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Illustration: Lazaro Gamio/Axios
A big Chinese trade counter-assault may be on its way: A deliberate devaluation of the yuan, with the aim of offsetting the impact of U.S. tariffs, experts tell Axios.
What's going on: The yuan has plunged by 4.5% in value against the dollar over the last month, making Chinese goods cheaper in the U.S. and American products more expensive in China.
As of now, the drop in the yuan's value appears to reflect a selloff by traders watching China's economy weakening, reports the WSJ's Saumya Vaishampayan. But, with both sides digging in their heels and the prospect of a protracted trade war, a determined devaluation appears to be the strongest tool in China's toolbox, economists tell Axios.
"If they want to minimize the effect of the tariffs on their exporters, this is about the only option."— Joseph Gagnon, a former Fed official now with the Peterson Institute for International Economics
As a result, from then on, Russia was earning dollars for its sale of oil and gas, but spending devalued rubles for salaries and other government programs at home.
Kim Jong-Un and Elvis. Fake: Lazaro Gamio/Axios
Researchers are in a pitched battle against deepfakes, the artificial intelligence algorithms that create convincing fake images, audio and video, but it could take years before they invent a system that can sniff out most or all of them, experts tell Axios.
Axios' Kaveh Waddell writes: A fake video of a world leader making an incendiary threat could, if widely believed, set off a trade war — or a conventional one. Just as dangerous is the possibility that deepfake technology spreads to the point that people are unwilling to trust video or audio evidence.
The big picture: Publicly available software makes it easy to create sophisticated fake videos without having to understand the machine learning that powers it. Most of the videos swap one person’s face onto another’s body, or make it look like they are saying something they didn’t.
That has ignited an arms race between fakers and sleuths.
The deepfake detectives are fighting from numerous angles:
What’s next: We’re years away from a comprehensive system to battle deepfakes, said Farid. It would require new technological advances as well as answers to thorny policy questions that have already proven extremely difficult to solve.
In the mid- to late-20th century, the American economy and culture were ripe for 30-year-old men, who — more than European and Japanese — typically landed well-paid careers, bought homes, and supported large families. But since then, getting ahead has become much harder, Axios' Stef Kight writes.
The background: Millennials now comprise almost a quarter of the population and are the largest generation participating in the workforce. But their median salaries are lower than the prior generation of 30-year-olds, and the financial burdens they carry are heavier.
So far, the trends suggest a break with prior American rites of passage, including marriage and child-bearing:
Going deeper: As a measure of upward mobility, 92% of 30-year-olds in 1970 earned more than their parents at that age, according to a 2016 study led by Raj Chetty, a Stanford economist (h/t Roger Lowenstein). But of those who were 30 in 2014, just half earned more.
Yesterday in Mike Allen's AM newsletter, we published a special report on the childless, aging future facing most developed countries. There was an unusually large response. Below, I excerpt a couple of the emails:
From Reinhard Frenzel, in Tuscon:
From Andrew Reinbach, who is writing the forthcoming Sailing Orders, on the naval war of 1812:
Illustration: Rebecca Zisser/Axios
How Russia's military is developing AI (Samuel Bendett - Defense One)
Silicon Valley's finger-pointing at China (David McCabe - Axios)
Kissinger, over lunch, on our "grave, grave period" (Edward Luce - FT)
Unraveling Brexit and Russia (Terry Gross - NPR) (audio)
U.S. factory towns turn red (Bob Davis, Dante Chinni - WSJ)
A test of the 4-day work week (Jesse Yeung - CNN)
Hopeful Grain and Oil in Sanhe has switched to Brazilian soybeans. Image: Greg Baker/AFP/Getty
The warning is delivered by a non-threatening soybean, but this talking legume is no weakling: If President Trump persists with his trade war against China, it says, he may lose seats in the coming midterms.
Kaveh writes: The talking soybean appears in an animated video produced by CGTN, the English-language branch of China’s state-owned TV broadcaster. In the middle comes a threat: Hike tariffs too high and China will look to South America to satisfy its humongous soybean appetite.
The background: Soybeans are a primary U.S. export to China, worth $14 billion last year, the New York Times reports. And China, responding to Trump's tariffs and threats of much, much worse, is targeting soybean growing states in an attempt to pressure the president to back off.
Hence the animation — distributed on Twitter and apparently aimed at an American audience.
Among the soybean's talking points:
The soybean points out that things could get worse — if the tariffs mean higher soy bean prices, China may "look to other sources for the bulk of its imports." Specifically, Brazil and Argentina, "could pick up the slack."