May 22, 2019

Axios Future

By Bryan Walsh
Bryan Walsh

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Any stories we should be chasing? Hit reply to this email or message me at steve@axios.com. Kaveh Waddell is at kaveh@axios.com and Erica Pandey at erica@axios.com.

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1 big thing: For Trump, a China election

Illustration: Sarah Grillo/Axios

Short of a highly improbable climbdown by China, President Trump, confronting a strong re-election challenge from Democrats, is likely to maintain an aggressive public posture toward Beijing at least through the 2020 campaign cycle, experts tell Axios.

  • Standing tall against China is one of the very few issues with strong bipartisan popularity across the country, which will make Trump hesitant to let it go, especially given the strong economy.
  • For China's Xi Jinping, too, there is much greater political safety in not caving to Trump.
  • "Whether or not we get a deal on trade, the U.S.-China relationship is heading towards greater confrontation," says Ian Bremmer, president of the Eurasia Group.

What's happening: As we reported Monday, health care appears to be a key bipartisan campaign issue. But for Trump, China could be as much or more important, exemplifying what he sees as his key attribute — strength against the foes he sees everywhere.

  • In a piece yesterday, the NYT's Trip Gabriel reported that Trump's China stance is helping him to solidify support among blue-collar workers in Ohio.
  • Ohio Rep. Tim Ryan, one of the two dozen Democratic candidates for president, told Gabriel that when local people observe Trump's China policy, they see that "at least he's punching somebody in the face, and no one else is."
  • This dynamic — the deeply visceral support for a sharp-edged approach to China — is likely to change the complexion of the election.

"If anything, I expect Democratic presidential candidates to attack Trump from the hawkish side, as being too accommodating to China by seeking a deal," said Adam Posen, president of the Peterson Institute for International Economics. 

The big picture: Last August and September, we surveyed economists and other experts on the U.S.-China tension, most of whom said they expect the trade war to last at least a year and perhaps longer (see here and here).

This week, I asked a half-dozen of them whether their opinion had changed. Some said that the outcome is not locked in — Trump and Xi could have a breakthrough next month at the G20 summit in Osaka, for instance.

  • But Edward Alden, a trade expert at the Council on Foreign Relations, said, "If there’s no room for face-saving compromise, the trade war could certainly extend to November 2020 and beyond."
  • And Gary Hufbauer, a trade specialist with the Peterson Institute, said the best-case scenario would be that Trump and Xi call a truce through the 2020 election and agree not to escalate further.

For now, both countries are flexing their muscles, feeding their mutual political frenzies. On Monday, Xi made a veiled threat to cut off U.S. supplies of rare earth metals, crucial to everything from high-tech devices to military jets, writes Bloomberg's David Fickling.

The bottom line: Trump has already signaled that China will be a pillar of his campaign. On the Democratic side, front-runner Joe Biden has so far been the outlier by calling China a paper tiger, says Axios' Alayna Treene. But he has backtracked and criticized Trump mostly for failing to fight the battle alongside traditional U.S. allies, and he may have to retreat further given the politics.

2. Facial recognition under fire

Photo: Steffi Loos/Getty

Government use of facial recognition systems came under biting attack on both sides of the country today — in Congress and at one of the largest tech companies in the world, Kaveh writes.

Why it matters: Momentum is picking up to limit police facial recognition, driven by widespread concerns about the technology's accuracy and fairness. Slowing its rollout would be a serious blow to an emerging field that has so far grown unchecked.

What's happening: Critics turned up the heat in Washington state and Washington, D.C.

  • At Amazon's shareholder meeting in Seattle, investors voted on two proposals to limit the company from selling its facial recognition software to governments.
  • On Capitol Hill, the House Government Oversight Committee displayed a rare bipartisan drive to consider adopting restrictions for the technology.

Amazon shareholders voted down the proposals, as was widely expected. Privacy groups claimed that their appearance on the ballot — despite Amazon's complaints to the Securities and Exchange Commission — shows that investors are concerned with a potential hit from selling an untested tech.

  • Matt Cagle, an ACLU staff attorney, told Axios ahead of the Amazon meeting:
"It is an embarrassment for Amazon's leadership that their failure to address this technology's obvious dangers — to civil rights and the company's reputation — has come to this: a shareholder intervention."

But the House hearing suggested that even if private companies don't act, Congress may. Lawmakers at either extreme of the political spectrum — staunch Trump ally Mark Meadows and progressive superhero Alexandria Ocasio-Cortez — came down on the same side of the question. Meadows, a North Carolina Republican, said:

"You’ve now hit the sweet spot that brings progressives and conservatives together. … I’m here to tell you we’re serious about this and let’s get together and work on legislation. The time is now before it goes out of control."

Background: It's been a tough couple of weeks for facial recognition. Last week, San Francisco voted to implement a complete ban on the city's use of facial recognition surveillance.

What's next: The same House committee is inviting witnesses from law enforcement to an upcoming second hearing on the same topic, which promises to sound very different.

Go deeper: Uncovering secret government AI

3. New AI guidelines target governments

Illustration: Aïda Amer/Axios

Forty-two countries today adopted a new set of international principles for developing AI, the latest in an increasingly crowded field of guidelines for countries and companies racing to implement the technology, Kaveh writes.

The 36 countries in the Organization for Economic Cooperation and Development (OECD), plus six more, signed onto the document, which — like other international efforts — emphasizes AI safety, transparency and accountability.

Our thought bubble: These general principles are widely agreed upon, but there is no consensus on how to achieve them, either politically or technically.

  • OECD is calling the document a "political commitment," enforced by monitoring and peer pressure. Participating governments will have a few years to get up to speed before the pressure kicks in.
  • By the end of 2019, its officials say, OECD will organize an "AI policy observatory" that will allow members to trade lessons and tools.

Context: The new guidelines are targeted at governments, where an earlier document from the EU went after companies. Expect more international bodies to weigh in, potentially creating a confusing crossfire of recommendations.

4. Worthy of your time

Illustration: Aïda Amer/Axios

Amazon turns warehouse work into a game (Greg Bensinger — WP)

The new tech Cold War (Ina Fried — Axios)

IBM's quantum computer (Richard Waters — FT)

The kilogram is now a real thing (Rhett Allain — Wired)

If you are blue collar, skip superstar cities (Richard Florida — CityLab)

5. 1 faux thing: Even bigger fake meat

Beyond Meat CEO Ethan Brown at Nasdaq. It went public in May. Photo: Drew Angerer/Getty

In a new report today, Barclays estimates that faux beef is going to become a very, very large part of global consumption. By 2029, the bank projects, plant-based meat could capture 10% of the $1.4 trillion global industry, meaning a whopping $140 billion in sales.

As we have reported, faux beef is now available in thousands of U.S. fast food restaurants, including Burger King, White Castle and Carl's Jr.

Says Barclays, "With consumers becoming increasingly aware of the environmental, animal welfare, and health and wellness impacts from the consumption of traditional meat, we believe there is enough evidence indicating that alternative meats are not merely a fad."

Bryan Walsh