senior fellow at the Atlantic Council who works in the financial services industry, said of Russia’s cooperation with a price cap. “If that were the case, he wouldn’t have invaded Ukraine in the first place.”

But proponents believe that if the European Union bans insurance transactions, an oil price cap may be the best chance to mitigate the economic fallout.

John E. Smith, former director of the foreign assets control unit, said the key was ensuring that financial services firms and maritime insurers were not responsible for vetting every oil transaction, as well as providing guidance on complying with the sanctions.

“The question is will enough jurisdictions agree on the details to move this forward,” said Mr. Smith, who is now co-head of Morrison & Foerster’s national security practice. “If they do, it could be a win for everyone but Russia.”

Matina Stevis-Gridneff contributed reporting from Brussels.

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G7 to hike sanctions on Russia, nears oil price cap deal

  • G7 to announce new Russia sanctions on Tuesday – U.S. official
  • G7 to work with other countries, private sector on oil price cap
  • Japan tries to cut zero-emission vehicles goal from G7 statement

SCHLOSS ELMAU, Germany, June 27 (Reuters) – The Group of Seven rich democracies will commit on Tuesday to a new package of coordinated actions meant to raise pressure on Russia over its war in Ukraine, and will finalise plans for a price cap on Russian oil, a senior U.S. official said on Monday.

The announcement came as the White House said Russia had defaulted on its foreign sovereign bonds for the first time in decades – an assertion Moscow rejected – and as Ukrainian President Volodymyr Zelenskiy spoke virtually with G7 leaders meeting at an alpine resort in southern Germany. read more

Zelenskiy asked leaders of the Group of Seven leading industrial democracies for a broad range of military, economic and diplomatic support, according to a European official.

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G7 nations, which generate nearly half the world’s economic output, want to crank up pressure on Russia without stoking already soaring inflation that is causing strains at home and savaging the global south.

The price cap could hit Russian President Vladimir Putin’s war chest while actually lowering energy prices.

“The dual objectives of G7 leaders have been to take direct aim at Putin’s revenues, particularly through energy, but also to minimize the spillovers and the impact on the G7 economies and the rest of the world,” the U.S. official said on the sidelines of the annual G7 summit.

G7 leaders would also make an “unprecedented, long-term security commitment to providing Ukraine with financial, humanitarian, military and diplomatic support as long as it takes”, including the timely provision of advanced weapons, the White House said in a fact sheet.

Western sanctions have hit Russia’s economy hard and the new measures are aimed at further depriving the Kremlin of oil revenues. G7 countries would work with others – including India – to limit the revenues that Putin can continue to generate, the U.S. official said.

India’s Prime Minister Narendra Modi is one of the five leaders of guest nations joining the G7 for talks on climate change, energy, health, food security and gender equality on the second day of the summit.

“Since it is a mechanism that could benefit third countries more than Europe,” one EU official said. “These countries are asking questions about the feasibility, but in principle to pay less for energy is a very popular theme.”

TARGETING RUSSIAN GOLD, DEFENCE SECTOR

A U.S. official said news that Russia defaulted on its foreign sovereign bonds for the first time since the Bolshevik revolution in 1917 showed how effective Western sanctions have been.

“This morning’s news around the finding of Russia’s default, for the first time in more than a century, situates just how strong the actions are that the U.S., along with allies and partners, have taken, as well as how dramatic the impact has been on Russia’s economy,” the official added.

The Kremlin, which has the funds to make payments thanks to rich energy revenues, swiftly rejected the U.S. statement, accusing the West of driving it into an artificial default. read more

New sanctions planned by the G7 countries will target Moscow’s military production, crack down on its gold imports and target Russian-installed officials in contested areas. read more

The G7 leaders would task their governments to work intensively on how to implement the Russian price cap, working with countries around the world and stakeholders including the private sector, the official said.

The United States said it would also implement sanctions on hundreds of individuals and entities adding to the more than 1,000 already sanctioned, target companies in several countries and impose tariffs on hundreds of Russia products. read more

The agencies involved would release details on Tuesday to minimize any flight risk, a second senior administration official said.

The Ukraine crisis has detracted attention from another crisis – that of climate change – originally set to dominate the summit. Activists fear Western nations are watering down their climate ambitions as they scramble to find alternatives to Russian gas imports and rely more heavily on coal, a dirtier fossil fuel, instead.

Japan is also pushing to remove a target for zero-emission vehicles from a G7 communique expected this week, according to a proposed draft seen by Reuters. read more

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Reporting by Andrea Shalal and Sarah Marsh, Additional Reporting by Angelo Amante, Phil Blenkinsop; Editing by Thomas Escritt, Mark Heinrich and Alex Richardson

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Ukraine pleads for air defence as Russia turns sights on Lysychansk

  • This is not an accidental hit, Zelenskiy says of strike on mall
  • Russian attack on frontline eastern city kills eight: Ukraine
  • G7 leaders promise nearly $30 billion in new aid for Kyiv

KREMENCHUK, Ukraine, June 27 (Reuters) – Russian missiles struck a crowded shopping mall in central Ukraine on Monday, President Volodymyr Zelenskiy said, as Moscow fought for control of a key eastern city and Western leaders promised to support Kyiv in the war “as long as it takes”.

More than 1,000 people were inside when two Russian missiles slammed into the mall in the city of Kremenchuk, southeast of Kyiv, Zelenskiy wrote on Telegram. At least 16 people were killed and 59 injured, Ukraine’s emergency services said. Rescuers trawled through mangled metal and debris for survivors.

“This is not an accidental hit, this is a calculated Russian strike exactly onto this shopping centre,” Ukrainian President Volodymyr Zelenskiy said in an evening video address, adding there were women and children inside. He said the death count could rise.

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Russia has not commented on the strike, which was condemned by the United Nations and Ukraine’s Western allies. But its deputy ambassador to the United Nations, Dmitry Polyanskiy, accused Ukraine of using the incident to gain sympathy ahead of a June 28-30 summit of the NATO military alliance.

“One should wait for what our Ministry of Defence will say, but there are too many striking discrepancies already,” Polyanskiy wrote on Twitter.

As night fell in Kremenchuk, firefighters and soldiers brought lights and generators to continue the search. Family members, some close to tears and with hands over their mouths, lined up at a hotel across the street where rescue workers had set up a base.

Kiril Zhebolovsky, 24, was looking for his friend, Ruslan, 22, who worked at the Comfy electronics store and had not been heard from since the blast.

“We sent him messages, called, but nothing,” he said. He left his name and phone number with the rescue workers in case his friend is found.

The United Nations Security Council will meet Tuesday at Ukraine’s request following the attack on the shopping mall. U.N. spokesman Stephane Dujarric said the attack was “deplorable”.

Leaders of the Group of Seven major democracies, gathered for their annual summit in Germany, condemned what they called an “abominable” attack.

“We stand united with Ukraine in mourning the innocent victims of this brutal attack,” they wrote in a joint statement tweeted by the German government spokesperson. “Russian President Putin and those responsible will be held to account.”

Dmyto Lunin, governor for Poltava which includes Kremenchuk, said it was the most tragic day for region in more than four months of war.

“(We) will never forgive our enemies … This tragedy should strengthen and unite us around one goal: victory,” Lunin said on Telegram.

Elsewhere on the battlefield, Ukraine endured another difficult day following the loss of the now-ruined city of Sievierodonetsk after weeks of bombardment and street fighting.

Russian artillery was pounding Lysychansk, its twin across the Siverskyi Donets River. Lysychansk is the last big city still held by Ukraine in the eastern Luhansk province, a main target for the Kremlin after Russian troops failed to take the capital Kyiv early in the war.

A Russian missile strike killed eight and wounded 21 others in Lysychansk on Monday, the area’s regional governor Serhiy Gaidai said. There was no immediate Russian comment.

Ukraine’s military said Russia’s forces were trying to cut off Lysychansk from the south. Reuters could not confirm Russian reports that Moscow’s troops had already entered the city.

‘AS LONG AS IT TAKES’

Russia invaded Ukraine on Feb. 24 in what the Kremlin calls a “special military operation” to rid the country of far-right nationalists and ensure Russian security. The war has killed thousands, sent millions fleeing and laid waste to cities.

During their summit in Germany, G7 leaders, including U.S. President Joe Biden, said they would keep sanctions on Russia for as long as necessary and intensify international pressure on President Vladimir Putin’s government and its ally Belarus.

“Imagine if we allowed Putin to get away with the violent acquisition of huge chunks of another country, sovereign, independent territory,” British Prime Minister Boris Johnson told the BBC.

The United States said it was finalising another weapons package for Ukraine that would include long-range air-defence systems – arms that Zelenskiy specifically requested when he addressed the leaders by video link on Monday. read more

In his address to the G7 leaders, Zelenskiy asked again for more arms, U.S. and European officials said. He requested help to export grain from Ukraine and for more sanctions on Russia.

The G7 nations promised to squeeze Russia’s finances further – including a deal to cap the price of Russian oil that a U.S. official said was “close” – and promised up to $29.5 billion more for Ukraine. read more

“We will continue to provide financial, humanitarian, military and diplomatic support and stand with Ukraine for as long as it takes,” a G7 statement said.

The White House said Russia had defaulted on its external debt for the first time in more than a century as sweeping sanctions have effectively cut the country off from the global financial system.

Russia rejected the claims, telling investors to go to Western financial agents for the cash which was sent but bondholders did not receive. read more

The war has created difficulties for countries way beyond Europe’s borders, with disruptions to food and energy exports hitting the global economy. read more

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Reporting by Reuters bureaux; Writing by Angus MacSwan, Nick Macfie and Rami Ayyub; Editing by Frank Jack Daniel and Catherine Evans

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G7 aims to raise $600 bln to counter China’s Belt and Road

SCHLOSS ELMAU, Germany, June 26 (Reuters) – Group of Seven leaders pledged on Sunday to raise $600 billion in private and public funds over five years to finance needed infrastructure in developing countries and counter China’s older, multitrillion-dollar Belt and Road project.

U.S. President Joe Biden and other G7 leaders relaunched the newly renamed “Partnership for Global Infrastructure and Investment,” at their annual gathering being held this year at Schloss Elmau in southern Germany.

Biden said the United States would mobilize $200 billion in grants, federal funds and private investment over five years to support projects in low- and middle-income countries that help tackle climate change as well as improve global health, gender equity and digital infrastructure.

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“I want to be clear. This isn’t aid or charity. It’s an investment that will deliver returns for everyone,” Biden said, adding that it would allow countries to “see the concrete benefits of partnering with democracies.”

Biden said hundreds of billions of additional dollars could come from multilateral development banks, development finance institutions, sovereign wealth funds and others.

Europe will mobilize 300 billion euros ($317.28 billion) for the initiative over the same period to build up a sustainable alternative to China’s Belt and Road Initiative scheme, which Chinese President Xi Jinping launched in 2013, European Commission President Ursula von der Leyen told the gathering.

The leaders of Italy, Canada and Japan also spoke about their plans, some of which have already been announced separately. French President Emmanuel Macron and British Prime Minister Boris Johnson were not present, but their countries are also participating.

China’s investment scheme involves development and programs in over 100 countries aimed at creating a modern version of the ancient Silk Road trade route from Asia to Europe.

White House officials said the plan has provided little tangible benefit for many developing countries.

U.S. President Joe Biden attends a working lunch with other G7 leaders to discuss shaping the global economy at the Yoga Pavilion, Schloss Elmau in Kuren, Germany, June 26, 2022. Kenny Holston/Pool via REUTERS

Chinese foreign ministry spokesman Zhao Lijian defended the track record of BRI when asked for comment at a daily briefing in Beijing on Monday.

“China continues to welcome all initiatives to promote global infrastructure development,” Zhao said of the G7’s $600 billion plan.

“We believe that there is no question that various related initiatives will replace each other. We are opposed to pushing forward geopolitical calculations under the pretext of infrastructure construction or smearing the Belt and Road Initiative.”

Biden highlighted several flagship projects, including a $2 billion solar development project in Angola with support from the Commerce Department, the U.S. Export-Import Bank, U.S. firm AfricaGlobal Schaffer, and U.S. project developer Sun Africa.

Together with G7 members and the EU, Washington will also provide $3.3 million in technical assistance to Institut Pasteur de Dakar in Senegal as it develops an industrial-scale flexible multi-vaccine manufacturing facility in that country that can eventually produce COVID-19 and other vaccines, a project that also involves the EU.

The U.S. Agency for International Development (USAID) will also commit up to $50 million over five years to the World Bank’s global Childcare Incentive Fund.

Friederike Roder, vice president of the non-profit group Global Citizen, said the pledges of investment could be “a good start” toward greater engagement by G7 countries in developing nations and could underpin stronger global growth for all.

G7 countries on average provide only 0.32% of their gross national income, less than half of the 0.7% promised, in development assistance, she said.

“But without developing countries, there will be no sustainable recovery of the world economy,” she said.

($1 = 0.9455 euros)

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Reporting by Andrea Shalal; Additional reporting by Martin Quin Pollard in Beijing; Editing by Mark Porter, Lisa Shumaker and Muralikumar Anantharaman

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G7 to announce ban on import of new Russian gold on Tuesday, U.S. official says

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An employee stores newly casted ingots of 99.99 percent pure gold after weighing at the Krastsvetmet non-ferrous metals plant, one of the world’s largest producers in the precious metals industry, in the Siberian city of Krasnoyarsk, Russia November 22, 2018. REUTERS/Ilya Naymushin

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KRUEN, Germany, June 26 (Reuters) – The Group of Seven rich democracies will announce a ban on imports of Russian gold on Tuesday, as part of ongoing efforts to hold Russia accountable for its war in Ukraine and block attempts to evade Western sanctions, a senior U.S. administration official said on Sunday.

Britain and the United States would announce the move on Sunday, followed by an official announcement on Tuesday, the official said.

“The president and other G7 leaders will continue to work to hold (Russian President Vladimir) Putin accountable. Today the U.S. and the U.K. are announcing that G7 leaders will ban imports of Russian gold. The official announcement will come on Tuesday,” the official said.

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Ukraine War’s Latest Victim? The Fight Against Climate Change.

BERLIN — Russia’s invasion of Ukraine seemed like an unexpected opportunity for environmentalists, who had struggled to focus the world’s attention on the kind of energy independence that renewable resources can offer. With the West trying to wean itself from Russian oil and gas, the argument for solar and wind power seemed stronger than ever.

But four months into the war, the scramble to replace Russian fossil fuels has triggered the exact opposite. As the heads of the Group of 7 industrialized nations gather in the Bavarian Alps for a meeting that was supposed to cement their commitment to the fight against climate change, fossil fuels are having a wartime resurgence, with the leaders more focused on bringing down the price of oil and gas than immediately reducing their emissions.

Nations are reversing plans to stop burning coal. They are scrambling for more oil and are committing billions to building terminals for liquefied natural gas, known as L.N.G.

coal plants that had been shuttered or were scheduled to be phased out.

as top economic officials in Ukraine, say it would serve two key purposes: increasing the global supply of oil to put downward pressure on oil and gasoline prices, while reducing Russia’s oil revenue.

Proponents say it is likely that Russia would continue to produce and sell oil even at a discount because it would be easier and more economical than capping wells to cut production. Simon Johnson, an economist at the Massachusetts Institute of Technology, estimates that it could be in Russia’s economic interest to continue selling oil with a price cap as low as $10 a barrel.

Some proponents say it is possible that China and India would also insist on paying the discounted price, further driving down Russian revenues.

floating ones.

Critics charge that building all 12 terminals would produce an excess capacity. But even half that number would produce three-quarters of the carbon emissions Germany is allowed under international agreements, according to a recent report published by a German environmental watchdog. The terminals would be in use until 2043, far too long for Germany to become carbon neutral by 2045, as pledged by Mr. Scholz’s government.

And countries are not just investing in infrastructure at home.

Last month, Mr. Scholz was in Senegal, one of the developing countries invited to the Group of 7 summit, to discuss cooperating not just on renewables but also on gas extraction and L.N.G. production.

In promoting the Senegal gas project, analysts say, Berlin is violating its own Group of 7 commitment not to offer public financing guarantees for fossil fuel projects abroad.

These contradictions have not gone unnoticed by poorer nations, which are wondering how Group of 7 countries can push for commitments to climate targets while also investing in gas production and distribution.

One explanation is a level of lobbying among fossil fuel companies not seen for years, activists say.

“It looks to me like an attempt by the oil and gas industry to end-run the Paris Agreement,” said Bill Hare of Climate Analytics, an advisory group in Berlin, referring to the landmark 2015 international treaty on climate change. “And I’m very worried they might succeed.”

Ms. Morgan in the German Foreign Ministry shares some of these concerns. “They’re doing everything that they can to move it forward, also in Africa,” she said of the industry. “They want to lock it in. Not just gas, but oil and gas and coal.”

But she and others are still hopeful that the Group of 7 can become a platform for tying climate goals to energy security.

Environmental and foreign policy analysts argue that the Group of 7 could support investments in renewable energy and energy efficiency, while pledging funds for poorer nations hit with the brunt of climate disasters.

Above all, activists warn, rich countries need to resist the temptation to react to the short-term energy shortages by once again betting on fossil fuel infrastructure.

“All the arguments are on the table now,” said Ms. Neubauer, the Fridays for Future activist. “We know exactly what fossil fuels do to the climate. We also know very well that Putin is not the only autocrat in the world. We know that no democracy can be truly free and secure as long as it depends on fossil fuel imports.”

Katrin Bennhold Bennhold reported from Berlin, and Jim Tankersley from Telfs, Austria. Erika Solomon and Christopher F. Schuetze contributed reporting from Berlin.

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Treasury Secretary Yellen Looks to Get Global Tax Deal Back on Track

“I think the reality of turning a political commitment into binding domestic legislation is a lot more complex,” said Manal Corwin, a Treasury official in the Obama administration who now heads the Washington national tax practice at KPMG. “The E.U. has moved and gotten over most of the objections, but they still have Poland and it’s not clear whether they’re going to be able to get the last vote.”

With President Emmanuel Macron of France heading the European Union’s rotating presidency until June, his administration was eager to get a deal implemented. But at a meeting of European finance ministers in early April, Poland became the sole holdout, saying there were no ironclad guarantees that big multinational companies wouldn’t still be able to take advantage of low-tax jurisdictions if the two parts of the agreement did not move ahead in tandem, undercutting the global effort to avoid a race to the bottom when it comes to corporate taxation.

Poland’s stance was sharply criticized by European officials, particularly France, whose finance minister, Bruno Le Maire, suggested that Warsaw was instead holding up a final accord in retaliation for a Europe-wide political dispute. Poland has threatened to veto measures requiring unanimous E.U. votes because of an earlier decision by Brussels to block pandemic recovery funds for Poland.

The European Union had refused to disburse billions in aid to Poland since late last year, citing separate concerns over Warsaw’s interference with the independence of its judicial system. Last week, on the eve of Ms. Yellen’s visit to Poland, the European Commission came up with an 11th-hour deal unlocking 36 billion euros in pandemic recovery funds for Poland, which pledged to meet certain milestones such as judiciary and economic reforms, in return for the money.

Negotiators from around the world have been working for months to resolve technical details of the agreement, such as what kinds of income would be subject to the new taxes and how the deal would be enforced. Failure to finalize the agreement would likely mean the further proliferation of the digital services taxes that European countries have imposed on American technology giants, much to the dismay of those firms and the Biden administration, which has threatened to impose tariffs on nations that adopt their own levies.

“It’s fluid, it’s moving, it’s a moving target,” Pascal Saint-Amans, the director of the center for tax policy and administration at the Organization for Economic Cooperation and Development, said of the negotiations at the D.C. Bar’s annual tax conference this month. “There is an extremely ambitious timeline.”

Countries like Ireland, with a historically low corporate tax rate, have been wary of increasing their rates if others do not follow suit, so it has been important to ensure that there is a common understanding of the new tax rules to avoid opening the door to new loopholes.

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UK to provide 1.3 billion pounds of further military support to Ukraine

Ukraine’s President Volodymyr Zelenskiy and British Prime Minister Boris Johnson attend a news briefing, as Russia’s attack on Ukraine continues, in Kyiv, Ukraine April 9, 2022. Ukrainian Presidential Press Service/Handout via REUTERS ATTENTION EDITORS – THIS IMAGE HAS BEEN SUPPLIED BY A THIRD PARTY. MANDATORY CREDIT/File Photo

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LONDON, May 7 (Reuters) – Britain said it would provide a further 1.3 billion pounds ($1.60 billion) in military support and aid to Ukraine, making the pledge ahead of a planned video call on Sunday by Group of Seven leaders with Ukrainian President Volodymyr Zelenskiy.

Prime Minister Johnson has been one of the strongest supporters of Ukraine’s efforts to resist Russian forces since Russian President Vladimir Putin launched the invasion on Feb. 24. Johnson’s government has sent anti-tank missiles, air defence systems and other weapons to Ukraine.

The new pledge almost doubles Britain’s previous spending commitments on Ukraine and the government said this is the highest rate of spending on a conflict since the wars in Iraq and Afghanistan, although it did not give details of this calculation.

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“Putin’s brutal attack is not only causing untold devastation in Ukraine – it is also threatening peace and security across Europe,” Johnson said in a statement. Last week he became the first Western leader to address Ukraine’s parliament since the start of the invasion.

The leaders of the G7 countries – Britain, Canada, France, Germany, Italy, Japan and the United States – will hold their virtual meeting with Zelenskiy on Sunday, the day before Russia marks its Victory Day holiday, which marks the end of World War Two in Europe. read more

Britain said the extra spending on Ukraine will come from a reserve used by the government for emergencies.

The government also said Johnson will host a meeting of leading defence companies later this month to discuss increasing production in response to increased demand created by the war in Ukraine.

While Britain has provided significant military aid, it has so far accepted relatively few of the more than 5 million Ukrainians who have fled their country. The British government said on Saturday that so far it had issued more than 86,000 visas to Ukrainians, of whom about 27,000 had reached Britain.

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Reporting by Andrew MacAskill
Editing by Frances Kerry

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UK’s Truss tells China its rise depends on playing by the rules, article with image

LONDON, April 28 (Reuters) – British Foreign Secretary Liz Truss warned China that failure to play by global rules would cut short its rise as a superpower, and said the West should ensure that Taiwan can defend itself.

Renewing her call to boost NATO, Truss said moves to isolate Russia from the world economy in response to its invasion of Ukraine proved that market access to democratic countries was no longer a given.

“Countries must play by the rules. And that includes China,” Truss said in a speech at Mansion House in London.

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Britain, the world’s sixth-largest economy, is dwarfed economically and militarily by China, but believes that via soft power and strategic alliances it can help persuade Beijing to play by the rules of a new, more dynamic international system.

China’s economic and military rise over the past 40 years is considered to be one of the most significant geopolitical events of recent times, alongside the 1991 fall of the Soviet Union which ended the Cold War.

But Truss said its further rise was not inevitable.

“They will not continue to rise if they do not play by the rules. China needs trade with the G7. We (the Group of Seven) represent around half of the global economy. And we have choices,” she said.

“We have shown with Russia the kind of choices that we’re prepared to make when international rules are violated.”

Earlier this month, U.S. Treasury Secretary Janet Yellen said China should persuade Russia to help end the war in Ukraine, or face a loss of standing in the world. read more

Beijing has said it firmly opposes linking the Ukraine war to its relations with Moscow and that it will defend the rights of Chinese individuals and companies.

Truss said NATO needed to have a global outlook that extended to democracies outside its membership, citing Taiwan as an example.

“We need to pre-empt threats in the Indo-Pacific, working with allies like Japan and Australia to ensure that the Pacific is protected,” she said.

“We must ensure that democracies like Taiwan are able to defend themselves.”

Taiwan’s Foreign Ministry said on Thursday it warmly welcomed the comment, and would continue deepening its cooperation with Britain and other like-minded partners to jointly ensure peace and stability in the Taiwan Strait.

Britain and Taiwan have close though unofficial ties.

China views Taiwan as its own territory, to be brought under Beijing’s control by force if necessary, saying it is one of the most sensitive and important issues in its relations with the West. Taiwan rejects China’s sovereignty claims.

In 2015, Britain’s then-finance minister, George Osborne, predicted a “golden” era in Chinese-British relations. But ties have since frayed over issues including Beijing’s security crackdown on former British colony Hong Kong and security concerns around Chinese investment in Britain.

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Reporting by Andy Bruce; Additional reporting by Ben Blanchard in Taipei; Editing by Rosalba O’Brien and Kenneth Maxwell

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