This week marks the 50th anniversary of President Richard Nixon’s historic 1972 visit to China, which opened relations between the United States and China’s communist government after more than two decades of mutual distrust. As VOA’s Mike O’Sullivan reports, the anniversary comes at a fraught time in U.S.-China relations.
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The United States announced Friday that it would freeze the assets of Russian President Vladimir Putin and Russian Foreign Minister Sergey Lavrov, following similar steps taken by the European Union and Britain, as nations around the world sought to tighten sanctions against Russia’s government over its invasion of Ukraine.

The U.S. Treasury Department announced the action after EU foreign ministers meeting in Brussels unanimously agreed to freeze the property and bank accounts of the top Russian officials.

Britain’s government took the same action Friday, with Foreign Secretary Liz Truss writing on Twitter, “We will not stop inflicting economic pain on the Kremlin until Ukrainian sovereignty is restored.”

A Russian foreign ministry spokeswoman, Maria Zakharova, said the sanctions against Putin and Lavrov reflected the West’s “absolute impotence” in foreign policy, according to the RIA news agency.

World leaders are rarely the target of direct sanctions. The only other leaders currently under EU sanctions are Belarus President Alexander Lukashenko and Syrian President Bashar al-Assad, according to Agence France-Presse.

Austrian Foreign Minister Alexander Schallenberg said the move was “a unique step in history” toward a country that has a permanent seat on the U.N. Security Council, but said it showed how united EU countries were in countering Russia’s actions.

The EU sanctions against Putin and Lavrov are part of a broader sanctions package that targets Russian banks, oil refineries and the Russian defense industry.

EU leaders agreed, however, it was premature to impose a travel ban on Putin and Lavrov because negotiating channels need to be kept open.

British Prime Minister Boris Johnson called Friday for nations to cut Russia off from the SWIFT international bank transfer system “to inflict maximum pain.”

Ukraine has lobbied for a SWIFT ban on Russia, urging Europe to act more forcefully in imposing sanctions against Moscow. However, some European nations, including Germany, are hesitant to take that step.

German Foreign Minister Annalena Baerbock said Friday that the package of banking sanctions the EU has passed would hit Putin’s government harder than excluding Russia from the SWIFT payments system.

“The sword that looks hardest isn’t always the cleverest one,” she said, adding, “the sharper sword at the moment is listing banks.”

Luxembourg Foreign Minister Jean Asselborn said, “The debate about SWIFT is not off the table. It will continue.”

In response to the sanctions, Russia has taken its own measures, including banning British flights over its territory, after Britain imposed a similar ban on Aeroflot flights.

The United States and several allies had imposed a first tranche of sanctions Tuesday, after Putin declared the disputed eastern Ukraine regions of Luhansk and Donetsk as independent states, much as he appropriated Ukraine’s Crimean Peninsula in 2014.

Biden added another round of sanctions on Russia on Thursday, hours after Russia began its invasion of Ukraine, declaring at the White House after meeting virtually with leaders of the Group of Seven leading industrial nations and NATO that “Putin chose this war, and now he and his country will bear the consequences.”

Biden said those U.S. sanctions, which target Russian banks, oligarchs and high-tech sectors and include export controls, would “squeeze Russia’s access to finance and technology for strategic sectors of its economy and degrade its industrial capacity for years to come.”

Effects on markets

NATO allies, including Britain and the European Union, also imposed more sanctions Thursday, and the effects were felt almost immediately when global security prices plunged and commodity prices surged. Biden acknowledged that Americans would see higher gasoline prices.

More than half of all Americans, 52%, viewed the Russia-Ukraine conflict before Russia’s invasion “as a critical threat to U.S. vital interests,” a significant increase from 2015, when 44% thought it was a threat after Russia annexed Crimea in 2014, according to a poll released Friday by Gallup.

The poll was conducted from February 1-17 before the Russian government recognized the independence of Donetsk and Luhansk and deployed troops to those areas.

As in 2015, roughly half of Democrats and Republicans said they were likely to see the conflict as a critical threat to U.S. vital interests.

Also Friday, an International Criminal Court prosecutor warned that the court might investigate whether Russia has committed any war crimes in its invasion of Ukraine.

“I remind all sides conducting hostilities on the territory of Ukraine that my office may exercise its jurisdiction and investigate any act of genocide, crime against humanity or war crime committed within Ukraine,” ICC prosecutor Karim Khan said Friday in a statement.

Some information for this report came from The Associated Press, Agence France-Presse and Reuters.
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Drugmaker Johnson & Johnson and three major distributors finalized nationwide settlements over their role in the opioid addiction crisis Friday, an announcement that clears the way for $26 billion to flow to nearly every state and local government in the U.S.

Taken together, the settlements are the largest to date among the many opioid-related cases that have been playing out across the country. They’re expected to provide a significant boost to efforts aimed at reversing the crisis in places that have been devastated by it, including many parts of rural America.

Johnson & Johnson, AmerisourceBergen, Cardinal Health and McKesson announced the settlement plan last year, but the deal was contingent on getting participation from a critical mass of state and local governments.

Friday was the deadline for the companies to announce whether they felt enough governments had committed to participate in the settlement and relinquish the right to sue. The four companies notified lawyers for the governments in the case that their thresholds were met, meaning money could start flowing to communities by April.

“We’re never going to have enough money to immediately cure this problem,” said Joe Rice, one of the lead lawyers who represented local governments in the litigation that led to the settlement. “What we’re trying to do is give a lot of small communities a chance to try to change some of their problems.”

While none of the settlement money will go directly to victims of opioid addiction or their survivors, the vast majority of it is required to be used to deal with the epidemic. The need for the funding runs deep.

Kathleen Noonan, CEO of the Camden Coalition of Healthcare Providers, said a portion of the settlement money should be used to provide housing to people with addictions who are homeless.

“We have clients who have a hard time staying clean to make it in a shelter,” she said. “We would like to stabilize them so we can help them recover.”

Dan Keashen, a spokesman for Camden County government, said officials are thinking about using settlement money for a public education campaign to warn about the dangers of fentanyl. They also want to send more drug counselors into the streets, put additional social workers in municipal courts and pay for anti-addiction medications in the county jail.

Officials across the country are considering pumping the money into similar priorities.

California Gov. Gavin Newsom’s proposed budget calls for using $50 million of the state’s expected $86 million share this year for youth opioid education and to train treatment providers, improve data collection and distribute naloxone, a drug that reverses overdoses.

In Florida’s Broward County, home to Fort Lauderdale, the number of beds in a county-run detoxification facility could be expanded from 50 to 70 or 75, said Danielle Wang French, a lawyer for the county.

“It’s not enough, but it’s a good start,” she said of the settlement.

With fatal overdoses continuing to rage across the U.S., largely because of the spread of fentanyl and other illicitly produced synthetic opioids, public health experts are urging governments to use the money to ensure access to drug treatment for people with addictions. They also emphasize the need to fund programs that are proven to work, collect data on their efforts and launch prevention efforts aimed at young people, all while focusing on racial equity.

“It shouldn’t be: ready, set spend,” said Joshua Sharfstein, a former secretary of the Maryland Department of Health who is now a vice dean of public health at Johns Hopkins University. “It should be: think, strategize, spend.”

In a separate deal that also is included in the $26 billion, the four companies reached a $590 million settlement with the nation’s federally recognized Native American tribes. About $2 billion is being set aside for fees and expenses for the lawyers who have spent years working on the case.

New Brunswick, New Jersey-based Johnson & Johnson has nine years to pay its $5 billion share. The distributors — Conshohocken, Pennsylvania-based AmerisourceBergen; Columbus, Ohio-based Cardinal Health; and Irving, Texas-based McKesson — agreed to pay their combined $21 billion over 18 years. To reach the maximum amounts, states have to get local governments to sign on.

The settlements go beyond money. J&J, which has stopped selling prescription opioids, agrees not to resume. The distributors agree to send data to a clearinghouse intended to help flag when prescription drugs are diverted to the black market.

The companies are not admitting wrongdoing and are continuing to defend themselves against claims that they helped cause the opioid crisis that were brought by entities that are not involved in the settlements.

In a joint statement, the distributors called the implementation of the settlement “a key milestone toward achieving broad resolution of governmental opioid claims and delivering meaningful relief to communities across the United States.”

The requirement that most of the money be used to address the opioid crisis contrasts with a series of public health settlements in the 1990s with tobacco companies. In those cases, states used big chunks of the settlement money to fill budget gaps and fund other priorities.

The amount sent to each state under the opioid settlement depends on a formula that takes into account the severity of the crisis and the population. County and local governments also get shares of the money. A handful of states — Alabama, New Hampshire, Oklahoma, Washington and West Virginia — have not joined all or part of the settlement, mostly because they have their own deals or are preparing for trial.

In Camden, Lisa Davey, a recovery specialist for Maryville Addiction treatment Center, was at a needle exchange this week handing out naloxone, a drug that reverses overdoses, and asking people if they wanted to start treatment.

Davey said she wants to see detoxification and treatment programs receive more funding to keep people in them for longer. As it is, she said, users can detox and be back out on the streets in search of drugs within days.

“They need more time to work their recovery,” she said.

A man picking up clean needles who asked to be identified only as Anthony P. said he was 46 and had struggled with addiction since he was a teenager. He said he’d like to see an effort to cut off fentanyl and related synthetic opioids that are driving overdose death rates from the drug supply.

“Fentanyl’s got to go,” he said.

Martha Chavis, president and CEO of Camden Area Health Education Center, which runs the needle exchange, said one need is offering services like hers in more places. Now, users from far-flung suburbs travel into Camden to get clean needles and kits to test their drugs for fentanyl.

The settlement with J&J and the three distributors marks a major step toward resolving the vast constellation of lawsuits in the U.S. over liability for an epidemic that has been linked to the deaths of more than 500,000 Americans over the past two decades.

Other companies, including business consultant McKinsey and drugmakers Endo, Mallinckrodt and Teva, have reached national settlements or a series of local ones. OxyContin maker Purdue Pharma and a group of states are in mediation through U.S. Bankruptcy Court to try to reach a nationwide settlement.

The crisis has deepened during the coronavirus pandemic, with U.S. opioid-related deaths reaching a high of more than 76,000 in the 12 months that ended in April 2021, largely because of the spread of fentanyl and other lab-made drugs. A recent report from a commission by The Lancet medical journal projected that 1.2 million Americans could die of opioid overdose between 2020 and 2029 without policy changes.

John F. Kelly, a professor of psychiatry in addiction medicine at Harvard Medical School, said he wants to see money from the settlements go not just for treatment, recovery and support efforts but also to build systems designed to prevent this sort of epidemic from happening again.

“Some kind of national board or organization could be set up … to prevent this kind of lack of oversight from happening again — where industry is allowed to create a public health hazard,” he said.
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An inflation gauge that is closely monitored by the Federal Reserve jumped 6.1% in January compared with a year ago, the latest evidence that Americans are enduring sharp price increases that will likely worsen after Russia’s invasion of Ukraine.

The figure reported Friday by the Commerce Department was the largest year-over-year rise since 1982. Excluding volatile food and energy prices, core inflation increased 5.2% in January from a year earlier.

Robust consumer spending has combined with widespread product and worker shortages to create the highest inflation in four decades — a heavy burden for U.S. households, especially lower-income families faced with elevated costs for food, fuel and rent.

At the same time, consumers as a whole largely shrugged off the higher prices last month and boosted their spending 2.1% from December to January, Friday’s report said, an encouraging sign for the economy and the job market. That was a sharp improvement from December, when spending fell. Americans across the income scale have been receiving pay raises and have amassed more savings than they had before the pandemic struck two years ago. That expanded pool of savings provides fuel for future spending.

Inflation, though, is expected to remain high and perhaps accelerate in the coming months, especially with Russia’s invasion likely disrupting oil and gas exports. The costs of other commodities that are produced in Ukraine, such as wheat and aluminum, have also increased.

President Joe Biden said Thursday that he would do “everything I can” to keep gas prices in check. Biden did not spell out details, though he mentioned the possibility of releasing more oil from the nation’s strategic reserves. He also warned that oil and gas companies “should not exploit this moment” by raising prices at the pump.

A separate report Friday showed that orders for long-lasting factory goods rose sharply in January, led by a rise in demand for airplanes. The figures indicate that many companies are willing to invest more in industrial equipment and other goods, a sign of confidence in the economy.

“Overall, the real economy appears to be in stronger health than we feared,” said Paul Ashworth, chief U.S. economist at Capital Economics, a forecasting firm.

Russia’s invasion and the likely resulting rise in inflation have increased pressure on the Federal Reserve, which is expected to raise interest rates by a quarter-point as many as five or six times this year beginning in March. The Fed’s delicate task — to raise rates enough to restrain inflation, without going so far as to tip the economy into recession — has now become more difficult.

Fed officials are acknowledging that the invasion of Ukraine has complicated the economic outlook, but say that so far they are sticking with their plans for rate hikes.

Loretta Mester, president of the Federal Reserve Bank of Cleveland, said Thursday that she supported a series of rate hikes beginning in March. But she said the Fed should remain flexible: Faster rate hikes might be needed, she said, if inflation hasn’t begun to fade by mid-year, or more gradual increases if inflation is slowing.

“The implications of the unfolding situation in Ukraine for the medium-run economic outlook in the U.S. will also be a consideration,” she said. Other Fed officials have offered similar remarks this week.

Late Thursday, however, Fed governor Christopher Waller said he would support a half-point rate hike in March if inflation remains high.

Fed officials want inflation to fall back to its 2% target, as measured by the Commerce Department’s gauge, released Friday. A separate measure, the consumer price index, released two weeks ago, showed that inflation reached 7.5% in January from a year earlier, also a four-decade high.

In December, Fed officials projected that inflation would decline to just 2.7%, according to their preferred measure, by the end of this year, which most economists see as increasingly unlikely. The Fed will release updated projections at its March meeting.

January’s data show inflation was already picking up before the invasion. From December to January, prices rose 0.6%, up from 0.5% in the previous month.

There are early indications that consumer spending has stayed healthy, boosted by the rapid fading of the omicron wave of the coronavirus. JPMorgan Chase said that spending on its credit cards for airline tickets, hotel rooms, and restaurant meals rose in the first half of this month.

The JPMorgan Chase Institute also recently released data showing that cash balances remain elevated among their customers, including those with lower incomes. Bank account balances for Americans with less than $26,000 in income were 65% higher at the end of last year than they were two years before.

Americans’ paychecks are rising steadily. Average hourly earnings rose 5.7% in January compared with a year ago. Unless companies can offset their higher labor costs with greater efficiencies, most of them will likely charge their customers more. This would send inflation higher.

The combination of higher pay and enhanced savings suggests that Americans may be able to keep spending at a solid pace in the coming months, thereby sustaining the economy’s inflationary pressures.
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