The Revolution in Military Affairs: Artificial Intelligence

ChatGPT logo with a synthetic brain hovering above

AI is working its way into just about every aspect of modern life. I mean, who didn’t fall for that video of the bunnies jumping on the trampoline. But artificial intelligence might not be the game-changer in warfare that you think it is…at least not in the short term.

AI promises faster processing, targeting, and decision-making, which all sounds great, until you throw in the wrench of deglobalization. As the globalized world collapses, the semiconductor supply chain will fall apart. The most advanced chips will not be able to be created anymore. Between the bottlenecks of EUV lithography and the countless single points of failure, we’ll be stuck with what we currently have (or yesterday’s tech).

When you factor this into military applications, it means older systems like cruise missiles and smart bombs will be mainstays. Fully AI-enabled systems will be severely constrained and reserved for the really important stuff.

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Transcript

Hey, all. Peter Zeihan here come to you from Cassidy arch. And where am I? Capitol reef National park. Sorry, it’s been a busy week. Today we are going to close out the series on the revolution in military technology. As advances in automation and digitization in materials science and energy transfer come together to remake how we fight. 

And we’re going to close out with something that you probably don’t need to worry about. And that’s artificial intelligence in war. The whole idea of AI is it can process faster than we can’t make decisions faster than we can, and potentially target with lethality faster than we can. 

I don’t think it’s going to happen. The problem is that the semiconductor supply chain for the high end chips that are capable of doing AI, and as a rule here, the cutting edge is going to be three nanometers and smaller, simply isn’t going to be able to survive the globalization age. So any chips that are not made in the next relatively short period of time, no more than a single digit of years, are really all we’re going to have for a good long time. 

And that means that the machines that are going out and doing the fighting have to rely on something that is older, that is not capable of processing and has to be linked back to something back home, either via wire or telemetry or some sort of radio communication. And that makes for a very different sort of beast. 

There are roughly 30,000 manufacturing supply chain steps that go into semiconductors. The high end stuff. And there’s about 9000 companies involved, and about half of those companies only make one product for one end user. There’s literally thousands of single point failures, and it only takes a few of them to go offline for you to not be able to make the high end chips at all. 

But the place that I think it’s going to be most concentrated, the place where we’re all going to feel like the place where is going to be obvious is going to be with the lithography. Specifically, we are currently using something called extreme ultraviolet, which is done by a company called ASML out of the Netherlands. And they are the world leaders in all of this. 

There are other companies that do the fabs other than TSMC and Taiwan, but the lithography can really only be done by the Dutch. And it’s not like this is one company. This is a constellation of hundreds of companies, and every time one of them either has a generational change or goes public, ASML basically sweeps them under the rug, absorbs them completely, puts the staff in different areas and puts it all under referential lockdown so there is no way to duplicate what they have. 

And so if you take this gangly supply chain that wraps the whole world and any part of that breaks, we can’t do EUV at all. And that means functionally, no chips that are worse than or better than six or 7 or 8 nanometers based on where you draw the line, we can still do something called deep ultraviolet, but extreme ultraviolet. 

It just becomes impossible. And that means that the best chips that we will have ten years from now are going to be very similar to the best chips we had ten years ago. And that limits what we can do with any sort of technological innovation. For the purposes of the military, it becomes very, very truncated. Old weapons like smart bombs and cruise missiles actually don’t use very sophisticated chips. 

20 year old chips are just fine. It’s the high end, the thinking, the processing, anything that’s more than guidance and requires a degree of decision making, that is what’s going to be off the table. So while I applaud all of us for having these conversations about the implications of AI, what it means for the workforce, what it means for culture, what it means for morality and legality. 

These are great conversations. It’s very rare that we get ahead of the technology in discussing what it can and can’t do, and start thinking about the implications for us as people, but I think we have some extra time because once this breaks, it’s going to take us 15 to 20 years to rebuild it. And that was back before everything accelerated with the Chinese fall and the Trump administration. 

Now it’s probably going to take longer. So have these discussions. I think that’s great. But it’s really probably going to be a problem for the 2050s.

The Revolution in Military Affairs: What’s Ahead

Photo of a soldier pointing to a tech screen

Before we close out this series on military tech, let’s discuss what military advances are on the horizon (and our last episode will cover something we don’t need to worry about).

Many of the larger evolutions coming down the pike are related to drones. Whether it’s strikes, surveillance, detection, or deadly jobs…drones will likely be taking it on.

These technologies are just the beginning though. As battery science improves and more advances are made, the battlefields will be going through countless iterations.

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Transcript

Peter Zeihan here coming to you from a foggy Colorado today. We’re do another in our Military Revolution series how changes in Materials Science and Data Transfer and Energy storage are shifting, the way the military works, and some of the new things that will be seen in the not too distant future. Today we’re going to talk about some edge cases that are likely to move into the mainstream in just the next few years. 

And these kind of fall the two general categories. First, you’ve got the topics where humans just aren’t the best tool for the job. These are things where they’re either dangerous, or expensive, we have to train someone up to an extreme level to do a job that then has a high mortality rate. 

You know, things you don’t want people doing. And the first one of those is saving other people, search and rescue in a combat environment uses a huge amount of resources to cover a large amount of land to save 1 or 2 people. It doesn’t matter if it’s a fighter pilot, it’s been shot down or someone who’s been shot out of the field having drones do this not only builds up your combat awareness for the field in general, but also allows you to provide, say, targeted supplies and of course, guide the real force in to pull the person out of trouble. 

The general topic of recon, something that is starting to be called perch and stair. Basically, you have a recon drone, but rather than flying around at altitude, it finds a place at, say, a quarter of a building and just parks and stays there. Maybe it has solar panels on its back so it can extend its battery life and it just looks around. 

It’s a mobile sensor that, for the most part, isn’t mobile. You know, you might call this a spotter or a spy in another condition, but if you can automate that, and instead of having one guy in one place that might be able to move around, you can have hundreds if not thousands of mobile sensors that can extend their life to span by just not flying the whole time. 

And third is something called an underwater swarm. Submarines are among the most expensive things that most modern navies can float. And if you can throw a few dozen things into the water, not only do you get some excellent acoustic collection for purposes of locating them, you know, you put like a one kilogram charge on each one. It doesn’t take a lot of those to take a multimillion dollar sub completely out of action forever. 

So these are technologies that you apply them to. What we know we need. And all of a sudden they really are game changers in terms of efficiency. Now the second category are things that we used to do and maybe even used to do well, but we haven’t done it for a long time. Keep in mind that the US military has not been preparing to deal with another peer adversary until just a few years ago. 

And the immediate post-Soviet era. We thought of the Russians no longer as an enemy. And so we stopped preparing to fight a global conflict with them. We then spent 20 years in the war on terror, focusing on counterinsurgency. That means going against the Taliban. And that means you don’t really need air power. You really don’t need air defense. 

And so certain aspects of our military were allowed to atrophy just from lack of use. And the two biggest ones are air defense suppression and hunting mines, whether land mines or sea mines. The general idea was, you know, if there is no big force out there fielding things you need to shoot through, then why would you maintain an entire arm of your force doing things that are just going to sit around? 

So, for example, we really only have a couple of minesweepers left, but naval minesweepers that are drones are a great idea. In essence, you have a drone that’s hooked up to your ship as it’s puttering around at a relatively low speed doing a sonar capture. You locate the drones and you send out a suicide drone to take it out. 

They’re already doing this in, say, Romania in the western part of the Black Sea. You can use aerial drones with radar to triangulate metal signatures in the soil and locate landmines before anyone can step on them. 

And for air suppression. Back in Vietnam, we had this thing called a wild weasel. Basically, it was a bunch of suicidal maniacs on a plane who would fly into Vietnam ahead of the bombers to activate air defense. Well, do that with drones. Don’t do that with a manned plane. In fact, do that with drones backed up by other drones so that by the time the real bombers get in the air, defenses are already gone. 

Same basic concept holds for coastal patrol. Now, the United States has never really been good at coastal patrol because we have oceans between us and everybody else. But this is one of those technologies that everyone else is going to find really useful. Again, in the post-Cold War world, everyone slimmed down their military spending, with navies seen as just something you would never need again. 

History was over. It was a world of commerce. Why would anyone shoot at anyone’s commerce? Well, that’s gone, but the time it would take to build up a coastal fleet and coastal patrol capability is going to be measured not in years, but in decades. Or you can just have a fleet of drones. It basically flies patrols out on your coast and then, if necessary, a more robust naval vessel can go out to take care of whatever the issue happens to be.  

So these are all things we’re going to see in probably just the next five years, certainly the next ten. And this is just the leading edge. These are things that me as a nonmilitary guy can kind of just think of based on the gaps in the system right now as the military technologies continue to evolve. We’re going to see radical applications of all of these. 

And keep in mind that drones are really just the leading tip of this. We don’t know what our material science is going to be in the next five years. Maybe we’ll get a new battery chemistry that allows for longer loitering, that generates an entirely new field of military tech. We’re just at the beginning here.

The Revolution in Military Affairs: Water Wars

Water sloshing from a cup

Today, we move onto the backbone of civilizations, the lifeblood of (most) meaningful empires—water. Will future wars be fought over it?

The short answer is that it’s unlikely to happen. Water is a pain in the ass transfer, making it impractical for long-distance or military-scale operations. Water doesn’t make sense if you need to move it, you must settle, build, and expand with water in your backyard.

Of course there are some exceptions to the rule. The Nile will become a heavily disputed resource between Egypt, Ethiopia, and Sudan. Over in Central Asia, diversions of water from the Soviet-era have drained the Aral Sea and countries like Uzbekistan may have to invade neighbors to secure dwindling water supplies.

Water scarcity is real, especially in these hotspots, but water wars are not likely to become a global threat.

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Transcript

Hey, Peter Zeihan here. Coming to you from Colorado. Today we are taking a question from the Patreon page specifically about water wars. Do I expect the distribution of water to be the source of military conflict in the future? Short version is this is something I usually don’t worry about, for the simple reason that water is really hard to move and it’s pretty corrosive to any system that you’re going to use to move it. 

So, for example, if you just spill some water on your countertop and touch it, you’ll notice how it clings to your finger in that weird drop. That’s something called hydrogen bonding. It’s an atomic feature that a small molecule that has some very strong positive and negative aspects tends to link together without actually forming. See ice. That hydrogen bonding basically causes a cling between water and everything, including itself. 

So pumping water outside of a municipal environment is very, very difficult and very, very expensive. So if you are going to move large volumes of water from one place to another, you’re generally not going to do it by pipe. You’re going to use gravity. And that means basically digging some sort of canal and allowing the, the world to do the work for you. 

There are some exceptions, of course. Whenever you have a municipal situation, you obviously need water treatment and distribution. That is all done by pipe. But again, it’s very, very energy intensive. And you will always have some places like, say China who work going to let something little like physics or economic rationale get in the way of national unity. 

And so the Chinese are in the process of basically diverting several of their rivers in order to ship water from the south, where it’s more humid and more jungly to the north, which is more heavily populated and more arid. But this comes at a huge cost environmentally and economically. What that means is it’s really difficult to imagine a situation where people will go somewhere to get the water and bring it back. 

If they’re going to get the water, they’re going to go there and they’re going to stay. And that is also very hard as a rule. Economic development follows, the same track. You start with water. You use that water to grow food. You use the food to expand your population. You use the capital from that population growth and then agricultural sales to establish a tax base and eventually an industrial base. 

You then use that industrial base to build a military. And it is all rooted in having water at the very start. If you don’t have that water, you’re never going to get the industrial base that is necessary to have a projection based military. And so if you look out throughout history, while you do sometimes have dry cultures that conquer wet ones, the only ones who then become meaningful cultures that can project power in the future are those that then stay, conquer, assimilate, wipe out the generation that they’re conquered and then move on. 

It’s just the technology that is required for the industrial age just doesn’t allow it to go any other way. So, are there exceptions? Of course. Every rule has exceptions. Let me give you the two big ones. The first one is the Nile region. Most of the rain that fuels the Nile River falls in the highlands of Ethiopia. 

It then flows down through the tributaries of the Nile, through Sudan, before eventually entering Egypt and becoming the riverine culture that we all know from history. Well, the water falls in one place, passes through another place, and is ultimately used in the third place in the existing treaty systems that date back to the colonial era say that Sudan, and especially Ethiopia, aren’t supposed to tap the river at all. 

It’s all for Egypt. Well that’s breaking. And we’re seeing the Ethiopians and the Sudanese starting to take more and more water from the river for irrigation purposes in order to stabilize their populations and have economic growth. Hard to argue with them, but that does mean there’s no longer enough flow coming down into Egypt to sustain Egypt long run. 

So sooner or later, something is going to crack. Either we face an economic and ecological collapse in Egypt, or the Egyptians, get creative with military power and go up river with the intent of blowing up the dams, preferably in a way that does not trigger a fresh biblical flood in Egypt. No easy solution, but there’s certainly not enough water for everyone to come out on top. 

The second big issue is in Central Asia, where the premiers provide the headwaters for a couple of rivers called the AMA. When the sphere and those two rivers flow through Tajikistan and Kyrgyzstan, Turkmenistan and Uzbekistan before dead, ending in the Aral Sea. Well, during Soviet period, cotton plantations were planted throughout these areas, most notably in Kazakhstan and especially Turkmenistan and Uzbekistan. 

And now most of that water never even makes it to the Aral Sea. So it’s become desiccated. And right now, what’s left of the arrow, the little bits that are left are only about 10% the volume of what existed there. Back when these diversion systems were built, back in the 1960s. So the entire area is gradually drying out. 

And after having a few decades of agricultural runoff get into those rivers, they’ve basically polluted what is now the open salt plains of the formal Aral Sea bed. And hotter, drier conditions mean more winds, which means those salts are being whipped up in storms and dropped several hundred miles away and are causing health issues for everyone in Southeast Asia. 

So sooner or later, one of the downstream states, if it has the capacity, is going to invade the upstream states to control what little of the water there still is. Of the five stand countries, the one with by far the most military capacity is Uzbekistan, and it is very close to the physical borders of Kyrgyzstan into Guestand, which control the headwaters. 

So expect a hot fight there, with the Uzbeks moving in with the intent of taking over. And unlike the situation that we have, say, with Egypt and Sudan, there isn’t a big giant chunk of trackless desert to serve as a barrier. These population centers are all on top of one another. So for water, that’s what you’re looking at pretty much a local issue. 

We still obviously have issues with distribution in the United States, but it’s very rarely cross-border issue. And where it is, it’s really just limited to those two locations.

The Revolution in Military Affairs: Recruitment

Cadets marching in the military

Most of the conversations in this series will revolve around technology, but recruitment is a large component of keeping a military productive. We’re not talking about the high school pull up competitions that the recruiters do, but more of the systemic ideology around recruitment itself.

As military technology evolves, we’re seeing the equipment on the battlefield change overnight. However, finding the people to operate this tech and fill out the ranks needs a refresh as well. Considering that 2/3 of the American population are not straight white dudes, the DEI conversation is about to get a new angle.

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Transcript

Hey, all Peter Zeihan here. Coming to you from Capitol Reef National Park. We are continuing our series on the future of military technology. And today we’re going to talk about staffing and recruitment. What is the United States or really any country need if it’s going to succeed in this changed era of warfare? 

Well, the short is that we really don’t know yet because we haven’t invented the future. 

What we know for sure is that the military is going to have to be more flexible. And if you look at the Ukraine war, it’s easy to see why, as little as a year ago in the Ukraine conflict, it was all about fighter jets and bombers and artillery and tanks. But in that time, it’s evolved completely, with most of those platforms no longer being able to hold their own against evolutions in drone technology. 

And drones are just leading edge of this revolution that combines new types of digitization and energy transfer material science to completely new packages. We now have, for example, our first rocket drones, which have a range of over a thousand miles that can easily take out a refinery. The world is changing. What we do know is that the old style of doing war, which is basically throwing a bunch of bodies at something else and see who comes out on top, isn’t going to work. 

One of the biggest problems that I have with the current administration, most notably Defense Secretary Pete Hegseth, is he doesn’t seem to understand how the numbers work. Hegseth is on a roll, basically on the warpath against something that he calls Dei diversity, equity, inclusion and the idea that one group should have favoritism over the other. I agree is silly, but in the military context, that’s not how Dei has ever been implemented. 

Dei in the military is a recruitment tool based on how you look at the numbers. At most, 30% of the American population are straight white males, and on average, straight white males are older than the average American population. 

So no matter what your definition is of what a good soldier, marine sailor, airman happens to be. The bottom line is, if you’re drawing from a small pool that it’s getting smaller and you’re fighting a war of numbers, by your own definition, you’re going to lose and lose badly. And that’s before you consider the changes that are coming to the technology. 

We need better skill sets embedded within the system, and that means recruiting people there in a different way than how we do it now. right now we generally bring in people in the age bracket of roughly 17 to 25, and we break them down. 

We indoctrinate them into the system, train them on systems that have existed not for years but for decades. Well, that’s not going to work when the technological time to target is measured in weeks to months. We also need to change procurement. The idea that the military goes out there and says what it wants, and then private military contractors go out and design the system, basically parade it in front of the military to see what works. 

And then years from now, we get a prototype, and years after that we get mass production. That won’t work because this all has to go from the point of imagination to the point of deployment in less than a year. So everything about how we fight right now needs to evolve, 

And that means a broader skill set with as wide of a diversity of backgrounds as possible. 

And so why, while we’re going through these transitions, will you tell anyone in the United States who is a woman or who is black, or who is Hispanic, or who is gay, that they have limitations on how they could choose to serve their country? It just doesn’t make any sense from a strategic point of view. 

About the only argument that I have seen that argues for a different direction in order to maintain power is basically the Elon Musk approach, which is to basically go out for everyone who is a white, straight male who has employees go out, sleep with 12 of them and start generating a new white race. 

Well, you know, I don’t know if you knew how math works, but if that all happens today, you’re not going to get your new crop of your new race for 18 years. And we will be on the other side of this military transition by then. We need to work with what we have, and that means using the skill sets of absolutely everyone who has an interest of being in the US military.

Trump Trade Talks: Japan Gets a Deal

Photo of Japanese Yen

Japan is one of the few countries who has been willing to step into the batter’s box and take whatever Trump throws at them. This time at the plate, they were tossed a 15% tariff on Japanese goods (with some big caveats).

Tariffs on some of the most important exports, like cars and semiconductors, have been deferred for future negotiations. Which means Japan will be back at the plate in no time. The Japanese also pledged investment into US infrastructure via state-linked commodity institutions. Trump claims most of the profits will go to American pockets, but the Japanese disagree with that interpretation.

As is the running theme with most of Trump’s “trade deals”, this is predominantly fluff and the real talks are yet to begin.

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Transcript

Peter Zeihan here, continuing our series on the new deals that the Trump administration has announced for trade with our major trading partners. Today, we’re going to tackle Japan. The Japanese situation is very similar to the European situation. And then it looks like the Trump administration, Donald Trump personally came up with a few numbers, walked into the room, said, I want this, this and this and this. 

And the Japanese nodded their head and smiled and say, sure. The headline figure for tariffs going, for, for goods coming from Japan. The United States is now 15%. And unlike in Europe, where there’s not a lot of back and forth in manufactured goods, to the degree that industrial substitution might happen with Japan, there’s a fair amount. 

Japan is an industrialized economy that doesn’t have a lot of consumption because of their demographic bomb. And so they export basic goods. Intermediate goods, processed goods and finished goods to the United States. So there’s a lot of room for things to move around if that ends up being the final number for the long term. 

But that’s probably not going to be the final number for the long term. The most interesting piece of the trade deal, as it’s currently been announced, is that on things like cars and semiconductors, those are going to be pushed off to another day. So even the Trump administration is saying that this is the beginning of the negotiations, not the end. 

Here’s the problem. Japan doesn’t make a whole lot of semiconductor, and the United States doesn’t make a huge number of semiconductors. But both of us absolutely dominate certain pieces of the supply chain. So the United States makes the silicon dioxide that basically goes into all of the world’s semiconductors. And we also do almost all of the design. The Japanese do some design, but they absolutely dominate the photo mask, which is, for lack of a better phrase, really fancy sunscreen. 

So when you were throwing the lasers at the chips, you can trim to different depths to achieve different things. These steps are not replicated in either country to the same degree that they would need to be. If you wanted to have a purely national semiconductor supply chain system. So the Trump administration, by pushing this off, is leaving unresolved the question of what the United States is. 

Semiconductor policy is going to be are we only interested in the last step, fabrication, which is what the Taiwanese do? Is that what we want? And we still want to bring in all the inputs that we need from the rest of the world, or do we want to completely indigenous semiconductor system. The first one is $100 billion question that would take 10 to 15 years. 

The second one is a $5 trillion question. That would take 20 to 40 years. And the Trump administration, to this point, hasn’t figured out how it wants to approach that, because that’s a huge tax, no matter which version of the question it’s going to be. And so things with Japan in that regard are being put off. Something similar is happening with drug manufacturing because the Japanese aren’t the ones that make the really cheap drugs. 

They make the more advanced drugs. And if you want to do that at home, you need a whole support chain going up to it. Okay, that’s kind of piece one. Piece two is a promise of investment, unlike the Europeans, where everything is done at the nation state level. And so negotiating with the European Union is a little loosey goosey. 

Japan is a sovereign nation. when you negotiate with Tokyo, you’re negotiating with Tokyo. And Japan is a country that over the course of the last 50 years, has realized that they have a poor system for raw material production and processing. So they’ve built a number of state entities to basically compensate for that. You basically throw state money at entities who are kind of relieve from the normal laws of supply and demand, and go out into the world and make investments that under normal circumstances, Americans wouldn’t make in order to source lithium or oil or whatever it happens to be, according to the terms of the current deal, those institutions will now start investing 

in American infrastructure in order to produce products in the United States. And 90% of the profits from those institutions will go to American entities. So two problems with that. Number one, these Japanese financial institutions that are government linked, they usually go into raw commodity production and processing. That’s not what Donald Trump said they’re going to do. 

He says they’re going to go into high end manufacturing. So already you’re talking about a significant shift in their mission and outside of their normal realm of expertise. The second problem is the idea that the Japanese will provide all of the money, but take hardly any of the profit. That’s a stretch. And as soon as Trump made these announcements, the Japanese like, that’s not what we agreed to at all. 

So unfortunately, in a similar manner to what we have going on with the European situation, this is the start of talks. This is the Trump declaration of what they want. Here we are. When this all started back on April 2nd. We’re now see May, June, July. We’re now three and a half months later. And we’re only now getting the initial declaration of what Donald Trump actually wants to see. 

Now, this is progress. But if you’re talking about the re fabrication of financial entities at the government level in Japan as the starting point for whatever this later deal is going to be, you’re still talking about projects that are going to be realized over the course of a decade or more. Not the sort of thing that can have any impact on things like the trade deficit on any meaningful time frame. 

We are once again, at the beginning of this process. We are nowhere near the end.

Trump Trade Talks: US-EU Strike a Deal

European Union Flags in front of a stormy sky

The Trump administration and the EU have announced a new trade deal. It’s more of a political headline than a meaningful agreement, but let’s break it down.

The agreement includes a 15% tariff on European goods, $750 billion in US energy exports to Europe over three years, and $500 billion in investments from EU institutions in US infrastructure. There is a lot to going on here, but the bottom line is that the “deal” was made with the EU, NOT the member countries. So, until the individual countries agree or decide to move forward with this…it’s just another wish list from Trump that’s not likely to go anywhere.

Up until now, these talks have just been political fluff. The structural issues in the US-EU trade relationship remain untouched and will stay like that until the real negotiations begin.

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Transcript

Hey, I’m Peter Zeihan here, coming to you from a suddenly stormy Colorado. Today we’re launching off a new series on the status of the trade deals that the Trump administration has announced. We’re going to start with the European Union, which is by far the biggest. Now, Donald Trump has said this is the biggest trade deal ever. It doesn’t even make the top 25 list, actually, for the United States. 

And the problem is that a lot of the things that have supposedly been agreed to can’t happen. So, let’s start with the headline where we are at the moment. Then we’ll go into the detail. So the headline is that Trump was threatening the European Union with originally a 20% tariff, and that went up to 30%, then eventually 50%. 

And now it’s going to be 15%. And the Europeans agree to not retaliate, with their own tariffs. So there are a lot of folks across Europe who think that this is a particularly unfair deal. But, you know, whatever. 15% on European trade, Europe collectively is probably our fourth largest trading partner. That would have an impact on a lot of things. 

The United States and Europe have a relatively robust trading relationship that’s built on intermediate manufactured goods and then finished things like cars and aerospace that go both ways, as well as the United States sending a fair amount of energy products and processed materials, whether it’s lumber, cement or whatever. To the Europeans, the Europeans, of course, send a lot of luxury goods to the United States. 

French wine, of course, is on that list. Kentucky bourbon goes the other direction. You know, these are these are culturally intertwining trade types. And so throwing a 15% tariff on what’s coming from Europe to the United States is obviously going to require a squeeze in people’s budgets and redirect how things are going elsewhere. The thing to keep in mind, primarily when you’re talking about European trade, however, is that most of the stuff that we buy from Europe is not stuff that can really be sourced from other locations. 

So you’re either going to be looking at a reduction in demand as prices go up, or a withering of that trade relationship. So this is not one of those trade relationships where you’re going to see new industrial plant coming online in the United States to compensate. It’s not that kind of trade. That’s kind of the first piece. 

That’s the headline piece. That’s where we are. That all takes effect August 1st. The other two pieces are kind of loosey goosey and are very Trumpian. Trump has announced and the Europeans have said that, yes, this is broadly what we agreed to, that over the next three years, the Europeans will buy three quarters of $1 trillion in American energy products. 

Now, the energy product is defined very, very loosely to include things that don’t exist, like small modular nuclear reactors, or things that the Europeans just don’t buy from us like, for the most part, crude oil. Mostly we’re talking here about natural gas and liquefied form, but the number makes no sense. 

$750 billion in U.S. energy products over three years, the United States only exports a little over $300 billion of energy products total globally. So the idea that all of a sudden it’s all going to be and go to the United States, that would actually be a massive reduction in the take home pay for U.S. energy exporters. Right now, U.S. LNG exporters in particular, are in kind of the catbird seat because they look to see whoever is having a crunch, and then they send LNG there. 

So they get spot prices that are very, very, very high. If we were to send everything to the continent of Europe, we would be talking about more term contracts where the renumeration cost would be significantly lower because of the reliability. You would probably see U.S. LNG exporters see their profits drop by well over two thirds. And you’d probably drive a quarter of them out of the business if this agreement were to happen, which it won’t, because the European Union is not an economic entity. 

It is an international political organization among the member states. And the member states are the ones who decide what they buy from where. So the EU, the European Union institution, the executive arm, has committed to buy in the stuff, but their annual budget for the entire European Union is under $200 billion a year. So no, this is not going to happen at all. 

And if it did happen, it would be really bad for American energy exporters. That’s problem. One problem too, is that supposedly there’s going to be a half $1 trillion of investment by European entities in the United States. And again, the EU is a political institution that doesn’t have that kind of budget. It has agreed on behalf of the member states, but the member states are under no legal liability whatsoever to actually carry out the agreement. 

So what’s probably going to happen is a few months from now, these talks will continue again, because this is not a final deal. This is a memorandum of understanding for what the Trump administration would like to see happen. And even if this was a final deal, it would then have to be ratified by all the member states. But the EU institutions don’t have the political or legal authority to negotiate for their member states on behalf of things like energy and investment treaties. 

That is a bilateral deal. Those talks have not even begun. And from what we’re hearing from both the Trump administration and from Brussels, is that Trump basically came into the room with a few numbers, said, I want this, this, this, and this. And the Europeans kind of nod and smiled, assuming that this would end the conversation for the moment, which appears to be what has happened. 

But in terms of the real talks, the things that might address the irritants in the relationship, of which there are many, those haven’t even started.

Why Trump’s Stance on Ukraine Has Changed – Part 2

Ukraine solider on a armored vehicle with a split screen of Donald Trump

Let’s unpack Trump’s evolving stance on Ukraine a bit more today.

Trump came into his second term strapped with his loyalty vacuum, purging anyone who wouldn’t kiss the ring. This left Trump with a lackluster roster, many of whom had acquired a taste for Russian propaganda. All of that led to Trump giving Putin an extraordinarily long leash.

After six broken promises of peace, Melania talked some reality into Trump, and he is now pulling back on the lead. The question now is not whether to oppose Russia, but where to draw the line. US support for Ukraine has come cheaply so far, but nuclear retaliation from Russia is still looming on the horizon.

We still don’t know where Trump will take this, but his stance on both Russia and Ukraine is quickly changing.

Prefer to read the transcript? Click here

Transcript

Now, when Trump was out of power, he had a beef with the Republican Party because there were people who had studied policy in the world and the Republican Party who tried to steer his decision making in a way that reflected history and economics. And one of the weaknesses of Donald Trump, charisma. It’s his ego. And he feels he has to be the smartest person in the room at any given topic. 

So we all he was out of power. He restructured the Republican Party so that all of those folks were gone and basically turned it into an institution that was designed to glorify and reelect him. And it worked. He comes into power. He no longer has a cadre of several hundred people behind him to help him make policy. He just has a handful of people who, for their own personal reasons, have chosen to to hook up. 

And he has a cluster of Russian agents up to and including Tulsi Gabbard, who is currently the director of National Intelligence, who has been whispering in his ear and amending the national intelligence brief since day one with Russian propaganda. Well, as he comes in, he does the same thing to the federal bureaucracy that he did for the Republican Party and basically stripped it of expertise so that no one could ever tell him, you know, he was wrong. 

And what that meant is for the first six months, he was wrong a lot, especially as regards Vladimir Putin and the Ukraine war. We actually had some weird situations where Trump was blaming the Ukrainians for the Russian rape camps that had been set up, or the kidnaping of Ukrainian children, that the Russian government set up a cabinet level position to take care of, and the death camps and the mass murders and, you know, on and on and on. 

Using phosphorus to clear out village was, phosphorus is kind of like napalm. Anyway, turning point for Trump was in May and June. He engaged in personal diplomacy, with Vladimir Putin. He decided that, Steve Wyckoff, who had been his frontman, really didn’t know what he’s doing. And that was because Steve Wyckoff really didn’t know what he’s doing. 

And so Trump took it over directly. He couldn’t hand it off to the State Department because that is handled by, Rubio, who’s a guy he doesn’t particularly like. And actually, I’m a little surprised he hasn’t fired Rubio yet. He’s basically just sidelined the entire national, security and foreign service institutions. Put him under Rubio, then sent them off to the side and told them to do nothing. 

Anyway, he takes over the negotiations himself. So that puts Putin in a position where he’s lying to Trump’s face repeatedly and according to Trump’s own words, on six different occasions. We had a deal to end the war. And then less than 24 hours later, the Russians would bomb a civilian target. When I say bomb, I mean sending several dozen, several hundred drones and missiles and bombs into major cities. 

The first five times this happened. Trump seemed annoyed but willing to give Putin the benefit of the doubt. But the sixth time, the sixth time Melania Trump called Donald Trump out on it, and that apparently changed the minds. Keep in mind that Melania Trump was not born in the United States. She was born on the other side of the Iron Curtain in the former Yugoslavian republic of Slovenia. 

So she, among Trump’s inner circle now is the most aware of international relations of all, because she’s the only one who can’t be fired. How useful that will come to be in the days and weeks and months to come. I have no idea. But what she has done very successfully is convince Donald Trump that he was being played, that he was being lied to, and that he was being made to look quite unintelligent. 

And so a few weeks ago, the two weeks ago, Trump gave Vladimir Putin a 50 day deadline to change policy. And in the last 48 hours, Trump has said, I’m not going to give him 50 days because nothing’s changing and nothing will change. And that’s part of the problem with this conflict. Putin accurately sees the Ukraine war as the beginning of Russia’s last best chance to survive this century. 

From the Russian point of view, and I think the correct, if they cannot conquer all of these countries, not just Ukraine, the other 15 as well, Russia will vanish from the Earth before 2100 based on how the war goes, potentially a lot faster. So there can be no peace treaty that the Russians can agree to that they will enforce. 

That leaves any of these countries independent. This is a country that is fighting for its existence. Unfortunately for the Russians, in order to continue to exist, they have to conquer a number of people who collectively are of a greater number than there are Russian ethnics on this planet. So from the American and the European point of view, the question wasn’t will we or won’t we stand against the Russians? 

It’s where would we draw the line? Where is the point where we say no further? And for those of you who think that we can just wash our hands of this completely. A couple things to keep in mind. Number one, the Russians have more nukes than we do. And since they’re on their way out, the incentive to use them is a lot higher because from their point of view, in the long term, they have nothing to lose. 

Number two, if the line that we decide to defend is in Ukraine, well, then all of the Europeans and all of the Ukrainians are between the Russians and us. And the war to this point, the United States really hasn’t bled. We haven’t really provided much cash, and we haven’t provided much in terms of military equipment that we actually use. 

What the Ukrainians are using against the Russians, or at least until recently, has been American equipment that has been decommissioned since 1995. They are basically going through our hand-me-downs and holding the Russians off. And the cost to us is minimal. The alternative is, of course, to leave the Russians and the Ukrainians to it, break the alliance, go home, and just hope that in everything that happens with the conflict in the time to come, the Russians just forget that we have been the target of all of their nukes and all of their propaganda since 1935, and hope that should they ever be stopped by someone else, that on their way out the door of history, they 

choose not to send a few hundred nukes our way because they really do hate us massively. Anyway, for those of you who have bought the Russian propaganda, you’re going to have some uncomfortable times in the days ahead. Donald Trump’s ego has been bruised and he is now starting to direct policy against the Putin government. There are a thousand ways that this can go. 

I can’t predict the specifics. People like Tulsi Gabbard are still in place, who are still beating the drum on behalf of the Russians inside the white House. This can go a lot of strange directions, but hopefully this little brief gives you an idea of why things are happening the way that they are. And maybe, just maybe, it’ll make you reconsider a few things.

Why Trump’s Stance on Ukraine Has Changed – Part 1

Ukraine solider on a armored vehicle with a split screen of Donald Trump

It seems that the Trump administration might be listening to some classic rock lately, because his recent stance on Russia and Putin is awfully reminiscent of The Who’s 1971 classic “Won’t Get Fooled Again.” Or maybe Melania just yelled at him.

The issue with the Trump and Putin dynamic is that they’ve been operating on two different playing fields. Trump thought he was just caught up in your standard playground pissing contest (the kind of conflict that he loves). Putin was playing along, but Trump is finally realizing that Putin’s war on Ukraine is existential. The Russians MUST take Ukraine. They MUST expand their borders. Otherwise, it’s the end of Russia as we know it.

This is the geographic playbook that Russia has always followed. Now that their demographic crisis has reached critical mass, there is only one path forward. So, Trump’s stance on Ukraine is starting to shift, but this is only the beginning.

Prefer to read the transcript? Click here

Transcript

Hey, all Peter Zeihan here coming to you from Colorado. Today we’re doing an educational video for folks who are of the MAGA crowd who, are discovering that the Trump administration is changing policy pretty dramatically on them in the case of Ukraine. 

When Trump was running for president, the third time to get a second term, he started repeating a lot of Russian propaganda about how the war was Ukraine’s fault. And Zelensky needs to go. Then he came in and discovered, that things perhaps were not, as he realized. So the point of this video is to explain to you what Trump has discovered over the last six months and why it’s leading to his policy change. This war was always going to happen. It didn’t happen because of who the American president was, or the German chancellor or the Ukrainian president. 

It happened because of how the Russians view their world. The Russian territories are pretty flat and open, and there’s no real good spot to hunker behind to shield yourself the armies of your foes. And so, Russian strategy going back to the time of the early czars, you know, centuries ago, has been to expand. 

Conquer the people next to you, subjugate them, turn them into cannon fodder, and then use them as a vanguard to attack the next group of people. And repeat and repeat and repeat until eventually you reach a geographic border that tanks can’t go through. And so Muscovite expanded into Tatarstan, expanded into Ukraine, expanded into the Baltics. And they keep going until they hit those geographic barriers. 

And the key ones are the Baltic Sea, the Carpathian Mountains, the deserts of Central Asia, and the tension mountains of Central Asia and the Caucasus. If the Russians, from their point of view, can do this, then they will have achieved a degree of physical security that they could not get from remaining at home. And the Russian leader, who ultimately proved most successful at doing this in the modern age is Joseph Stalin. 

And the borders that the Soviet Union held during the Cold War were the most secure that the Russians have ever been. You just have to keep in mind a few things here. Russia is not a nation state like Germany or the United States or Australia. It’s a multi-ethnic empire where the non Russian ethnics exist solely to serve as a ballast. 

And it’s cannon fodder in wars, which means that in times of prolonged economic or political decay, like, say, the 1980s, the empire breaks apart and all of the various nationalities that used to be used as cannon fodder all of a sudden are the on the other side of an international border. So Russia has only about, 60%, 65% of the territory of the Soviet Union. 

But all of those other zones are largely populated, and they’re populated with ethnicities that are not simply hostile to Moscow, but have been subjugated to Moscow in the past. Now, modern day, the Russian population is dying out. There are two big things that shape demographics, and the first is the degree of urbanization. And the second is economic, where for all and health. 

So first, urbanization starting under Stalin, but really getting serious under Brezhnev, the Soviets started a massive urbanization campaign, basically taking people off the farm and cramming them into small housing units. And in doing so, birthrates dropped by 80% in two generations. At the same time, this agrarian population was not really schooled up to deal with the realities of the industrial age. 

And you had a lot of people who became functionally dispossessed. One of the results among many, was insane levels of alcoholism. Then when the Soviet system collapsed in 1989, heroin became a big problem along with multidrug resistant tuberculosis and HIV. And so, arguably, the Russian population of the 2020 tens and today is the least healthy in the world. 

And one of the ones that has faced so low of birth rates for so long that the actual ethnicity of Russians is vanishing. These two trends come together in the Ukraine war. 

First, the Putin government has tried to expand on the cheap through the 2000, sponsoring coups and assassinating people throughout the what they call their near abroad. Throughout the 2020 tens, trying to shape the political space of these countries that they used to control in order to force them to do what Moscow wants. 

And they were always able to find collaborators among these countries who could be bought off, or maybe even wished for the return of Russian troops. But they could never convince the majority of the population that existing to serve Russian goals was in their best interests. And so the result among many, were things like color revolutions, where the peoples of these countries, it would basically rose up and throw off the pro Russian puppets. 

And then the second problem demographics is that the Russian birthrate has been so low for so long, the Russians are losing the capacity to field an army of their own, and they don’t control enough subject peoples anymore to generate a large conscript army full of cannon fodder. So the late 2020s, where we are now, was always going to be the last period where there were enough ethnic Russian men in their 20s where making a go of a military solution could happen. 

These two things come together. And the Ukraine war with the Putin government basically going all in. It was always going to happen. It was always going to happen about now. The only question is, how does the rest of the world in general and the United States specifically react to it? Because remember, the Russians will keep going until they reach a geographic barrier that can stop tanks. 

Ukraine’s only part of that. Ukraine is the ninth post-Soviet war that the Russians have participated in. And it will not be the last. We will also, if Ukraine falls, have conflicts in Moldova, Estonia, Latvia, Lithuania, Poland and Romania, Kazakhstan, Georgia, Azerbaijan and probably Uzbekistan as well. This is just the next phase of Putin’s plan of the Russian plan, that if anything was written 500 years ago.

China vs. Mother Nature: Can the Dikes Hold the Rain?

Person with umbrella standing on Xinghai Bay Bridge

Flooding has already claimed lives and destroyed infrastructure in Hebei, Beijing, and Tianjin. Over five feet has already fallen—more than an average year’s total rainfall and there is more on the way. There is more to this than just another bad weather forecast.

The North China Plain is flat and prone to droughts and floods. But the Chinese have learned to manage the Yellow River through a series of channels. Each year, the riverbed rises due to the silt, and the surrounding land now sits will below the top of the river. Which means that the dikes are the only thing preventing a catastrophe. We’re not just talking some rural farmland being flooded, we’d be looking at a mass casualty event in the heart of the country’s capital.

We’re not in panic territory quite yet. However, all it takes is a few more inches of rain and one of the dikes to give way, and hundreds of thousands of people will be at the mercy of Mother Nature.

Prefer to read the transcript? Click here

Transcript

Hey all, Peter Zeihan here come to you from Colorado. And today we’re going to talk about weather in China. There are areas of Hubei province, Beijing, the capital, and Tianjin province, which is the super port, the artificial port that has a lot of the capacity that serves northern China, that have all gotten just huge amounts of rain. Some areas have gotten in excess of five feet of rain, which is more than they normally get in an entire year, and more rain is forecast. 

Normally I wouldn’t comment on something like a weather report unless it was a hurricane about to hit the, say, the Persian Gulf or something. This is an exception. The issue is to just flat out human geography, cultural geography, and, economic geography. 

The North China plane, which is where Beijing is and where roughly two thirds of the Chinese population lives, is a very large flat zone that is normally fairly arid. 

And if you look at a map of northern China, you’ll notice that the yellow River, the primary river, does a lot of curves and everything because it’s not particularly steep area. So this is a region that is always dealing with either drought or flood. And when it floods, things get crazy because the river basin, the actual channel, isn’t very low compared to everybody else. 

In fact, most public works by Chinese government is going back a couple of millennia have been built about wrestling the yellow River into some sort of submission so you can break the flood cycle. What that has meant is that they’ve channelized the river over most of its lower length. So that when you do have the river coming through, especially in drought season, it drops a lot of silt, which builds up the riverbed. 

And so they have to build the dikes higher. So in most of the places where the yellow flows through populated China, the riverbed now is actually at a higher elevation than the surrounding floodplain. 

As long as the dikes hold, this is not a problem. So, yes, we have had evacuations that affect people. Thousands moving into the tens of thousands right now. Yes. We’re expecting more rain, but as long as the dikes hold, this is a water management issue. The concern would be is if in a populated zone, one of the dikes gives away. Because if that happens and it starts to erode, then you have a different sort of problem. 

Then you have the river pouring out of the basin and down into where everybody is living. In the past, when this has happened, you have literally had hundreds of thousands of deaths. The last time it went down in the early 2000s, the Chinese mobilized several million people to fill up sandbags until the river could be wrested back under control. 

Industrialized China has done a great job with their water waterworks. I’m not saying I expect everything to go wrong. I’m saying this is the sort of thing that breaks confidence in governments very, very quickly. There’s nothing like having tens of thousands of people drowning in your capital to shatter political coherence. Now, Chairman XI is far more aware of social disruptions in China now than he has been in a while. 

He decided to cancel the recent EU China summit. So the Europeans decided to relocate it to China so that he would attend. He is there. He is obviously aware, and I’m not suggesting we’re about to have a catastrophe. What I’m saying is I can’t predict the weather. All I can tell you is they’re expecting to have at least another six inches of rain throughout the entire zone, which could turn this from an isolated point as the water is moving down the river to a broader system where all the tributaries start to flood, too. 

So it’s something to watch. It’s not yet something to panic about. And if it does become something to panic about, you’re not going to have to hear it from me, because it will be everywhere. Because China will be underwater…

Inflation Ticks Up Under Trump-2

a vacuum sucking up dollar bills

We spoke about monetary policy last week, but let’s lift the hood. Today, we’ll be discussing the inflation outlook under Trump’s second term, focusing on tariffs, immigration, and supply chain disruptions.

We’re seeing inflation climb. The consumption-led recession has begun, and as Trump’s tariffs continue to roll out, things will only worsen. Labor shortages, driven by immigration enforcement, are pushing labor costs up. And the impacts to global supply chains are hitting housing, food, and transport.

With a dysfunctional Congress, an understaffed administration, and a Republican party with no real plan…prices will continue to tick up and instability will deepen.

Prefer to read the transcript? Click here

Transcript

Peter Zeihan here. Coming to you from a humid Colorado morning. We’re not used to getting this kind of rain this time of year. Anyway, today we’re going to talk about inflation and what you can expect in the weeks and months ahead. Now, if you remember back, I have been saying since roughly April that, the United States was looking at a consumption led recession in July, and we are in July now. 

And the reason is good shortages. The tariffs that Trump put in on April 2nd basically triggered an end to all exports from China, the United States. And China is our number one source of consumer goods. And that ban functionally ban was in place for several weeks. And so nothing left. Everyone’s been living on inventories in July is when I expected starting on the West coast and then moving its way east us to basically start running out of stuff. 

And that’ll manifest in inflation numbers. Consumption numbers. The data is very loosey goosey because Trump, like he always does, set a very harsh penalty in early April. And then by the time we got to late May had basically rescinded all of it pending further negotiations, which, by the way, are not happening and not going anywhere. We’re now in a second phase of that where Trump is saying that after his grace period expires, tariffs are going to come back in. 

And for most countries, the numbers that he has floated are significant, higher than what he threatened to back in April, suggesting that on the worst case scenario. These tariffs happen as he’s talking about. And we just have a crushing of economic activity and consumer basis around the country. Best case scenario is that he keeps doing this on and off, on and off tariffs where we only have a problem with business uncertainty, which eventually hits industrial development and employment. 

But that’s a longer term problem for right now. Let’s talk about inflation. 

The US CPI, which for many reasons isn’t the best measure, but it’s really the best that we have that we can assess regularly. Is the consumer price index. And it generally puts out a statement once a month about where inflation is going. The newest numbers that came out of June are 2.7%, which is significantly higher than what we’ve had in the next few months before because the tariffs are starting to kick in. 

But you shouldn’t expect the CPI to skyrocket just because of tariffs. Your spending falls into a lot of different buckets, and most of them aren’t goods. In fact, about 60% of total spending is on services. And for services to have significant increases in prices, you have to have a feed through effect that affects goods first and also hits the labor market. 

Now, if we’re getting that on the labor market, it’s an immigration issue with the Trump administration now saying they’re not just going to go after people who with criminal records are not just going to be going after people who are actually working, but keeping the nose clean, but happen to be here illegally. They’re also going to go after people with legal protected status and canceling it on shipping them all out. And now that the big beautiful bill is passed, there is funding available to expand the Department of Homeland Security and Immigration and Customs Enforcement. So we should see significant expansions, in labor costs moving forward in an environment where we already have record low unemployment. So this will just feed straight through into inflation. So that’s going to be a problem throughout the services sector for goods. 

More specifically there’s three categories to watch. The first and by far the most important. And how is housing. It’s roughly one third of the entire index. You want to build a house, you need four things aluminum, steel, copper and labor. And between the tariffs and the immigration crackdown, the Trump administration has severely constricted the availability of all four of those things, which is grossly retarded New builds. 

We’ve seen about a 10% drop in new housing starts since Trump became president. And this is before most of these tariffs even kick in and before the anti-immigration pulse gets really, really strong. So we’re going to be seeing some significant increases in housing prices over the remainder of the year and into the next. 

Keep in mind that once you fix these input problems, it generally takes a couple of years before you see meaningful increases in housing builds, because you have to wait for companies to reform. It took us a good six years to recover from the financial crisis and the subprime boom. It won’t take us this long based on how bad the policies get, but this is not something where you just turn a key and all of a sudden you’re back in business. 

Next up is food. We still don’t have food tariffs. Trump keeps promising and he says they’re right around the corner. They’re going to be 40%. But they haven’t happened yet. And until they do. The biggest problem with food prices is immigration. Again, because most of the harvesting of things like fruits and vegetables and most of the processing of meats is done by immigrant labor and the Trump administration has started directing Immigration and Customs Enforcement to raid the sites where people would show up for work and sometimes even raid meatpacking plants themselves. 

And we’ve already had a number of facilities shut down because of that, because they can’t find Americans to do the job. Number one, Americans don’t want to do the job. Number two, there aren’t any Americans to do the job. Remember, record low unemployment. We have a labor crunch. Third, let’s see. We did the housing. We did food, transport. 

Food and transport are both about 13% of the index. And transport really comes down to cars and trucks. And here’s something where we’re all going to be feeling it really soon. The new tariffs that Trump has threatened against Canada and Mexico were over 30%. And most vehicles that are made in North America are made as a team effort with, say, carburetors coming from the United States, engine blocks from Mexico, spark plugs from Canada. 

Things go back and forth and back and forth and back and forth and back and forth. And in a tariff environment, that model dies almost overnight. There have been numerous extensions to everything. So I’m not saying convincingly that this is what’s going to happen. Because Trump keeps changing his mind. But if these tariffs go in, there will be no more American made cars functionally, because it’ll be cheaper to make cars abroad and then ship them in and just pay the tariff once instead of having to pay it on every part, more or less. 

You’re basically looking at American cars becoming the most expensive vehicles in the American market and out of the reach of most lower and middle income people. One more, drugs. About 5% of the CPI is medications of some form. Trump has announced, without a implication date, a 200% tariff on all imported medications. 

Now, this is both indirectly smart and directly dumb. First of directly dumb. There are a lot of high end medications that come from Europe that simply will be unaffordable. And under things like Medicaid and any sort of insurance that you can get, they simply will be ignored completely because no one will be able to fund them. On the lower end, though, your maintenance medications, your lisinopril and things like that. 

There’s an argument to be made there that terrorists might be part of a tool kit that would improve drug availability. Right now, all of these easy to make pills that are less than a nickel a pop, are typically made in China and in India. And this has been the case for roughly a decade. And so reshoring that to the United States makes a lot of sense from a medical security and a national security point of view. 

And while the cost will undoubtedly go up probably more than double, it’s from such a low base that I don’t think a lot of people are going to really feel it too much. The reason I’m a little bit hesitant this is even in Donald Trump’s mind, is the last time that this was a top of mind issue. 

It was during Covid when the situation was the same, and there was a moment early in Covid when the Democrats, the Republicans and the Trump administration were all on the same page on what needed to be done, and Trump couldn’t be bothered to provide the leadership to make it happen. Now we have a broken Congress. We have a broken Republican Party. 

We have a scattered Democratic Party and a Trump administration that hasn’t staffed up yet. So the idea that there’s a phase two to the plan beyond big tariffs, I find really dubious because it’s now been five months since Trump became president and we haven’t seen that anywhere.