United States Archives - Zeihan on Geopolitics

Should the US Stay in the Middle East?

Photo of a Marine on top of a HESCO barrier

Here’s a video I recorded while I was in New Zealand at the end of 2024. In this video, we cover a question that the US is still trying to answer – should the US maintain its presence in the Middle East?

The US has been involved in the Middle East for quite some time, but times are changing. The US is now energy independent, but US involvement in the region was never about energy for the US; involvement in the region was about securing energy supplies for US allies and maintaining strategic alliances against the Soviet Union.

The US has a few paths to choose between, and each option leads us to a very different geopolitical picture. Remember, this isn’t just about energy, this is about alliances, power, and strategy.

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

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

Hey, everybody. Peter Zeihan here on the Tongariro Crossing in New Zealand. The weather. So we’re not seeing much, but I figured I’d take a question from the Patreon forum. And specifically it is, I’ve always been told that the United States was involved in the Middle East for oil, but now that the US is energy independent, does that change?

Is there a reason to stay? Great question. I’m not sure I’ve got an answer for you, but I can at least inform the debate. Keep in mind, until 1973, the United States was an oil exporter. We were an importer from roughly 1973 until roughly 2013. I mean, you can fudge those numbers a little bit, but about that.

But the United States remained one of the world’s largest oil producers. Right up until the 1990s. And we most of the crude that we got came from the Western Hemisphere, with Canada, Mexico and Venezuela being our three largest sources. It was pretty rare for us to get more than 10 or 20% of our crude on a daily basis from the Middle East.

Most of what we did get was typically, equator, Saudi Arabia. And in order to make sure that we had an interest in defending them, what they would do is park a supertanker off the US Gulf Coast and basically wait for an order. Because they knew that they couldn’t defend themselves if push came to shove. It is a Kuwait.

That was absolutely true. Anyway, the point is, is that we didn’t use much of their crude. Most of the crude that, is exported from the Persian Gulf went to our allies, first in Europe and later in Northeast Asia. Keep in mind, during the Cold War, China was an ally. So the reason wasn’t so much for oil per se, but for the strategic alliance that we built to contain and beat back the Soviet Union.

Keep in mind that the Soviet Union is a land based power that takes up a very large chunk of Eurasia, and there was no way that the United States, a maritime power, could counter it at all points of the compass at all times. We needed allies for that, and that means we needed allies that were willing to take a degree of risk.

So you basically indirectly support countries like Britain and France and Italy and Germany and Korea and Taiwan and China and Japan, in order for them to be able to hold onto the alliance. And if for whatever reason, the United States proved unable or unwilling to do that, then these countries that were serving American strategic interests would have to have a deep conversation with themselves about whether or not the alliance is going to work for them at all, because if you don’t have oil, you’re talking about a deindustrialization process and a catastrophic drop in economic activity and standard of living

Anyway, some version of that is what the conversation needs to be in the United States today. We don’t need the oil. That’s obvious. In fact, we’re even retooling more and more of a refining complex to specifically run the light, sweet crude that comes out of the shale fields. But the rest of the world needs middle Eastern crude.

And so one of the things that we did after World War two is make that globalization for a security deal that brought us to more or less the current day. It is time for the United States to lead a conversation with the allies on what the next chapter of that looks like. Now, the last president in the United States who started us down the road of having that conversation was George Herbert Walker Bush.

And if you remember the 1000 points of light in the New World order, that was the core of it to renegotiate the deal. We voted him out of office. And in every election since then, we’ve voted for someone who is actually less interested in maintaining the global order. I would actually argue that, Joe Biden was less interested in that than Donald Trump.

So it’s kind of a wash. This last one.

But this is a conversation we need to have, because if our decision is no, we’re not interested in the Middle East. We’re not interested in maintaining an alliance of nations to help us achieve our goals. Then we have to do it all ourselves. And then we have to decide whether we want to basically ostrich here in North America or massively expand the military complex so we can at least attempt to do it all by ourselves.

Personally, I don’t think either of those are particularly attractive options. If you look at the long run of American history, every time we do truly, nationalist and really do ostrich down, something happens in the Eastern Hemisphere that draws us back in in a very ugly way that costs us hundreds of thousands of lives. But I’m not the only one who’s a decision maker here.

And this is the conversation that we all need to have.

Oh, one more thing. There’s more to maintaining a presence in the Middle East than just being Mr. Nice Guy for an alliance. For example, China today is the world’s largest oil importer, bringing in somewhere between 12 and 14 million barrels a day based on whose numbers you’re using. If the United States controls the ability of the region to send crude out, you could shut off China in a day.

Food for thought.

India Complicates the US Fentanyl Crisis

The 2025 US threat assessment has revealed that India is now a significant source of precursor chemicals used in fentanyl production, alongside China.

Fentanyl is a synthetic and much easier to produce then cocaine, meaning just about anyone can do it. Trying to pressure supplier countries and crack down on drug labs doesn’t work with a substance like this. Since fentanyl precursors are legal, regulating them is tough and inspecting shipments is a losing battle. So, a new strategy will be needed.

The only effective long-term solution to this crisis is addressing demand and consumption within the US and given historical American drug policy…it’s going to require a lot of work.

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

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

Hey, all. Peter Zeihan here coming to you from a snowy, foggy morning in Colorado. Today we’re gonna talk about something that came out in the new 2025. And that’s American, threat assessment. And basically it says that some of the precursor materials that are being used for fentanyl are now not coming necessarily from China, but from India.

So quick backstory. Fentanyl, unlike cocaine, is a synthetic. It is manufactured rather than grown. And because of that, it takes about four man hours, 4 to 6 man hours to make a single dose of cocaine. Because you have to clear land, you have to grow the crop, you have to harvest the crop, you have to dry the crop.

You have to then process the crop and eventually ship it north. A lot of involvement because it’s an agricultural product. Not so with fentanyl. With fentanyl you get your pre precursor materials. You process those into something called a precursor material. Fancy. And then you basically cook the stuff in a lab for a week. And then you have several thousand, probably several tens of thousands of doses that you ship north.

It only takes a few man seconds to make a dose of fentanyl. The problem is twofold here, the way the United States has chosen to go after fentanyl is, number one, to try to put pressure on the countries that are providing the precursor materials. The issue is that one of these countries is China and the precursor materials are legal.

You use them in any number of things, from making installation to medicine. So you can’t like, not produce them. And it’s very easy for you to siphon off a very small amount to ship to the United States. So you’re talking about things that are measured in liters here. In fact, all of the precursors that were used to make all of the drugs, all the fentanyl that was intercepted at the U.S. border could fit into 33, oil drums.

It’s not a lot of material. Once this stuff gets to the United States, it’s repackaged and sent into Mexico, typically by just a pickup truck. And then it’s distributed to the drug labs, which are just little facilities about the size of your average garage, typically in your average garage, where the processed into the final drug and it’s shipped north.

And so what the U.S. does is it tries to convince the countries that are producing the precursors to not and it tries to convince the, countries that are have the drug labs to have better security. And it’s not that these are stupid plans, but they’re not going after the low hanging fruit. The low hanging fruit is how you shipped the stuff from China, the United States.

And that’s the post office. If you’ve got a decent scanning system for small parcels, you’d probably be able to cut that link. But even that isn’t going to do very much because the precursors are legal and they can come from anywhere. And this is where India’s getting on it. One of the things that we see whenever we’re fighting the drugs is we don’t get good data until it’s two years out of date.

And so two years ago, India didn’t make the radar at all. And the Biden administration and now the Trump administration are talking to the Chinese about trying to find out which Americans are doing this to crack down on the personnel. It’s probably the better way to do it. And in the meantime, you squeeze the balloon, it just pops up somewhere else where it’s legal.

And then, of course, the border crossing from Mexico to the United States isn’t really something that we can lock down. And even if we could, one liter of finished fentanyl is enough to create somewhere between 50 and 100,000 doses based on the purity. So all you need is one dude in a backpack to get through to supply the entire country for a couple of days.

And at the end of the day, there’s no reason that those labs need to be in Mexico any more than the precursor materials need to come from China. The stuff is ubiquitous. It doesn’t take much of a capital investment to set up operations, and you can do it in Kansas and just as much as you can do it in Mexico.

And for the precursors, you can do it in China, you can do it in India. You could do it in new Jersey. So, the only real way to get fentanyl under control, it would be to address the consumption side of the equation. And that has always been a flaw in American drug policy.

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

Why I’m Okay with Some of the Secondary Tariffs

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

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

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

You Mess with the Don, You Get the Tariffs

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Half A Million Immigrants Get the Boot

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

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

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

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

Auto Tariffs and the Art of Routine Vehicle Maintenance

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The American Reindustrialization – A (Stalled) Progress Report

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Fentanyl Isn’t as Lethal…What Happened?

How about some positive news to start your day? A study was just released showing that fentanyl deaths in the US peaked in 2022 or early 2023 and have been declining since.

The decline in fatalities can be attributed to a few factors: less potent doses, fewer users, safer consumption methods, and more widespread availability of Narcan (Naloxone). Despite these improvements, this crisis is far from over; the ease with which Fentanyl can be produced makes it a sustained priority for the US.

Regardless, I’ll take my good news where I can get it, especially when it comes to the drug epidemic.

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.

Peter Zeihan here coming to you from Orlando with some good news. The good news is not that I am in Orlando. It’s that the University of North Carolina in Chapel Hill has recently released a report that pulls together all the statistics from all the health authorities in the United States. And according to the data, at some point in 2022 or early 2023.

Fentanyl deaths peaked and have been falling dramatically since then, about one third down on average across the country and in North Carolina, specifically down more than half. This is like the first good news we’ve had in the fentanyl situation in quite some time. Quick review. Fentanyl is a synthetic opioid, so it is manufactured as opposed to grown and processed, which means that it can be produced faster and at a much lower cost than the natural but organic drugs that are processed with gasoline anyway, because of that, the time to target to get it into the system is a lot lower.

And Graham, for Graham, it’s something like 500 times as powerful as cocaine or heroin. And that means a lot of people have shot up with it and just died. And it has been one of the leading causes of death in the United States for the last several years. So a one third drop is amazing news. We can probably attribute that drop to four main factors.

First of all, the Mexicans who are producing this stuff, this is not coming from the cartels. This is coming from small mom and pops that are basically cooking the stuff up in a garage. And those folks have not been interfacing directly with customers. There’s a few supply chains for distribution between them and their customers. And so it took them a while to realize that they were just killing everybody.

And that’s bad for business. So when they make it into, say, pills, they have bit, which are then, you know, dissolved or crushed or whatever. They’re making them less strong. So less than one third of the dose that they used to have a few years ago, giving people a chance to, you know, not die. Second, for the the addicts in the United States that are dying from fentanyl.

You can only die once. And so if enough addicts do this drug, then the remaining addicts, you’re like, Maybe that’s not the high I’m after. Which brings us number to three. It’s like it’s. It is the high that you’re after. Maybe I shouldn’t just pop a pill or inject it. Maybe I should crush it, turn it into something I can smoke, and that way I can meter how much goes into me.

Those three things combined have really contributed to a significant drop in lethality. And then finally, there’s something called Narcan, which is an anti narcotic drug that you can give to somebody who has overdose. And it’s now not just available in hospitals. You can actually get it and take it home with you. So if you have a friend or a loved one who you know is going to overdose, you can have the Narcan standing by and hopefully revive them in.

Those four factors have really helped out. Does this mean that the fentanyl crisis is over? Oh God no. Again, it’s a synthetic. You can cook it up in your garage. And even if every single drug lab in Mexico were to vaporize tomorrow, the technology is so easy. We’re talking about, like, middle school to high school chemistry here that it would just pop up somewhere else like and say, I don’t know, Oklahoma or Illinois.

So this is part of the drug milieu. Now we’re not going to get rid of it. All we can do is hope to cope with it better than we’ve been doing so far. Still, I’ll take my good news where I came.

The Russian Reach: Why Leadership Doesn’t Matter…Until It Does

Despite the short-term emphasis placed on the title of president, chancellor, or prime minister, the reality is that leadership typically has minimal impact on the trajectory of a nation. The real movers are geography and demography; however, sometimes a leader can be the exception to that rule.

If you take the US, it’s clear that geographic security enabled a flexible and powerful military. If you look at German history, constant neighboring threats lead them down a different path. Demographic structures carry influence in all spheres of life. Younger demos can drive consumption and inflation, while an older, wealthier demo fuels investment and stability. Again, geography and demography are structural realities that are often “untouchable” by a singular leader.

And yet, there are pivotal moments when a leader (or single decision for that matter) can change the course of history. We’re talking about instances like Churchill’s stance during WWII or Zelensky’s defiance in the opening week of the Ukraine War. And now, Trump is pulling the US from its post-Cold War holding pattern and plunging it into a deglobalized system.

Trump’s leadership, coupled with his ability to appoint unqualified officials with little opposition, is a symptom of the disintegration of both major US political parties. Which means we’re entering a period where outside forces, like Russia, can weasel their way into American politics.

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

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

Hey, everyone. Peter Zeihan here. Coming from Colorado. Today we’re launching into our new series on what the hell is going on in Washington. Over the last few weeks, The Donald Trump administration has taken a number of steps that I don’t think pushed the MAGA agenda at all. And can’t be explained away as incompetence or toddler syndrome or whatever you want to call it.

Something else is up. It seems like the actions were designed specifically to tear down American power over the long term. And so I want to start by talking about why normally leadership just doesn’t matter. All countries are shaped by two things, their physical environment, their geography and their population structure, their demography. You understand those two things.

You can understand the challenges, opportunities and tools in front of a country. So, for example, if you’re a country like the United States that is surrounded by oceans, you don’t have to spend a lot of resources on defending the homeland, especially not on land. And armies are expensive, both in terms of money and in terms of manpower.

So if you are freed up from that, you can then instead invest your people in doing something that will actually earn income and invest your military and naval forces, which, while not cheap, can be wherever you need them to be. And so you basically get a much more mobile military force, and you get to choose the time and the place of when a conflict happens, rather than the other way around.

Another good example are the Germans. They are surrounded by potential competitors the Dutch, the French, the Austrians, the poles, the Russians, the Swedes and off the coast, the Brits. And so no matter where the Germans look, they face a potential threat. And throughout all of German history, until very recently, the goal was always to consolidate as quickly as you can, develop as quickly as you can, just in a panic, and then eliminate one of the threats so you can focus on the others.

And this generated a very hostile, erratic, rapid German economic and security policy that eventually triggered a couple of wars. That ended the European order, as it was until World War Two. And it was only with the creation of the European Union and NATO where the Germans were no longer, viewed themselves as surrounded by enemies but surrounded by allies, that this finally changed, of course, that shaped their economy because they still have that built in.

And so they focused everything on industrial activity because that’s what they knew. And because the frantic miss in the culture never really went away. They just focused it differently, which was triggered some of the economic problems that the Europeans are having. Now. You can play this for any country. Open borders means you have to have an army and you’re going to be a little nervous if you’ve got a rampart between you and everyone else, like, say, the Chileans versus the rest of the world.

With, the Andes Mountains, you get a culture that can be very productive, a pretty laid back because you’re not facing any sort of threat on a regular basis. And then everybody in between. That’s for demographic structure. It’s a question of balance among people who were under the age of 18, roughly 18 to 45, 45 to 65, and retired that first category.

Those kids to expensive. And you have to house them, clothe them, feed them, educate them. And for most adults, raising your kids is the most expensive thing you will ever do. Certainly more expensive than purchasing a house, but it does generate a lot of consumption, which generates a lot of economic activity

Next group, 18 to roughly 45. These are your young workers. These are typically your parents. And just like with the kids, lots and lots of consumption because they’re buying homes, getting educated, and, buying cars. So we have a relatively low value added workforce, but still a lot of consumption and a lot of inflation, and you got people 45 to 65. The kids are moving out. The house has probably been paid for and they’re preparing for retirement. They’re also paying a lot of taxes because they’re experienced workers that are very productive with high incomes.

So this is the tax base. This is the capital stock. This is the stock market. And then when you retire whatever assets you’ve accrued, you want to protect them. So you move out of things that are relatively risky, like say the stock market and go into things that aren’t like cash or property, and then you basically just whittle away at it until you pass on.

Every country has all of these categories. The question is the balance. If you have a lot of young people, you have a consumption led system that tends to be inflationary. It’s also easier to build an army. If you have a more mature system, you’re going to have a little bit more capital, a lot more industrial capacity. It might be easier to do a Navy.

It’s got an advanced population 45 plus. The capital you have is massive, and your ability to invest in technology and be making yourself a technocracy is a very real possibility. And usually countries that are in this stage have some amazing growth patterns. But it’s not from consumption, it’s from investment, it’s from technological breakthroughs. It’s from the application of those technologies.

And then eventually you retire and everything stops. What does all this have to do with leadership? Well, very little. You can’t leader your way out of your borders without a war. And while wars do happen, consolidate and whatever the territory on the other side is a multi-generational thing. And the consolidation usually matters more than the conquering.

So when you look back at, say, American history, as we expanded westward through the continent, we don’t remember the politicians like Paul King, those who came before that actually expanded the borders very well. We think of the politicians that successively turned the country into something else. On the other side of that, we think of Eisenhower. It’s a different sort of work.

It takes time, and it takes a lot longer than any one leader ever has. Even if you happen to be a despot who happens to be a genius and you take over at age 22 and you rule your entire life, this is the stuff not so much of decades, but of centuries. Same and population policy. Let’s say we had a really robust population policy that really encouraged large scale childcare to allow workers to both work and have kids.

Well, that’s not going to hit economic headlines for 25 years, because you have to wait for the kids to grow up and become adults themselves. Leaders just don’t change that. But every once in a while, we have a moment in history where the decisions that are made in the short term don’t just matter. But after everything. A great example is Churchill, during the Blitz, could have surrendered, cut a peace deal with the Nazis.

But no, he decided to make his country and unsinkable aircraft carrier and pray that the winds of time would be favorable. It was a gamble. It worked, and history would have turned out very, very differently had he, not me personally. I put Zelensky’s quote to Ukrainian president of, when the Chechen hit squads were closing in and the United States offered evacuation.

He says, I don’t need a ride. I need ammo. That changed the course of the war. And without that decision, this conflict in Ukraine not only would have been over a lot longer, we’d have a lot more dead Ukrainians than we have now, but we’d already probably be hit deep in a war on the plains of Poland.

We’ve been at one of these moments for arguably the longest window, in human history, for these last 35 years. Ever since the Cold War ended, the world has kind of been in this weird little transition period where the old globalized system of the US, built to build an alliance to fight the Cold War, was mostly maintained, and the structures of globalization on the economic side were mostly maintained.

But we’ve all been kind of a holding pattern to see what the United States was going to do. And most of my work, most notably my first book, The Accidental Superpower, is about this dichotomy and how it can’t last, and that sooner or later, the United States is going to move on to something else, whether it’s something internally, something regionally, the Western Hemisphere, or sees something shiny elsewhere.

And this whole system was going to end anyway. But no world leader, no American leader really took advantage of that moment to do something or take us in a different direction. Until now. And that person who is doing something is Donald Trump. But rather than translating American power of this moment into a new system that will last for decades, he seems to be tearing it down.

Which is why we’re doing the series. There’s something else to consider about why Trump has been so successful and is faced so few obstacles. And it’s more than just the fact that the United States military is more powerful than everyone of the allies combined. It has to do with what’s going on in the United States, because our political system is not stagnant.

It evolves, too. And every generation or so, the factions that make up our political parties move around. And in those periods and these windows of opportunity, in these transition moments and these interregnum politics become unstuck. So I would argue that what we’ve seen in the last 15 years is a complete disintegration of both the Democratic Party and the Republican Party, other apparatus and loyalty system.

In that environment, MAGA was able to hijack and take over the Republican Party quite successfully, whereas the Democrats more or less just dissolved as an institution. We’re in the transition process here. We are not seeing anything close to what the end result will be for the next period of American history. But at this moment in time, the institutions which are based on the parties, which are based on the people are in flux.

And I think the best example I can highlight for that is what’s gone on in the US Senate. No American president has ever had all of his cabinet appointees approved. You have to get confirmed by the Senate with a majority except Donald Trump and phase two. And without a doubt, this is the least qualified cabinet we have ever seen in American history.

And every single one of them have gotten through. We’ve gotten a guy who pledged publicly to turn the FBI into a vindication engine, specifically to prosecute the president’s opponents, confirmed. We get a vaccine skeptic who’s a complete nut job confirmed. We get an agricultural secretary who’s never been on a farm, confirm, and we get a defense secretary whose military experience is limited and has absolutely no experience in policy.

Whatever confirmed all of them got through, all of them got through quickly. All of them got through easily. This is not my army. This is not the power of Trump’s charisma. This is an issue that we are in one of these moments where the institutions are in flux, most notably the political parties in this case. And until that firms back up, the Senate has basically abdicated responsibility and that provides opportunities for others who are much more organized, who are not going through this sort of flux to exercise their will.

Which will bring us to the Russians. And we’ll tackle them tomorrow.

Of Birds and Bugs

There are two issues we’ll be discussing today: Bird Flu and the new disease outbreak in Congo. These topics are unrelated, but there is a lesson to be learned in their comparison.

A severe bird flu outbreak has egg prices soaring and shoppers reconsidering their breakfast choices. The newly appointed Agriculture Secretary Brooke Rollins proposed a handful of ideas to end the crisis. After consulting experts, she abandoned those ineffective ideas and opted for an aid package that was a bit more informed.

Over in Congo, a new disease has broken out and at the time of recording over 400 people had been infected and a significant portion of those were killed. Usually, the US would have a swift response with boots on the ground trying to get to the bottom of this; however, new Health Secretary RFK Jr. has gutted those teams and crippled the United States’ ability to respond. Oh yeah, and Trump also severed ties with the WHO.

Rollins doesn’t have the background or knowledge on how to address a crisis like the bird flu, but she put forth the effort to learn and change: that is something I can live with. RFK Jr. lacks the same competencies necessary to carry out his role as Health Secretary, but he is too rigid to even attempt to learn and adopt new strategies: that is a level of incompetence that risks catastrophe.

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

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

Hey everybody. Peter Zeihan here. Coming to you from Colorado today. We’ve got two completely unrelated topics I’m going to weave together into a little story. The first is here in the United States. It has to do with the bird flu epidemic that has been raging through U.S. agriculture for the better part of three years now. It’s now gotten to a point where it’s just as bad as the really bad one we had back in 2015.

If you remember that far back. Egg prices have more than doubled. They’ve gone up by like 40% just this year. And there’s no reason to expect that to go down at all. Considering how much inflation was a part of Joe Biden’s defeat, relevant topic. Trump, of course, said on his first day he’d put things in place to fix it overnight.

That’s not how it works. So let me explain what’s going on. With the first phases of what the Trump administration proposed, and then we’re we’re actually going to go. So, the chicken industry is a split between boiler chickens, which are the ones that you like, buy pre-cooked at the store, chicken parts or whatever. And then layers and the layers, of course, make the eggs two different functional species.

The bird flu situation is affecting the layers, not the broilers.

Now, among that these chickens because you know, they’re laying eggs have to be kept in a relatively confined place in order to generate the eggs in sufficient density so they can be harvested, safely, effectively, and above all, from a biosecurity point of view, cleanly, however, birds are filthy, filthy creatures.

They are the rats of the sky. And if you have any interaction between them and the outside world, they interact with wild birds and bird flu is a wild thing, and it is endemic in every bird species on the planet. And so any sort of interaction risks getting the bird flu from the wild species into the domesticated species that are laying the eggs.

And that’s really the core of the problem here. Also, the turnaround time from first infection to death is typically less than 72 hours, with only about 48 hours between first symptoms and death. So if you become aware that the chickens in your enclosure that just even a few of them are sick on Monday, you’re going to have the majority of your chickens either diseased or dead, by Wednesday.

So when, Brook Rollins, who is the new agricultural secretary, who has no experience in agriculture whatsoever, I’d be surprised if she owns a pair of boots. She may have never set foot in Iowa before. Not sure about that one. Anyway, her policy background is very limited. She’s a highly ideological person. She serves as an advisor to the Texas governor Abbott.

And basically the sum total of her, recommendations to him is that, other jurisdictions, not the state, other jurisdictions shouldn’t raise taxes. It’s not that I really disagree with that statement, but that’s not a lot to hang your hat on if you’re going to be agricultural secretary, when that is the most scientific of the various, agencies we have.

The way it works in the U.S government is you’ve got three tiers, at your top, you got your political appointees. Those come and go with every administration down below. You’ve got people who are technically, political appointees, and the president does have the authority to remove them at a whim, but they’re generally staffed with people who know what they’re doing with a lot of experience in the industry or the sector or whatever.

It happens to be. A lot of scientists, a lot of logisticians. And usually these people are allowed to go from administration to administration because they’re largely apolitical jobs. And there’s nowhere where that is more true than the USDA. However, they have all gotten caught up at USDA, just like in every other, agency.

And those are people have all been purged. So the people who know how to make the trains run and keep the birds alive, they’re gone. Rollins comes in, she inherits this bird flu epidemic, and she casts around for ideas. And the first thing that comes out of her head, because it was her first briefing, was the biggest issue going in agriculture right now is let’s improve biosecurity.

Let’s improve medication of the birds. And let’s, do mass vaccination of the birds. Now, the surface, none of those sound like dumb ideas, but they’re very, they’re very freshman mistakes for number one. The vaccine. Yes. A vaccine for bird flu does exist, but it’s not through full trials.

It’s never been tested out in a commercial flock. So that’d be kind of a question. Also would cost about a dollar per bird and it has to be injected manually. Now, I don’t know if you guys have ever gone chasing chick chickens, but your typical bird operation in the lane industry in the United States has 3 million of them.

So you have to pick up a chicken, inject it, carry it to another bio, secure facility to drop off, do that 3 million times. Well, folks, from the point that a bird gets the ability to generate eggs to the point that you retire because it can’t anymore is only 18 months, so basically they’d be retiring faster than you could immunize them. Second medication. There is none. Bird flu triggers total organ failure in under 72 hours. So that just kind of goes out the window. And then there’s just improved biosecurity. That’s like I hate to point out the obvious, but if your life savings is involved in a bird laying operation, your biosecurity is the damn best you know how to do because there isn’t a medication and there isn’t a vaccine.

Oh, one more thing on the vaccine. It’s a live virus. Vaccine? Like most vaccine, this is not an MRI, and this is not one of the more advanced ones. It doesn’t leave any biological components in your body. And, you know, you vaccine skeptics, you can suck it. But it does leave, virus residue in your system, which means that that bird will then, at the end of its life, test positive when you’re testing it for bird flu, if you want to export it.

So you can’t export it either. So it’s a dollar on the front end. It’s administration costs, it’s transport costs. And then on the back end you can’t get it’s money to money from your retired birds. Anyway, the churn in this system just means that if you detect bird flu, you just have to kill everything in that enclosure.

And from the point that you introduce a new chick to an enclosure, to the point that it’s laying eggs, that’s only six months, you can’t catch up with that with immunization anyway, despite the fact that the Trump administration has purged everyone who knows these things from the top tier of USDA, Brooke Rollins, despite her faults, isn’t stupid. And so she went out and spoke with people who knew things in the industry, and she realized that the medication and the, immunization angles of her original idea weren’t feasible.

And so she backed away from something that would have just cost the industry a huge amount of money and probably reduced the number of laying eggs, which would have driven inflation higher. Crazy idea. She’s still working on biosecurity, which I don’t think is going to go anywhere, but she was told by Trump to get this under control, she had to announce something.

She realized that everything it could be done was being done. She announced something that was $1 billion, which, you know, in the world of Trump, world is, not a lot of money. And it’s going to provide a little financial support for, the ranchers and the farmers so that maybe, maybe, maybe they can bring some more facilities online.

It’ll have no real impact on inflation or legal aid numbers. This is someone who is out of her depth and is trying to become more schooled on the topic, and is doing the best she can. It’s a degree of incompetence that I can live with that story one. Story two is happening over in Congo where we have a new disease.

It looks like hemorrhagic fever. Whether it’s the Crimean Congo version or Ebola, we don’t know. In fact, the people who have had it tested negative for both of those. It’s something new. Apparently, it’s already infected over 400 people. It’s already killed over 50 people. It seems to burn out in 2 to 4 days, which is a really fast time to kill people, especially if the mortality rate continues to be over 12%.

It seems to be so far. Now, normally this is where Department of Health and Human Services would come in. Normally this is where a group that’s called the Epidemic Intelligence service would rush over there, help set up quarantines, get some tests done and find out what we’re dealing with. But RFK Jr, who was our new HHS secretary, gutted the Epidemic Intelligence Service on his first day.

And he doesn’t like the medical industry and he doesn’t like vaccines. And so the IHS is basically running on two out of its four wheels right now and doesn’t have the capacity to participate. The second organization we rely on is the World Health Organization. But one of the first things the Trump administration was several contacts with the W.H.O..

So as regards this new disease variant, we in the United States are in the complete dark, and we are relying on other countries to come up with information and choose to share it out of the goodness of their own hearts. Brooke Rollins is someone who’s in over her head and is trying to learn. RFK Jr is a waste of skin.

When you look at people either in health or in agriculture, they have a very low tolerance for bullshit. Because if you screw up the health system or if you screw up the food supply chain, people die. But now we have two different examples, two polls, if you will, of what can happen based on the core intelligence and the personality of the person you put in charge.

Competence would be nice, experience would be nice. That would be amazing in both of these sectors. But we’re seeing one approach that involves learning on the job and one approach that involves pushing your own preconceived notions that are based on no facts whatsoever down the throats of everybody. One of these is not a disaster. The other one very well is likely to become one.

Venezuelan Crude Is Off the Menu… But You Can Still Get It Around Back

Venezuelan oil is getting the boot from the US. Well, kinda, sorta, not really. Let me walk you through what’s going on.

Biden allowed Chevron to import Venezuelan crude to help lower gasoline prices, but Venezuela couldn’t meet their election-related obligations and the deal failed. Regardless, Biden’s motives were misguided as Venezuelan crude is such a small portion of US imports.

Trump came along and revoked that Chevron deal and is now focusing on deporting Venezuelan migrants (many of whom are highly skilled).

Regardless of the policy shift, global oil markets won’t be impacted. Venezuelan crude will likely continue to flow to the US, even if it takes a pit stop somewhere else for a “rebrand” – a page out of the Iranians’ playbook.

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Hey, everybody. Peter Zeihan here. Coming to you from Colorado. And today we’re going to talk about Venezuela specifically. The Trump administration has recently revoked an operating contract that allows, U.S super major Chevron to import about a quarter million barrels a day of Venezuelan crude. This is unwinding some of the things that I think was one of the dumber things that the Biden administration did.

To explain that I need to go back and explain why the Biden administration did what it did. Okay. So step one, if you go back to the transition from Trump one to Biden, both leaders were basically competing for our affections. And in doing so, they decided to do the Great American political thing and bribe everybody. So in his last month in office, Donald Trump pushed through a or two months in office.

He pushed through a stimulus program that put $1 trillion into Americans pockets. And the first thing that Biden did in his first three weeks is do the same thing. So with $2 trillion of stimulus spending, cash put in everyone’s pockets, even though Covid was already and fully in the rearview mirror, and there was no sign that we needed the stimulus at all, that $2 trillion generated inflation over the next two years, which eventually caused Joe Biden some political headaches.

And then he started to obsess about bringing inflation down. But, the Biden team, like the Trump team, has no one on it that can really do math. So they kind of did their best guess based on ideology and past history, of which Joe Biden has a lot, in order to decide what needed to be done. And Joe Biden settled on gasoline prices.

He specifically believed that as long as OPEC was producing large volumes of crude that could then flow throughout the world, or OPEC and other producers, that gasoline prices in the United States would stay under control, and he wouldn’t have to deal with that political headache. It’s it’s not that the math is completely bad. The U.S does have a semi-open energy market, specifically the shale oil that is the vast, vast, vast majority of American energy production is super light and super sweet.

It’s not really hard to refine, but the American Refining Complex was designed for something else back in the 1980s and 1990s when we knew knew that the global crude stream was getting uglier and more sour and more polluted. We retooled our refineries to be the best in the world, which would allow them to take any crude, no matter how crappy, and turn it to any product, no matter how nice.

Most notably gasoline, diesel, jet fuel. Well, shale Revolution came along, turned that math on its head. And so now the United States exports a lot of light, sweet crude and imports a fair amount of heavy sour crude and then makes bonkers money on the difference, taking in cheap crude and turn it into a high end product. Anyway, that was kind of lost for him.

And so he just thought more was better. So he looked at Russian crude and was like, you know what? I don’t like the Russians. And I want them to suffer for the Ukraine war, but I we need their crude to keep gasoline prices in the United States under control. So let’s work out a regime where they can still export their crude, but they don’t get all the cash.

And it was, you know, squirrely, in the case of Iran, something similar. Let’s bring him in partially from the cold so they can officially export more crude in order to keep crude prices under control. And then, of course, the same with Venezuela and now with Venezuela. It was a little bit more of a match up because Venezuelan crude is that heavy sour that U.S. refiners really crave.

But we’re only talking about total production here of under a million barrels a day, with the exemption that was granted to Chevron only for less than a quarter of that. Most of the heavy crude that the United States imports comes from Alberta, our Canadian neighbors. So that’s like 3 million barrels a day. So apples and oranges. Well, not opposite oranges, but like apples and trees full of apples.

In addition, 250,000 barrels a day in a good month, compared to a total market in the U.S. of 20 million barrels a day, didn’t really move the needle very much. Joe Biden got some crap deserved it for, cutting the deal because it basically said that, in exchange for this oil access, the Venezuelan government has to have real elections.

And they didn’t. So basically, Maduro, who is the dictator down in Venezuela, got all the benefits without having to pay anything. And now the Trump administration is, in my opinion, rightly unwinding this. But of course, we have to talk about what’s happening now with the American Venezuelan relationship, because while Biden was all about gasoline prices and probably did it wrong, Donald Trump is all about illegal migration and is probably doing it wrong, because most of what he has been hammering on the Venezuelan government with is about taking back, Venezuelan migrants.

Now, the Venezuelans have a special dispensation from the US government. So while they may have started a flow that was originally illegal, most of these guys are now registered. Now, part of it is really real political asylum, unlike folks who are applying from, say, a Central America. And as a rule, Venezuelan migrants tend to be much higher skilled than what everybody else is crossing the southern border.

Keep in mind that until Hugo Chavez, who was Maduro’s, predecessor, an idol, until Chavez took over, Venezuela in the early 2000. This is one of the most skilled labor markets in the Western Hemisphere, probably third or fourth behind the United States, Argentina and Canada.

So they’re the kind of migrants that we say that we want. Most of them were in some sort of legal system. And now, the Trump administration is sending them home. Maduro agreed to take them. He has no problem butting heads together for people who might be, his opponents. And that’s going to be a little bit of a drama down the line now that the people who tried to get away are now back.

And at the end of the day, the energy thing probably isn’t going to matter too much anyway. One of the things that people forget about crude refining is because the US complex is so good.

Not a lot of places can process Venezuelan crude. So what will probably happen next is what happened before in that, Venezuelan crude will probably be purchased by some Chinese state major, which will be then sold to a middleman and then sold back to the United States and marketed as something that’s not Venezuelan crude. Will be a little bit of a markup because of the middlemen, but the flows will continue.

We’ve seen something very similar, with Iran in the past as well. Anyway, that’s what’s going on. See you next time.

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