PARIS — French President Emmanuel Macron is leaning towards recognizing a Palestinian state, but diplomats and experts say such a move may prove a premature and ineffective way to pressure Israel into moving towards a peace deal with the Palestinians.

They say it could deepen Western splits, not only within the already-divided European Union (EU), but also with the United States, Israel’s staunchest ally, and would need to be accompanied by other measures such as sanctions and trade bans if recognition were to be anything more than a symbolic gesture.

French officials are weighing up the move ahead of a United Nations (UN) conference, which France and Saudi Arabia are co-hosting between June 17-20, to lay out the parameters for a roadmap to a Palestinian state, while ensuring Israel’s security.

If Mr. Macron went ahead, France, home to Europe’s largest Jewish and Muslim communities, would become the first Western heavyweight to recognize a Palestinian state, potentially giving greater momentum to a movement hitherto dominated by smaller nations that are generally more critical of Israel.

“If France moves, several (European) countries will follow,” Norwegian Foreign Minister Espen Barth Eide told Reuters.

Mr. Macron’s stance has shifted amid Israel’s intensified Gaza offensive and escalating violence by Israeli settlers in the West Bank, and there is a growing sense of urgency in Paris to act now before the idea of a two-state solution vanishes forever.

“We must move from words to deeds. Faced with facts on the ground, the prospect of a Palestinian state must be maintained. Irreversible and concrete measures are necessary,” Mr. Macron’s Middle East adviser Anne-Claire Legendre told delegates at a preparatory meeting in New York on May 23.

Diplomats caution that while Mr. Macron now favors the move, he has yet to make a final decision, and things could change — including a potential Gaza ceasefire accord — before mid-June.

However, his diplomats are scrambling to ensure the best conditions are in place for him to make the decision, including full assessments at the UN conference on the reform of the Palestinian Authority, disarming Hamas or future reconstruction.

ISRAELI LOBBYING
Israeli officials have spent months lobbying to prevent what some have described as “a nuclear bomb” for bilateral relations.

The idea that France, one of Israel’s closest allies and a G7 member, could recognize a Palestinian state, would certainly infuriate Israeli Prime Minister Benjamin Netanyahu.

When Britain and Canada joined France this month to say they could impose concrete measures on Israel and commit to recognizing a Palestinian state, Mr. Netanyahu issued a firm rebuke, accusing the leaders of the three countries of antisemitism.

Diplomats say Canada and Britain remain lukewarm for now about recognition, suggesting the priority is to make a difference on the ground, something that may dampen Mr. Macron’s ambitions.

According to two sources familiar with the matter, Israel’s warnings to France have ranged from scaling back intelligence sharing to complicating Paris’ regional initiatives — even hinting at possible annexation of parts of the West Bank.

Whether that would materialize seems unlikely, given the likely international fallout fuelling one of Israel’s greatest fears: deepening isolation, particularly with regard to Europe, its key trade partner.

“(But) the reaction will be negative across the board (in Israel),” Tamir Hayman, executive director at the Institute for National Security Studies (INSS) told Reuters, adding it would feed an ultra-right narrative in Israel that the world is against it. “It would be useless and a waste of time.”

SHIFTING FRENCH VIEWS
Mr. Macron strongly backed Israel after Hamas’ Oct. 7, 2023 attack, which killed 1,200 people and took 250 hostages. But he has steadily sharpened his language against Israel over its actions in Gaza, where the death toll among Palestinians has risen to more than 50,000, according to Palestinian health officials.

“We need to move towards recognition. Over the next few months, we will,” Mr. Macron said during an interview on April 9.

Even then, he hedged, setting vague conditions and saying he aimed to build momentum with a coalition backing France while nudging Muslim states toward recognizing Israel.

However, there are no indications for now that any new Muslim or Arab states are ready to move towards normalizing ties with Israel.

Saudi Arabia, the ultimate prize for Israeli normalization, is in no position for any rapprochement given the anger in many Muslim countries over events in Gaza.

“Regional peace begins with recognizing the state of Palestine, not as a symbolic gesture, but as a strategic necessity,” Manal Radwan, an adviser to the Saudi foreign minister, said in New York on Friday.

She did not mention the possibility of recognizing Israel.

Mr. Macron’s critics argue that recognition should come as part of negotiations towards a two-state solution — not before — and warning that an early move could weaken incentives for Palestinians to engage.

Underlining divisions within the EU, one European diplomat said: “It is our view that this recognition would not be helpful now or encourage more action within the member states.”

Others say recognition must be twinned with other measures such as a Europe-wide ban on trade with illegal Israeli settlements on occupied Palestinian territories and specific sanctions on Israeli officials.

French officials say they will not be swayed by such criticism or by the Israeli pressure.

“If there is a moment in history to recognize a Palestinian state even if it’s just symbolic then I would say that moment has probably come,” said a senior French official, adding that Mr. Macron may also want to leave a trace in history before his presidential mandate expires in 2027. — Reuters

MOSCOW — U.S. President Donald Trump’s envoy, Keith Kellogg, on Wednesday scolded a top Russian official for stoking fears of World War Three after Trump warned President Vladimir Putin was “playing with fire” over Ukraine.

As Russian forces advanced in Ukraine, Trump, in a post on Truth Social, said that Putin was playing with fire and cautioned that “REALLY BAD” things would have happened already to Russia if it was not for Trump himself.

“What Vladimir Putin doesn’t realize is that if it weren’t for me, lots of really bad things would have already happened in Russia, and I mean REALLY BAD. He’s playing with fire,” Trump said in a Truth Social post on Tuesday.

Top Russian security official Dmitry Medvedev, a former president, dismissed Trump’s criticism.

“Regarding Trump’s words about Putin ‘playing with fire’ and ‘really bad things’ happening to Russia. I only know of one REALLY BAD thing — WWIII. I hope Trump understands this!” Medvedev wrote in English on the social media platform X.

U.S. envoy Kellogg quoted Medvedev’s post and said it reckless.

“Stoking fears of WW III is an unfortunate, reckless comment… and unfitting of a world power,” Kellogg said on X.

“President Trump @POTUS is working to stop this war and end the killing. We await receipt of RU Memorandum (Term Sheet) that you promised a week ago. Cease fire now.” — Reuters

NEW DELHI – Global makers of surveillance gear have clashed with Indian regulators in recent weeks over contentious new security rules that require manufacturers of CCTV cameras to submit hardware, software and source code for assessment in government labs, official documents and company emails show.

The security-testing policy has sparked industry warnings of supply disruptions and added to a string of disputes between Prime Minister Narendra Modi’s administration and foreign companies over regulatory issues and what some perceive as protectionism.

New Delhi’s approach is driven in part by its alarm about China’s sophisticated surveillance capabilities, according to a top Indian official involved in the policymaking. In 2021, Modi’s then-junior IT minister told parliament that 1 million cameras in government institutions were from Chinese companies and there were vulnerabilities with video data transferred to servers abroad.

Under the new requirements applicable from April, manufacturers such as China’s Hikvision , Xiaomi and Dahua, South Korea’s Hanwha, and Motorola Solutions of the U.S. must submit cameras for testing by Indian government labs before they can sell them in the world’s most populous nation. The policy applies to all internet-connected CCTV models made or imported since April 9.

“There’s always an espionage risk,” Gulshan Rai, India’s cybersecurity chief from 2015 to 2019, told Reuters. “Anyone can operate and control internet-connected CCTV cameras sitting in an adverse location. They need to be robust and secure.”

Indian officials met on April 3 with executives of 17 foreign and domestic makers of surveillance gear, including Hanwha, Motorola, Bosch, Honeywell and Xiaomi, where many of the manufacturers said they weren’t ready to meet the certification rules and lobbied unsuccessfully for a delay, according to the official minutes.

In rejecting the request, the government said India’s policy “addresses a genuine security issue” and must be enforced, the minutes show.

India said in December the CCTV rules, which do not single out any country by name, aimed to “enhance the quality and cybersecurity of surveillance systems in the country.”

This report is based on a Reuters review of dozens of documents, including records of meetings and emails between manufacturers and Indian IT ministry officials, and interviews with six people familiar with India’s drive to scrutinize the technology. The interactions haven’t been previously reported.

Insufficient testing capacity, drawn-out factory inspections and government scrutiny of sensitive source code were among key issues camera makers said had delayed approvals and risked disrupting unspecified infrastructure and commercial projects.

“Millions of dollars will be lost from the industry, sending tremors through the market,” Ajay Dubey, Hanwha’s director for South Asia, told India’s IT ministry in an email on April 9.

The IT ministry and most of the companies identified by Reuters didn’t respond to requests for comment about the discussions and the impact of the testing policy. The ministry told the executives on April 3 that it may consider accrediting more testing labs.

Millions of CCTV cameras have been installed across Indian cities, offices and residential complexes in recent years to enhance security monitoring. New Delhi has more than 250,000 cameras, according to official data, mostly mounted on poles in key locations.

The rapid take-up is set to bolster India’s surveillance camera market to $7 billion by 2030, from $3.5 billion last year, Counterpoint Research analyst Varun Gupta told Reuters.

China’s Hikvision and Dahua account for 30% of the market, while India’s CP Plus has a 48% share, Gupta said, adding that some 80% of all CCTV components are from China.

Hanwha, Motorola Solutions and Britain’s Norden Communication told officials by email in April that just a fraction of the industry’s 6,000 camera models had approvals under the new rules.

CHINA CONCERN
The U.S. in 2022 banned sales of Hikvision and Dahua equipment, citing national security risks. Britain and Australia have also restricted China-made devices.

Likewise, with CCTV cameras, India “has to ensure there are checks on what is used in these devices, what chips are going in,” the senior Indian official told Reuters. “China is part of the concern.”

China’s state security laws require organizations to cooperate with intelligence work.

Reuters reported this month that unexplained communications equipment had been found in some Chinese solar power inverters by U.S. experts who examined the products.

Since 2020, when Indian and Chinese forces clashed at their border, India has banned dozens of Chinese-owned apps, including TikTok, on national security grounds. India also tightened foreign investment rules for countries with which it shares a land border.

The remote detonation of pagers in Lebanon last year, which Reuters reported was executed by Israeli operatives targeting Hezbollah, further galvanized Indian concerns about the potential abuse of tech devices and the need to quickly enforce testing of CCTV equipment, the senior Indian official said.

The camera-testing rules don’t contain a clause about land borders.

But last month, China’s Xiaomi said that when it applied for testing of CCTV devices, Indian officials told the company the assessment couldn’t proceed because “internal guidelines” required Xiaomi to supply more registration details of two of its China-based contract manufacturers.

“The testing lab indicated that this requirement applies to applications originating from countries that share a land border with India,” the company wrote in an April 24 email to the Indian agency that oversees lab testing.

Xiaomi didn’t respond to Reuters queries, and the IT ministry didn’t address questions about the company’s account.

China’s foreign ministry told Reuters it opposes the “generalization of the concept of national security to smear and suppress Chinese companies,” and hoped India would provide a non-discriminatory environment for Chinese firms.

LAB TESTING, FACTORY VISITS
While CCTV equipment supplied to India’s government has had to undergo testing since June 2024, the widening of the rules to all devices has raised the stakes.

The public sector accounts for 27% of CCTV demand in India, and enterprise clients, industry, hospitality firms and homes the remaining 73%, according to Counterpoint.

The rules require CCTV cameras to have tamper-proof enclosures, strong malware detection and encryption.

Companies need to run software tools to test source code and provide reports to government labs, two camera industry executives said.

The rules allow labs to ask for source code if companies are using proprietary communication protocols in devices, rather than standard ones like Wi-Fi. They also enable Indian officials to visit device makers abroad and inspect facilities for cyber vulnerabilities.

The Indian unit of China’s Infinova 002528.SZ told IT ministry officials last month the requirements were creating challenges.

“Expectations such as source code sharing, retesting post firmware upgrades, and multiple factory audits significantly impact internal timelines,” Infinova sales executive Sumeet Chanana said in an email on April 10. Infinova didn’t respond to Reuters questions.

The same day, Sanjeev Gulati, India director for Taiwan-based Vivotek 3454.TW, warned Indian officials that “All ongoing projects will go on halt.” He told Reuters this month that Vivotek had submitted product applications and hoped “to get clearance soon.”

The body that examines surveillance gear is India’s Standardization Testing and Quality Certification Directorate, which comes under the IT ministry. The agency has 15 labs that can review 28 applications concurrently, according to data on its website that was removed after Reuters sent questions. Each application can include up to 10 models.

As of May 28, 342 applications for hundreds of models from various manufacturers were pending, official data showed. Of those, 237 were classified as new, with 142 lodged since the April 9 deadline.

Testing had been completed on 35 of those applications, including just one from a foreign company.

India’s CP Plus told Reuters it had received clearance for its flagship cameras but several more models were awaiting certification.

Bosch said it too had submitted devices for testing, but asked that Indian authorities “allow business continuity” for those products until the process is completed.

When Reuters visited New Delhi’s bustling Nehru Place electronics market last week, shelves were stacked with popular CCTV cameras from Hikvision, Dahua and CP Plus.

But Sagar Sharma said revenue at his CCTV retail shop had plunged about 50% this month from April because of the slow pace of government approvals for security cameras.

“It is not possible right now to cater to big orders,” he said. “We have to survive with the stock we have.” — Reuters

WASHINGTON/SAN FRANCISCO – U.S. Federal Reserve staffers have scrambled since January to decipher what Trump administration trade policies will mean for the economy, with published tallies of potential income losses, inflation estimates running as much as 2 percentage points higher, and breakdowns showing state-by-state winners and losers.

The research papers and notes, at least a dozen and counting, have taken different approaches to estimate the implications of the still evolving trade war, which has pushed U.S. import taxes to levels not seen in decades and, at times, to their highest since the Great Depression.

Given the shifting administration announcements, with some of the stiffest tariffs now on hold, none stands out as a definitive take.

But the research effort has been systemwide and steady, reflecting the overarching role of trade policy in the national economic debate and in Fed deliberations over monetary policy.

The Fed held its policy interest rate steady in the 4.25% to 4.5% range at its last meeting, with officials saying they are reluctant to change it until they know which way inflation and jobs will pivot. Minutes of that meeting will be released on Wednesday and may provide more detail about how Fed staff and policymakers perceive the impact of the tariffs imposed so far.

Fed governor Christopher Waller said in a May 14 speech the central bank is in “firefighting” mode to understand what he has called “one of the biggest shocks to affect the U.S. economy in many decades” — an all hands effort to analyze a potential rewrite of the global trading system after decades of closer economic integration among nations.

After Trump’s April 2 tariff announcements proved larger and more extensive than anticipated, “questions were asked of staff around the Federal Reserve system such as, ‘What will this do to the U.S. economy? What will happen to inflation and unemployment?,'” Waller said “The answers to these questions are obviously time sensitive.”

The ongoing research, Fed officials say, will be particularly useful once the final tariff rates and any retaliatory steps by other nations are in place.

But staff’s initial findings and analysis may already be influencing the debate, generally undergirding Fed officials’ topline conclusion that tariffs will raise prices paid by U.S. households and lower purchasing power.

Administration officials argue that the tariffs and trade details they will impose or negotiate will raise money for the U.S. Treasury and boost U.S. manufacturing jobs without sparking higher inflation.

INFLATION IN FOCUS
Fed researchers have been particularly keen to understand how import taxes influence prices, a complex process that depends on things that shift in reaction to each other, like the willingness of producers or retailers to offset tariffs with lower profits, and the ability of consumers to pay more for imported goods, change what they buy, or forego some purchases altogether.

A May note by Fed board economists estimated that the tariffs imposed on China in February and March had already added about a third of a percentage point to goods prices excluding food and energy in the first months of the year, and that but for the tariffs those prices would have fallen — a conclusion that helps explain why policymakers are reluctant to cut interest rates until they know more about inflation that may be in the pipeline.

Larger tariffs have been put in place since that study was done, and even bigger ones are threatened.

“Once we start to get some clearer contours, I think that’s the time to really start to use these models more robustly, ” Atlanta Fed president Raphael Bostic said in comments to reporters on May 20 in Florida.

A Boston Fed study in February of general inflation and an Atlanta Fed study released the same month looking at everyday consumer items both saw prices moving higher, with the estimates depending on the tariffs used to make the estimates.

The fact that the final level of tariffs remains in such flux is another factor keeping Fed officials on the sidelines. Trump has said there will be a baseline tariff of 10% on imports, but some of the paused tariffs exceed 100%, and unexpectedly on Friday the president said there would be a 50% tariff on all imports from the European Union and a 25% levy on all imported iPhones.

CONSUMPTION AND INCOME
Along with rising prices Fed officials are concerned about how changes in trade policy may influence U.S. economic growth if consumers, for example, are left with less purchasing power.

The Dallas Fed in May highlighted one of the hurdles to sorting that out. The outcomes for the U.S. economy depend heavily on whether other countries respond to Trump’s tariffs with retaliatory levies on U.S. exports.

A 25% across-the-board tariff without retaliation could actually boost U.S. consumption by around 0.5%, assuming that proceeds from the tariffs were funneled back to consumers, perhaps through tax cuts.

The same tariffs with retaliation lead to an overall 1% decline in consumption, unevenly distributed across states with effects ranging from a 2.9% decline in Washington state to a 2.6% boost in Wyoming. As with any tax, tariff impacts vary from location to location based on the structure of the local company, with states that are exposed to global supply chains or whose citizens consume more imported goods likely to be hit harder than others.

San Francisco Fed researchers, meanwhile, published a working paper in May that showed high tariffs and retaliation from other countries would lower inflation-adjusted income by 1% nationally, with the biggest hits felt in California, Texas, and the important political swing state of Michigan.

RAISE PRICES OR FIRE WORKERS?
Along with quantitative studies, the Fed has fielded surveys to ask businesses how they may respond to rising tariffs, a staple issue also in conversations officials and staff are holding around the country to sense whether firms are primed to raise prices or fire workers.

Boston Fed researchers, in a survey of small business tariff-related expectations conducted just before Trump took office, found that firms on average anticipated less-aggressive tariffs than actually seen, with 20% tariffs seen imposed on China, 15% on Mexico and non-Asian countries, 14% on Europe, and 13% on Canada. The firms indicated they would pass cost increases to consumers over two years; non-importers felt tariffs would have little impact on prices and potentially lower their costs.

The Cleveland Fed in April published results of a February survey of regional businesses.

The firms largely expected that while tariffs would lead to higher input costs, higher selling prices, and lower demand, there would be no effect on employment — a finding that also buttresses U.S. policymakers’ willingness to keep interest rates on hold given a still, relatively strong, job market. — Reuters