kyiv and has called on Moscow to de-escalate tensions. 

Some military movements appear to be posturing, aimed at deterring Russia from any aggressive actions, but other steps appear to be prepared for a serious conflict. Either way, experts say, the assistance could show Russian President Vladimir Putin that the cost of an invasion of Ukraine is too great.   

“There's clearly a sense that the military support provided to Ukraine would help Ukraine raise the cost to Russia of military aggression,” said former US Ambassador William Courtney, a senior fellow at RAND Corporation.  

Ukraine has asked to join NATO, a move that is staunchly opposed by Russia. Russian officials have demanded that NATO not extend further east, but the alliance has rebuffed these demands. The Kremlin has used this refusal as a justification to amass forces at the border, claiming unspecified security concerns. 

Russia has amassed at least 100,000 troops near its border with Ukraine, and US officials have warned that an attack could likely occur by mid-February.  

In recent years, the Ukrainian forces have been able to increase operability and protect itself against another invasion. Still, the Russian military is far more dominant and capable than its opponent.  

Courtney confirmed that NATO has no formal obligation to defend Ukraine, but added that the West’s military support to the Eastern European country has been “quite substantial” since 2014. 

At the time, Russian forces invaded and annexed the Crimean Peninsula.    

“Europe and the United States, over time, developed an increasing desire to help Ukraine advance internally both through reforms democratic and economic reforms, and also to move closer to the West which seems to be Ukraine's interest,” he said.  

One goal of aiding Ukraine is centered on the concept of “porcupine defense,” the idea that a country makes itself as difficult to invade as possible.  

“You provide security assistance and arms that are lethal that complicate Russia's ability to take large parts of Ukraine without getting beaten up in the process,” said Rachel Ellehuus, deputy director of the Europe, Russia and Eurasia program at the Center for Strategic and International Studies. 

“So, they can certainly withstand a Russian incursion for a limited period of time, but not forever,” she continued.  

This method, combined with the alliance’s threats of severe economic consequences should Russia invade, could make Putin think twice about doing so.  

“The issue is helping to deter Russian aggression by making clear that the cost to it economic, military and the human costs of casualties will be greater than maybe expected before,” Courtney said.  

While the alliance is behind Ukraine, countries thus far have varied on the extent of their support.  

Over the past couple of weeks, Denmark decided to send four additional F-16 fighter jets to Lithuania for air policing and a 160-man frigate in the Baltic Sea. France, for its part, has offered to send troops to Romania.  

The United Kingdom also announced that it is sending Ukraine light, anti-armor defensive weapons systems, as well as a small number of UK personnel to provide training.  

Meanwhile, Estonia, Latvia and Lithuania recently received approval from the US to send American-made weapons to Ukraine for additional defense.  

Estonia is providing Javelin anti-armor missiles, while Latvia and Lithuania are providing Stinger anti-aircraft missiles and adjacent equipment.  

“We sincerely hope that Ukraine will face no need to use this equipment and call on Russian Federation to seize its aggressive and irresponsible behavior,” the Baltic nations said in a statement.  

Spain announced that it is sending warships to bolster NATO’s naval forces in the Mediterranean and Black Seas and is mulling sending its own fighter jets to Bulgaria.  

But countries sending assistance must strike a delicate balance — helping Ukraine without doing anything that could provoke the Kremlin.  

Charles Kupchan, a senior fellow at the Council for Foreign Relations, explained that recent efforts to provide assistance have been defensive in nature for this reason.  

“Given that diplomacy continues and that the preferred outcome by NATO countries is a diplomatic resolution to the conflict, NATO members are trying to find the right balance between improving the capabilities of the Ukrainian military to resist Russian aggression and taking steps that the Russians would see as a provocation,” Kupchan said.  

Further complicating matters is uncertainty about how Russia would invade Ukraine, should it choose to do so.  

Moscow has largely positioned troops along Ukraine’s northeastern border. On Tuesday, it announced that it is moving troops to Belarus for military drills that are scheduled for next month, when the West fears an invasion could occur.  

The drills put more pressure on NATO nations, as it puts Russian troops on Ukraine’s northern neighbor, giving Putin more options for a possible invasion.  

“I think the dynamic really changed when Russia sent forces into Belarus,” Ellenhuus said. “A lot of allies now worry that Russia is somehow preparing to invade Ukraine, both from the south and then also from, from Belarus.”  

A Russian invasion of Ukraine could trigger a rush to ensure that countries on its eastern flank are defended.  

The US, for its part, has no intentions of sending troops to deter an invasion, but has said if Russia invades, then it would send troops to bolster NATO’s forces along the Eastern Flank.  

President Biden has also repeated several times in recent weeks that if Russia decides to invade Ukraine, the US will slap devastating economic sanctions on the country. Vice President Harris echoed this same sentiment in an interview with Savannah Guthrie earlier this week.  

The US military has already sent the USS Harry S. Truman aircraft carrier strike group to take part in a NATO naval exercise in the Mediterranean, though Pentagon officials insist the drill are not in response to Russia’s recent aggressions. 

United States no longer supports EastMed pipeline

The United States no longer supports the proposed EastMed natural-gas pipeline from Israel to Europe; the Biden administration has informed Israel, Greece and Cyprus.

The reversal of position from that of the Trump administration was first reported in Greece earlier this month. Former US Secretary of State Mike Pompeo and former Energy Secretary Dan Brouillette expressed US support for the pipeline when they were in office.

Washington informed Athens it was reversing course from the Trump administration in a “non-paper,” a diplomatic term for an unofficial, or off-the-record, communication this month.

 “The American side expressed to the Greek side reservations as to the rationale of the EastMed pipeline and raised issues of its economic viability and environmental issues,” a Greek government source told Reuters.

“The Greek side highlighted that this project has been declared a ‘special project’ by the European Union and any decision on its viability will logically have an economic impact,” the official said.

The EastMed pipeline, meant to transfer natural gas from Israeli waters to Europe via Greece and Cyprus, was announced in 2016, and several agreements have been signed between the three countries on the subject. The three states aimed to complete the €6 billion project by 2025, but no financing has been secured for it.

The US Embassy in Jerusalem said that the Americans “remain committed to the energy security and connectivity of the Eastern Mediterranean.”

Among the proposals the US supports is the EuroAsia interconnector linking Israeli, Cypriot and European electricity grids, “allowing for future exports of electricity produced by renewable energy sources, benefiting nations in the region.” The interconnector “would not only connect vital energy markets, but also help prepare the region for the clean energy transition,” the embassy said.

The US Embassy also said this is “a time when Europe’s energy security is – more than ever – a question of national security,” and as such, the US is “committed to deepening our regional relationships and promoting clean energy technologies.”

The US Embassy in Greece made a similar statement last week, saying Washington still supports the 3+1 mechanism of meetings between Israel, Greece, Cyprus and the US.

Claims over natural gas in the Eastern Mediterranean have been a point of contention with Turkey in recent years, with Ankara saying it should be part of the EastMed project.

Turkish President Recep Tayyip Erdogan took the opportunity of the US withdrawing its support to say. “If Israeli gas would be brought to Europe, it could only be done through Turkey. Is there any hope for now? We can sit and talk about the conditions.”

He also noted his recent phone calls with Prime Minister Naftali Bennett and President Isaac Herzog and said engagement with Israel had improved.

Turkish state media channel TRT last week aired a documentary opposing the EastMed pipeline titled The Pipe Dream, which includes footage of State Department Senior Advisor for Energy Security Amos Hochstein discussing the matter before he was appointed to his current position.

Hochstein said he would be “extremely uncomfortable with the US supporting this project” because of its environmental implications.

“Why would we build a fossil fuel pipeline between the EastMed and Europe when our entire policy is to support new technology... and new investments in going green and in going clean?” he asked. “By the time this pipeline is built we will have spent billions of taxpayer money on something that is obsolete – not only obsolete but against our collective interest between the US and Europe.”

Hochstein said the project was not financially feasible. It would cost more than €6 billion, he said, adding that international financial institutions no longer are committed to investing in fossil fuels.

The pipeline plan was “totally driven by politics,” but “multibillion-dollar deals should be driven by the commercial side,” Hochstein said.

“This idea came up in 2016, but no movement has been made except for signing some contracts, MOUs [memorandums of understanding] and the big hoopla of politics... Some ministers in the region are talking about the EU supporting [the plan]; they agreed to a feasibility study on the project. That’s a big difference,” he said.

“This is politicians talking, but there’s [nothing] there,” Hochstein said. “This project probably will not happen because it’s too complicated, too expensive and too late in the arch of history.”

Gabriel Mitchell, director of external relations for the Mitvim Institute for Regional Foreign Policy, said Israel’s relationship with Greece and Cyprus, which has grown very warm in recent years, does not depend on the EastMed pipeline.

“The cooperation between the parties has expanded beyond the narrow scope of an undersea pipeline project, incorporating multiple fields and inter-ministerial cooperation,” he said.

Regarding Israel’s future in exporting natural gas, the EastMed was never its only option, Mitchell said.

“The story of the EastMed pipeline should serve as a reminder that these projects require a high level of commercial, technical and political feasibility,” he said. “As one door potentially closes, others could open that present a different but no less important set of commercial and geopolitical opportunities.”

“The EastMed pipeline’s feasibility issues were well-documented, but in the end, it may be other energy initiatives – such as the EuroAsia interconnector – that become the tripartite relationship’s flagship project,” Mitchell said.

US sends aircraft carrier group to Mediterranean

The United States military has sent the USS Harry S. Truman aircraft carrier strike group to take part in a NATO naval exercise in the Mediterranean amid tensions between the West and Russia, the Pentagon’s top spokesperson announced on Friday. 

Neptune Strike 22 exercises, which are set to begin Monday and run through February 04, 2022 will “demonstrate NATO’s ability to integrate the high-end maritime strike capabilities of an aircraft carrier strike group to support the deterrence and defense of the alliance,” press secretary John Kirby told reporters.  

He added that the strike group, along with several other NATO allies he did not name, “will participate in coordinated maritime maneuvers, anti-submarine warfare training, and long-range strike training.” 

Kirby insisted the war games had been “long-planned,” since 2020, and were not in response to the recent Russian military buildup near the Ukrainian border. The drills are not listed on NATO’s website among exercises slated for this year. 

Shortly after the DOD announcement, NATO Secretary General Jens Stoltenberg added to speculation as to the timing of the maneuver when he tweeted that “NATO will always do what is necessary to protect and defend all Allies.”  

He added that the participation of the US vessel in Neptune Strike 22 displays “a strong sign of transatlantic unity.” 

NATO forces and weapons in recent days have moved to areas near Ukraine as Russia has refused move back the roughly 100,000 troops amassed near its border with Ukraine. The movements also come amid warnings from the west that Moscow may soon invade the former Soviet nation.   

Spain has sent warships to the Mediterranean and the Black Sea and is mulling sending fighter jets to Bulgaria, while Denmark is sending a frigate to the Baltic Sea and France has offered to send troops to Romania.   

Secretary of State Antony Blinken — who met with Russian Foreign Minister Sergey Lavrov on Friday in Geneva in a high-stakes meeting to quell tensions— said he wants to use diplomacy to de-escalate the situation. If that proves impossible, however, and Russia decides to pursue aggression against Ukraine, it will be met with “a united, swift and severe response.” 

Asked whether the scope or location of the Neptune Strike 22 exercises had been altered in any way due to the tension around Ukraine, Kirby directed questions to NATO. 

“If this scenario has changed over time, I don't have that level of detail, but I would tell you ... the exercise itself is not designed against the kinds of scenarios that might happen with respect to Ukraine,” Kirby said. 

Iran and India establish shipping links

Deputy Head of Iran's Ports and Maritime Organization (PMO) Jalil Eslami has said direct container shipping lines have been established between Iran’s southeastern port of Chabahar and two Western Indian ports of Nhava Sheva and Kandla.

According to Eslami, regular container service with a traffic schedule of 10 to 15 days is performed by the Islamic Republic of Iran Shipping Lines (IRISL) through these lines.

The official noted that PMO is going to offer the necessary tariff incentives and facilities on tolls and transportation costs to support the traders that use the lines.

He pointed out that according to the schedule, the first container service through the mentioned route will enter Iran’s Shahid Beheshti port on February 16, 2022.

Iran and India had previously launched shipping lines between Chabahar and the Indian ports of Mumbai, and Mundra.

The first shipping route between the two countries was put into operation in 2017 between Iran’s Chabahar port and Mumbai.

In January 2019, Iran and India inaugurated the second direct shipping route which passes through Mumbai, Mundra, Kandla, Chabahar, and finally Bandar Abbas in southern Iran.

India is using the mentioned shipping routes to transit goods to Afghanistan and Persian Gulf nations as well as the countries in Central Asia.

Through Chabahar port India aims at bypassing Pakistan and transport goods to Afghanistan and Central Asia, while Afghanistan can get linked to India via sea.

Iran has awarded India the project for installing and operating modern loading and unloading equipment including mobile harbor cranes in Shahid Beheshti Port in Chabahar.

The strategic Chabahar port in southeastern Iran is the only ocean port on the Makran coast and it has a special place in the country's economic affairs.

Back in September 2021, Indian Prime Minister Narendra Modi had called on Central Asian countries to benefit from Chabahar Port capacities for expanding their trade in the region.

US allows NATO allies to send American-made weapons to Ukraine

The United States has allowed three NATO allies to send American-made weapons to Ukraine amid growing fears of an imminent Russian invasion.  A State Department spokesperson confirmed to The Hill that the agency has authorized third-party transfers for Estonia, Latvia and Lithuania to send “US origin equipment from their inventories for use by Ukraine.”

“The United States and its allies and partners are standing together to expedite security assistance to Ukraine,” the spokesperson said. “We are in close touch with our Ukrainian partners and our NATO Allies on this and are utilizing all available security cooperation tools to help Ukraine bolster its defenses in the face of growing Russian aggression.” 

News of the transfer comes as the Biden administration warns of the immediacy of the threat of a Russian invasion of Ukraine amid Moscow’s amassing an estimated 100,000 troops near its border with Ukraine.  

Third-party transfers are only authorized if recipients of weapons of US origin obtain written consent from the State Department before transfer, according to the agency’s website.

According to Politico, which cited an administration official, the requests from the countries were received in recent weeks, with the last of them being approved Wednesday, a day after being received.

The State Department spokesperson didn’t elaborate on what specific weapons were approved for transfer. But The Wall Street Journal reported that the countries will be allowed to send Javelin antitank weapons and Stinger air-defense systems.

The US has invested more than US$2.7 billion in military assistance to Ukraine under the authority of the State Department and Department of Defense since 2014, when Russia annexed Ukraine’s Crimean Peninsula.

In the last year alone, Washington has committed US$650 million in defense equipment and related services to Ukraine, the spokesperson said, more than at any other point since 2014.

On top of this funding, the US has expedited up to US$60 million in lethal and nonlethal equipment from existing Pentagon stocks since August and in December authorized up to US$200 million in additional security assistance to Ukraine. 

US unhappy on growing Iran-Russia ties

Ebrahim Rezaei, Chairman of the Iran-Russia parliamentary friendship group, said that the West, particularly the United States, is unhappy with the growing relationship between Iran and Russia. 

The current visit of Iranian President Ebrahim Raisi to Moscow, according to Rezaei, marks a milestone in the government's foreign policy agenda.

Rezaei said the two countries enjoy great potential for cooperation in areas of energy, agriculture, commerce, transportation, security, and tourism. 

The parliamentary friendship group chief said both the countries are eager in negotiating on oil and gas swaps, pointing to the presence of Oil Minister Javad Oji in the president's accompanying entourage to Russia as evidence.

Meanwhile, Iran's First Vice President, Mohammad Mokhber, praised Raisi's visit to Russia. Talking at the cabinet meeting, Mokhber said Iran's relations with its neighbors are growing well, and the visit to Moscow reflects Iran’s fundamental progress in cementing ties neighboring and regional countries. 

Iranian President Ayatollah Seyed Ebrahim Raisi arrived in Moscow on Wednesday morning at the invitation of his Russian counterpart Vladimir Putin. The visit is intended to deepen economic, political and cultural interactions between Iran and Russia, according to the official website of the Iranian presidency.

The ministers of foreign affairs, petroleum and economy are accompanying Raisi on the trip.

The president’s agenda in Russia includes meeting with the Russian President, addressing the Duma, and meeting Iranian expatriates in Russia.

Speaking before leaving for Russia at Mehrabad Airport, Raisi said, "This trip is done at the invitation of the President of Russia and in order to promote neighborhood and regional diplomacy."

The pPresident also said, "We seek to establish and strengthen relations with all neighbors, especially Russia in various political, economic and trade fields, and this trip can be a turning point to improve and strengthen relations with Russia."

Calling the Islamic Republic and Russia as two independent, important, powerful and influential countries in the region, the President said, "Cooperation and talks between the two important, powerful and influential countries can be effective in improving regional security and economic and trade relations.”

Political ties between Iran and Russia have been strengthened in recent years. The two countries backed the government of Bashar al-Assad in the fight against terrorists and are now mediating between the Damascus government and the opposition groups.

Iran also joined the Shanghai Cooperation Organization in September 2021 which was first established by China, Russia and some former Soviet republics in 2001. 

President Raisi said, "In the Shanghai Summit, we will establish good cooperation with all countries, especially Russia. Russia also plays a key role in the Eurasian Union, and cooperation between the two countries in this regard can lead to effective steps to promote trade and economic issues."

Stating that Iran and Russia share common interests, Ayatollah Raisi said, "The existence of common and interactive interests between Tehran and Moscow in the region provides security and will prevent unilateralism in the world. Also, interaction and mutual cooperation between the two countries can affect the regional and international situation."

Referring to the vast potential for cooperation between Tehran and Moscow in various political, economic and energy sectors, the president said, "The current level of trade and economic cooperation is not satisfactory for either country and needs to be upgraded to a much higher level. We hope that this trip will be an effective step towards securing the common interests of the two countries, which are influential at regional and global scenes."

 

Hong Kong to Kill 2000 Pets

Hong Kong officials are killing hamsters by the thousands after declaring the rodents responsible for spreading COVID-19. Meanwhile, in China’s mainland, the blame has been put on international mail packaging.

As one of the world’s last major holdouts of a zero-tolerance approach to the virus, China is fanning unusual theories about the source of emerging COVID-19 clusters despite doubts from overseas experts over the likelihood of such claims.

On January 18, 2021 Hong Kong ordered 2,000 hamsters, chinchillas, rabbits, and other small animals to be “humanely” put down after a health check on the rodents found 11 to carry the Delta variant of COVID-19. All of them are hamsters imported from the Netherlands, from a local pet shop where a 23-year-old worker had tested positive to COVID-19.

While the officials acknowledged there’s no clear evidence hamsters could transmit the virus to humans, they are telling pet owners who bought hamsters from any store in the city beginning December 22, 2021 to hand over their animals for culling. Those who visited the pet store after January 07, 2022 are subject to quarantine. All 34 pet stores in the city that sell hamsters are now shuttered, and imports of all small mammals have come to a halt.

Hong Kong’s pet killing follows heightened virus containment measures in Beijing, where authorities suggested that mail from Canada might have been the culprit for the city’s first Omicron case.

The city’s health officials noted how the first Omicron patient, a 26-year-old woman, who has not traveled outside Beijing recently, handled a parcel sent from Canada via the United States and Hong Kong, before developing a sore throat two days later. They have detected the Omicron variant on both the outside of the package and in its contents, as well as on other mail samples delivered from the same origin, the officials said.

 “This is something not only new but intriguing and certainly not in accordance with what we have done both internationally and domestically given what we know about the transmissibility of Omicron,” he told reporters at a January 17, 2022 press conference.

Health experts have assessed the risks of virus transmitting through contaminated surfaces to be extremely low. The World Health Organization (WHO) said that coronavirus in general “need a live animal or human host to multiply and survive and cannot multiply on the surface of food packages.”

Touting the theory that the virus might have come from somewhere other than China is hardly new for the Chinese authorities. In October 2020, Beijing said an outbreak in the port city of Qingdao originated from a shipment of imported cod. In a June outbreak linked to a Beijing wholesale market, officials pointed to frozen salmon from Norway as the cause, citing a sample on a cutting board used for processing the fish that tested positive for COVID-19.

July last year, amid tensions between India and China, Beijing withheld over 1,000 containers of Indian shrimp on the grounds that the packaging allegedly contained virus residues.

In a bid to deflect growing scrutiny on Beijing’s coverup of the pandemic origins, authorities and state media have consistently put forward claims, without credible evidence, that the virus originated outside of the country. Following a WHO-China joint virus probe in China’s Wuhan last year, authorities have also repeatedly called for origin tracing efforts to begin outside of China.

The regime’s pandemic-control actions, though, have also come at a particularly sensitive time for Beijing. Less than three weeks before the country’s capital opens the Winter Olympic Games, Beijing and cities across China have struggled to stamp out waves of COVID-19 infections.

Hundreds of Omicron infections have surfaced in multiple parts of China even as Delta cases continue to spike. After the Omicron variant extended its reach to Beijing, Olympic organizers called off ticket sales to the general public, saying the entry will be reserved for a targeted group of spectators only.

Five takeaways from Biden news conference

US President Biden held a rare formal news conference Wednesday, one day before the first anniversary of his inauguration. The event came with the president's poll ratings at a low ebb and as he is enduring one of his most difficult stretches to date. 

His legislative agenda has stalled and he faces challenges ranging from inflation to Russian aggression. 

But the president, speaking amid the grandeur of the East Room of the White House, had a chance to reset the agenda with the midterm elections just 10 months away. Here are the five biggest takeaways:

A big misstep on Russia

Biden’s loquaciousness has a history of getting him in trouble. So it proved again on Wednesday. A predictable question on a possible Russian invasion of Ukraine produced an odd and damaging response. 

Biden suggested that a “minor incursion” by the Kremlin forces might not receive much aggressive push back from the United States.

The comment lit up social media, and a second reporter asked Biden about it later in the news conference. 

Offered a second bite at the cherry, Biden missed yet again, this time implying that a limited Russian action would make it difficult for him to drive a unified response from NATO.

White House aides immediately scrambled to try to clear up the confusion. They had little success.

They core of the problem is that Biden’s remarks sounded weak and timid — liabilities that Putin will try to maximally exploit. 

The Russian leader has form. He annexed Crimea in 2014 and, for all its noble-sounding words of protest; the international community has not been able to reverse the move.

The entire thrust of Washington’s approach in its negotiations with the Kremlin has been to show seriousness this time around.

But Biden put a hole in his own strategy on Wednesday, for no obvious reason.

In terms of domestic politics, the remark will also feed into the conservative tendency to portray Democrats as puny on the world stage.

The news conference was long — very long

Biden spent almost two hours in the East Room, and even joked about the longevity of the event in its closing stages.

“How many more hours am I doing this? I’m happy to stick around,” he said.

There were pluses and minuses to the marathon approach.

On one hand, the briefing’s duration was proof of Biden’s stamina and mental acuity — a retort to conservative critics who suggest that, at 79, he is not up to the job. 

In fact, that issue was explicitly — and somewhat pompously — brought up at the news conference by a reporter for Newsmax, and Biden swatted it aside.

But the length of the news conference also played to two Biden-related weaknesses — an eagerness to talk at considerable length and a propensity for inexact language. Those aren’t functions of his age. They are traits that have marked his entire political career. 

In the later stages of the event, for example, Biden suggested he might not consider the midterm elections legitimate under certain circumstances— but the wording of his answer was rather unclear.

Some commentators complained the event grew dull because of its length. 

But that critique is not likely to matter much with the general public, relatively few of whom are likely to have watched the presser in its entirety.

Biden kicked off his midterm campaign

Next to the Russia gaffe, the most politically significant aspect of the briefing was Biden’s shift to a midterm election strategy.

He is not — yet — going full, scorched-earth negative. But he clearly wants to put a contrast between his party and the GOP in the front of voters’ minds

He claimed several times that Republicans were happy to position themselves against him but unwilling to state in plain terms what they favor.

“What would be the Republican platform right now?” he asked rhetorically, citing issues including taxation, the cost of prescription drugs and human rights. “I honestly don’t know what they’re for.”

An old political dictum holds that elections are either a referendum on the incumbent or a choice between two options. 

Biden is doing what he can to make the 2022 midterms a choice — surely seeing this approach as his party’s most realistic chance to cling onto its razor-thin congressional majorities.

Relatedly, Biden also promised to hit the road more, talking wistfully about how he has not been able do more of the old-school politicking he relishes because of the pandemic.

“I don’t get a chance to look people in the eye, to go out and do the things I’ve always been able to do,” he said at one point. “Connect with people; let them take the measure of my sincerity.”

A bite-sized approach to his goals

Biden bowed to the inevitable on his legislative agenda — sort of.

In effect, he accepted that his Build Back Better plan, which he had hoped would be the capstone of his legislative agenda, would not pass in its current form. He acknowledged the same of voting rights legislation, more or less.

But he emphasized the fight for those goals was not over. Instead, he said he would move on to trying to achieve the same big objectives in bite-sized chunks over time.

“It’s clear to me that we are going to have to probably break it up,” he said of Build Back Better, noting as one example that even Sen. Joe Manchin was in favor of some of the big bill's provisions on early childhood education. 

He made essentially the same argument on voting rights and asserted that change happens incrementally.

“I don’t know many things that have been done in one fell swoop,” he said.

Whether that approach is enough to satisfy a restive Democratic base remains to be seen.

Did it move the needle?

It’s tough for any single event these days to shift the political realities of a deeply polarized nation, Biden’s press conference was no exception.

The extent of the damage done by the Russia-related gaffe will only become clear after several days. 

Right now, it’s impossible to tell whether it will fade from relevance or instead come to be seen like other infamous verbal miscues — President Ford’s “there is no Soviet domination of Eastern Europe” debacle during a 1976 debate comes to mind.

On the flip side, Biden supporters can take heart from the vigor with which the president pressed the case against the GOP. They have wanted more of that from Biden for a while and he delivered in spades on Wednesday.

His remarks hitting Republicans were a reminder that the presidential bully pulpit still holds power. 

Whether that power will be enough to reverse Biden’s current low fortunes remains to be seen.

Biden hits one year mark in dire straits

Joe Biden, President of United States faces reporters for his first news conference of the year 2022 with serious questions about his agenda and the health of his presidency as he nears the first anniversary of taking office.

Biden has been unable to move members of his own party to back his most ambitious goals, with Senators. Kyrsten Sinema and Joe Manchin were stiff-arming the president in ways that left the White House looking ineffectual.

Biden’s climate and social policy package, the top priority of the White House and Democrats in Congress, appears doomed — unless parts of it can be broken up and salvaged.

The president’s push for voting rights bills has similarly fizzled at the hands of Manchin and Sinema, who rejected Biden’s calls to make an exception to the filibuster.

“It started off really strong, but at some point they started hitting a brick wall, the problems started piling up, and they’re now looking for their footing as we start the second year,” said Jim Manley, a former aide to the late Senate Majority Leader Harry Reid of Biden’s first year.

The White House’s effort to quell the coronavirus pandemic has also been snarled, most recently by a ruling of the conservative Supreme Court that struck down Biden’s vaccine-or-test mandate for large businesses.

Inside the White House, there is a strong sentiment that a shift in strategy is needed. Sources close to the White House say Biden will find ways to speak directly to the people to more effectively communicate the work that is being done. Democrats also expect Biden to draw a sharper contrast with Republicans, which he has started to do in the New Year.

“I think there is a recognition that some things have to change and change quickly,” said one Democratic source who speaks directly with White House officials. “Some of the things they have done haven’t worked.”

A Democratic strategist who is also in contact with the White House said that much needs to change in terms of winning back public confidence and building a cohesive message to Americans.

“The problem is rooted in the fact that we’ve gone from one extreme to another,” the strategist said. “We went from Trump’s unique brand of style and communicating to Biden’s, and both leave something to be desired from the general public.”

“With Biden, it’s a sense of prioritization,” the strategist added. “Is it the pandemic? Is it Build Back Better? Is it the economy? And oh yeah, is it voting rights? ... No one knows what we’re supposed to be worked up about. What? Which?”

To be sure, Biden has had some wins, and some Democrats don’t believe he’s getting enough credit. On the legislative front, he ushered through a US$1.9 trillion coronavirus relief package in his first two months in office and beat expectations by signing into law a bipartisan infrastructure bill.

“Compared to where we were a year ago, I think it’s an A,” Navin Nayak, president and executive director of the liberal Center for American Progress Action Fund, said of Biden’s first year, citing the job creation, wage gains and COVID-19 vaccinations that occurred under the president’s watch.

“There’s a lot of work left to do,” Nayak said. “I don’t think anyone came into this thinking that the agenda he laid out on Jan. 20 would be completed within a year.”

White House Press Secretary Jen Psaki, in a nod to the looming one-year mark since Biden’s inauguration, opened Tuesday’s briefing with statistics she argued underscored the strength of the president’s first year in office.

She cited the “dramatic” improvement of the US economy, driven by strong job growth and declining unemployment. And she noted 74 percent of adults in the US are fully vaccinated against COVID-19 after the shots were just being rolled out a year ago.

“The job is not done yet, but we have a plan to address the challenges we are facing,” Psaki said.

But those accomplishments have done little to lift Biden’s deflated poll numbers, which show the president increasingly unpopular, including among those in his own party. Many have blamed Biden’s dip in the polls on the public’s fatigue with the ongoing coronavirus pandemic as well as frustrations about higher costs of goods.

Nayak said there is a path for Biden to rebound in the polls once the pandemic begins to recede, given the positive news on the economic recovery and Biden’s likeability compared to former President Trump.

“People really disliked [Trump], and I don’t think there was really any path for him to win over those people he had lost,” Nayak said. “People still like Joe Biden. This is not a personal thing.”

Democrats are bracing for losses in the midterm elections unless Biden can turn things around. There is a sense among some Democrats that the party has thus far failed to deliver on key promises from the 2020 campaign on health care, climate change and getting the pandemic under control.

Some have also questioned Democrats’ strategy on pushing forward on voting rights bills, even as it was guaranteed to fail in the Senate because of the filibuster.

“I guess I don’t blame him for trying, but the reality is unless you have Sinema and Manchin — and you don’t — it’s not going to happen,” said Manley, who argued Democrats should have focused on negotiating a bipartisan compromise on voting rights legislation early on.

There is chatter among lawmakers that Democrats should pass whatever pieces of Biden’s Build Back Better package can get enough support in the Senate in order to have some kind of legislative win to point to in the New Year. But in the absence of a breakthrough, strategists believe Biden must tailor his message around what his administration has managed to get done.

“Inflation is a serious problem, and no Democrat should ever minimize it. But it’s also true that many other economic indicators are extraordinarily good,” said Matt Bennett, co-founder of the centrist think tank Third Way.

“If Trump had this economy, he’d be calling it the greatest ever. There’s high inflation, but low unemployment and a booming stock market,” Bennett said. “So I think they need to be a little more aggressive about addressing the things people really care about and making sure people know what Biden has achieved.”

While Biden’s poll numbers remain low and even some Democrats worry that his legislative agenda is all but dead, others say it’s too early to make any judgments.

David Litt, a bestselling author who served as a speechwriter in the Obama White House, said he knows what it feels like to be counted out.

“In the Obama administration, there were a lot of moments when people counted us out before all the innings had been played,” Litt said. “We don’t know what’s going to happen. A lot can change in a couple of months.

“There’s not a huge indication that it’s the bottom of the ninth with any of these things,” he said. “If the last two years have taught us anything it’s that the future is hard to predict.”

Russian Gazprom has no plan to export gas to Europe in February

Russian state energy giant Gazprom said it has not booked any capacity to pump gas to Europe through the Yamal pipeline in February, underscoring a sharp drop-off in Russian exports to the region so far this year.

Gazprom said pipeline exports of Russian gas have tumbled 41% from a year ago so far in January, underlining the impact of a reversal in the Yamal-Europe pipeline, which usually pumps Russian gas into Europe, from Germany to Poland. Data from German network operator Gascade showed that this was occurring for a 28th consecutive day on Monday.

Although, the Kremlin-controlled group has not booked any capacity through the pipeline for February, this could change as it is able to take part in daily auctions.

The link has been operating in reverse mode since December 2021, helping drive up gas prices, although these dropped on Monday thanks to robust liquefied natural gas (LNG) volumes and higher wind power output.

Exports of Russian commodities have been under the spotlight in recent months amid a broader standoff with the West over Ukraine. Moscow has initiated the talks with the United States and NATO in an effort to stop Ukraine from joining the bloc.

Russia has also been accused by some politicians and experts of deliberately withholding gas exports in order to obtain clearance from Germany and the European Union for its Nord Stream 2 gas pipeline, built to bypass Ukraine.

Russia denies any plans to attack Ukraine and says it meets all contractual obligations on gas exports.

It is not clear when the Yanal-Europe pipeline will revert to normal. A source close to Gazprom said the Kremlin-controlled company is expected to switch flows at some point this month, as Gazprom has paid for westbound volumes for January.

High gas prices present a major problem for European governments, utilities and consumers, with some firms forced out of business by last year's rapid rise in costs.

The Yamal-Europe pipeline usually accounts for about a sixth of Russia's annual gas exports to Europe and Turkey.

Gazprom has not booked any gas transit capacity for February via the route, according to a monthly auction results. Deputy Prime Minister Alexander Novak on Saturday repeated that Russia was ready to supply more gas to Europe, but only if there are new long-term contracts.

Capacity nominations for Russian gas flows from Ukraine to Slovakia via the Velke Kapusany border point, another major route to Europe, were 286,970 megawatt hours (MWh) on Monday.

That was steady compared to nominations seen so far in 2022 but well below levels of more than 900,000 MWh recorded in early December last year, data from Slovak pipeline operator Eustream showed.

Gazprom has not booked gas transit capacity for exports for February via two other crossing points into Ukraine, although some 11.14 mcm/day of capacity via Velke Kapusany were booked for Russian gas for the next month.

Russia could launch attack in Ukraine any time

White House Press Secretary Jen Psaki told reporters on Tuesday, the United States believes that Russia could carry out an attack on Ukraine at any point underscoring the immediacy of the threat should Moscow decide to take action. Psaki added later that her language was starker than we have been.

Secretary of State Antony Blinken plans to meet with Russian Foreign Minister Sergey Lavrov on Friday as the US seeks to ward off an invasion of Ukraine by Russia, which has amassed 100,000 troops on the border with Ukraine and recently moved forces to Belarus for joint military drills.

The meeting follows high-level diplomatic talks between the US and Russian officials and NATO in Europe last week. Blinken and Lavrov spoke by phone on Tuesday and agreed to meet.

Blinken plans to urge the Russians to deescalate the situation and take the diplomatic path offered by the US and its allies, Psaki said, reiterating that there would be significant economic consequences should Russia choose to invade Ukraine.

“It is up to the Russians to determine which path they are going to take, and the consequences are going to be severe if they don’t take the diplomatic path,” Psaki said.

President Joe Biden told Russian President Vladimir Putin on a video call in December that Russia would face sanctions if it invaded Ukraine and that the US would move to bolster NATO’s eastern flank and increase military aid to Ukraine in the event of an invasion.

Psaki on Tuesday disputed reports that cutting Russia off from the SWIFT global banking system was off the table. 

 “No option is off the table, in our view,” she said.  

As of last week, White House National Security Adviser Jake Sullivan said the US intelligence community had not assessed whether Putin has made his mind up on invading Ukraine but nevertheless characterized the threat as high.  

US officials last week said they have evidence of Russia laying the groundwork for a false flag operation that could serve as a pretext for invading Ukraine.