Peter Zeihan, Author at Zeihan on Geopolitics

Why I’m Okay with Some of the Secondary Tariffs + You Mess with the Don, You Get the Tariffs

Why I’m Okay with Some of the Secondary Tariffs

On March 25, President Trump announced a new 25% tariff on purchases of Venezuelan crude. There’s a lot going on with this one, so let’s cover the micro and macro.

According to how the framers wrote the constitution, authority over tariffs—like much of trade—sat with Congress. Second, Venezuelan crude typically hits the US to be processed by our specialized refineries. So, this tariff is just raising costs for US refiners instead of directly hurting Venezuela. Unless of course you ignore all that and simply apply the tariff wherever you want.

Regardless of how many holes can be poked in these moves, the broader reality is that globalization is ending, and the US will need some new economic tools to face that change. As clumsy and unstructured as it is, at least the US gets to put some new tools through the ringer before they have to take the big stage.

You Mess with the Don, You Get the Tariffs

Well, it finally happened. Word got back to President Trump that Putin and the Russians were making a fool of him in their negotiations and peace talks, so the obvious next step is to throw some more tariffs at them…

This would be accomplished with 25-50% secondary tariffs placed on the US exports of countries who still buy Russian crude – primarily China. Total up all of the tariffs coming down on China after April 2nd, and they could be looking at over 100% tariffs. So, those Chinese electronics and other imports risk becoming a lot more expensive in the near future. There’s no quick replacement for China’s supply chains either, which means high prices and tariff-driven inflation will be hitting consumers hard for a while.

The worst part of all this tariff minutiae is that it won’t change how the Russians interface with the world. It just ups the pressure on Russia’s key suppliers, like China, Iran, and North Korea. As I said in my secondary tariff video the other day, at least we’re going to see if secondary tariffs can be an effective tool for us in the coming deglobalized world.

Here at Zeihan on Geopolitics, our chosen charity partner is MedShare. They provide emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it, so we can be sure that every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence.

For those who would like to donate directly to MedShare or to learn more about their efforts, you can click this link.

Hey. Peter Zeihan here. Coming from Colorado. We’re going to a quick one today about something that happened on the 25th of March. Specifically, Donald Trump announced in a bit of a surprise to everyone on his team that there’s yet another tariff coming. This one specifically is a 25% tariff on anyone who purchases Venezuelan crude oil. The idea is that Venezuela is a horrible place, led by a horrible team that is doing horrible things to its people in the United States, thinks horribly of it, and therefore no one should deal with it.

Three things here. Working from least to most important. First, this is blatantly illegal. The Constitution is very clear that the authority for tariffs is, lies with Congress, not with the presidency. Whenever the president wakes up with a hair up his ass. That obviously does not matter to this administration at all, as we have seen over and over and over again, and especially since the American Senate has basically abdicated all responsibility for policymaking and just defer to Trump on everything.

Legally, this is obviously an issue. And moving forward, it could be an interesting series of topics in domestic politics, but I really don’t see anyone calling the president on it. So, you know, bygones. Second most Venezuelan crude ends up in the United States. So this is technically a tariff on us. Venezuelan crude is super heavy, and it’s super, contaminated with things like sulfur and mercury and there are very, very, very few refineries in the world that can process it unaided.

And almost all of them are in the United States. Actually, I would argue all of them are in the United States. However, Venezuelan, the United States don’t get along. So what happens is Venezuela produces the crude, they export it to a broker, and then that broker sells it to U.S. refineries. And so even though Venezuela and the United States have really not gotten along now since 1998, it’s been that long.

We’re still the end destination for most of their stuff, and everyone just agrees to participate in a little bit of, paperwork, in order to make relationship still functional. Now, a little bit does go to China, and even less and it more regularly does go to India. But really, it’s all here. Now, the brokers who do this, those are primarily Chinese.

So there could be an interesting, legal approach here to go after the brokers as to the United States. But, you know, ultimately, the people who are paying the tariffs or the people who are importing the stuff, or at least that’s theoretically going to work. Donald Trump is really not concerned with the details. So it feels like it’s just going to be a flat tariff on all things China of another 25%, which I believe brings us to almost 100% at this point.

It’s been a moving target keeping track of that. That’s a lot. Anyway, far more importantly is, Trump’s right. Globalization is gone. It’s not coming back. And the series of tools that were developed to regulate the American economy and its interface with the rest of the system from 1945 until 2015, the at a minimum, need an update, much less things like saying that tariffs are the purview of Congress, which is enshrined in the Constitution.

That certainly needs an update to. And so while I can make fun of the specifics of what is really a clownish attempt at economic policy, I have to admit that if we’re going to develop new tools, I would rather have them battle tested under an incompetent administration, in a short period of time than done the right way, using legalism and acts of Congress under a more capable president.

So I’m actually okay with this. We’re moving into a world where it’s less based on rule of law and more based on whatever you define. Your national interest in the moment happens to be. So Venezuela clearly is a country that indirectly, indirectly has worked against American national interests for a couple of decades. And, basically hit him with a baseball bat in the shins is going to cause them a lot of problems.

And the Chinese are not our friends. And so if you want to put an arbitrary tariff on them and just see what happens, you know, this is as good of a time as any to try this out. It’s all about experimentation. We need to develop a fundamentally new toolkit. And while Trump is obsessed with tariffs, tariffs will be at least one of the tools in that kit. So at least for the moment.

Hey, everybody. Peter Zeihan here coming to you from a sloppy Colorado. It’s the 31st of March and the news is over the weekend, Donald Trump gave an interview when he talked about how angry he was with Russian President Vladimir Putin. The term pissed off was used a couple of times. The issue is that the Russians have absolutely no intention of agreeing to a meaningful cease fire, much less a long term peace agreement.

And they’ve been deliberately going out of their way to humiliate the American delegations and all of the peace talks, because they can’t go back to Donald Trump with nothing. And they’ve actually been upping the ante trying to embarrass Trump himself. And apparently it finally sunk in, that there is not going to be a deal that the Russians would possibly ever agree to.

And, Trump is starting to get angry now. You guys know my feelings on how the Russians negotiate. You know, my feelings on why the Russians do what we do and we’ll put links to why there will never be a ceasefire. At the end of this video. But the key issue, of course, is how Trump feels.

Trump deliberately chose his national security team like he did most of his team, to not be competent, simply to be loyal and so just getting basic information about what’s going on in the talks back to the top is a simplistic issue because nobody’s communicating anything that they don’t think their boss is going to want to hear.

Well, apparently it has gotten back to him that he’s being made a fool of, and it’s not going over well now. I might not think very much about Donald Trump’s negotiating tools and his negotiating record. However, he is the US president. He is the most powerful person in the world, and that gives him an array of options to implement, even if imperfectly.

And the one he has decided to settle on, at least at the moment, is something called secondary tariffs, which is something he just made up last week when talking about Venezuela. We’ll link to that one as well. The idea is that anyone who purchases crude from the country in question Venezuela last week, Russia this week faces a 25 to 50% tariff on anything that comes into the United States.

Now, this hasn’t been implemented yet versus Venezuela. So we don’t exactly know how it would work, but it would be potentially crushing. Now, the Russians themselves wouldn’t care. They’re not the ones paying the tariff. And even if they were, this war from there is about long term national security needs. They feel until they can get Ukraine completely into their territories, plus Estonia, Latvia, Lithuania, Finland, parts of Romania and Poland and Moldova.

That they won’t stop. They can’t stop. They’ve already paid the price of a major war. And if they stop now, that was paid that price without actually getting the strategic benefit of having a more secure, able external frontier. Now, until Trump came along, there is no way that the United States was going to send by and let this happen, because it would mean basically 100 million people, roughly half of which are allies, being on the wrong side of a new Iron Curtain.

But Donald Trump had a different view of things until apparently Sunday. So now the question is what happens next? The Russians won’t do anything different. In fact, the Russian view going back to the beginning of the war is that even if the Europeans had stopped taking all Russian exports and energy cold turkey, the Russians would have still done this.

It’s that important to them. So something coming out of the Trump administration now really isn’t going to change their math. However, the Russians are not in this war alone. Iran is providing drones. North Korea is providing troops and artillery. And the Chinese are providing basically all the technical stuff that the Russians need to build everything that they can build.

So secondary sanctions on Russian crude would apply to China primarily. Well, secondary sanctions from Venezuela would partially apply to China. So we are in a position here where we might have a 50 to 75% tariff on China just because of secondary sanctions. That’s on top of the 20% that Donald Trump has already put on. That’s on top of whatever number he’s going to make up when it comes to Tariff Day, which is April 2nd, which is just two days from now.

So it’s entirely possible, but by the end of this week, the Chinese will have over 100% tariff, maybe even a lot more than 100% tariff on anything that they sell under the United States. And that is going to change a lot. I don’t want to say what the end result will be, because there’s a lot of other tariffs that are supposed to hit on the second, and it’s I know where they are relative one versus the other.

What I can tell you, if it does get that high versus China, anything that you use that you plug it into the wall, it’s going to get very, very expensive almost overnight.

And because there are no alternative supply chains anywhere in the world to the manufacture and assembly of electronics, this is something that’s going to stick for years. It took 40 years to build out electronics processing and manufacturing in the China centric system that we know now. If we did a breakneck process here in the United States, just the United States, that’s easily another 15 years.

If we include everybody within NAFTA in character, we could probably shave that down to seven. But it is a big step. And in the meantime we still need stuff. So we’re going to get a very, very breakneck lesson in two things here. Number one the impact of tariffs on inflation on a very grand scale from just this one country.

And number two, we’re going to find out if secondary tariffs are an interesting idea that is destined for the dustbin of history or something more. And while the stakes are high, I got to say I’m looking forward to figuring out if this works or not because we are definitely moving into a globalized world. Trump is absolutely right on that, which means we will need different tools and more tools than we’ve been using these last 80 years of globalized trade.

Secondary tariffs are potentially one of them, and we’re going to find out really soon if it works at all, or if it just screws us all over.

Signalgate. It’s Worse Than You Think.

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Signalgate. Well…Shit.

Here at Zeihan on Geopolitics, our chosen charity partner is MedShare. They provide emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it, so we can be sure that every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence.

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Hey, everybody. Peter Zeihan here, coming to you from Colorado. We have to talk about this whole signal gate thing. Oh, my God, so many, so many, so many things going wrong. Signal gate is this little scandal that has popped up in Washington because a number of top Trump administration national security officials had a chat on a third party unsecured platform about tactical military operations involving the strike on Yemen in mid-March, I think was the 12th and 13th of March.

Anyway, reason we know about this is a reporter from the Atlantic was accidentally keyed on the conversation and basically had the whole thing. So we’re going to talk a little bit about classifications then, and secrecy issues and operational security. And then we’re going to talk about more of the implications of this and what it actually means for us as a country.

And it’s not a happy story. So, from my brief and limited experience in the government, both in the State Department and the Defense Department, it’s drilled into you as an intern, operational security, the things you don’t talk about, the things you do talk about, where you talk about them with, who you talk about them. And the key thing is that every topic has its own set of rules.

So if you have a certain level of security clearance, that doesn’t mean you can just go into the archives and read everything. There has to be a certain need to know. And if there’s a conversation on a certain topic that is sensitive, those conversations can only happen on specific locations or on specific platforms, none of which involve third party software.

Which is very vulnerable to hacking. More on that in a minute. Anyway, so the fact that this conversation happened at all is bad. The idea that it happened with the people who were involved is worse, because one of those people was in Russia at the time using his personal phone, and one of those people was the Treasury secretary, who had no business being on a communication about tactical military operations at a place like Yemen.

And then, of course, this was tactical military operations. What pushes you way above the, you know, the classic classification of top secret and is the ultimate of the need to know. Now, anyone who is a rival to the United States, or honestly just curious, is going to be targeting our Treasury secretary, because he apparently is involved in these conversations that have nothing to do with the Treasury Department, and there nothing in his background, and there’s no one in his circle that suggests he has any experience in operational security.

So we just identified our top finance individual as being a leaker and intelligence target for intelligence operations for the rest of his term. That is a disaster in of of itself. But now let’s talk about the actual format here. Signals a third party app for communications. No third party apps are allowed anywhere in the State Department or the Defense Department or the intelligence agencies specifically because it’s illegal.

It’s a bad idea to be communicating outside of government channels. When you’re talking about information that should be classified, part of it is illegal, because the little simple thing of the Freedom of Information Act, so that decades from now, we know how things happen on the inside. Part of it is to help future administrations see inside the decision making process for the current administration.

All that information will be lost, but most importantly, it’s because it’s fucking hackable. And specifically with signal. The week that this went down, the Defense Department warned everyone in the defense Department that the Russians were actively circumventing the security measures on signal. So Pete Hegseth, who was the defense secretary, is the one who set this up. And he should have known better at every possible level.

And every person who was involved in the chat should have known that everything about this at every level was not just a bad idea in poor statecraft, but illegal as well, for all the right reasons. That all of that is part one. second issue is the general mismanagement of information in the public sphere of the Trump administration at this point. Now, when this story broke, the smart play, the national security conscious play would have been to contact the reporter and make sure that information got wiped. Instead, they did what they always do, and they went on the attack saying that, nothing was shared.

That was a war plan or classified information. And it is the fault of the reporter who doesn’t even have a security clearance, that this information was out at all. In fact, it got so bad that Tulsi Gabbard, who is the director of national Intelligence, even went to Congress and testified that this is no big deal. Now, I have an opinion.

Most of the intelligence community in the defense community are of the opinion that Tulsi Gabbard is a Russian agent that is actively working against American interests, right at the very top. Little professional tip, Miss Gabbard. If you don’t want people to think you’re a Russian agent, quit acting like a Russian agent. So, for example, lying to Congress about the use of the platform at the use of security, about the use of commercial information, and then actually what was in the conversation in the first place, because within hours of her doing that nonsense, the reporters like, well, if you don’t think this is classified information, I guess I can release it.

And he did. And holy shit, it talked about specific assets, specific attack vector, specific times and locations. This is as high as it gets in terms of operational security needs. Which brings us to the third question why? Why is the Trump national security team so moronic? Two things going on here. First, Trump himself. When most leaders spend time out of power, they reflect on what went wrong and they build a team that fills in the gaps of what they don’t have.

And they put together legislation so that when they get back into power, they can actually make their vision reality and make it last beyond their term. Trump didn’t do that. Trump fired everyone from his circle, inner and outer, who knew anything about anything. Because people who know things share what they know. And that means that Trump can’t be the smartest person in the room.

He instead surrounded himself with loyalists, people who, you know, the recruiting process, competence didn’t make the list for anything that he wanted. So we have a DNI who works for a foreign power. We have a defense secretary that is a former TV host, and it shows. The second issue is when you’re first asked, when you get into the white House, is to pardon the people who protested and rioted on January 6th, complete with those who had attacked law enforcement personnel.

Anyone who knows anything about national security won’t work for you because they’re like, fuck that noise. So the pool of people that Trump could draw from self-selected out, leaving only the people who would be personal, loyal, loyal, and really didn’t know anything about the process. Trump then went on to gut the upper echelons of every single department, not just the undersecretaries and the deputy secretaries, but everyone down as far as he possibly could fire.

Removing all the knowledge base of everyone throughout the entire federal government and then replacing them with lackeys. And so we have people like this who literally have no idea how to keep information secure, who are making policy on behalf of all of us. And so, of course, it is all going horribly wrong. And that’s before you even start talking about the specifics of what those policies are.

Half A Million Immigrants Get the Boot + Auto Tariffs and the Art of Routine Vehicle Maintenance

Half A Million Immigrants Get the Boot

The Trump administration has decided to rescind legal status for over half a million immigrants from Venezuela, Nicaragua, and Haiti. If you’ve listened to any of my videos, you’ll know there are some glaring holes in this decision.

First, the labor impact. The US is already facing a labor crunch, and the problem will only be exacerbated as we shift away from manufacturing in China. These immigrants had already been vetted and were ready to contribute to the workforce…there goes that.

There are legal and social consequences as well. Since these immigrants were fully integrated in the US system, stripping them of their legal status forces them into the cash economy and makes them targets for crime and exploitation. This also signals to future migrants that following legal pathways is futile, leading to more illegal crossings.

It’s just another notch in the undermining of trust by the Trump administration.

Auto Tariffs and the Art of Routine Vehicle Maintenance

The Trump administration announced a 25% tariff on imported cars and car parts. While this tariff isn’t as severe as the others expected on April 2, it will still increase the cost of vehicles in the US by $2-3k on average.

There are some NAFTA exemptions for this tariff, but any vehicle containing 50% imported parts will still face a 12.5% tariff. This will impact all the manufacturers across the industry a bit differently, with the European manufacturers feeling the most heat.

Prices start to get spooky when you begin stacking tariffs. Between the 25% tariff on steel and aluminum and the reciprocal tariffs coming soon, I would keep driving your vehicle for as long as you can.

Here at Zeihan on Geopolitics, our chosen charity partner is MedShare. They provide emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it, so we can be sure that every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence.

For those who would like to donate directly to MedShare or to learn more about their efforts, you can click this link.

Hey, Peter Zeihan here. Coming to you from a hotel room. I don’t have a lot of time today, so packing up while I do this. Okay, so, the issue is, I see today is the 25th of March, and yesterday, the Trump administration rescinded legal, status for about 530,000 immigrants, specifically from Venezuela and Nicaragua, some from Haiti.

Two big problems here. The first is that we are in a labor crunch. We have record low unemployment in poorly and a half a million people who are participating in the labor force. The kind of problem, you see, these were not your normal people who cross the border. These are people who got legal ization from the Biden administration not just to come here, but for them to come here.

They had to register with authorities, have an interview with Department of Immigration, have a financial sponsor. And so they were integrated to the system. They had passed checks. So we’ve basically done all the work necessary to make them citizens. And then at the last segment, like say so, unless they’ve already proceeded on to the next step, they now have to go home.

That’s problem one. Remember, we need to double the size of the industrial plant if we’re going to be ready for the Chinese collapse. That means a lot of construction. That means a lot of people building things. And as a rule, construction is a sector where most American citizens don’t want to work. So this is a real problem for the labor force.

So to invest all of this time and effort and money and man hours in making these people ready and then kicking them at the last second, that’s just a waste. Second problem is legalities. And not the legalities of doing this. President obviously has the authority. The problem is on the other side, you see, when you’re legal, when you’re in the system, you can get a bank account, you can own property, you can register for health care.

You can send your kids to school without having to worry about pulling them out the next day. And when you’re in that sort of environment, law enforcement is a resource you can draw upon. So, for example, if you’re a legal, illegal, you’re in the cash economy. And that means that everyone in your area who knows you’re not a legal migrant knows that you basically deal with cash.

And as a result, you’ve identified yourself as someone to rob. And if you are Rob, you don’t go to law enforcement because you’re afraid you might get deported. So for these 530,000 people, we weren’t in that category. They were, for as far as we can tell, law abiding immigrants.

And that means that now the Trump administration has basically penalized a half a million people for following the law, which means that the next half a million that come will probably not make the same mistake.

This is an issue that we have had pretty chronically, since the 1980s, when the Reagan administration was the last administration to go through and change the legal structures for migration. We haven’t really given would be migrants an incentive to participate with the system? And this sort of thing is definitely going to accentuate that problem.

Keep in mind that within the last month, the Trump administration has, started arresting, would be migrants that have also participated with the system through the, the, CBCp, arresting them on their way to their court hearings where they were supposed to be ruled upon, whether or not they were legal or not, and just grabbing them and send them home.

So the next wave is definitely going to cross illegally and form an underclass in American society. And as we’ve seen with the phase one of the Trump administration. And, you know, four years ago, the wall did wonders for encouraging illegal migration, made it a lot easier because the Sonoran and the Chihuahuan Desert are the greatest natural barriers in the hemisphere.

And by building 50 construction roads across the desert to build the wall, we basically obviated half of the barrier. This is definitely going to take advantage of that when we get our next big wave, which will probably happen as soon as the migrants can figure out how to navigate the new system, which, historically speaking, takes about a year or two, so we won’t have to wait too long.

Hey all, Peter Zeihan here. Coming to you from Colorado. It is the 27th of March and late yesterday. Donald Trump initiated yet another tariff. I think this is the 87th tariff policy that we’ve had in the last six weeks. Oh my God. Seven weeks. Seven weeks. Anyway, 25% tariff on all imported cars and car parts. This is not the one that I was dreading.

This one is actually not too bad, considering the scope of all of the others. Because if the car or the car part is produced within Canada, Mexico, in the United States, and is registered as a NAFTA product to import lifts, then it gets a bypass. So if your car is made out of one half content that comes from somewhere else.

You now have a 12.5% tariff on the vehicle. It’s still going to drive up the cost of vehicles in the United States on average by about 2000, maybe $3,000 in some cases. But, because most of these imported parts don’t go back and forth across borders, in the NAFTA system. It’s not nearly as bad as what a NAFTA tariff would have been, which is what Donald Trump is threatening for April 2nd anyway.

This will kick in on April 2nd as well. Not all vehicles are made equal. And just because it’s in a U.S. company does not necessarily mean that they don’t use a lot of import content. Automotive is unique among the world’s manufacturing sectors in that everyone produces some of everything because almost everybody needs cars at some level.

So the Germans make the good transmissions, the Mexicans make the mediocre transmissions, and the, Chinese make the crap transmissions. Just to pick one. So just because it’s a Ford or a Chevy doesn’t mean it doesn’t have a lot of imported content. As a rule, the Big Three American automakers do have more. The the changes model by model.

And as a rule, the Japanese, most notably Toyota, also have a lot of North American content because they have this concept of build where you sell and they put their money where their mouth is, and they’re trying to get on the right side of tariff and political issues. Once you get into Korean cars, it drops quite a bit.

And once you get into the European cars, it really drops. Most of the European and manufacturing centers that are in North America actually use almost 100%, in some cases, 100%, imported content from Europe. And then, of course, if you’re getting a Beamer that comes from Bavaria, it’s probably 100%, European content as well. Anyway, we’re putting up this handy little chart so you can see of the top 25 models, which ones or which.

Generally, the closer you are down into the red towards zero, the more your vehicle is going to cost. And a quick reminder that this is just one of the tariffs that is hitting automotive. We’ve got another one that’s in place already. And that’s the 25% tax on imported aluminum and steel, which you know every vehicle has a lot of both of those.

And then once we get to April 2nd, that’s when Donald Trump is going to be announcing a lot more tariffs, something he calls reciprocal tariffs, probably NAFTA tariffs and then additional tariffs on everybody on the outside that he doesn’t like. He calls them the dirty 15. And they’re really just our 15 largest trading partners. So you put those three together.

Remember these all stack up with one another. They’re cumulative and could easily see the cost of automobiles in the United States going up by $10,000 a vehicle, or maybe even a lot more based on where they come from.

Now the data in this graphic is from 2021. There is more recent data available from the Department of Transportation. Unfortunately, because of the bonfire of staffing that is occurring in the federal government right now, it is not in an easily absorbable format. So it’s going to take us a couple days to process it. And we will get that out as soon as is feasible.

Which reminds me. We’ll be covering all of this and all of its, and to severe effects when we do our quarterly briefing, our question time when people can ask me questions in real time on April 9th.

It is for our Patreon subscribers at the top tier. So sign up now and learn about all these tariffs as they happen. And then we’ll pull it all together for you and show where it’s going to take the American and the global economy over the long run. See you soon.

The Future of NATO’s Supreme Allied Commander + Live Q&A Reminder

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The Supreme Allied Commander position in NATO allows the US to lead allied forces in wartime. However, the Trump administration is considering withdrawing the US from that position (mainly for cost-cutting reasons).

Stepping away from the Supreme Allied Commander position would signal America’s withdrawal from NATO, since US forces cannot legally be placed under foreign command. There must be some strategic misunderstanding of the power this title holds, a lack of expertise in Trump’s circle, a penetration into Trump’s thinking by Russian propaganda, or a combination of all of those.

Should the US move forward with leaving NATO leadership, US power projection in Europe would be crippled and another box on the Russian wish list would be crossed off.

Here at Zeihan on Geopolitics, our chosen charity partner is MedShare. They provide emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it, so we can be sure that every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence.

For those who would like to donate directly to MedShare or to learn more about their efforts, you can click this link.

Hey, all. Peter Zeihan here, coming to you from a sunny Colorado. Today we’re going to talk about something that is making the rounds within the Trump administration as it relates to the NATO alliance. The idea is that the United States is going to withdraw from something called the Supreme Allied Commander position. Now, the Supreme Allied commander, as it sounds in times of war, takes command of all local military forces that are affiliated with the Alliance. So in a hot shooting war, the US would take control of the world’s third, fourth, sixth and seventh largest navies and the world’s fourth, fifth, sixth, ninth and 10th largest armies, as well as that of all the smaller members of the European structures. And the question is, why would you give that up?

Well, keep in mind that NATO is the most powerful alliance in human history, and it was founded by the United States, and it was run by the United States. And, yes, the lion’s share of the equipment and the troops come from the United States. But since all of the Europeans have regional militaries, while their militaries may be stronger, they’re all focused on one area as opposed to ours, which is spread out around the world.

So collectively in the European theater, the rest of the European forces actually are on par with what the US can do. So a massive force multiplier there. The Trump administration says that the NATO countries, the European countries, have been taking advantage of the United States and trade. They need to defend themselves. But how? Giving this up would be a big deal. It would be the end of American ability to project power throughout all of Europe.

You see, unlike the other NATO countries who can sublimate their military commands to American authority, the reverse is actually illegal here in the United States. So if we give up the ability to command Europe and say, a European has to take that position, we’re also saying that no American forces are now available for NATO use, and that’s functionally leaving the alliance.

Now, I personally think that would be a horrible idea, but I think it’s going to happen anyway. The Trump administration seems fairly hellbent on leaving NATO. Three things going on here. Number one, the Trump administration seems has a very inaccurate idea of how militaries work. Because in a time of war, when you need the help to be able to automatically, reflexively just be able to take control of everyone else’s militaries in the alliance and just go through.

How much is that worth to you? How much is it worth to have that on standby the whole time? It’s worth the cost of a trade deficit, in my opinion. The second issue is that Trump doesn’t really have anyone in his circle telling him otherwise or correcting him on these things. One of the weird things about the Trump administration is, you know, normally when you lose an election, they’re out of power for a few years. You try to learn from your past mistakes. You try to build a team that is competent, that fills in the gaps with the things that you don’t know. And you get people who are experts in legislation so that when you come back, you can get everything pushed through Congress as quickly as possible.

Codify what you want and have it outlive you. Trump’s taken the opposite lesson, and he’s removed everyone from his circle who knows anything about anything, because people who know things tend to say that they know things. And that means that Trump is not always the person who appears as the smartest one in the room. It’s the difference between a good leader and a bad leader.

That means that Trump is making the decisions based on the advice that comes to him from a handful of people he trusts, and the people trusts aren’t honest with him, which is bring us to the third problem. Russian propaganda has penetrated up to and including the white House. Last week we had Donald Trump repeating some particularly interesting propaganda.

Notice he was saying, in true social posts and in interviews that the Russians had surrounded several thousand Ukrainian troops, and he was pleading with the Russians to not kill them in what would be a bloodbath. Here’s the thing that never happened.

In fact, that didn’t even occur in Russian propaganda in American political circles. That was Russian propaganda for Russian citizens to try to convince the Russian citizenry that the war in Ukraine was going very well.

Somehow that little bit got lodged in Trump’s mind. And it didn’t come from the CIA or the FBI or the Defense Department. It either came directly from Vladimir Putin or through one of the other vectors that the Russians have been using to influence this administration. So we have a white House that is making public statements and policies, basing on an internal Russian propaganda.

Now. And if I could think of one thing that the Russians want in the short term from this administration, it’s to destroy the NATO alliance, which was always formed to contain Russian aggression. And here we are.

The American Reindustrialization – A (Stalled) Progress Report

I recorded this video before Trump took office for his second term. At the time, this video outlined the trajectory the US was on. We held off on releasing the video because…well, everything was going to be changing. So, here is a look at where we could have been. In the coming days, we’ll unpack where things are heading now.

Here at Zeihan on Geopolitics, our chosen charity partner is MedShare. They provide emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it, so we can be sure that every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence.

For those who would like to donate directly to MedShare or to learn more about their efforts, you can click this link.

Hey everybody. Peter Zeihan here, taking a question from the Ask Peter Forum on the Patreon page. And that is where is the United States or where do we stand in the re industrialization process that started a few years ago? Just a quick backgrounder. The Chinese population is plummeting. And we now have about the same number of people in China above age 50 as below.

And so we’re looking at an economic collapse over the course of sometime in the next decade. And so if the United States still wants manufacturing goods, we’re gonna have to get it from somewhere else. And the quickest, easiest, cheapest way to do that is to build out the industrial plant within North America. And to that end, we have seen industrial construction spending.

Think of that as the construction of factories, expand by a factor of ten over the last five years. So we are definitely hitting the ground running in a number of sectors. The two sectors that have seen the most activity are things that are energy adjacent. Taking advantage of the fact that the United States has the largest supply of high quality crude in the world and the largest supply of natural gas in the world, retooling our entire chemical sector to run off of, especially the natural gas.

And now using all of these intermediate products that we get from the processing of this for other things going into heavy manufacturing. So that’s a big part of the story that is moving very, very fast and is being moved almost exclusively by, domestic economic concerns without any push from any politicians anywhere in the system, because it’s just we have the most and the cheapest.

And so the next logical step is then to move up the value added scale. That’s proceeding just fine. Most of the stuff where the government has put its finger on the scale involves electron IX, and especially computing. Think of the Chips act and the IRA, which are designed to bring back the manufacture of things like semiconductors. Now, it’s not that I think that any of this is a bad idea.

I just think it’s kind of missing the primary need we’re going to have. There are 9000 manufacturing supply chain steps that go into the manufacture of a high end semiconductor. And the Fab facility, while important, is only one of the 9000. And there are any number of ways that the United States can build out the supply chains, in addition to the fabs that are a lot cheaper than the fab.

So I’m not saying no. I’m saying it’s really, really myopic, focusing on one very, very specific piece when you need all of them. If you’re looking for a recommendation, I would say the single biggest restriction on manufacturing in general is going to be processed materials. I know that doesn’t sound very sexy, but it really is a problem.

In the United States, we have steadily outsourced pretty much anything that is energy intensive and might have an environmental footprint that we don’t like. The Europeans have done the same to a lesser degree, the Japanese the same thing. And most of the stuff has gone to China. It’s not that China is better at it, a more efficient at it.

It’s just that the Chinese massively subsidize everything and their environmental regulations are significantly lower. So taking raw materials like bauxite and then turning them into an aluminum and then aluminum, the Chinese control roughly 60 to 70% of that market for something like gallium, which is a byproduct of aluminum processing, it’s closer to 90% for things like rare earths, it’s over 80%, for lithium.

It’s not that they have the lithium that comes from Australia and Chile, but they take the lithium concentrate in the lithium ore and they turn it into metal in China. And you can just go down product after product after product for the Chinese. Basically, if cornered, this market. Well, if the Chinese go the way that I’m anticipating all of that’s going away and we’re going to make our own, it’s luckily there’s nothing about these, material processing technologies that is difficult in most cases.

You’re talking about things that were developed over a century ago, and it would probably only take a couple of years and a few billion dollars to set up for each specific material that we need. So not hard, but something that is cheap and quick is not the same as saying that it is, free and overnight. Right.

And until we do the work, we haven’t done the work. And if China cracks before we do the work, then we have to figure out how to re industrialize without lithium or aluminum or cobalt or on and on and on and on and on. So this is something where I would expect state governments to take the lead, because it’s ultimately about an environmental regulation issue paired with the energy intensity that’s required.

And so most of this is probably going to end up going on in the Texas or Louisiana coastal regions, where those two things kind of come together right now nicely for the federal government to be part of the solution. But considering politics in the US, I think that’s a kind of a high bar. One other broad concern, no matter what the industry is, no matter what is reshoring, no matter what, we’re expanding automotive, aerospace, insulation.

You know, take your pick. All of it requires electricity. For the last 35 years, the United States has become a services only economy to a certain degree. We do manufacturing still, in terms of net value, we produce more in the manufacturing sector than we did 35 years ago. But everything else has gotten so much bigger. And while the AI push with data centers does require more electricity than what we’ve done before, as a rule, moving things, melting things, stamping things, building things requires more energy than sitting at a computer and typing.

And so we have, for the first time in 35 years, a need for a massive expansion in the electrical grid. We probably overall need to expand the grid by about half. And half and expand, generating by about half. And there are certain parts of the country like the Front Range, Arizona, Texas in the south, going up to roughly Richmond, that probably need to double their grid as soon as possible, because if you don’t have enough electricity, it’s really hard to have meaningful manufacturing.

The problem in the United States is we don’t have a grid. We’ve got one that’s basically from the middle of the Great Plains West, from the middle of the Great Plains East, and another one in Texas. But even that makes it sound like it’s more unified than it is, because almost all utilities are state mandated local monopolies. So they all have their turf, and all of them have to individually make a case for expanding their electricity production, because that cost ultimately has to be passed along to someone else.

One of the reasons why I’m so interested in things like small modular nuclear reactors is if you get the tech folks to pay for that, then all of a sudden you get the power and you don’t have to go through all the normal regulatory rigmarole because you have to, as electrical utility, prove to your regulator that, what you’re doing is in the best interests of your end consumers and until you have the manufacturing capacity, it’s hard to make the argument that you need electricity to make manufacturing capacity.

So it’s a very chicken and the egg thing. The easiest way to get around this would be for state and regional electrical authorities to loosen up the ability of one electrical mini grid to provide electricity to another. That would do two things for us. Number one, it would increase the amount of transmission we have within the system, allowing power to go from where it’s generated to where it’s needed.

And second, If you’re in a rural area that’s not likely to get, say, a major chip’s factory, you could still build a power plant and export it to an urban center that is likely to need a lot more electricity, and all of a sudden you can get someone else to pay for your electricity development in your own region.

So that is where I’d say the shortfall is. It’s a solvable one. It’s just one that we need to do as soon as possible. Because if we say, wait ten years and the Chinese are gone, then we have to do this all from scratch with less money, less labor, and everyone trying to do everything at the same time.

And if you think inflation was uncomfortable for the last three years, nothing compared to what that environment would be like. All right, that’s it for me. Take care.

Introducing the Next Generation Air Dominance Platform, F-47

President Trump and Defense Secretary Pete Hegseth have announced the approval of the Air Force’s newest toy, the Next Generation Air Dominance (NGAD) platform, aka the F-47 fighter jet.

In recent times we’ve seen the very impressive F-22 built for air superiority and the lackluster F-35 designed as a multi-purpose aircraft. Shifting priorities have sidelined the F-22 in favor of the F-35, but how will the F-47 fit into the picture? Here are some of the big concerns I have.

This thing will be expensive, posing problems for foreign buyers. The details are still unclear on this aircraft, so we’re not sure if the limitations that faced the F-35 will persist. Since this will be an air superiority fighter, a ground attack jet will still be needed. And given the evolving tech, manned fighters could be rendered obsolete before reaching full deployment.

Here at Zeihan on Geopolitics, our chosen charity partner is MedShare. They provide emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it, so we can be sure that every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence.

For those who would like to donate directly to MedShare or to learn more about their efforts, you can click this link.

Hey everybody. Peter Zeihan here, coming to you from a sunny Colorado. Today is the 21st of March. And there was just a press conference between American President Donald Trump and American Defense Secretary Pete Hegseth, where they announced the launch of a new fighter program called the NGAD, the next generation air dominance fighter. It’s been, dubbed the F 47 because it’s Trump’s the 47th president.

But anyway, you can’t make this stuff up anyway. It in theory will be made by Boeing and should come into manufacture in a few years. That’s the goal. Before we go forward and talk about what it can do and implications, let’s talk about how we got here. So if you dial back to the 1990s and the early 2000, the Defense Department realized that they had a window.

The Soviet Union had collapsed, and the Russian Federation, which emerged from it, was a pale shadow of its predecessors. And so there was going to be an extended period of time where the Soviet slash Russians weren’t going to be able to develop new air products. No new bombers, no new fighters. They did get a couple off the drawing board, but they were never able to produce more than one of them at a time.

And even now, 35 years later, they only have 12 of some of their more advanced fighters. And that meant you had an opportunity to skip a generation. So Donald Rumsfeld, who was working with the Defense Department at the time, had this idea that we will look at the best technologies we have available right now and build the absolute minimum that we possibly can, and then research the next generation.

Back at the time, we were dealing with F-15s and F-16s and the two programs that were greenlighted to proceed on that limited production basis were the F-22 air superiority fighter, which I think is one of the most badass pieces of military technology I’ve even heard of. It can hit supersonic speeds without using its afterburners, and all of its weapons are internal bay, so it has the radar cross-section of a small bird.

I mean, it is bad ass. And then the other one is the F-35 joint strike factor, which is a flying pig. From my point of view, yes, it’s better than what we had, but its range isn’t very good. And the technology that’s gone into it has had all kinds of teething pains, and this has driven up the cost of the fighters to over $100 million per fighter.

And it’s not very good at doing what it needs to do because its range is so limited. And that’s even before you put external weapons on it. The problem is it’s a Joint Strike fighter. It’s designed for both air to air combat and ground assault. And by being a multi-role platform, yes, you can do more, but you don’t do any of it particularly well.

So we only made a few less than 200 of the f-22s, even though they are the perfect tool for the job, because we also need ground strike. And so the decision was made to do more and more and more of the F-35s, despite its many, many shortcomings. And that meant looping in lots of allies in order to help defray the overall production cost.

And that brought it down to $100 million per airframe. Anyway, Rumsfeld and people like him thought, you know, we’ll just build the minimum we possibly can and then launch forward. And then the war on terror happened. And in the war on terror, what we discovered is we don’t need an air superiority con or a fighter against the Taliban because they don’t even have blimps, much less jets.

But we do need ground strike. And so the F-22 was pushed to the side, kind of stuck with that initial plan of just a limited run. And the F-35 went into mass production. And we’re getting lots and lots and lots of those. Fast forward to today, because of the war on terror, we spent 20 years fighting ground wars, and we weren’t able to put the resources that would have been ideal under the Rumsfeld plan into the next generation.

We’re only now getting there, took this long, and the end gap is supposed to be an air superiority fighter. The next generation after the F-22. Well, that leaves us with four complications. Problems. The first is cost. We saw the cost of the F-35 go up and up and up and up and up, and the end guard got a really nasty review from an internal Pentagon audit.

I think it was just last year or the year before where they said it looked like the cost could be upward of $300 million per airframe. And the days of us being able to spread that out across the alliance are gone. The Trump administration is careening very rapidly to breaking most of our alliances, including the NATO alliance, which is where almost all of the F-35 sales we’re making are going.

And every country that is committed to buying them is now rethinking it. Because if the United States is not going to be there in a real fight, not only are you not getting the implicit security guarantee that you thought you were getting, but if the Americans are responsible for all the tech and all the technicians and all the repair work and all the servicing, all the software and a lot of the weapons, do you really want to be dependent on the Americans at all in this brave new world we seem to be falling into so the F-35 is likely to get even more expensive, and no one is likely to sign up for the end guard at all. Problem two range. This is a black issue. It’s just an issue of, classification. We don’t know what the range of the guard is yet. It is in limited production, very limited, basically handmade. Nothing manufactured. The manufacturing wouldn’t be in for a few years yet.

Three at the absolute low end. So this is a weapon system for the future, not for tomorrow. And until we know that range, it’s really hard to know if this is going to give us some of the advantages of the F-16 and the F-22, or weigh us down with some of the restrictions of the F-35. We’re just going to have to wait for more details on that.

The third problem is that the end guard is going to need a complement. It is an air superiority fighter in the vein of the F-22, and we will still need something for ground attack. And if it’s going to be the Joint Strike Fighter, if that’s what we’re going to use for the next 30 years, then that puts some really huge limitations on what the United States can do militarily.

Its range is just about 600 miles. Not great in terms of deep strike. And if we are moving into a world where the United States is walking away from most of its alliances, then we’re losing all the forward bases that allow us to launch these things in any meaningful way in the first place, which means we will also need a new ground strike jet. And that is an entirely new program that is going to have its own cost structure. And overlaying all of this is the question of technology during the course of the last 60 years. We haven’t seen actually almost 80 years. We haven’t seen a lot of changes. I mean, yes, yes, yes, we’ve gotten better at stealth.

Yes, yes, yes, our missiles have gotten more accurate. All that’s true. But we haven’t really seen a change in what, a fighter or what a fighter bomber does. Until really recently, in the last few years, we’ve had building breakthroughs in things like materials science and digitization and energy transfer. And we don’t know where this is going to take us in terms of military technology.

Yet the end guard looks interesting to me. It’s basically like a narrower version of the B-2 bomber, which is a badass piece of equipment, but it’s not a fundamental break. The stealth is cool. Don’t get me wrong, stealth is awesome, but it doesn’t do anything that you wouldn’t expect an air superiority fighter to do. These three breakthroughs in technology are in the very, very beginning stages, giving us drone technology, and we have discovered that the Ukrainians, for less than 20,000 a pop, can build a thousand drones that can saturate a battlefield, or for something closer to $200,000 a pop, develop rocket drones that can strike targets that are about as far away as the F-35 can reach. So we’re seeing these newer technologies come in and we don’t know how they’re going to mature. And so investing billions, tens of billions, hundreds of billions into a new manned fighter program, you got to wonder if this is the right call. I’m not saying it’s not. I’m saying we don’t know. And in a world where the United States is walking from its alliance structure, the new systems are probably not appropriate to what bases we’re going to have in a few years.

I don’t mean this so much as a condemnation of Trump, although there’s plenty of that going around right now, but just a recognition that as our technological envelope evolves, one of two things has happen. Either we develop technologies to match the geography of our deployments, or we change our deployments to match the evolution of the technology.

And there’s plenty of examples throughout history of both happening. We don’t know where we’re at yet. What we do know is if we try to do both.

Getting Ready for Trump’s Tariffs

AI generated image of supply containers with the flags of the US, Mexico, and Canada on them

If you look back at my videos covering a potential future recession, you’ll notice that I really wasn’t too concerned in the short term. Well, this next set of tariffs to be announced in early April, might change all of that.

The 25% tariff on trade with Canada and Mexico will increase costs for several industries and potentially shut down key manufacturing states. But it doesn’t stop there. The 40% tariff on imported food will be devastating for low-income families and could push millions below the poverty line. And again, it doesn’t stop there.

The proposed reciprocal tariffs could create economic chaos. Besides the bureaucratic nightmare that would ensue, US consumers and businesses would have their feet swept out from under them.

As the US begins to prepare for the decline of Chinese manufacturing, the slowing of industrial expansion caused by these tariffs couldn’t come at a worse time. Should these tariffs go into effect in early April, you should get ready for a US recession (and almost certainly a more severe global economic downturn).

Here at Zeihan on Geopolitics, our chosen charity partner is MedShare. They provide emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it, so we can be sure that every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence.

For those who would like to donate directly to MedShare or to learn more about their efforts, you can click this link.

Hey, all. Peter Zeihan here, coming to you from a bright and sunny Colorado today. Oh. This is going to be a big one. I have to warn you about the recession that’s just around the corner. Now, if you go back to my work from last year, I have been of the belief that we had no reason to fear recession at all.

U.S. consumer spending was strong. Industrial construction spending had been hitting records for almost two years straight. Technological productivity was starting to pick up again. Things looked pretty good. There was no big debt overhang except for in the federal government. And that’s not new. And in private sphere, credit card Defaults, mortgage and car loan defaults were well below historic norms.

They were simply off the record lows that we had in the aftermath of Covid. Things looked pretty good. But we’ve had a significant degradation in the environment in just the last several weeks, and it’s worth outlining to everyone on how we got to where we are, and especially what’s just around the corner. And if you were to sum it up in one word, it’s tariffs.

The Trump administration has had this on and off again tariff policy versus everyone, but particularly heavily concentrated here in North America targeting Mexico and Canada. We’ve had 71 specific tariff policies announced since Donald Trump became president. And the biggest one is a 25% tariff on Canadian Mexican exports, which has gone on and off and on and off and on and off.

Based on the diplomatic back and forth among Ottawa, Washington and Mexico City, what that’s done is it’s reduced the argument that investing in North America is a good idea, because if you’re going to have tariffs on American manufacturing, and that’s exactly what this is, because U.S. manufacturing is not like historical manufacturing. It’s an intermediate goods trade.

So for example, the intermediate goods trades just among Canada and the United States is about two thirds of $1 trillion. And that’s products going back and forth and back and forth and back and forth, having value added by whatever company happens to be best at that space. We got twice that sort of relationship with Mexico and if you slap a 25% tariff on that, it gets applied every time something crosses the border.

One of the fun facts of the world today is we have basically absorbed every Canadian province and every northern Mexican state into the American industrial behemoth. And by putting tariffs on it, we’re basically breaking up our own system, particularly in industries that have a lot of moving parts, like aerospace and automotive. Well, one of the tariffs that’s supposed to hit in the first week of April, specifically per second is an establishment of that 20% tariff.

Trump says he’s not going to offer any exemptions this time along. No more delays. We’ll see. Because he seems to think that 60 days is a enough time to unravel 40 years of supply chain of supply chain integration, which is, you know, amusing.

If this goes down as Trump says, it’s going to do, it’s going to mean an immediate recession in the manufacturing space in Washington, Missouri, Colorado, Kansas, Texas, Alabama, Tennessee, Kentucky, South Carolina, Wisconsin, Michigan, Indiana and Ohio. These are the states that are big into either aerospace, automotive, or more likely, both. And you’re basically looking at a shutdown in those sectors, because every single vehicle we produce in this system is going to go up in price between 4 and $6000.

And there is not a model of jet that Boeing is capable of producing. That with a 25% internal tariff can still produce more cheaply than what we can get from Europe’s Airbus. So we’re not necessarily looking at those industries being dead forever. But the adjustment period will require years. Okay. That’s only the first piece. The second piece is agricultural tariffs again kicking in the first week of April.

And if it goes according to plan, April 2nd again, it’s a 40% increase. Now. Right now the United States imports about, one sixth, one fifth based on who’s doing the numbers of the amount of food that we eat. Keep in mind that what we import is stuff that we cannot, cannot, cannot produce, whether it’s because of climatic issues or because of seasonal issues.

So, for example, it is March right now, blueberries can’t be produced in the United States right now. Those come from the southern hemisphere. Let’s say you want seafood unless it’s produced in the American waters, something like Pacific cod is simply produced too far away. We can’t substitute that coffee’s another good one aside from a little bit coming out of Hawaii.

And I love me some Kona. The other 99% of our coffee consumption comes from places that are basically tropical or semi tropical and uplifted with elevation. That’s where coffee is produced. And it’s like that for every single product category. There are very few places where there’s any meaningful competition between imported foods and local foods, because the local foods are going to be so much cheaper to produce, assuming we can produce them in the season in question.

So a 40% import tariff on agricultural products is hardly going to change at all what American agricultural producers produce. Because if they could produce those things in those seasons, they would already. So that just hits people’s pocketbooks directly.

And the bottom 20%, the bottom quintile of Americans by income, one third of their money is spent on food. So you’re talking about knocking somewhere between 10 and 20 million people below the poverty line. Just from that one thing. And the scary thing is these first to Canada, Mexico and AGG, these aren’t the big one. The big one is the third one, something called reciprocal tariffs.

Now on the surface reciprocal tariff sounds like it’s fair like it’s simple. If they put a 20% tariff on I don’t know steel tubing. We put a 20% tariff on their steel tubing. That ignores a couple of things. Number one, it puts your tariff policy completely at the mercy of their tariff policy. So you lose policy flexibility.

Number two, it ignores things that we import that we don’t export. Coffee is a great example. Why would we put a 50% tariff on coffee when we don’t even export any. And then third, it’s a problem from an administration point of view. Official I know it sounds kind of a bit of a snoozer, but it’s really a deal killer because right now we have dozens of tariff policies on different products, and Donald Trump has added 70 to those over the course of his term.

So far in this second round, there are tens of thousands of product categories. There are 200 countries that comes out to 2.3 million tariff policies, which would create a bureaucratic abomination from which the world would never recover. There’s a reason why we unilaterally abandoned this sort of tariff policy a century ago and never looked back. Now, Trump, in the last 72 hours, I’m recording this on the 21st of March.

He has come up with some modifications on that. So we don’t know what the final shape is going to be. And he’s suggesting now that it’ll be a single number per country with probable call carve outs for things like manufacturing or tech or agriculture or defense. So instead of 2.3 million, we only have a thousand policies. And that theoretically could be applied.

But keep in mind, all of these reciprocal tariffs are on top of everything else that he’s doing. And for a country that imports as much as the United States is, this is absolutely going to be a massive shock to the consumer. You basically have three types of economic activity government spending, which if Trump does what he says he wants to do, is going to be stall to shrink, although that’s not the impact so far.

Number two, industrial spending that’s been flatlined now for the last two months. And third is consumer spending, which is the biggest one of all these three things together are more than enough to cause a recession in the United States and something worse than a recession on a global scale. Now, I have spent my professional life warning people that globalization is coming, and when it does arrive, it’s going to be a shock for some countries more than others.

With the United States being of the countries that’s on the less side. And in the long term, a demographic industrial strength means that we will probably be just fine. But getting from here to there is going to be a bit of a rough ride. The Trump administration’s policies, when it comes to tariffs, are going to make this a much longer transition and a much harder ride than it would need to be otherwise, because I ultimately have my eye on the disintegration of China’s a unified nation state with all that industrial plant going away.

And we need to massively expand our industrial plant if we’re going to prepare for that world and just the Canadian Mexican tariffs before you consider the rest has basically put that process on hold and we’re losing time. And if these tariffs go down in the first week of April like it sounds like they’re going to, we’re going to lose a lot more.

Gaza Goes Back to Square One

Israel has resumed military operations in Gaza, so any ceasefire or hostage deal that was on the table can be kissed goodbye.

The humanitarian crisis in Gaza has worsened; much of the housing has been destroyed, food supplies remain critical, and supply chains have been disrupted. Given these conditions and the dense urban area that Hamas operates in, it will continue to have a stream of new recruits that will make elimination a near-impossible task.

Here at Zeihan on Geopolitics, our chosen charity partner is MedShare. They provide emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it, so we can be sure that every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence.

For those who would like to donate directly to MedShare or to learn more about their efforts, you can click this link.

Hello from Vegas. Just a real quick one today. Earlier this week, the Israelis, went back into Gaza. So we’ve had multiple hundreds of strikes and basically full military operations that began again. And so the, the peace for hostages deal that may have been kind of, sort of in place is clearly gone now. And anyone who’s interested in negotiating a ceasefire or a truce is just going to have to start from scratch.

Unfortunately. Fortunately, I words are kind of insufficient. Most of the population had tried to return to their homes, only

discover that, two thirds of the housing stock has been destroyed. And keep in mind that it takes about a thousand trucks a day coming in with food aid in order to keep the population alive. And that at a time when the greenhouses were working, which they no longer are.

So we’re once again right back into the humanitarian catastrophe. And if you are Israel, we are once again right back into the situation where Hamas is strong. Keep in mind that you’ve got over 2 million people living in an open air prison camp with absolutely no prospects. You can’t get out of the, Gaza Strip. Unless the Israelis specifically allow you almost on a case by case basis.

And because of that, you’re basically just in this cauldron. It’s a horrible way to live. And it makes it very, very easy for militant groups like Hamas to recruit. So if you think of all the big successes that Israel has had recently, they gutted Hezbollah with a brilliant, long term intelligence operations where they blew up cell phones.

They’ve gutted the, Lebanese government. The Syrian government has fallen, and with airstrikes, they basically removed all the heavy equipment that Syria has built up over the last 60 years. And Iran is on the back foot throughout the entire region. But Hamas is different because it’s basically in an urban zone and doing door to door clearing of an urban zone, especially when you can tunnel under it is just an order of magnitude more difficult.

It’s not that Israel’s been unwilling to put the men in the materials to the work to try to root out Hamas. It’s just that as long as there’s 2.3 million people there, Hamas will always, always, always, always be able to recruit more.

And unfortunately, that just means that a conflict like this doesn’t have an end. It’s just a question of what minimum tolerance the Israelis are willing to put up with in terms of violence. And it appears, at least for this government, that means keeping troops on the ground and active military operations for the foreseeable future.

Going Nuclear + Live Q&A Announcement

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As the Trump administration shifts US foreign policy, several countries are taking notice of the rising global instability. It looks like the nuclear question is getting thrown around by quite a few of those countries.

The US cancelled defense talks with South Korea following the (Korean) president’s impeachment. As a result, the South Koreans are now revisiting policies that would allow them to develop nuclear weapons, quickly. However, Seoul isn’t the only place these discussions are happening.

Feeling the US can no longer be relied upon for protection, places like Ukraine, Poland, Germany, Sweden, Finland, Romania, Japan, and Taiwan are all considering nuclear armament in varying degrees. This strays from the long-standing policy where the US would provide security in exchange for control over global defense policies.

With large scale nuclear proliferation now on the table, the risk of conflict (and use of these weapons) will grow. And more shiny, red buttons isn’t quite what the world needs right now.

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Hey everybody. Peter Zeihan here coming to you from the Home Office. Apologize for being inside, but there’s 70 mile an hour winds outside, and recording is just not possible. Today is the 17th of March, and the news is that American Defense Secretary Pete Hegseth just canceled defense talks with the South Koreans. He had a really good reason for doing it.

The South Koreans functionally don’t have a government right now. The former president was impeached, currently out on bail, which just feels weird linking those words together. And they haven’t had new elections yet, so there really is no one of authority to speak to about really deep strategic issues. And there is a very deep strategic issue that needs to be discussed.

The South Koreans have been looking at what the Trump administration has been doing with Ukraine and the European allies and even badmouthing, the Japanese of late. And they are coming to the unfortunate conclusion that they are going to have to go it alone on their defense policy. Now, South Korean military forces have basically been under this American umbrella, not just in terms of actual security protection, but actually leadership since the Cold War.

If a War were to break out, and the North Koreans were to invade South Korea, technically the entire South Korean military is under American command, even though there’s only about 30, 35,000 American troops on the peninsula, compared to, you know, ten times that for South Koreans. In addition, the South Koreans are one of the few countries that by Donald Trump standards have actually met their defense procurement goals over the course of this last several decades, typically spending more than 3 to 3.5% on defense the entire time, which is kind of the range that Donald Trump until recently said we were supposed to be in.

And at the moment, the Trump administration hasn’t really bad mouth the South Koreans in any way, like they have the Germans or the Italians or the Brits or the French or the Ukrainians or the, you know, it’s a long list give you the point. Anyway, the South Koreans see the reading, writing on the wall because they realize they are not what you would call a major ally.

The South Koreans are not capable of deploying forces really outside of their theater. And so they are definitely in the category of defense consumer. Regardless of how much of the week they try to shoulder themselves. And their concern is if the Trump administration just turns his eyes to them. But it’s just a matter of time before the United States moves on.

And so they are dusting off the policies from the 60s, 70s and 80s that would allow them to do a sprint to a nuclear weapon. In a matter of weeks, if not decades. And this has earned them the labor by the United States of sensitive energy country, meaning that they are no longer a complete non concern when it comes to nuclear proliferation.

But now something where it’s on the radar and that’s exactly where they should be, and having a discussion at the very top level between the Americans and the South Koreans on what can and would and should happen under all these scenarios is exactly what needs to happen.

But there’s no one to have that conversation takes up at the moment. So delay, South Korea is hardly the only country that is going to be in this bucket. We have a number of other countries who are concerned about what the United States is doing, and realize that they need to, or coming to the conclusion that they need to come up with their own defense plans.

And one of the things you have to consider if you haven’t had a sufficiently strong conventional force for a while, you know, like South Korea has, building up this conventional forces takes years, if not decades. So can they be American general staff situation is 50 years in the making. Aircraft carriers, from the point that you decide that you want to do it, you go through the design, you go to the current, you go through manufacturing, and then finally field testing.

You know, you have the 20 to 25 year process. Considering the speed at which things are unraveling in Europe, most countries just don’t have that sort of time. And so countries who want to actually look out for themselves, they can’t really rely on conventional forces in the short or medium term, which raises the question of nuclear weapons. The country that is, of course, under the greatest pressure is Ukraine.

And we’re supposed to have a conversation very soon between Donald Trump and Vladimir Putin of Russia, which will give some indication just how much Ukrainian territory, the Americans are willing to sacrifice in order to achieve a peace deal. But keep in mind that there are multiple nuclear power reactors in Ukraine. And Ukraine used to be where all the brains of the Soviet military industrial complex used to be on nuke issues, on aircraft issues, and on missile issues.

So the idea that the Ukrainians, when under pressure can’t go nuclear is silly. Next slide of countries in that are already publicly discussing who, where and how to get the nukes. Poland’s at the top of that list. They’ve actively asked the United States to deploy nuclear weapons to their soil, and that has gotten broadly rebuffed. And so now they’re discussing what they need to do to get their own, the road for Poland will be a little bit longer.

They don’t have a native nuclear industry, but their manufacturing capacity is robust. All they have to do is get the nuclear material and they’d be off to the races. It would probably take them 3 to 9 months in order to get a functional weapon, not an explosive device. They could probably do that in the weeks, but the actual deliverable weapon, probably within 3 to 9 months, the next country up is the one that I am, of course, most worried about.

That’s Germany. They’re having the discussion. Not should we get nukes? But how should we get nukes? Option one is to partner up with the French and pay money to the French, so that the French nuclear deterrent, which has existed since the 50s, also covers Germany. But at the end of the day, the French are the ones who would control that arsenal and whether or not it should be used or not.

And so the other option is for the Germans to get as close to the threshold as they possibly can get experience in doing the milling in order to make the warheads enriching uranium with the plutonium. And again, they have a nuclear industry so they can do this themselves, and the idea that the Germans could not put into the device into a deliverable weapon system.

The Germans have been arms manufacturers for a very long time. That would not be a challenge. In between, look to Sweden and Finland. Here are two countries that, like Ukraine, already have an indigenous nuclear civilian fleet. And the Swedes, like the Germans, already have an indigenous, robust military system, for contracting and manufacture. Both of them are openly discussing these options.

And if they do decide to pull the trigger, both of them would have a deliverable weapon in under a month. Rounding out the list in Europe, look to Romania. Like the Ukrainians, they have a nuclear industry. However, the weapon systems are subpar and pretty much all important. So they could get a device, use it as a failsafe.

But getting the deliverable system would be, probably a bridge too far. And anything less than a 12 month timeframe. But it’s a lot faster than doubling the size of your army. Over in East Asia, in addition to the Koreans, the two countries to watch, obviously, are Japan and Taiwan. Both have a arms industry. Both have the materials.

Both have plenty of scientists and engineers who have experience with both. You just have to marry the two together. It’s just a question of how many funds they decide to put behind it. And in the case of Taiwan, if they really did feel that the Americans were leaving, well, they really don’t have any option but to get nukes.

And while the Japanese Navy may be much more powerful in terms of reach in the Chinese Navy, the home islands are within range of a lot of Chinese weapons systems. And so if there was a war, I don’t doubt who would win in the end because the Japanese could choke off the Chinese mainland. But the damage could be extreme.

About the only way to mitigate the risk there is deterrence. And that means nukes. So they’re we’re talking about eight countries that are likely to pick up nukes in the not too distant future, based on how American policy unfolds in the next several weeks to months. Something the Trump administration is learning is something that every administration before it has learned it, including the first Trump administration, is that if you want to write everyone’s security policies, you have to give them something.

And during the Cold War, and until very recently, it was a guns for butter trade, the US would protect global sea lanes so that anyone could trade with anyone at any time. And in exchange, the allies allowed Washington to write their security policies. What the Trump administration is doing is not just breaking that deal, but saying that we’re not going to protect your trade.

You are on your own, but you’re also on your own for defense. And that forces all of these countries to take matters into their own hands. And if they do that, the United States loses the ability to say what can and cannot happen with weapons systems. And that leads to a world with a lot more nukes. And it a much, much, much higher likelihood of actually having a weapons exchange.

The Ukraine War Ceasefire

Photo of Ukrainian soldier in front of flag

Here’s a quick update on what’s going on in the Ukraine War and the discussions of a potential ceasefire.

Ukrainian forces had to withdraw from Kursk following a Russian assault. This was conveniently timed during the US intelligence blackout. Ukraine lost plenty of equipment and were on the receiving end of some new Russian drone tactics.

Trump has been spewing some more Russian propaganda, like 10,000 Ukrainians being trapped (which had already been debunked). So, he’s either getting bad/tainted info or he’s just naive. This erratic behavior will continue to plague this administration and negatively impact US strategy.

What about the ceasefire? Well, the initial agreement broke within hours. Putin’s demands are absurd and would effectively dismantle Ukraine’s military. So, not much movement there…

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Hey all, just a quick update from Vegas on what’s going on with the Ukraine war. Two things. Number one, the Ukrainians are definitely being kicked out of their position in Kursk. That’s the chunk of Russian territory that they invaded over the summer in order to get negotiating. Chip. During the American Intel and weapons blackout, the Russians were able to launch a multi vectored assault.

They basically relocated over 100,000 troops and basically hit the Ukrainians from all positions at a time when the Ukrainians couldn’t see them coming because of the lack of the Intel from the United States. The Ukrainians did manage to get their people out, but lost a lot of gear along the way. The Ukrainians, found themselves facing some new drone tactics from the Russians specifically.

The, Russians would fly in dozens of drones and then park most of them near the roads, wait for something to come by that they could pick up from, say, airborne reconnaissance and then activate the drones and swarm in. So casualties were not light. And a lot of equipment was destroyed, especially softer things like ambulances and pickup trucks and vans.

Even a couple of tanks were abandoned. But most of the troops got out. Which brings us to number two. The degree to which that Donald Trump personally has been caught up in Russian propaganda is really robust, because while this attack was going on in Kursk, the Russians, in order to communicate to their own people how wonderfully the war was going, were releasing, things were just not backed up like facts.

Specifically the idea that somewhere around 10,000 Ukrainians had been caught in what they call a cauldron and cut off from other forces. And in a cauldron that you can push in from whatever direction you want because there’s no retreat. Well, that did not happen. Ever. In fact, when Trump was repeating, these things on his truth social post, all the Ukrainians are had already been out of Kursk, or at least the dangerous part of Kursk for 48 hours.

So just basic information from the American military, the American intelligence stuff is not reaching Trump, and he’s just spouting out whatever he’s being told by the Russians. Now, who specifically the vector was for sharing that information with Trump? I don’t know. It could have been Putin himself, could have been, someone with the administration who has basically been compromised.

Could be somebody who’s just really, really stupid and has fallen for it. You know, all three of these, unfortunately, are options. But held true. And then most importantly, yesterday, the 18th of March, we had a one on one phone call between Putin and Trump that lasted about 90 minutes, where Trump tried to convince Putin to adopt a cease fire.

And Putin’s position is that he would do a partial cease fire that involved things like, not attacking energy infrastructure. He violated that less than three hours after the phone call. And he said that for real? Cease fire again, 30 day cease fire. What he expected was an end to all Western weapons transfers to Ukraine, and then to all intelligence support to Ukraine, and an end to all military recruiting within Ukraine to set the stage for the complete dissolution of the Ukrainian armed forces, and this for a 30 day cease fire.

It’s obvious to anyone who is familiar with this conflict, or anyone who is familiar with nouns, that Putin is not interested in a cease fire unless he gets everything he wants on Ukraine. Long run. And that means the dissolution of the state. Trump seems to be, at the moment, not ready to accept that that is the situation.

It doesn’t mean he won’t. But with Russian influence in his administration so robust, just getting basic information and accurate information to the president is clearly become a challenge. But we can’t rule out that at some point that, the Trump administration will treat Russia like it’s a real threat, like it’s Canada. And should that happen, you know, everything is up in the air.

This is the most erratic American, administration we have ever had. And its strategic decision making is clearly hobbled by the fact that it’s compromised, in terms of intelligence. But when you’re dealing with somebody who is that erratic and is just at the top of a system that is so unstable, things can change in a heartbeat.

So I don’t want to say boo, and I don’t want to say yay. I just want to say that this is a very dynamic political process, and it all depends upon the mood of one person. And that person’s mood is famously volatile.

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