El Jardinero Gets Trimmed by Mexican Authorities

A Mexican solider leans against a military truck

Mexican authorities have arrested Audias Flores Silva (aka El Jardinero…not the scariest nickname I’ve heard), a senior figure in the Jalisco New Generation Cartel.

El Jardinero had been trying to forge cooperation with the Sinaloa Cartel and utilize their distribution network, but his arrest will likely kill that effort. The removal of El Jardinero will further destabilize the cartel, as a fight for power breaks out and factions begin to splinter off.

While this arrest is a positive overall, Mexico’s near-term outlook will likely be much more unstable. Oh, and drugs flow to the U.S. won’t stop until all of y’all cool it with the white stuff.

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Transcript

Hey all, Peter Zeihan here. Coming to you from Colorado. Today we’re going to talk about an arrest in Mexico. A guy by the name of Audias Flores Silva, also known as El Jardinero. The gardener was a high up leader in the New Generation Cartel. He was arrested on the 28th of April. And barring surprises, we will never hear from him again. 

If you remember back a few months ago, El Mencho, who was the leader of the New Generation cartel, was killed in a raid by the Mexican authorities with some Intel provided by the United States. And so the question has been who, if anyone, is going to be able to take over. So quick backstory, then we’ll look forward. Historically speaking, in the last decade, we’ve had two big cartel alliances form and dominate the organized crime space in Mexico. 

First, Jalisco New Generation which was run as a corporate entity by a guy by the name of El Chapo that became the largest organized crime group on the planet, as well as the largest one in the United States in New Mexico. Basically, he had this idea that drug smuggling is our primary business, so we’re not going to muck with anything else. 

That is not that. And in doing so, he basically bought the loyalty of a lot of local governments throughout the system. Eventually, that became a massive corporate empire, and the Obama administration made him public enemy number one. Eventually we got him. He’s serving a permanent sentence in the United States. Now, that meant that the Sinaloa cartel started to break down from the inside, and El Mencho’s Kids Los Torpedoes started running their own little factions, as well as other regional leaders and even their accountant. 

That led to a break that allowed New Generation to rise to become the most powerful organized crime group on the planet and in the United States and in Mexico, run by a guy named El Mencho. Jalisco new generation who had a very different corporate philosophy. It’s more of a franchise model, but everyone was basically told, you know, when you go into a new town, you shoot the police chief and maybe a bunch of random people just to make it very clear who’s in charge. 

And in doing so, they generate a lot more fear. Their income isn’t as strong. They are not as diversified, and they’re more likely to come up against resistance from the state, especially in the United States, because of that. But that doesn’t mean it’s model that doesn’t work. Anyway, when I fell because it’s kind of a franchise model, everyone started going the wrong direction. 

El Jardinero is one of the guys who basically tried to come up with a new path. And what made him particularly interesting is while he is a regional leader, specifically in the northwestern part of Mexico, he reached out to Los to basically cut a deal. See, new generation is more powerful militarily within Mexico, no doubt there. 

But the remnants of the Sinaloa cartel have a better distribution system within the United States. So if you put the two together just in that tactical manner, you could really produce not necessarily a super cartel, but you could shove a lot more cocaine through the system. With El Jardinero gone and with half the Chupitos either dead or in jail, that’s probably not going to happen now, and that’s probably a good thing. 

Just keep in mind when you have an organization, whether it is Sinaloa or that doesn’t have a clear leader, you tend to get a lot of competition within the factions, and eventually that turns into a shooting war. So El Jardinero was in charge a lot of the militant aspects. And now that he’s gone, he isn’t there to kind of hold a lid on everything else. 

So this would suggest a lot more violence as generation breaks down. And so, yes, the US and Mexico isn’t particular are getting some of the kingpins. And that feels really good. But it does change the personnel leadership, the personal structure of these things. And without that top layer, it becomes a lot more violent and doesn’t necessarily stop the flow of cocaine. 

So Mexico’s near-term future is probably more fighting as the most violent cartel they have ever had now falls into infighting as well. The only real solution to this is actually pretty simple one don’t do cocaine. And if everyone would abide by those three words, this would all just go away.

The U.S. and Mexico Kick Off NAFTA Talks

US, Mexico, and Canada flags with a hole in the Canadian flag

The U.S. has kicked off renegotiating NAFTA, but Canada was left out of the first round between Mexico and the U.S.

The U.S. is likely prioritizing a relationship with Mexico because of its healthier demographics and growing consumer base; therefore, Mexico is a more strategic long-term economic partner. Canada, however, has been getting the cold shoulder from this administration.

Leaving Canada high and dry could backfire, as the U.S. benefits greatly from Canadian manufacturing. We’ll see how the strategy changes throughout these negotiations.

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Transcript

Hey, everybody. Peter Zeihan here. Coming to you from Colorado. You’re going to see this on the 16th of March. Meaning that formal trade talks on the relaunching of the North American Free Trade Agreement have begun. And the first round is specifically between the Americans and the Mexicans, and the Canadians have not been invited. Quite on purpose. 

We’ve got three things going on here. First of all, in the long term, the more important trading partner is Mexico. They’ve got a younger population. On a worker productivity basis, it’s actually a more productive and efficient workforce than what the Canadians have. And when the two countries come head to head in competition, the Mexicans typically win. 

But most importantly, it’s a larger population, over 100 million people. And they are at the stage of their life, under age 45, 20 to 45, where they’re buying a lot of things. So it’s a consumption base that has a lot of upside growth potential. So from a purely macroeconomic point of view, it does make sense for the United States to prioritize Mexico over Canada. 

That’s piece one. That makes some sense. Piece two makes less sense. Trump personally and the advisors around him and the MAGA movement in general have a real bone to pick with Canada for any number of reasons, which I’m not going to go into because a lot of them are made up. But the degree of almost hatred that this branch of the American political system feels towards our northern neighbor really is robust, and it is definitely affecting policy. 

To that end, not only is Canada being denigrated at any number of opportunities, but there’s actually a significant move within this move it to break up Canada as a country. Specifically. MAGA is doing a lot to reach out to separatists in the province of Alberta. Now, for those of you who have been following me for a while, you know that she’s 13 years ago now. 

Yeah, 13 years ago. I wrote a book called The Accidental Superpower. And in it, I listed five major international crises that Americans would be aware of and participate in. And one of them was called the Alberta Question. The idea is that Alberta has a fundamentally different culture, economy, infrastructure and approach to all things in the world that is very, very different from the rest of Canada. 

It’s younger, it’s more highly skilled. It’s an energy, an agricultural economy, and most importantly, all of their major economic links go south to the United States rather than laterally to the rest of Canada. So the idea, that Alberta will eventually seek something else makes a lot of sense to me. But a lot of things have changed in the last 13 years. 

For the most part, we’ve seen the Canadian system through immigration actually kind of get past some of their more urban demographics or at least mitigate them a little bit. So the risk that I had seen 13 years ago, basically Alberta paying for the entirety of the existence of Canada is no longer the case. 

They’re still the biggest contributor in per capita terms by far. It’s the richest province by a significant margin. But Ontario is no longer aging into obsolescence at the pace that it was because of the influx of immigrants that has generated its own set of problems. But that specific problem has been mitigated somewhat. 

The problem is, is that if Alberta were to achieve independence, it would very rapidly become a failed state. It would be a one trick pony with its energy economy. The currency would probably go through the roof because of it, and the place would become vastly unaffordable. The only real long term solution would then be for Alberta to join the United States. 

Now, no one in MAGA is talking about that. Very few people in Alberta are talking about that. But that’s really the only long term solution here from an economic inflation, a population of skills and an infrastructure point of view. There’s just that little cultural issue about whether you want to actually join the United States. So we have MAGA, basically stirring the pot to see the kind of problems they can generate in Alberta, specifically in Canada in general. 

But no one’s really thought about what’s the next step, should they actually win? That’s a problem anyway. Third piece impact on the United States for not having Canada in NAFTA. One of the beautiful things, from my point of view about NAFTA is we get access to the workers in the industrial plant of our neighbors, but we don’t have to pay for their education or their social welfare system, or their health care or the law enforcement. 

We just get all the benefits. So when I look at Canada, I basically see a country of 35, 38 million people, whatever the number is now, but it’s actually more tightly. Each of the provinces is more tightly integrated in the United States than ever with one another. And we get the benefit of that in our industrial base to serve our domestic needs, to serve our export markets, whatever it happens to be. 

And we don’t have to pay for any of it. So we know that the Trump administration is deeply hostile to, Canada’s presence in specifically aerospace and automotive, which are two big, big ticket items when it comes to manufacturing and trade. And it’s been very, very blunt and saying that Canada, you’re going to lose all of that. It’s all going to come back to the United States. 

But that would mean then that we need to train up a replacement workforce and build replacement infrastructure for stuff that already exists north of the border. And considering we’re just a few years from the Chinese breakdown and the breakdown in global trade in general, I would honestly say we don’t have the time to mess around with something like that. 

And even more importantly, we need to take the energy that we would have to build out that industrial plant to build up other industrial plant that we need even more. We’re already an environment of a labor market that is going to be shrinking for the next decade for demographic reasons, two decades, actually, and we just don’t have the labor or the capital, to be perfectly honest. 

That the green space in the industrial parks right now and do all of this at the same time. And so if the Canadians want to continue paying for their health care and their infrastructure and their training in order to help our industrial plant, I say let them, well, go that way. You know, we’ll see. 

NAFTA is the most complicated trade deal on the planet because it deals with all the technical details of 10,000 different product steps. The person who is handling the negotiations is the US TR who is Jamison Greer? He’s seen this before. This is not the first time that Donald Trump has pushed trade negotiations into a different direction. 

If you go back to Trump won the US, TR was a guy by the name of Robert Lighthizer famous for playing hardball. Very good negotiator. Jamison Greer is his protege. So Greer has seen the inside of this process already, even if his name wasn’t on it. And last time around, Lighthizer talked with the Mexicans quite a bit before forcing a deal on the Canadians. 

So whatever deal comes out of this is one that the Canadians, while very, very little leverage and independently of the fact that the current administration really doesn’t like Canada, that’s just the nature of the beast. It’s the nature of the people. It’s the nature of the future of Mexico. And while there are certainly things that we absolutely can do more easily with Canada as part of the process, that doesn’t necessarily mean that’s the way it’s going to go, because if there’s one thing you know about Americans in general and this administration specifically, we don’t always do the obvious thing.

Mexico Horses Around with Tariffs

Mexico's flag

Mexico is hoofing a 50% tariff onto imports from countries without a free-trade agreement, giving the US a strong leg up out of the gate while competitors like China and Korea get left circling the track.

Because the US and Mexico are built like steady workhorses rather than fragile export show ponies, keeping their industrial supply chains bridled together lets them keep pace as demographic headwinds start to throw export-heavy models off their stride.

With NAFTA renegotiations cantering up in 2026, this move shows Mexico isn’t about to buck the system — it’s staying in the same stable, tightening the reins, and betting North America can outrun the field for the long haul.

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Transcript

Hey all, Peter Zeihan here. Coming to you from Arizona. This is, Well, this is biscuit. He likes to eat phone, so I’m on my back up now. Today we’re to talk about something that went down in Mexico yesterday. Yesterday was the 11th of two. And that is my hand. Likes to eat hands, too. It was the 11th of December. 

And the Mexican Congress is in the process of passing a tariff bill, which, you know, from those of us on the north side of the border. It sounds pretty common. Anyway, the idea is that, Mexico will now have 50% tariff on, all products or almost all products that are coming from any country that it does not have a free trade agreement with. 

Now, Mexico has gone out over the last 25 years and built free trade agreements with a lot of countries that are not the United States, but the United States is still responsible for over 80% of their exports. And the United States and Mexico are now one another’s largest trading partners. And that is a position that is likely going to persist for at least the rest of my life, and probably for the rest of the century. 

Anyway. Why does this matter? Number one, Mexico is one of only a handful of countries in the world that still has a consumption led economy. He really wants my phone. Which means that in the world to come, where demographics are turning on a global basis, there just isn’t enough consumption capacity to drive what we consider to be a normal economic model for any appreciable amount of time. 

Countries as diverse as Korea and Japan and Germany and China and Italy, are all basically aging out, running out of people who are under age 50, which means that any sort of consumption led system is almost impossible. And you can’t have an export LED system if you can’t export to someone. So countries that still have consumption led economies like Mexico and the United States, are ones that can actually have an industrial base that is matched to what they actually produce. 

And if you can get those countries into a trading bloc, which honestly is some version of NAFTA, that’s basically the systems that are going to work. Everyone else is basically going to face some degree of do you industrialization and economic breakdown simply because the numbers don’t match up. So getting Mexico to put tariffs on countries, getting Mexico to put tariffs on countries that doesn’t have a free trade agreement with, means that the United States gets privileged access to the Mexican system. 

And countries like China, most notably, but also including Korea. Yes. Yes, I’m still here. All of a sudden have some pretty big restrictions and the way that the law is being phrase is it focuses specifically on sectors that Mexico is pretty good at, or the United States is good at, or more likely, ones that we’re good at as a pair. 

So what this is, is a big win, for the Trump administration in terms of shifting Mexico’s industrial policies to match American industrial policies and keeping Mexico and the United States locked together into an economic union. Now we have started the renegotiations of NAFTA now, and they’re probably going to be kind of brutal. But honestly, I don’t expect a whole lot to change. 

Number one, Mexico, is our largest trading partner. And the degree to which things would have to alter, in order for anything else to happen are pretty extreme from the American point of view, because we do need their industrial output, and we do need their super market. Second. 

The Trump administration still hasn’t staffed up the departments in the US government that would do negotiations in any sort of meaningful trade deals. I know that sounds crazy, considering that there’s like 200 under negotiation, but they’re really just about whether or not the United States can throw a tariff on without retribution. 

And we’ve discovered that the answer is not really. So when you got a country like Mexico, where the hard work has already been done in NAFTA, one and NAFTA two, and after two was negotiated by the first Trump administration, I really don’t expect a lot of major changes to happen in this re renegotiation. Anyway. That’ll happen in calendar year 2026 regardless. 

Bottom line, Mexico is showing itself to be very willing to be America’s long term partner, regardless of what the atmospherics of the politics happened to be. So with this new now, he’s after my shoes with this new structure in place. It pretty much guarantees for at least the next 20 years that the United States and the Mexicans will be working hand in glove on whatever the next phase of internationalism happens to look like. 

And that is really good news, really, regardless of what your politics happen to be.

Trump Trade Talks: NAFTA Deals Stall

A USA-marked shipping container on a truck, illustrating American international trade from Envato Elements: https://elements.envato.com/a-usa-marked-shipping-container-on-a-truck-illustr-HMKHD83

To nobody’s surprise, trade talks with Mexico and Canada have stalled. Reminder that these are America’s top two trading partners and export markets, so securing a favorable deal isn’t just a nice-to-have, it’s a necessity.

With US manufacturing on the line (and severe economic damage), I suspect a deal isn’t far off. North American production is growing in importance as China declines. Mexico offers a nice growth opportunity and some potential for political wins as the fentanyl trade is disrupted. To the north, deal progress has been slowed by some unrelated speed bumps.

If there was ever a trade relationship that needed to get hammered out ASAP, it’s NAFTA. Since Trump has already stamped his name on NAFTA 2 during his first term, I’m hopeful we’ll see some progress here soon.

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Transcript

Hey all, Peter Zeihan here coming to you from Colorado. We’re going to continue with our open ended series on the nature of the trade relationship that the United States is building with the rest of the world under Donald Trump. And today we’re going to talk about trade deals that have not yet happened. And that’s Canada and Mexico. According to the Trump administration, both of these countries are going to require significant additional time to negotiate at least 90 days with Mexico and a kind of an indefinite hold on everything with Canada. 

These two matter more, I would argue, than all of the other deals put together. Mexico is our top trading partner. Canada is number two. Both of them, a few years ago surpassed China and are not looking back. Both are also our number one and our number two export markets. 

So unlike China or Europe where the trade imbalance is pretty significant here, while there is a trade imbalance, it’s not nearly as large because we send them lots of stuff. Basically these are integrated economic spaces. And if we sever our relations with either Mexico, Canada, it would be like severing our relationship with California or Texas. What that means in real terms is roughly 14 million jobs in the United States are directly, dependent upon trade with our immediate neighbors. 

That’s about 10% of the total labor force. So if we can’t get a deal that favors Canada, Mexico versus the rest of the world, we’re going to not just see a significant drop off in local economic exchange. We’re going to see a significant hit to U.S. employment in manufacturing in general, unlike products that come from Europe or East Asia, which are largely completed when they hit U.S stores, products that come from Canada and Mexico are part of an integrated manufacturing system, with different pieces of the end product being made in different parts. 

Of the three country union that is NAFTA. And if you cut that out, then the American manufacturing model fails from the inside. And all that’s left is to import things from further abroad. Now the smart money remains on a meaningful deal for a couple of reasons. Number one, the economic catastrophe that would hit the United States if there wasn’t a deal would be horrendous. 

And Trump will definitely go down in history as the worst negotiator we’ve ever had on trade. Number two, the Chinese are dying. And if we can’t build out manufacturing in North America, then we just won’t have product. So we really are on the clock here. And every day that passes that we don’t have clarity in the Mexican, Canadian and American tri relationship is a day that we fall a little bit further behind and basically set up China to succeed in the short run. 

But us to fail in the long run. The third issue, of course, is employment. We will build this very, very quickly. And the fourth is growth markets. Canada has a very similar economic and demographic to us where we’re steadily aging. And so consumption is probably approaching peak levels. Mexico is not in that category. It already has $1 trillion consumption market, and it has a population bulge for people aged roughly 5 to 35, which is exactly where you want it. 

If you want people buy in more and more and more and more. So of all of the consumption led economies in the world outside of the United States, Mexico is the one that has the strongest growth trajectory, not just for employment and stability, but for product consumption, which is something that in a world that is rapidly aging, is something you want to get Ahold of. 

Another big reason to think that this is probably going to go somewhere is when Trump made his 90 day delay on the Mexico announcement, he specifically mentioned that there’s a fentanyl tariff in place. Well, fentanyl imports into the United States have been dropping for the last couple of years. Thank God for a mix of reasons. It has very little to do with policy. 

But Trump has inadvertently adopted a tariff policy that’s actually going to speed that process along and give Trump the opportunity to call a win. And that has to do with something called the de minimis exception. So when you purchase something on line that is less than $800 and is sourced from another country, it comes into the country without basically customs declaration or taxes. 

That is now over under the Trump administration. We now have a really steep tax. So everything that used to get from China say, is basically over. And that is how most of the precursor materials that are used in fentanyl made it to North America. They’re shipped via de minimis to the United States, and they’re repackaged and trucks to Mexico be to be turned into fentanyl. 

Anything that interrupts that process, anything that puts friction in that process, is going to raise the relative cost of fentanyl. It’s still wildly profitable, but, you know, every little bit helps. There is one complication in all of this, and that is ironically, Gaza. Oh my God. So there are a number of countries that include France and Britain and Australia and Canada that are talking about imminent recognition of the Palestinian state. 

As a formal country. Now, there’s a number of reasons why I think this is silly. We have a video we did on that relatively recently in case you want to review. But Trump has singled out one of those countries as this being a problem for trade relations. And that’s Canada. So there’s supposedly a deal with the European Union. 

There’s supposedly a deal with the United Kingdom, a supposedly one with Australia is coming in. Trump doesn’t seem to care about any of those, but Trump really has a bee in his bonnet when it comes to Canada about pretty much everything. And so he’s chosen to make the Palestinian recognition issue a subject that falls now under trade talks. 

And that has basically put relations with Canada on hold again. It’s very arbitrary, which means it could be going away arbitrarily tomorrow. But for the moment, it’s another issue that Trump has picked up on that has stalled relations that in the past is something that U.S administrations wouldn’t even blink out because they really don’t matter anyway. 

That’s the bottom line here. The two relationships that we need most for now, for the future, for American growth, for North American stability to beat down the drug war, to ensure high levels of American employment, to prepare for a post China world, they are still in limbo. One other reason to think that it might work out NAFTA two was negotiated by the first Trump administration. 

So it really wouldn’t take much for Trump to say I’m putting my name on something because he already has.

Should the US Military Invade Mexico?

A military scout on overwatch

With rising violence in Mexico, is it time that the US military steps in? To quote Michael Scott, “No God please no!”

The spike in violence can be attributed to the rise of fentanyl, an easy to produce synthetic drug. This has led to the fragmentation of cartels into smaller and more violent actors. On top of that, the Sinaloa cartel has splintered due to US-led efforts in dismantling its leadership, causing further instability in the region. And the relatively new kid on the block, Jalisco New Generation, likes to lead with an iron fist. So, Mexico’s security landscape is in shambles.

But does that mean the US military needs to step in? There are a few ways to answer that question, but the bottom line is that the US needs to stop doing drugs!

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Transcript

Hey, all. Peter Zeihan here coming to you from above Telephone Canyon and Zion National Park. Today we’re taking a question from the Patreon crowd, specifically considering that over the last year, Mexico has just gotten more and more violent, is now the time to consider some sort of U.S. military action across the border? The short version is. Oh, God….Please. No. But it it’s a real question. I don’t mean to dismiss it. We do need to break this down. First things first. We need to understand why the violence has gotten so much worse. And it has really nothing to do with policy in Mexico. It has to do with the nature of the drug war itself. 

For the longest time, the drug war was about cocaine. So that was a mechanic that we understood. There was a supply chain that we knew was an agricultural product. It was produced in the Andean region of South America, and then it was shuttled by plane or boat, north to Central America or southern Mexico, where it then got into the hands of what we now know was cartels and moved its way north to the US border, where it was then distributed by the gangs. 

Over time, this structure has evolved. Central America is a relatively new addition to the trafficking route because we got better at interdicting things at seas. And we went from having one giant cartel to regional cartels and then ultimately, ultimately local cartels. There are more coalitions now than hierarchical organizations. 

Anyway, that’s how it was in the last few years, fentanyl has exploded upon the scene, and fentanyl is not an agricultural product. It is a synthetic. It is made in the lab. And it takes very few people with very little experience to cook up hundreds of thousands of doses in a very short period of time. So all you have to do is basically get some synthetic, components, cook them together in your garage, literally, and then cut them into powder and mix them tablets. 

So if you do a gram of cocaine and don’t do cocaine, it represents somewhere between 4 and 8 man hours of effort from the point of view of the plantain to the bailey and to the processing, to the shuttling, to the smuggling, where is if you take a hit of fentanyl and don’t do fentanyl either. 

It represents just a few man seconds of work because it’s so much easier to produce. Well, what this has done is change the cartel landscape. 

So two things have changed. First of all, the organization that is today, the Sinaloa Cartel, a large cartel, largest drug trafficking organization on the planet, under the Obama administration, we captured, El Chapo and basically beheaded the organization. And it’s been basically experiencing a slow motion, disintegration from an organizational point of view, ever since its fracturing. 

And those factions are becoming, violent with one another. That was accelerate in the last couple of years when the United States and Mexico, working together, managed to get a few other, senior lieutenants. In the meantime, the replacement cartel called Wholesale New Generation, is an order of magnitude more violent. And not nearly, as corporate, in terms of its activities, and they see intimidation as a much more potent tool for shaping local behaviors than bribes. 

So that’s part of the violence. The other part is the fentanyl side, because any mom and pop can basically cook up $1 million of the stuff in their garage over a couple of weeks. 

We now, instead of having three broad cartel alliances, have literally hundreds of small organizations that can basically print cash with fentanyl in a short period of time, and they don’t see the reason why they need to be part of the cartel structures. 

And so most of them have basically gone into business for themselves. Think of it as the digital economy where everyone has a gig, except for the gig is fentanyl. You put all that together and you now have, instead of some large cartels that kind of hold together like Sinaloa used to. 

You know, how hundreds of small, crime organizations out for themselves? These two things together have basically made Mexico a bit of a shit show from a security point of view. Now we can start talking about what the United States can do. Basically, there’s five options. Only one of them doesn’t suck. The first option, use drones, monitor the border, maybe even do some targeted strikes. 

We’re kind of halfway into this already. The Mexicans tried to talk us out of doing border monitoring. But Trump administration didn’t care. We haven’t started using the drones in an armed capacity to strike on the other side of the border. And honestly, this doesn’t do a whole lot. I mean, yes, you can see the border and go deeper, but consider the volumes involved. 

If you have 20 pounds of cocaine in a backpack, that’s a quarter of $1 million. If you have 20 pounds of fentanyl, pure fentanyl, and you want to bring it across the border and cut into pills, that could be up to $10 million. So you’re not going to pick that up with a drone, that can be smuggled in your glove compartment. 

It just it’s not an effective tool against that type of activity. It’s not that it does nothing. It just doesn’t do much. So that’s one number two, we’re at the point we’re starting to discuss this. Start sending special forces across the border, and going after the cartels themselves. Now, this is something we’ve actually already started, kind of doing. 

There is a task force based out of El Paso, as it’s been explained to me, that is Mexican citizens, but they use American equipment, American Intel, they have American distribution. They use they use American intelligence. They’re paid for by the United States. They’re just Mexican citizens, but they go every day south of the border and basically bust heads in the cartels. 

But because they’re Mexican citizens, it’s not considered an invasion. Now, this has been going on for well over a decade. And while I don’t want to say that it hasn’t achieved anything, it really hasn’t moved the needle very much. So if all of a sudden you’re gonna start throw some Rangers and Seals into this, all that does is ramp up the angst probably doesn’t change much because as we have seen with El Chapo and his sons, the torpedoes and other leaders of the cartels, when you take out the guys at the top, the rest of the organization doesn’t fall apart in the traditional sense. 

It just goes at its own throat as there’s a fight for succession and it breaks into smaller and smaller and smaller pieces that are more and more and more violent. So it feels good to get the guys, sure, but it doesn’t actually change the math on the ground except make it more violent and have more independent producers and trans transporters of the drugs. 

Option number three, which I have not seen seriously considered but has been floated out there, cross the border with the army and encircle and administer, take over, invade, take over, conquer all the border cities, places like Juarez, and Tijuana. 

20 pounds of cocaine is a quarter of $1 million. 20 pounds of fentanyl is $10 million. Even if you move the border, there’s still a way through, especially if you’re going to have a commercial relationship with a country like Mexico that is our largest trading partner in every economic sector manufacturing, agriculture and, energy. So putting Americans in charge of security south of the border, you know, to be perfectly blunt, we tried this for 20 years in Afghanistan, in Iraq, countries where we did not care and were not exposed to the local economies. 

In Mexico, we are. So if you were to do something that breaks down those corporate relationships, then you’re talking about having a recession in the United States, it is at a minimum four times as bad as what we went through back in 2007 to 2009. I would recommend against that. The final one is, even more dramatic, but might not be quite as bad economically. 

Draw a line in Mexico that roughly goes from Monterrey to Durango, and just take everything north of that line. Basically have a second Mexican-American War, where you, the United States, basically annexes the northern states that are most tightly integrated with the United States, establish a security line south of that, where you basically build a new wall that as much shorter and perhaps more effective than the stupid one that we’ve got on the northern border right now, because all that one did was build a bunch of construction lines and roads across the desert and made it easy to cross. 

Dumbest thing we’ve seen in a long time basically increase the economics of illegal migration. But if you do it further south would be shorter and keep all of the industrial plant that is integrated into the United States north of that line and basically just swallow annex parts of Mexico and make them part of the United States. The economic case for that is more robust. 

The security case for that is more robust. You’re simply invading, conquering, 30 to 35 million people and trying to make them Americans. Now again, we tried a version of this in Iraq and Afghanistan, just because I think it’s a less horrific option than just grabbing the border cities, does not mean it gets the zillion stamp of approval. 

But unless you’re willing to consider something like that, there is no military option here that makes any sense. Which brings us to the fifth option. We could stop using fentanyl, cocaine.

Why There’s No Fentanyl in Easter Eggs This Year

Photo of easter eggs in a basket

US efforts against fentanyl have been ramping up. Specifically, the Trump administration has turned its focus to one specific Mexican cartel – La Familia Michoacana.

The US has increased financial sanctions on the fentanyl trade, specifically targeting the cartel’s foothold in Lázaro Cárdenas – Mexico’s largest Pacific port. This position allows La Familia Michoacan to import the precursor materials direct from China and India. In case that wasn’t enough, a bounty has been placed on the cartel’s leaders, the Olascoaga brothers.

Fentanyl will remain a problem for the US, but at least there won’t be any in your easter eggs this year…hopefully.

Prefer to read the transcript? Click here

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.

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Transcript

Hello, Peter Zeihan here. Coming to you from Colorado. Happy Easter. Let’s talk about drugs. Specifically fentanyl. Last week, the Trump administration. These are courtesy of my niece, by the way, and my sister. And they have no taste. Anyway, last week, the Trump administration upped enforcement of, basically financial sanctions against folks involved with the drug trade in Mexico, specifically a group by the name of La Familia Michoacan, which is a cartel in the southern part of the country. 

Music. Milliken state. Why does this matter? Well, Sentinel is a really difficult drug to move against because it’s a synthetic. It only takes a few seconds per dose to produce, basically do 100,000 doses in a garage and in the course of a week, as opposed to cocaine, which has a long agricultural supply chain stretching it back to South America. 

And so most of the things that the United States has done, before and during this current Trump administration has almost been pointless, because if you’re dealing with dozens, hundreds, thousands of mom and pop operators that are building this stuff, a traditional military or law enforcement approach just doesn’t work. The volumes are too small or too easy to smuggle. 

And since it’s synthetic, you basically can put it anywhere. So even if Mexico, working with the United States or on its own, was able to get rid of fentanyl production, it would just move to Oklahoma or Nevada or somewhere else. There has been a recent breakthrough with the de minimis shipping exception being closed, and that will greatly reduce the volumes of the precursor materials that make it in from India and China. 

And that will complicate the drug production, but it doesn’t solve the problem. Ultimately, it’s small scale and it’s hard to fight, of course, within every general trend there is an exception and la familia Michoacan is the exception. They are a cartel that instead of built around the smuggling of cocaine, is built a blurring the mass production of fentanyl. They are the only one of the major, narcotics trafficking groups in Mexico that has followed that business model. 

And because they control the part of Lazaro Cardenas, which is the largest Pacific port in Mexico, they have easy access to the raw materials that they need to basically produce fentanyl at an industrial pace. And they are largely immune to anything that happens with the de minimis exception or law enforcement in the United States. In many ways, they’re powerful enough to be a state within a state, and they control all of the corruption that goes along in the port as well. 

So rooting them out is going to be very, very difficult. In addition, some of the military options that the Trump administration really are inappropriate for this, not just because this is a major commercial port that would have a lot of complications and problems, but it’s on the wrong side of the country. It is on the southern coast of Mexico. 

It is nowhere near the U.S. border, so it’s just not in the sort of place that, the Trump administration or the United States in general can act. That said, the Trump administration has definitely named and shamed the brothers. Alaska Bagwell, who are in charge of the cartel, are now bumped up on the most wanted list. And I believe the new bounty is $8 million, in addition to a whole series of financial sanctions and indictments from US federal prosecutors. There is no good solution here. If there was, fentanyl wouldn’t be a problem. 

But because there’s an industrial scale production in this part of Mexico, U.S. authorities working in league with the Mexican government might actually be able to do something. It’s one thing to go door to door through every Mexican and American city looking for a drug lab. It’s quite another when, you know, the largest fentanyl labs in the world are in one specific city. 

That happens to be a port doesn’t make it easy, but it does mean that the sharp end of American power is a little bit more appropriate for this specific fight than for the rest of the drug war.

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).

Prefer to read the transcript? Click here

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.

Learn about medshare here

Transcript

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.

Getting Ready for Trump’s Tariffs – TEASER

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

Today on Patreon, I released the full video covering Trump’s next round of tariffs set for early April and the impact they’ll have on the economy. For access to that video, join the Patreon now!

We’re also excited to announce our next LIVE Q&A session will be on April 9th! This is an exclusive perk for our Analyst members on Patreon. More info can be found on the Patreon page.

Click here to learn more

Prefer to read the transcript? Click here

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.

Learn about medshare here

Transcript

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…

Trump Takes on Trade

Photo of man standing in front of trade shipping containers

There’s plenty of tools at the disposal of the US President and tariffs are one of them. When used appropriately – i.e., to get something else or discourage a certain action – tariffs can be a very effective measure. However, Trump is using them as an end, rather than a means to an end.

This has blossomed into “reciprocal tariffs”. These aim to match foreign tariffs on US goods. At first glance, this idea seems fair, but the complexity of international trade, vast product categories, and admin that would be involved make this nearly impossible.

If Trump continues down this path, it is likely that US international trade would come screeching to a stop and a severe recession would follow.

Prefer to read the transcript? Click here

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.

Learn about medshare here

Transcript

Hey, all. Peter Zeihan here, coming to you from Colorado. We are continuing with our, coverage of Trump’s first month in office. We’ve gone through the Middle East and China, the former Soviet Union, Europe. Today we’re going to talk about, international trade, specifically tariffs. Now, tariffs obviously are something that Trump is quite fond of. And it’s pretty clear by this point that he doesn’t necessarily see tariffs as a means to an end, but just an end in of of themselves, which is not great economic policy unless you already have your industrial plants set up. 

And even then it’s wildly inefficient. But let’s focus on more of the specifics. I’ve talked at least briefly about the tariffs on America’s closest trading partners. I think it’s worth underlining what a couple of these things would do. One of the new ones is Trump says he wants to do a 100% automotive tariff on Canada. 

Keep in mind that every car manufactured in the United States includes a substantial percentage of parts that come from Canada and Mexico, most of them over one third, a lot of them two thirds. And vice versa. It’s a very integrated system. So if you were to put anything more than about a 15 to 20% tariff on autos specifically, are you going to be taxing things as they go back and forth across the border? 

And you’re going to cause a massive headache for American consumers, raising the price of your average vehicle by somewhere between 4 and $8000. If you do 100% tariff, we just stop making cars. Detroit collapses within a week, and Texas within a month. So, you know, not my recommendation. But I think a more interesting topic is one that’s gotten a little coverage. 

The Trump implemented last week and something called reciprocal tariffs. And it sound on a surface to be pretty fair. The idea is if somebody else has a 15% tariff versus a product, that comes from the United States, then you should flip that and have a 15% tariff on anything that you take from them that is in that product category, and at least on the surface, against places like China where tariffs are high and subsidization is high, in order to force American products out of the product mix. 

It seems like a great idea, right? A couple problems here. Number one doesn’t always line up that way for climactic reasons. So, for example, if Kenya has a tariff on imported coffee, we’re going to what tariff coffee we bring in from Kenya because, you know, we don’t export coffee, so we’d just be charging our people more. 

That’s a pretty minor one. The bigger one, though, is administration. There are literally hundreds of thousands of product categories. And that’s before you consider intermediate product trade. And so if you want to do a reciprocal tariff, number one, you need a massive staff, at least an order of magnitude more than what we have a Customs Enforcement in the FTC, Federal Trade Commission right now just to learn all the product categories and all the tariffs for all 200 odd countries in the world. 

And then you would need at least five times as many of that staff to then enforce, these tariffs at the border. Keep in mind that most international trade, even today, is not digitized fully. It might be on the container level, but each container is going to contain somewhere between dozens and thousands of products, and typically not all from the same country, because as container ships go around the world, they drop things off, they pick things up. 

If there’s space in a container, you can always shove more in there. And by the time it gets to the United States, it’s a mess. And then what comes off is not all of it necessarily. Some of it gets shipped back out. And so somebody has to manually enter every single product. So it’s not so much that, reciprocal tariffs isn’t fair or is at least intellectually a good idea, but actually putting it into process basically ends trade, because it’s impossible to administrate with anything approaching the number of people we have in government right now in total. 

Much less if you wanted to do anything else. Now, the fact that Trump has announced this anyway gets back to the general theme of all of this is that he’s built a completely incompetent administration that won’t tell him the truth, because the truth might not make him look great. But on this specific topic, it’s less of a designed incompetence and more a purposeful incompetence by his other staff. 

Trump’s trade representative is a guy by the name of Jamison Greer, who is a smart dude who basically was raised from a pup by Robert Lighthizer. And Lighthizer was Trump’s first term trade representative. And Lighthizer has been in and out of government and at the center of American trade law going back to the 1980s into the Reagan administration. 

So, I mean, this is a guy who knows everything, is everything about trade. He’s not shy about using tariffs, but it’s always when there’s a specific goal in mind in order to reshape the relationship. He just doesn’t just do tariffs or turfs anyway. Greer learned at Lighthizer he was his chief of staff, during Trump’s first term. 

Definitely knows what’s going on. And definitely knows that reciprocal tariffs is a horrible idea unless you’re going to do an absolutely massive state expansion, which is definitely not in the cards. So one of two things either happened. Number one, he probably took the advice of Lighthizer because one of the things that Lighthizer learned from his four years working with Trump the first time around is you never contradict Trump. 

Not in public, not in private. You just nod. You smile. You make him think that you were one of the brainless people that he has surrounded himself, that do nothing but tell him how wonderful he is, and then hopefully he gives you enough room and enough lack of attention, for you to actually go and do your real work. 

And for Lighthizer, at least in part, that worked. He was able to renegotiate NAFTA and the Korean trade deal. He got a new trade deal with Japan, made a lot of progress on a trade deal with the United Kingdom. But then, we just ran out of time. And then there were the events of January 6th. So, Greer clearly knows that reciprocal tariffs are horrible. 

Just beyond stupid idea. But either one. He kept his mouth shut, nodded, and smiled. Or number two. He told Trump this and, managed to do it in a way that didn’t get himself fired already. Even odds for probably the first one being the way one or whatever went. 

So we’re going to see more things like this. 

Because the only way that reciprocal tariffs can work is with a staff you can’t build. So either we go 1 or 2 directions at this time. Number one, reciprocal tariffs are actually implemented, in which case pretty much all international trade stops in the United States falls into a really, really ugly recession in a short period of time or, or there’s an actually an effort to implement it on a case by case basis for specific countries, absolutely wrecking trade relations with that country. 

That could get interesting based on who you choose to go after. Hopefully it would not be a country like Canada. Oh my god. But if you did against India, that could actually set the stage for changing the relationship in any number of ways. But Trump coming to that conclusion would require someone to explain to him how reciprocal tariffs overall are. 

Really bad idea. And I don’t think that is going to happen at all.

Trump, Cartels, Terrorism and…Increasing Migration

Photo of man in gloves opening cocaine package

Trump had a fat stack of executive orders waiting to be slammed down onto his desk as soon as he took office. One of those was his designation of Mexican cartels as terrorist groups, which will have some unintended consequences.

This new designation does little to address the networks which smuggle drugs into the US, and is largely irrelevant to the deepening fentanyl crisis. But perhaps the biggest hmmm of Trump’s order is that certain victims of terrorism can qualify for asylum in the US, which means millions of Mexicans and Central Americans could now immigrate. Legally.

This kind of “oopsie” is nothing new for Trump, as his border wall inadvertently facilitated illegal immigration by creating new routes to access the US. While Trump claims one thing, his actions may be doing the exact opposite of what he intended (TBD whether it’s deliberate ignorance or incompetence). As we all expected, Trump’s time in office will be nothing short of a wild ride…and I’m going to need some more popcorn.

Prefer to read the transcript? Click here

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.

Learn about medshare here

Transcript

Hey, all. Peter Zeihan here, coming to you from a Lake Wakatipu in Queenstown, New Zealand. It’s a 21st locally, which means it’s the 20th in the United States, which means that Donald Trump was just inaugurated. And we’ve had several dozen, executive actions, quickly thrown in there. There’s a lifetime of material for me to work with in there, but I’m going to focus on the one that I think is actually most significant to how most Donald Trump supporters view the world. 

And it has with, designating the Mexican cartels who traffic illegal narcotics into the United States as terror groups. 

Okay. Let’s talk about what it does. Let’s talk about what it doesn’t do, and let’s talk about where it’s going to lead us. So what it doesn’t do is strictly loosen the tools of the US military can use on foreign soil, because Mexico is not a country that we are at war with. 

So designating the cartels, sponsors of terror doesn’t really do much unless you also designate the Mexican government as a sponsor of terror. What it does is allows the US government to very easily move against any entities who are associated in any way with the cartels, especially from a financial point of view, especially if they’re victims. So, like if there’s a 

Taqueria in Mexico City that pays protection money to the cartels, this action would target them because of the financial transfers, but it’s not actually going to encourage us Apache helicopters to be flying south of the border and blowing shit up. Keep in mind that, the number one drug that is of concern from my point of view is no longer cocaine. 

It is fentanyl. And fentanyl as a synthetic has a very different supply chain. What happens with cocaine is it starts in Colombia. It’s turned into a leaf. It’s pressed into a brick, it’s refined with gasoline. It’s turned into the white powder that we all recognize. Well, hopefully we don’t. All cocaine is bad. Don’t do cocaine. Anyway, it is smuggled by plane, train or automobile north and eventually makes the jump by water or air to Central America, where it gets on land and it goes into Mexico and up north. 

So interrupting cocaine flows. This is a good thing. We like this. That is not what we’re dealing with. We’re dealing with fentanyl. Fentanyl is a synthetic. And what happens is in China, you get a chemicals company that makes a precursor, which is then processed into another precursor. That precursor is put in the mail and is mailed to the United States. 

And then it is smuggled south across the border to a mom and pop shop that processes a few kilos of this stuff a month, and then that stuff comes north. That is where the money is. That is where the danger is. And this does nothing for that, because the mom and pops aren’t big enough to justify classification as terror groups, because there’s literally thousands of them, as opposed to just a few, cartels anyway, so it’s going after the wrong thing. 

More importantly, when you identify a group as a terror group, you have also identified the people that they prey upon as victims of terrorism. Right? We all agree with this, right? Well, if you identify someone as a victim of terrorism, then they automatically qualify for asylum status within the United States. So what Trump has done with this designation is designate 130 million Mexicans and 50 million Central Americans as automatically qualifying for U.S. immigration protection. 

Now, if you dial back 4 or 5 years ago, I said that Donald Trump will long go down in history as the most pro illegal migrant, president in American history because by building a wall, what he has done is built 50 roads, construction roads that bypass the most robust natural barrier on the North American continent, the Chihuahuan and Sonoran Deserts. 

And lo and behold, it came to be true. And we eventually got 2 million illegal migrants a year. What he has done now is generated the largest inflows of illegal migration of the asylum clause of any American president in American history. Now, normally I would argue that this would mean the end of him, because his supporters will immediately abandon him because he’s done exactly the opposite, or achieved exactly the opposite of what he said he was going to do. 

 But this is Donald Trump, and he defies convention all the time. But it will set the stage for a very different conversation in the United States. And I can’t wait to see how that comes out. 

Oh, one more thing that I would be remiss and saying, this is my last day in New Zealand. I have been drinking, I’ve been doing some wine tastings, and this is not what I would call great analysis. There’s nothing that I just communicated with you that would be any sort of secret to the national security community, the law enforcement community, the folks who are interested in immigration at Pro or Con, or anyone interested in generally security of the border in general. 

But clearly the new president, the president is unaware, otherwise he would not have done it. Because this is going to generate exactly the sort of crisis that he says he wants to solve. The reason for this is very simple. Donald Trump has made sure that there is no one in his inner circle who is capable and competent in the issues that really matter. 

And his cabinet nominations reflect that, the only other two leaders in modern history that I can think of that kind of fall into this category of deliberate blinders, reshaping of China, who is rapidly leading his country into a full out national collapse, and Barack Obama, who hated having conversations with other people to such a degree that he basically hermetically sealed himself into the white House for his eight years. 

Donald Trump now joins those other two as one of the three most deliberately unaware leaders in modern history, which means that of the dozens of executive orders that were just handed down, there is undoubtedly more that fond of his general category of going directly against what Donald Trump says that he stands for, which means that we are in for an incredibly interesting period over the next four years, as, Donald Trump’s leadership or more accurately, the lack of competence in his circle leads to some wildly interesting outcomes. 

And I am here for it.