Trump and Biden Both Get Globalization Wrong

“trade doesn’t need to balance. I have a trade deficit with my supermarket. They get more of my money every year. So, what? I don’t “lose.” I get food without having to grow it myself.
That’s a win for me and the food producer regardless of whether the food was grown locally or came from Mexico.

“Imports are great,” says Lincicome. “It means I can focus on what I want to do for a living and not go make my own food or make my own clothes. I can use those savings and buy other things that makes me better off.”

As long as trade is voluntary, trade is a win for both parties. It has to be; neither side would agree to it unless they think they get something out of the deal.”

“Manufacturing output in the U.S. is near its all-time high. We make more than Japan, Germany, India, and South Korea combined.”

Why is Biden blocking the cheapest, most popular EVs in the world?

“You can’t buy the Seagull in the US. But I bet you wish you could.
A small hatchback around the size of a Mini Cooper, the Seagull is a fast-charging electric car and claims a range of up to 250 miles (at least according to its home country’s generous tests); BYD, its Chinese manufacturer, claims it can go from 30 percent to 80 percent charged in a half-hour using a DC plug. It’s hardly a luxury car but it’s well-equipped, with a power driver’s seat and cruise control. “If I were looking for an inexpensive commuter car … this would be perfect,” veteran car journalist John McElroy said after taking a drive.

The best part? Its base model costs about $10,700 in China. That’s about a third of the cost of the cheapest EV you can buy in the US. In South America, it’s a little pricier, but still fairly affordable, at under $24,000 for a top-trim version. Even in Europe, you can get an entry-level BYD for under €30,000.

These are absolutely screaming deals — exactly the kind of products that could turbocharge our transition away from gas and toward electric vehicles.

And it’s just one of many BYD electric cars on offer, from the compact e2/e3 hatchback and sedan (think a Honda Civic or Toyota Corolla) to the full-size, luxe Han EV, a more expensive option nonetheless selling for under $33,000 in China (it costs more than double that in Europe). Many of the options have an aquatic themed name: the Seal, the Dolphin, the Sea Lion.

The problem for Americans? The Biden administration is hell-bent on preventing you from buying BYD’s product, and if Donald Trump returns to office, he is likely to fight it as well.

That’s because the BYD cars are made in China, and both Biden and Trump are committed to an ultranationalist trade policy meant to keep BYD’s products out. They’ve seen what’s happened in other global markets that Chinese EV companies have entered. Shipments to Europe have increased astronomically; Chinese companies sold 0.5 percent of EVs in Europe in 2019 but they’re already over 9 percent as of last year. Companies like BYD make cheap, reasonably good-quality cars people are eager to buy.”

The US Navy has a missile problem in the Red Sea

“The US Navy has a missile problem. A shortage of its best SM-6 missiles – multipurpose weapons that can sink ships, hit targets on land and intercept aircraft and other missiles – could doom its fleet. Missiles are being expended at a high rate in the current Red Sea fighting against the Iranian-backed Houthis of Yemen. What good are the Navy’s 85 destroyers and cruisers if they can’t shoot?
A little industrial ingenuity could end the crisis, however. Defense firm Lockheed Martin is proposing to arm Navy ships with a missile that normally launches from land: the US Army’s Patriot.

The Patriot is a deadly accurate munition, as Ukrainian and Russians forces have learned. The hard way, in the Russians’ case. But its main advantage over the Navy’s best SM-6 missile is that Lockheed makes a lot of them.

On paper, the US fleet is a giant floating missile magazine. Each of 72 destroyers sails with as many as 96 vertical missile cells. A cruiser – the Navy has 13 of them – has 122 cells. Each cell can fire various weapons such as an SM-2 surface-to-air missile or a Tomahawk land-attack cruise missile. But the best weapon that fits in the so-called “vertical launch system” is the SM-6.

The 22-foot, 3,300-pound SM-6 is the Navy’s only omni-role missile. Thanks to its sensitive built-in radar, it works equally well against targets on the sea, on land and in the air out to a range of 150 miles or farther. It’s even able to offer a defense against incoming hypersonic weapons.

But the SM-6 is complex. For a decade now, the Navy has been paying Raytheon to build 125 of the missiles per year at a cost of slightly more than $4 million per missile; the fleet has around 600 in stock. The production rate should increase slightly in the coming years.

Even taking into account the fleet’s large arsenal of less-capable SM-2s, there’s a real danger it could get overwhelmed by enemy missiles, drones and warplanes during, say, a war with China over Taiwan.”

New Tariffs on Tin Cans Get Biden Administration Approval

“The Commerce Department has officially declared a trade war on cheap tin cans.
Last week, the department gave a green light to placing new tariffs on tinplate steel—the metal used to manufacture tin cans and a wide variety of other consumer goods—imported from Canada, China, Germany, and South Korea. While the new tariffs are far less extensive than the absurdly high trade barriers originally requested by Cleveland-Cliffs, an Ohio-based steel company that is one of the few companies in America to make tinplate steel, the tariff decision once again underlines the arbitrary and cronyist nature of federal trade policy.”

“Because the tariff-petition process is heavily skewed in favor of companies seeking protectionism—among other things, the Commerce Department is forbidden from considering how higher tariffs might impact other parts of the economy, including consumers—industries that need reliable access to tinplate steel were prepared to take a hit.

The Consumer Brands Association (CBA), which represents more than 2,000 companies including Campbell Soup Company and other brands that stood to be harmed by the tariffs, estimated that Cleveland-Cliffs’ proposed tariffs would have added about 58 cents to the cost of the average canned food product. A separate study by the Trade Partnership Worldwide LLC, a pro-trade think tank, found that 600 jobs would be put at risk for every steel-making job protected by the proposed tariffs.”

“A single American company was able to file a petition asking unelected bureaucrats to punish its competitors (along with many downstream businesses and consumers) in order to goose its bottom line, triggering a review process that cost taxpayer resources and forced other businesses to play defense in a game that’s deliberately rigged against them.”

First Preemptive Strikes Against Houthi Missiles Preparing To Fire Launched By U.S.

“The U.S. launched a preemptive strike against Houthi targets in Yemen early Tuesday morning Yemen time, destroying four anti-ship ballistic missiles being prepared for launch, a U.S. defense official told The War Zone. This is the first time the U.S. has launched what a second U.S. official called an “imminent self-defense strike” against Houthi missiles being prepared to launch. The first official, speaking on condition of anonymity to discuss operational details, declined to say how those strikes were carried out, citing operational security concerns.”

Chris Christie Is Right, Trump’s Trade War Accomplished Nothing

“Trump’s presidency overturned decades of a generally pro-trade Republican consensus and ushered in an era of assuming that trade is bad for American workers and consumers. He hiked tariffs on steel, aluminum, solar panels, washing machines, and a wide range of Chinese goods. For Trump and his allies, those higher tariffs—which were directly paid by American importers and consumers—were meant to reconfigure the trading relationship between America and China.
But Christie is exactly right. It failed.

The one material thing Trump’s trade war accomplished was a so-called “phase one” trade deal with China, which he signed with Chinese President Xi Jinping to much fanfare in December 2019. That deal included a promise that China would buy $200 million more American exports annually. Those increased purchases were supposed to be spread across multiple sectors of the American export economy, something Trump promised would provide much-needed relief to farmers, manufacturers, and other businesses harmed by the tariffs he’d imposed since taking office.

China didn’t do that. According to an analysis by the Peterson Institute for International Economics, American exports to China didn’t even reach pre-trade-war levels in the first year that “deal” was in place. Both countries seem to have quietly dropped any pretense of following through on the agreement.”

Sanctions aren’t working: How the West enables Russia’s war on Ukraine

“Which company is the leading maker of the so-called “high-priority battlefield items” trafficked to Russia that the Western coalition wants to interdict?
If you said Intel, then go to the top of the class: According to the sanctions team at the Kyiv School of Economics, the U.S. semiconductor giant again leads the pack this year. It’s followed by Huawei of China. Then come Analog Devices, AMD, Texas Instruments and IBM — all of which are American.

Russian imports of microelectronics, wireless and satellite navigation systems and other critical parts subject to sanctions have recovered to near pre-war levels with a monthly run rate of $900 million in the first nine months of this year, according to a forthcoming report from the Kyiv School’s analytical center, the KSE Institute.

All of this indicates that, while Western sanctions imposed over Russia’s full-scale invasion on February 24, 2022, had a temporary impact, Moscow and its helpers have largely succeeded in reconfiguring supply chains — with the help of China, Hong Kong and countries in Russia’s backyard like Kazakhstan and NATO member Turkey.”

“In our investigations, we showed how U.S.-made sniper ammunition finds its way into Russian rifles, and how China has positioned itself as Russia’s go-to supplier of nonlethal, but militarily useful, equipment.”

“Russians with close ties to Putin — and their money — continue to be more than welcome in Europe despite the death and destruction his regime has unleashed. His former wife, Lyudmila, and her new partner have splashed the cash on luxury property investments in Spain, Switzerland and France, as a POLITICO investigation found at the start of the year.

And when the European Council — the intergovernmental branch of the EU — does sanction Russian business leaders suspected of aiding and abetting the Putin regime, it has often relied on slipshod evidence that makes the decisions easy to challenge in court, POLITICO has also found.

Nearly 1,600 Western multinationals continue, meanwhile, to do business in Russia. Many that announced they would pull out have struggled to do so, as POLITICO discovered when it investigated Western liquor companies that said they had quit Russia — only to find that their booze was still freely available. And some companies that did stay, like Danone and Carlsberg, have been shaken down by Putin and his cronies — a case of Russian roulette, if ever there was one.”

“With the EU apparently lacking the means, or the political will, to do more to economically isolate Russia, the bloc is sending its sanctions envoy, David O’Sullivan, on a mission to apply moral suasion to countries that are, as he diplomatically puts it, “not aligned” on sanctions.

On the high-priority battlefield technology, Sullivan told POLITICO’s EU Confidential podcast last month that the EU has had “a limited success — but in an area which is absolutely critical to the defense of Ukraine.”

More broadly, he said: “The sanctions are a sort of slow puncture of the Russian economy. Perhaps not the blowout that some people initially predicted, but … the air is escaping from the tire and sooner or later the vehicle is going to become impossible to drive.”

To be fair, O’Sullivan isn’t overselling the efficacy of sanctions. And he may ultimately be proven right.

But he only will be vindicated if Western governments do a better job of holding their own businesses to account in stemming the flows of technology, equipment and spare parts that sustain Putin and his war of aggression.

That will come down to whether they have the will to enforce their decisions. And the evidence so far is that they don’t.”

American Distillers Brace for Huge E.U. Tariff Hike

“The E.U. imposed retaliatory tariffs on American whiskey (along with other quintessentially American products like blue jeans and motorcycles) in June 2018 after the Trump administration unilaterally slapped tariffs on all imported steel and aluminum. Trump’s tariffs were sold as an anti-China measure, but covered imports from allies like the E.U. and South Korea as well. The E.U.’s retaliatory tariffs, meanwhile, occurred despite promises from Trump’s top trade adviser that other countries would not respond with tariffs targeting American goods.
Due to those 25 percent tariffs, whiskey exports to Europe fell by about 20 percent between 2018 and 2021, according to the Distilled Spirits Council of the United States (DISCUS), which lobbies on behalf of American booze producers. That decline in foreign sales cost American distilleries over $100 million.

Those tariffs were temporarily suspended in 2022, and exports to Europe rebounded almost immediately, according to DISCUS’ data. Over the past two years, exports to the E.U. increased by 29 percent and exceeded pre-tariff levels.

Now that recent growth is at risk. If no deal is reached by January 1, the E.U. could decide to reimpose the tariffs at 50 percent—double the previous levels—when the temporary reprieve expires.”

“Trump’s been out of office for nearly three years, but the consequences of his half-baked trade wars are still spiraling out of control—in no small part because of Biden’s unwillingness to end them. Another escalation in that conflict now looms over American distillers.”

Iran inks deal with Russia for supply of Su-35 fighters, Mi-28 attack helicopters

“Iran has finalized an agreement with Russia to buy Su-35 fighter jets, Mi-28 attack helicopters, and Yak-130 jet trainers, Iran’s Deputy Defense Minister Mahdi Farahi said on Nov. 28, the semi-official Iranian news agency Tasnim has reported.
In a conversation with the outlet, Farahi said that these three advanced military aircraft will be at Iran’s disposal, and the relevant processes are “currently underway.””

Most of Israel’s weapons imports come from the US. Now Biden is rushing even more arms.

“One area where the Biden administration has set itself apart is in sending weapons to partner countries, and now we’re getting a more complete picture of what the US is sending Israel in the weeks since October 7.
Since Russia invaded Ukraine in February 2022, the US has ramped up its previously minimal military aid to the country to an unparalleled $46.7 billion. Ukraine towers over the other major recipients in bar charts of US security assistance for 2022 and ’23. The US is sending so many munitions there that it has apparently strained American factories and led to a whole-of-government effort to revive military supply chains.

The US is also accelerating arms transfers to Israel in response to Hamas’s October 7 attacks that killed 1,200 people and resulted in the kidnapping of more than 200. Last month, President Joe Biden announced from the Oval Office that he would seek “an unprecedented support package for Israel’s defense” of $14.3 billion. “We’re surging additional military assistance,” he added.

But while Ukraine has never been a traditional recipient of heavy military aid, the US’s most recent support of the Israeli military builds on a long bipartisan American practice. Israel has received about $3 billion annually, adjusted for inflation, for the last 50 years, and is the largest historical recipient of US security aid. The Obama administration in 2016 announced the biggest security assistance package to the country ever, pledging $38 billion for Israel over the next decade. US support has ensured that Israel maintains its qualitative military edge over neighboring Arab countries by having more advanced weapons systems, something Congress wrote into law in 2008.

Israel would not be able to conduct this war without the US, which over time has provided Israel with about 80 percent of the country’s weapons imports.”