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Longshoreman on Strike: US Ports Get Shut Down

A photo of shipping containers in a port yard

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Back to the picket lines we go…this time with the longshoreman. Ports across the East and Gulf Coasts of the US will impacted by the strike, disrupting nearly two-thirds of the imports and exports by water.

European manufacturers are going to take a hit on this one, along with the US agricultural industry. We’re not just talking a couple days sitting in limbo either, even if the strike ends today, we’re still looking at weeks to clear the backlogs.

The unions’ demands on this one are pretty hefty; we’re talking about a 70% pay increase and a ban on automation at ports. In an industry that’s already plagued by slow advancement and limited automation, this ban would set the US way back. On top of that, the Jones Act has exacerbated the inferences of shipping in the US. So, we’re not talking about a duct tape solution here, its going to be a complex one.

There’s always a way forward, so what does that look like? Manufacturers can brush up on their Spanish and become friends with our neighbors to the South and/or they can build some more warehouses and stop relying on just-in-time supply chains. But that’s costly and inefficient, so expect some economic hurdles along the way.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know 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. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides 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. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are free and we will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Hey everybody. Peter Zeihan here. Coming to you from Dallas. Oh, humid even in October. Anyway, today we’re going to talk about the longshoremen strike on the East and Gulf Coast of the United States. They’ve been in place for a couple of days already by the time you’ve seen this, and we’re looking at roughly half of America’s ability to import and export.

Close to two thirds by water has been shut down. Basically, every port from Maine to the Texas border with Mexico is in effect, and all the ports are closed. This is going to have an impact far more than the actual time of the strike, which is so far to be determined, because for every day that the strike has shut down the ports, it takes about four days for once they reopen to clear the backlog.

So, if you hear that the port has been cleared while you’re watching this video, it’s still going to be upwards of two weeks before they actually get back to normal. And so, if this lasts through the entire month of October, that will obviously impact the holidays and going into the new year. Now, who gets hurt most by this?

Europe is the short version of all this — Europe and agriculture. So, first Europe. The Asians obviously import and export via the West Coast of the United States, which has a different union structure. Talk about them later. But the European model is different from the Asian model when it comes to interfacing with the United States.

In Asia, they either import finished products. Well, no, that’s the bottom line. They import finished products for the most part. The Europeans bring in all kinds of parts and have them assembled within the United States as much as possible so that they then can get around tariff walls. That means that the parts have to have access.

So most of the automotive industry that is in the East or the West Coast regions that has a European component is doing things that way. And it’s not just automotive. It’s pretty much any sort of manufacturing that the Europeans are looking to source closer to the demographic strike that is the United States. And so without that constant flow of parts, the whole thing gets disrupted.

And that’s going to have a very big impact on employment and economic growth throughout the entire eastern seaboard for the foreseeable future. The second group that gets hit is the United States agricultural system because moving things by water is really the only way you can ship things to the wider world, with the exception of Mexico. And so, everything that comes off of rail, everything that goes down the Mississippi to New Orleans, has to get repackaged onto another vessel — oceangoing vessel — at the port and then sent out, and that has basically stopped.

Now, we are kind of in a lull of seasons, agriculturally speaking, so if this only lasts a couple of weeks, no big deal. But if it lasts a month and we’re talking about all of the grains that are coming out of the Midwest suddenly having very few places to go. All right. How is this able to happen?

Well, the United States has an incredibly stupid law called the Jones Act. And you’ve probably heard me talk about it before because it prevents any cargo being transported by any ship between any two American ports by being transported by anything but a system that is 100% American-owned, captain-crewed, and built. We don’t do this for any other modes of transport.

And if we did, we’d be in a significantly worse economic position than the United States is. But since this law was passed in 1920, we’ve seen the amount of cargo in terms of value per mile that has shipped on our waterways drop by over 99%. There’s also a couple of clauses in the Jones Act regarding port management, which basically makes them all local monopolies.

And unions have taken advantage of this by forming a network of unions. It takes in all of the ports so that when one of them strikes, they can all strike. If this was done in the corporate world, this would obviously be easily illegal. And what the unions are demanding is a 70% pay increase. But the real kicker is they want a guarantee in their contracts that no automation will ever be added.

They want to go with like 1970s, 1980s levels of automation. And already, America’s East Coast ports are among the world’s least functional. There are a number of ports on the African continent that actually are more advanced than ours now. Now, under normal circumstances, what we would do — we, the United States, whatever — is give them everything that they say they want.

And then behind the scenes, work, work, work, work, work to add automation so that this can never happen again. That’s more or less what happened with the Teamsters union on the West Coast. And now, the port of LA has gone from one of the worst in the world in just the last few years to one of, you know, let’s call it above average. Repeating that on the East Coast would be wonderful.

That’s probably not going to happen for political reasons. Not only is this an election year, we are going through our once-every-generation-or-two political realignment in the United States, and the factions that make up our parties are moving around. And one of those factions is organized labor. One of Donald Trump’s political successes was teasing them out of the Democratic coalition, but he has not yet succeeded in folding them into the Republican coalition.

So they’re kind of out there in the wind right now, free agents. And as the Chinese system fails and as the euro system falters, if Americans still want manufactured goods, we have to build them ourselves. Well, that means we need to double the size of the industrial plant. How many of those jobs do you think are going to be?

Blue-collar? Probably 80% or more of them. So we are at the dawn of the golden age of organized labor in the United States, and the Longshoremen’s Union is part of that process. So it’s difficult to see the Biden administration using its executive power — which it does have — to forcibly end the strike before the election. You can’t say it won’t happen, but it’s politically more complicated now than it would have been the last time this went down.

In the 1980s. And so we’ve got a very different situation here, and it’s going to be complicated because neither side really wants to piss off organized labor right now. Now, if you’re a manufacturer, you’ve got two possible solutions here. The first one is the easiest one, and the one that will probably be followed most aggressively: Mexico.

Mexico. Mexico. Mexico. Mexico. Mexico. Mexico. Over 90% of our trade with Mexico is done by truck and rail. It doesn’t touch the ports at all. One of the advantages of having a land border. And so, the Mexican integration with especially Texas, but the United States in general, isn’t being affected by this really much at all. And that’s certainly going to increase the argument that Mexico not only is our number one trade partner but is going to maintain that position for the rest of our lives.

And by “our,” I mean anyone who’s alive today. The second piece is a little uglier, and it’s not ideal. And that’s inventory. We’ve spent the last 40 years in manufacturing going to something called Just in Time. The idea that as you get better with logistics, you can partner with all of your suppliers so every piece arrives at the moment you need it in order to assemble a product.

And by doing it that way, you don’t have to buy rafts of warehouses to keep parts for emergencies. You can just focus on the supply chain. Well, if the supply chain is not reliable because of strikes at ports, you have to go back to something called just in case. And that means stockpiling parts — maybe not at your primary facilities, but along the supply chain route for everything.

And that means probably having four, maybe five times as many parts in circulation at a time. That is expensive. You need to buy the land, you need to maintain the inventory, you need to staff that. You need to have basically twice as much industrial plant dedicated simply to holding things in a box. It is wildly inefficient.

And in the world the United States is finding itself in, it’s very, very expensive because we need to expand our productive capacity, expand our storage capacity. And if just-in-case techniques need to be done, then we have less capital and less labor and less land and less industrial plant available for the things we actually need to build.

But until this is resolved, if you’re a European manufacturer, that’s really your only option.

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Things are heating up between Israel and Hezbollah, with both sides launching attacks on the other.

What Is the United States’ Role in the (New) Global Order?

*This video was recorded in May of 2024.

If you’ve read my book “The End of the World Is Just the Beginning” then you’re well aware of the US stepping away from the Global Order. But what does life look for other countries once that happens?

Places like New Zealand might need to take a page out of Japan’s playbook, forming strategic partnerships with the US by offering trade concessions, security cooperation, or any other ways that help them stay relevant to the US. (I’ll take a vacation home near Milford Sound if the Kiwis are offering).

Some larger powers are going to be stepping up as the US pulls back, think France, Sweden and Turkey. Each of these countries will have to navigate this new reality and find their footholds as regional powers. The dynamics between these big three will shape the future of NATO, the EU and Europe as a whole.

As for places like the Middle East, the US is very, very reluctant to re-engage too deeply. This marks a shift in the broader US strategy of disengagement and signals a move towards acting more independently on the global stage.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know 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. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides 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. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Something we discuss amongst ourselves, Peter, is the shifting, changing global order. What happens to small countries around the world, like New Zealand, as the U.S. strategic relationship with this post-Cold War global order starts to change and the global environment shifts? I don’t think New Zealand is the country to look to. I think Japan is the country to look to because Japan so far is the only country that’s figured it out.

A few governments ago, the Japanese realized that the Americans were losing interest in everything. Japan, like a lot of countries, is dependent on international trade for its economic health, especially for its energy imports. They realized that unless they could get into the American inner circle, give the Americans something that they want, there wasn’t much of a future.

For smaller countries that are less capable than Japan, this is triply true. What Japan did is seek out a deal with the United States on America’s terms. During the Cold War, when we needed everybody to be on our side to face down the Soviets, it was the United States that provided the economic and strategic concessions in order to build the alliance.

That’s not the world we’re in anymore. Now, if you have a more disassociated America, you have to bring the case to them. You have to offer them something in order to keep them involved. In Japan, it was trade concessions and a security partnership. For smaller countries, you have to be a lot more aggressive and a lot more giving in order to keep the Americans interested.

New Zealand, being off the edge of the earth, basically doesn’t face the security concerns that a lot of other people do. For them, their interest is going to be primarily economic because they produce a lot of agricultural products that the rest of the world really needs. That is an easier carry before you even consider the cultural connections between America and New Zealand.

But for most of the rest of the world, that’s a much taller order. The things that you have to offer the United States in order to keep them engaged—there aren’t a lot of things that the U.S. is really interested in, and you’re going to have to get really creative and dig really deep.

With the U.S. reevaluating its position globally and with the emergence of the largest land conflict in Europe since World War II, with the Ukraine-Russia war in place, we’ve seen some regional powers shift how they behave within broader Europe. I’m thinking about France, Sweden, and Turkey. What do we see between these three regional leaders/powers?

When it comes to their political, economic, and military mindset, how they interact with each other, and what that means for the future of the EU, Europe, and NATO overall, you’ve just put your finger on the three countries that are going to matter—not just now, but ten years from now, twenty years from now, and thirty years from now.

But for the remainder of the century, for demographic reasons, we’re going to lose, at some point, Spain, Germany, Italy, and eventually Poland. But these countries have very healthy democracies and a geography that allows them a degree of freedom to act outside of the confines of just Europe. How they get along or don’t is going to determine what is possible for NATO, the EU, and a post-unified Europe.

At the moment, the French are increasingly taking their talking points from the Swedish government. The Swedes have always been very big on energy security, manufacturing self-sufficiency, and partnership with countries immediately around them in opposition to Russia. Now that they’re no longer neutral, the French are sounding a lot like the Swedes. So the room for partnership there is very robust.

So long as ego doesn’t get in the way—I wouldn’t even mention that if it wasn’t for the fact that France is one of the two powers we’re talking about here—it’s going to be very interesting, from my point of view, to see how the two powers coordinate or step on each other’s toes in Ukraine, because that is going to set a really strong pattern for their bilateral relationship moving forward.

At the moment, it looks pretty positive. No, they’re not talking past each other at the moment. Turkey, of course, is from a radically different culture. Turkey has a very different economic structure, even if it’s still very healthy from my point of view, and they’ve got a foot in the Middle East as well, which complicates things. But again, we’re seeing a degree of cooperation that didn’t exist ten, twenty, or thirty years ago.

So I’m pretty hopeful there. But I don’t think that’s going to last for the long term. Turkey is too big of a power, too dominating in its own neighborhood, and if Russia loses the Ukraine war, Turkey is one of the powers that has the opportunity to do a massive geopolitical expansion. That is something that is undoubtedly going to make other powers in the neighborhood a little uneasy, even if the Turks aren’t taking any hostile actions against them.

So we’ve got here a Swedish-German-French axis, with the Germans being the junior partner in the city partner, and Turkey trying to figure out just how much it can grab. This, to me, is starting to sound a lot like the 1500s. You’ve written about and spoken quite a bit about the changing global order and the U.S. sort of stepping back from its near-century of keeping the world safe, managing global shipping, and maintaining this global order.

When we look at the Red Sea and U.S. Navy actions against the Houthi rockets, is there a risk of the U.S. being pulled back into the Middle East from its current actions? Is the U.S.’s attempt to help secure global shipping through the Red Sea—a region in which the U.S. is not a major participant—a sign of the U.S. stepping back into its previous role?

It feels a lot like a placeholder to me. It’s become a testing ground, in an unfortunate manner, for American missile interdiction. We’re discovering that as easy as it is to shoot down an individual shaky drone or a missile, preventing a hostile group from launching any number of weapons systems any number of times is very difficult.

We’re talking about patrolling an area roughly the size of half of Texas, and it’s stretching American naval interdiction capacities to the breaking point because the Navy wasn’t designed for this. It was designed to interdict things shot at the Navy, not going off or through a wide swath of territory. And if a real country—not Yemen, but a real country—were to do this on a broader scale, it’s pretty clear to U.S. naval commanders now that there’s not a lot we can do about it. So, if someone else joined in, we’d have a real problem, and this belief that the United States is still patrolling the global oceans—even if we wanted to—would be pretty clear that we couldn’t, against some of the technologies that have evolved over the last 75 years.

In terms of the idea of the United States getting sucked back into the Middle East, I really don’t think that’s on deck. In fact, if anything, I think the Gaza conflict has underlined to the United States how little we want to do with the region. We’re having a fun little conversation with the Israelis that feels a lot like the conversations we were having with the French and the Germans a few years ago.

We tried to convince them back in the 2010s that, you know, the Russians are going to keep pushing. Look, they just invaded Georgia. They just invaded the Donbas in Ukraine. They just took Crimea. Of course, they’re going to do more. They’re going to push and push and push until they can’t. The Germans and the French were like, “It’s a brave new world.”

In fact, Germany was going to put into place a defense minister whose job was to wind down the entirety of the German military because they didn’t need it anymore, because we’ve entered a new era of peace. Then the Ukraine war happened, and all of a sudden, the French, the Germans, and a lot of other allies in Europe are singing a very different tune.

In the case of the Middle East, we have been saying publicly to everyone who will listen, at home and abroad, that we want out of the Middle East already. The Israelis assumed that what we meant was we wanted to double down on the alliance with Israel and turn against the Middle East. No, no, no—we want out.

So the Gaza war happens, and while we feel badly for what happened, what the Israelis have done in the months since, we also don’t feel all that hot about it, and the idea that the United States would get sucked into another long-range conflict in the Middle East so that Gaza can go exactly the way the Israeli government wants it to—that’s a dumb play.

What Gaza has done is kind of underline to the United States just how distasteful we find the whole thing. The discussions we’re seeing recently between the Israeli government and the American government on arms transfers are really bringing home to Israel that they are not the golden child. They are not the special exception that is going to keep the United States in the region, and that is forcing some soul-searching.

Finally, in Europe, it took a Russian invasion to change minds. Here, it’s taken a one-day-old arms embargo. But there’s a dawning revelation, one country at a time, one day at a time, that the United States is not the same place it was 20 years ago. That eventually is going to seep through many layers of incomprehension in many places. If you’re an American strategist looking at this, you know it’s kind of a little bit like the Nixon strategy of being unpredictable. But it’s not that there’s a master plan backing it all up—it’s just that the United States is looking to get out, become a free agent again. It’s a different world.

Should Cuba Integrate with North America?

*This video was recorded during my backpacking trip through Yosemite in the end of July.

Sure, the Cubans and the Americans have some history, but who doesn’t? If both sides can let that water pass under the bridge, what will Cuba’s role in the North American system look like moving forward?

Cuba hasn’t done much integrating with global manufacturing, and has allied with anti-American powers like the Soviets/Russians and China. With all of its partners facing huge problems – Russia at war, China collapsing and demanding subservience for aid, and Venezuela’s mess – there’s a clear need for Cuba to consider a new path.

So, who can fill those shoes? It looks like the US is the only viable partner for the Cubans, and that will require some work. We’re talking political changes and hefty negotiations, but both sides could benefit from the partnership. We are talking stability, tourism, and North American integration into manufacturing norms. Also, a secular challenge to the American sugar sector.

Again, this will take some significant reform and changes to mindsets on both sides, but a partnership could be lucrative for both the US and Cuba.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know 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. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides 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. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Hey everybody. Hello from Yosemite’s North Country. I’m just above Butte Canyon right now, and today we’re going to talk about Cuba. Grabbing a question from the Ask Peter forum about the place of Cuba in the North American system as globalization falls apart. Obviously, there’s a bit of drama between the United States and Cuba.

The United States seized Cuba from the Spanish at the end of the Spanish-American War, way back at the end of the 19th century, and then ran it as a colony until it broke away under the Castro revolution of the 1960s. Since then, it’s generally been a pain in the ass for the U.S. from the American point of view, while the Cubans obviously see us as the pain in the ass.

However, the Cubans have never joined the globalized structures in a normal way. They never got into manufacturing; the only thing they really produce for export is sugar. Instead, they have chosen to cozy up to whoever the dominant anti-American power happens to be, and for most of their history, that has been the Soviet Union—Russia. The problem they’re going to be facing in the not-too-distant future is that Russia is occupied with things much closer to home and doesn’t have a lot of cash to throw Cuba’s way.

Now, while the Cubans are flirting with the Chinese, the Chinese want a lot more—what’s the word I’m looking for?—servile policy out of Cuba if they’re going to invest any money. The Chinese are very well aware of the map and that Cuba’s just on the wrong side of the planet, making it impossible to supply unless the United States allows it.

So, sooner or later—probably within the next ten years—we’re going to have a situation where the available sponsors are no longer available. Their backup plan for the last, well, it’s 2024, so for the last 25 years, has been Venezuela, which has basically paid for Cuba to exist with oil transfers. Well, Venezuelan oil is going away—it’s almost gone, actually. And so there’s really not much left. We’re going to have a situation in the not-too-distant future where the Cubans are going to be forced to find a new way to operate if they want to, you know, feed themselves. And the only option on the table is the United States because there’s no one else in the world who’s going to side with Cuba against the United States.

The question is when, and the question is how. “When” is a little tricky because it ultimately comes down to when the Cuban government decides it wants to open up a new chapter in its history. Now that the Castros are gone, that is at least possible. We did see, under the Obama administration, a deal—though not a great one, as pretty much all Obama-era deals were. He wasn’t really interested in negotiating; it was more of a “let’s just get this done and move on.” Trump abrogated it anyway. The bare bones of that deal—forget the specifics—are just that the United States would allow tourism to go on, the United States would allow food sales to Cuba, and in exchange, Cuba would need to politically loosen up a little bit.

Obviously, those three things would be part of any longer-term pact, but there are really two other things you should think about. The first is not just agriculture, but the impact that Cuban agriculture will have on the United States more than the other way around. Yes, the United States is the world’s largest producer and exporter of foodstuffs, and the Cubans need that food because they’re not capable of growing what they need to feed their own population. But what they can grow competitively is cane sugar, and if cane sugar were allowed in the United States, it would be at a lower price and a higher quality than our existing sugar, which mostly comes from sugar beets in places like the Red River Valley of North Dakota, Minnesota, and a little bit down in the sugar bowl of Louisiana—very low-quality sugar, very high prices, very heavily subsidized.

So, if you do bring Cuba into the fold, keep in mind that you’re going to have a little fight with the agricultural lobby. Now, the agricultural lobby will ultimately go with Cuba because everybody else would be able to sell things to Cuba, and only the most protected industry we have in the country would be the one that would suffer. It’s just a question of time.

The second thing to keep in mind is that despite Cuba’s many faults—and there’s a list—they actually have a pretty good technical education system. Remember, this is a country where the cars on the streets date back to the ’50s and ’60s, and a lot of nostalgic tourists like to go there. They’re still running—not because they were ever good cars, but because this is a nation of doctors and mechanics. Now, they’re not certified in the way that Americans would define the term—let’s not get crazy—but for a developing country, their technical skill is actually pretty high, and their cost of labor is only like 10 to 15% of what it is in Canada or the United States. So, if you were to take a new deal and expand NAFTA to another country, you’d have something pretty special here.

Mexico, especially northern Mexico, has now advanced to the point that they don’t do low-skilled labor, but Cuba could. In fact, Mexico is in a position where it needs an “1980s Mexico” in order to achieve economic efficiency. So, you get an agricultural merger, and you get some really interesting things happening in the manufacturing space. And it’s right off the coast of Miami. Oh, and I have no doubt that it’ll turn into a tropical Vegas, so there’s that, too.

All that takes is a change in mindset in Cuba—that it’s really time to come on board or move on—and a bit of a change in mindset in the United States—that it’s time to either negotiate a deal or force the issue. Either of those can take any number of forms; it doesn’t have to involve shooting. It can all happen around the negotiating table. It’s just an issue of choice on both sides.

Alright, that’s it for me. Take care.

Life’s Greatest Mystery: Understanding Americans

*This video was recorded during my backpacking trip through Yosemite in the end of July.

We’re going to group therapy today, and on the docket for discussion is what makes Americans so difficult to understand? Not in a weird accent kind of way, but in a “why are we the way that we are” kind of way.

Yeah we’re all manic depressive, but how did we end up like this? If you look back at US history, there are some clues as to how we got here. The first settlers struggled with the geography of America, but soon discovered vast fertile lands once they trekked into the interior. This led to rapid economic growth and a sense of boundless opportunity (aka the American Dream), that established the national ethos of hard work will always pay off.

This overly optimistic and often unrealistic worldview in the states isn’t seen most places. Take Canada for example – the harsh landscape within Canada led to a more passive-aggressive national character. Or Australia – the barren outback meant that they had to develop strong external relationships to thrive. Each of these countries’ ethos is unique and contributes to much of the miscommunication that happens throughout the world.

The US also has a quirk in which we overreact to crises. The launch of Sputnik by the Soviets led to a complete overhauling of American industry and education. 9/11 led to the US asserting its power globally. This is a blessing and a curse, and you don’t know how it will end up until years down the road.

So, rules of engagement for understanding Americans, just treat us like teenage girls…

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know 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. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides 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. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Hey, everybody. Peter Zeihan here, coming to you from upper Spiller Canyon in Yosemite. Just in front of me is Horse Creek Pass, which sucks. Anyway, this is Spiller Canyon behind me. That’s much better. We’re doing a number of videos while I’m out backpacking. This one, we’re going to talk about why Americans are so manic-depressive or, as most other countries refer to it, why Americans are batshit crazy.

It has to do with geography. When the original settlers started laying claim to the eastern seaboard of what’s now the East Coast of the United States, we were just another colony. Even when the United States got its independence, its opportunity for growth was very limited. You basically had a thin coastal strip that wasn’t even particularly well connected.

And there was the Chesapeake Bay right in the middle, which was valuable. But if somebody, as in the War of 1812 kind of thing, took over Baltimore, it cut the United States in two. So we discovered that Americans had a very regional approach to everything until we started penetrating inland. Part of the Treaty of Paris gave the United States the eastern side of the Mississippi Basin, basically up to the Appalachians, and then later the Louisiana Purchase, which gave us the western side.

This was a major change, one that has shaped America’s mindset ever since. As people took the National Road and entered the Ohio River Valley, they soon found out that these were the best farmlands on the planet, overlaid by the largest natural navigable waterway system in the world, just right on top of each other.

Anyone, for the price of a Conestoga wagon, which in modern times is like $14,000, could basically go out to this interior zone and within eight months be exporting grain through New Orleans for hard currency. This lasted for five generations, with the notable interruption of the Civil War.

For five generations, Americans found more and better lands. They got richer, and there were really no security concerns from their point of view. You do that for 150 years, and you develop a series of national ethos and mythos. For the United States, that mythos was that the world is ultimately a kind place, and that you just have to work hard, and security will take care of itself, and wealth will take care of itself, because that is what we knew for 150 years. But, as we have all learned, that is not how the world actually works.

From time to time, the world reaches out and punches you in the face. And for Americans, who went for five generations without a serious adjustment, well, we lose our minds because we become convinced that the covenant with God has been broken and that our days are over. We start a panicked recreation of everything about ourselves in a desperate attempt to survive.

Now, is this an overreaction? You betcha. But does this have an upside? Absolutely. Because if you respond to negative stimuli with reinvention, then the sky is the limit. Let me give you a few examples. The quintessential one is Sputnik. Let’s be honest here. It was a beeping aluminum grapefruit.

The Americans were ahead of the Russians at the time in rocketry, metallurgy, and electronics. But because the Russians were able to launch something that went beep, beep, beep, beep, beep, we lost our shit and completely overhauled our industrial base. We completely overhauled how we handled public education, and we then coasted on those advantages for the next 50 years.

9/11 is another really good example. It was a tragedy by any measure. I don’t mean to talk people out of that, but as a side effect of the War on Terror, Americans ended up at the sharp end of American power, striding every major waterway on the planet, something we have yet to use.

When that time comes, all the hard work is done. Vietnam is another great example. We lost a war to a post-colonial power that was a rice producer, and we were the world’s largest rice exporter at the time. As a side effect of our reaction to Vietnam, we took about a decade off, and we completely overhauled our defense industry, marrying technology to our weapons systems in what has become known as the revolution in military affairs.

That gave us everything from satellite communications to cruise missiles to drones. Our reaction, our overreaction, to stimulus is one of our great advantages, but it does mean we’re a little “whoo-hoo” when we’re dealing with the diplomatic side of things. When something goes down that we think is too much, we have to remake everything.

Now, our closest cultural cousins, the Australians, the New Zealanders, and the Canadians, have something similar to this. Let’s start with our Canuck neighbors. Actually, the Canucks and the Australians both, unlike the American settlers who found more and better lands, the Canadian and Australian settlers basically found a dead heart.

The Aussies found the Outback, which, you know, may be good for mining, but it’s certainly not good for the average person to start anew. And the Canadians found the Canadian Shield, which is forested land with a broken crust where you might be able to mine, but you’re never going to farm. So they had a very different approach.

In the case of Canada, this is where the passive-aggressiveness comes from because they’ve always seen the country to their south doing very, very, very well with absolutely no planning. With the Australians, this is why they have a tendency to be very, very forward-thinking because they know that at the end of the day, their capacity to leverage their own geography to achieve success is somewhat limited. So they have to have good relations with someone else. It used to be the United Kingdom; now it’s definitely the United States.

And then there are the Kiwis. They have a situation somewhat similar to the United States in that they pushed inland and found more and better lands, especially relative to the size of the country. But there was one big difference between New Zealand and the United States: New Zealand’s remote. The Americans have a massive coastline on two ocean basins.

So, you take the size of the United States and combine it with its resources, of course, it’s going to be a global power, which is one of the reasons why we get punched in the face every once in a while. The New Zealanders never had that.

The Kiwis could exist in a degree of splendid isolation should they really choose to, and as a result, they kind of have all the upside of what goes on in the American mind, but none of the downsides, because, you know, the last time that there was a war on New Zealand shores, you have to go back to like the 15th century.

I think that’s the 15th, 16th, 13th, mid-18th century when the Maori settled there in the first place and went to war with the natives who were already there. The result is a very, very different political culture. Okay, that’s it for me. I will, that’s my next stop. I’ll see you guys there.

Could Jet Ski Bombs Change the Way Navies Operate?

*This video was recorded during my backpacking trip through Yosemite in the end of July.

The US Navy and its fleet of carriers (and super-carriers) haven’t had much of a challenge on the seas since WWII. But of all things, it might be some low-tech jet ski bombs that change the way the world’s navies operate.

As the Ukraine War evolves, we’re seeing warfare innovations that could reshape all future conflict. This has come in the form of modified speedboats and jet skis with bombs, used to disable Russia’s Black Sea Navy. And other countries are starting to take note.

For countries with constrained naval access points, this could spell trouble; think of regions like the Black Sea and Baltic Sea or countries with punchy neighbors like Israel and Turkey. These innovations are low-cost and accessible to just about everyone…even worse, they’re difficult to defend against with current tech. So, how does this look for the major naval players?

China is vulnerable to attack from smaller countries due to their port locations. For the US, UK and Japan, there’s less concern given their geographies and strategic partnerships. However, everyone should be updating their defense systems and working to handle this new style of water warfare.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know 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. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides 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. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Hey, everybody. Peter Zeihan here, coming to you from Yosemite. Really doesn’t matter beyond that because I’ve been pushed into my tent by some Thunder boomers for the last hour anyway. Thought I’d use the wet as an excuse to talk about the future of movies around the world. Since World War One—really, World War Two—the carrier has been the backbone of everything that matters, largely because they can project power. More conventional ships like, say, battleships have to get into engagement range, which is, you know, measured in miles or tens of miles, whereas a carrier can launch fighters and fighter bombers from hundreds of miles away and never be in danger itself.

That’s why the Soviets invested so much in trying to break through the American carrier perimeter with things like airlines, cruise missiles, or submarines to questionable effect. But anyway, that was the goal. Now, for the last 30 years, the United States has been the only game in town. It’s not just carriers the United States has. It has supercarriers. It has ten of what most countries consider carriers, which are the core of the Marine expeditionary units, and then another ten of the Nimitz class carriers, which are the ones that, you know, outshoot everybody. One of those has more projection-based firepower than every other navy in the world, with the exception of the Japanese and the British navies, who are allies anyway. So, big difference. And then, of course, the United States is in the process of floating three Ford-class carriers, which will be even more powerful. So, from a conventional naval point of view, the United States is in a league of its own. Might as well be on its own planet. The question is whether that is changing.

One of the things that we have seen in the Ukraine war is that the Ukrainians have been able to modify speedboats and literally jet skis with remote controls, put a couple hundred pounds or 500 pounds of bombs on them, and send them off. In doing so, they’ve basically sunk or incapacitated the vast majority of the Black Sea navy of the Russians. It’s actually worse than it sounds because the Russians moved a lot of ships into the Black Sea just before the war, and those are all gone too. So recently, the Russians abandoned the port of Sevastopol. Basically, they’re not having naval assets in the Crimean Peninsula anymore. They’ve moved everything back to Novorossiysk. But the Ukrainians have already hit Novorossiysk, so they’re probably going to have to move it back to Tuapse, or maybe even Astrakhan. Basically, the Russian Black Sea Fleet is no more. It’s no longer a fleet in being. It no longer has the capacity to project power, and it’s basically hiding in its supposed home waters. Say what you will, but the Ukrainians are creative, and they’re working with very, very little. There’s not much about these naval drones that is particularly sophisticated; we just haven’t seen them patched together like this before. So, to think that this technological innovation is going to stop just in Ukraine is kind of stupid.

So you need to look around the world for other navies that really shouldn’t exist much longer because if they get in a shooting war with a neighbor, all it’s going to take is a few non-dudes on jet skis, and they’re gone. The country that is going to suffer the most from this is Russia. All of Russia’s maritime access points where it has naval ports are contested. I mean, yeah, yeah, yeah, yeah, it’s got that really, really, really crazy long Arctic coastline, but hardly anyone lives there, with the exception of Arkhangelsk and Murmansk, which are the bases for the Arctic Fleet. And both of those are within jet ski range of Norway. Saint Petersburg and the Baltic Sea Fleet are even more constrained. Anything that wants to operate there has to get by Finland, Estonia, Latvia, Lithuania, Sweden, Denmark, Poland, and Germany. So yeah, not happening. The only other remaining base is out in Vladivostok, where the Russians are completely circumscribed by the Japanese islands. So, you know, any meaningful conflict involving any of these theaters, and the Russians lose it all very, very, very quickly to jet skis. I mean, that’s just embarrassing. The Russians have never been a naval power because all of its navy points are constrained, and one fleet can’t really reinforce the other, but still, this is just a little over the top.

They’re hardly alone. Basically, there are a lot of countries that are near one another, they don’t like one another, and getting a few motorboats or jet skis together to throw things out of whack is a really good plan. So, for example, if the Israelis and the Turks don’t find a way to get along, both of them can largely decimate the regional navies. This is a bigger problem for Turkey because it’s on the Black Sea, and that means it has to have good relations with not just the Russians and the Georgians, but the Romanians and the Bulgarians. And of course, then there’s the Greeks. The Aegean Sea is probably going to be a no-go zone for the Turkish Navy, which basically makes it really important for the Turks to get along with Israel. Otherwise, they won’t have a navy at all.

But the real fun starts in the Persian Gulf, where Iran, Kuwait, Qatar, Saudi Arabia, the United Arab Emirates, and Oman can basically, whenever they want to, bomb each other’s navies. Not that any of them have navies, but it’s a commercial thing. All of these countries are dependent upon the Persian Gulf and the Strait of Hormuz to get crude out, and now it takes really, really low-tech stuff to interrupt it. But the real, real crazy exciting stuff is going to happen in East Asia because every Chinese port is on the wrong side of the first island chain. That’s the line of islands going south from Japan to include Taiwan, the Philippines, and Indonesia. I would look to Indonesia and the Philippines to really explore these technologies because they’re not naval powers, but anyone can buy some bombs on a jet ski, and all of a sudden, all this money that the Chinese have been investing in their navy is completely pointless.

Now, of course, if you’re talking about the big three navies in the world, that’s the United States, Japan, and the United Kingdom. Those are the three big naval powers. The game might be a little different. One of the reasons why these three countries are the world’s biggest naval powers is because of their positioning. Obviously, Japan and the United Kingdom are islands, so they have to have a navy, and then the United States is basically on a continent more or less by itself from a strategic point of view. Well, in the case of Japan, all of its ports are on the east side of the island, so they’re out of jet ski range. For the United Kingdom, as long as they get along well with Norway, Denmark, and France, there’s nothing to worry about there, and that’s one of the many reasons why NATO tries to keep an eye on all of these relationships. And to be perfectly blunt, the French and the Brits—there’s a lot of bad water under the bridge there, but they’re not about to go bombing one another, and the Danes, the Norwegians, and the Brits have gotten along well for centuries, so that’s probably okay.

There’s still the open question, though, of where can you operate? Just because you can get your ship out of port doesn’t mean you can do anything with it because if you come in range of a foreign coastline, the jet skis may very well come out. So we’re going to have to see a counter-revolution in naval technology here. I don’t want to go so far as to say the age of the supercarrier is over because those things are really tough to sink, and they are really fast, and they are really useful. But if someone’s coming at you with a fleet of jet skis, you don’t have the right weapons for that. There’s nothing on the ships or even in the ring of ships that supports them that can shoot down at an angle to engage these things, so we’ll need something new.

Now the Navy is working on something called the Replicator initiative, which isn’t simply going to field a bunch of drones; it’s going to turn all of the major surface combatants into drone manufacturing centers, so they can kick out dozens of these things in a few hours, is the theory. And if that happens, you get some serious drone-on-drone action. While using a jet ski against a capital ship is a big bang for your buck, using a small drone against a large drone is an even bigger bang. So, according to the Navy, within two years, Replicator should be online, at least in a prototype fashion. We’ll see what it looks like then. It’s all a question of whether or not the existing naval powers can innovate at the speed that the upstarts are. I can tell you this for sure: they’re putting a budget behind it because they don’t want to lose those big boats.

All right, that’s it for me. Until next time.

US Border Crossings: Is Mexico the Solution?

It’s time that we discuss the situation at the US – Mexico border. What’s going on and how is it all going to shake out?

Over 2 million people crossed the border illegally last year. Crossings appear to have been decreasing over the past six months thanks to executive orders by President Biden (although, they were first part of a Republican proposal). While these crossings might be happening via Mexico, the majority of those entering the US illegally are not Mexican.

These migrants are coming from Central American countries like Honduras and Nicaragua, as well as countries like India, Russia and China. While some of these people used to enter legally, policy changes have forced them to cross via more illicit means. Physical barriers can only do so much in preventing these crossings, so it may be time to explore political solutions.

Since most of these migrants are entering through Mexico, that should be the first line of defense. Discussions between Mexican President Andrés Manuel López Obrador (Amlo) and President Biden have led to positive trends in managing border crossings. However, this issue is constantly evolving and will require much more than a big wall and soft handshakes to sort out.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know 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. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides 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. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Hey everybody, Peter Zeihan here, coming to you from hot and smoky Colorado, where we’re finally getting some much, much, much needed rain to put out the forest fires that are way, way, way too close. Anyway, I’m back for a couple of days, so I want to give you an update on what’s going on at the border.

Now, as we all know, over 2 million people crossed illegally last year. Whether that’s good, bad, or indifferent depends on your politics. From a rule of law point of view, it’s questionable at best. Politically, it’s untenable. But economically, if it hadn’t happened, we’d probably have 10% inflation because of labor shortages. So, pick your poison—what problem do you want to embrace, and which one do you want to work against?

Now that we’re into August, there are two big things going on. First of all, the number of apprehensions at the border has been steadily dropping for the last six months. This is largely due to a package of executive orders that Joe Biden enacted a few months ago. These include summary expulsions and much stricter rules on asylum. These measures were part of a Republican-sponsored project earlier this year to remake the border. The Democrats were forced into it, but then Donald Trump thought this would be a victory for Biden, so he told his allies in Congress to scuttle the deal. In response, Biden went ahead and imposed the Republican ultimatum as a series of executive orders. I don’t want to say it’s working—it’s too soon to know for sure—but tensions at the border have dropped by roughly a third during this time. We’re well below the high levels of detentions and crossings from last year, and preliminary data for July and August suggests that trend is continuing.

The second thing is that folks from beyond Central America are now making up a larger and growing group of those crossing the U.S. border. Remember, the majority of people crossing were from the failed or nearly failed states of Honduras, Nicaragua, and El Salvador. But now, there’s a significant number coming from other places, especially India, Russia, and China. These are people who used to come to the United States legally, but due to the lack of immigration reform through the Obama, Trump, and now Biden years, most legal pathways for immigrants have been closed. So now, people are just coming illegally, which means different tools are being used to regulate the flow.

Specifically, Biden has had a series of deep conversations with his counterpart in Mexico, President López Obrador (AMLO). Behind the scenes, they’ve quietly cut a deal where Mexico acts as the first line of defense. This makes it more difficult for people from those failed states to travel north. Once they get to the northern border, they’re put on buses and shipped back to the southern border. Secondly, Mexico is no longer accepting third-party visas for would-be immigrants coming from places like China. It used to be that you could fly from China to Mexico City and then come up, but not anymore. Now, they’ve been flying to places like Ecuador and trying to connect through to Mexico, but that doesn’t work anymore either. So, they’re trying to go through Bolivia or Africa, but now the Mexicans are saying unless you have a year-long multi-entry visa for all the countries on your trip, we’re just going to ship you back. This means all the countries where they used to start, like Korea, Japan, Vietnam, or Russia, are now having to take deportees on flights from Mexico City.

None of this would have been possible without having a conversation with AMLO. And AMLO is a difficult guy to have a conversation with—just ask Donald Trump. He banged his head against the Mexican administration for a couple of years early in AMLO’s reign. It hasn’t been any easier for Joe Biden, but after a fashion, we have the beginnings of a deal.

Will it work? For the moment, things are trending in a positive direction if you want to keep the border closed. But keep in mind, this border is 2,000 miles long. Even if the United States were to deploy its entire military to the border, that’s only enough people for one dude every 50 feet, assuming no one ever takes a break or sleeps. So, there has to be a political angle to any sort of border management. Simply building a wall won’t work because, as we found out in the early years of the Trump administration, if you can quadruple your income by using a ladder, well, you’re going to use the ladder. The wall hasn’t done much to inhibit people from crossing illegally.

However, a political deal, like the one we saw between Trump and AMLO and now between Biden and AMLO, which turns all of Mexico into a kind of a wall—that works a lot better.

Alright, that’s it for me. Take care.

China’s Tariff Wars: The EU Opens a New Front

*This video was recorded in June of 2024.

We’re talking about a different kind of war today – Trade Wars. Specifically, we’ll be looking at attempts by the US and EU to limit Chinese involvement in their electric vehicle markets.

With 100% tariffs from the US and around 50% from the EU, the Chinese EV industry is being backed into a corner…and its only going to get worse. China’s retaliatory measures are limited by their dependence upon foreign imports and attempts to restrict exports of other materials like gallium have backfired. Heck, the Chinese even tried to slap some tariffs on bacon.

China’s myriad of other issues (demographics, post-COVID decline, low value add, etc.) have only exacerbated the problems brought about by these tariffs. The semiconductor industry is a good example of the inefficiencies in the Chinese system and how reliant on foreign expertise it is.

Don’t get me wrong, China is the world’s manufacturer and that’s no small thing, but its dominance will be challenged by these ever-growing wars on trade.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know 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. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides 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. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Hey, everybody. Peter Zeihan here, coming to you from the top of Frazier Peak in New Mexico. Back behind me, you can see Mount Walter and just a little bit of Wheeler.

Today, we’re going to talk about trade wars shaping up with the Chinese and why the Chinese don’t have too much leverage. The issue is that the United States and the European Union have both put heavy tariffs on Chinese electric vehicles—100% in the United States, about 50% in the case of Europe.

This is just the first round. Expect these tariffs to at least double over the next couple of years. The goal is to keep everything that involves any part of a Chinese EV out of the system, starting with the finished vehicles. This will extend to parts and especially batteries in the near future.

This is the beginning of the process, not the end. Regardless of what you think about electric vehicles, there’s a belief in the governing systems of both the U.S. and the EU that this is the future, and they don’t want another country or economic bloc to dominate it. Obviously, there’s a lot of subtext there, but that’s the core of the issue.

The Chinese are looking for things to retaliate against. The problem is, when you’re a major manufacturing country that imports all of your raw materials and relies upon foreign markets for all of your sales, there’s not a lot you can do. If you impede trade, you’re destroying the trade system you rely on for your economic model.

The demographic situation in China has gone from bad to horrific. Since the beginning of Covid, we’ve discovered that not only did they overcount their population by well over 100 million people, but people have aged out of the block that does most of the consumption.

We only got our first decent look at Chinese demographics a little under a year ago. The Chinese are now starting to understand why retail sales have not rebounded post-Covid—they’re not going to rebound because they no longer have enough people to generate a rebound. So, foreign sales are all they have. China is also not the technological leader, which means it can’t withhold technology from its trading partners to get market access.

So, the question is, what can they reach for? In the United States’ case, if you retaliate with tariffs on anything, it immediately triggers a second round of tariffs on you, which hurts you more. Even with things where the Chinese might seem to have an advantage, like gallium and germanium (two rare metals they dominate in production), they restricted access to Japan and the U.S. after previous sanctions rounds. The problem is, these metals are just byproducts of aluminum manufacturing. The U.S. is getting back into aluminum smelting, solving that problem, and leaving China without leverage.

In Europe, this is the first significant trade dispute between the EU and China, and it’s not likely to be the last. Europe is known as Fortress Europe for a reason, and China is ripe to be cut out of the European market. Right now, however, the Chinese don’t feel the same danger in doing retaliatory tariffs against Europe as they do with the U.S. The problem again is finding leverage, and they’ve gone after pork.

Back before Covid, China was hit by a massive outbreak of African swine fever, decimating their herds. America and other swine exporters stepped in to fill the gap. Then, the Trump administration cheesed off the Chinese government, leading China to decide to never buy American foodstuffs again unless there was no other option. They switched to European supplies for pork, mainly from Denmark, Spain, and to a lesser extent, Italy.

Fast forward a few years, and China’s swineherd has recovered, creating overproduction. Now, they’re sticking it to the Europeans on pork. It’s not nearly as impactful as targeting semiconductors, but the Chinese don’t have much leverage there either.

No one makes high-end semiconductors by themselves. Making chips better than 28 nanometers involves over 9,000 firms globally. China can make chips of about 90 nanometers, suitable for smart light bulbs, but anything more sophisticated requires significant outside help. The idea that having a fab plant means you can run with it is false. It takes a village for specialty chemicals, design work, and lithography.

If the Chinese ever find something to retaliate with, the EU and U.S. can hit back in ways that impact core Chinese interests very quickly. This leaves the Chinese with limited options, like going after pork. Unless you’re raising pigs in Spain, this isn’t a big deal yet. Sooner or later, Chinese demographics will cause their system to collapse, revealing how much of the lower-end manufacturing the rest of the world can do without. China is the workshop of the world for mid to low-quality products and the king of assembly, but that’s not the tool you use to fight a trade war.

A Crack in the North American Drug War

An image depicting cocaine in lines, a card credit, and bill rolled up

I’m back home from Yosemite on a brief intermission to my summer backpacking trips, and wanted to issue an update on the Mexican Cartels. Specifically, we’re talking about the arrest of Sinaloa leader, El Mayo.

El Mayo is one of the heavy hitters in the Sinaloa cartel, known for being the logistics and money guy under El Chapo. This past week, he was mislead by one of El Chapo’s sons to enter the US, where he was immediately arrested.

This shakes things up for the Sinaloa cartel, but what will the fallout be? Well, you can expect lots of violence as different factions compete in this newly developed vacuum. I wouldn’t expect any lags to your drug supply though, but don’t get too excited, as this gives the US more insight to ultimately dismantling the cartel’s operations domestically. If I was the shot caller, I probably would have gone after the leader of the Jalisco New Generation cartel – El Mencho – but hey, I’m not complaining.

Oh yeah, if you we’re hoping for an update on the US political situation…nothing has really changed in my book. Just a different name on the ticket.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know 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. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides 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. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Hey, everybody. Peter Zeihan here, coming to you from smoky Colorado. We’re definitely in the depths of fire season here; in fact, there’s a forest fire about five miles that way. No stress. Anyway, I’ve been gone backpacking for a couple of weeks, and I’m about to disappear again, so I figured I’d take this opportunity to update you on what has gone down while I’ve been out.

I’m sure lots and lots and lots of you have a long, long list of things you want me to update you on, but there’s really only one thing that I saw that happened that really requires giving you guys the lowdown. That happened in Texas and Mexico last week when a guy by the name of Ismael Zambada, also known as El Mayo, the titular head of the Sinaloa drug trafficking coalition in Mexico, got on a plane, flew to Texas under false pretenses, and was promptly arrested.

Quick background: the Sinaloa cartel is not simply the most powerful drug trafficking organization in Mexico; it’s the most powerful one here in the United States. In fact, it’s the largest organized crime group in the world. The reason it got into that position is because of its previous leader, a guy by the name of El Chapo Guzmán.

El Chapo ran the cartel like an American or Korean conglomerate. The idea was that they were all on the same side—don’t shoot at each other, don’t engage in petty larceny, things that would anger the population. Instead, they branched out into affiliated industries on the side—not just cocaine, but also marijuana, heroin, maybe a little bit of light kidnapping and human trafficking, and even local government, transport, agriculture, and tourism. Anything you could launder money with. He ran it as an institution, which kept the violence rate within his organization relatively low and minimized clashes with local governments. This allowed him to take the Sinaloa cartel to dizzying heights.

The United States named him public enemy number one, and eventually, in a series of operations, we got him. Then he escaped, and we got him again. Now he’s serving a life sentence in some dark hole in the United States. His successor is El Mayo, recently arrested. El Mayo is best known as El Chapo’s accountant. He knows where all the bodies are buried, how the institutions run, who the key players are, where the money flows, and how it’s laundered. So, big win. It’s also noteworthy how he was captured—not a DEA or FBI operation, but a setup by one of the other leaders of the Sinaloa cartel, one of El Chapo’s four sons, who tricked him into getting on the plane to the U.S. under the pretense of looking at an investment property.

El Mayo turned himself in immediately and is basically going through a plea bargain, leaving him with nowhere to turn because the evidence against him is overwhelming, and now there’s another insider involved.

The question is, what kind of operational impact will this have on the Sinaloa cartel? The cartel fractured into several dozen pieces after El Chapo’s fall, with El Mayo controlling the largest chunk. The second, third, fourth, and fifth largest chunks are controlled by those close to him, one of whom just turned him in. We already have another key player in custody in the United States, so two of the four are down, and three of the five kingpins are down.

In the short term, this means a lot of bloodshed in Mexico as these factions, without their leader, splinter and other factions try to grab pieces. Local crime groups in these areas will also try to seize opportunities. Mexico is already coming out of a three-year period that’s the most violent in the country’s history, and this situation isn’t likely to improve that.

However, now that the U.S. has some idea of where the money is flowing and the routes used, we can start dismantling the Sinaloa apparatus within the United States. Don’t expect this to have a huge or immediate impact on the flow of narcotics into the U.S. That is driven by two things: one, Americans really like their cocaine, and two, because cocaine is very expensive per unit of weight in bulk, it’s easy to smuggle. There will always be groups in Mexico and the U.S. willing to push that stuff through, but it just won’t be at the institutional level of the Sinaloa cartel.

If you wanted to make a bigger impact, the target would have been a guy named El Mencho, leader of the counter-group to Sinaloa in Mexico, known as the Jalisco New Generation Cartel. Unlike El Chapo or El Mayo, El Mencho runs his organization as a one-man show and a crime boss, ruling by fear and violence, which is the point of his operation. He just happens to make money on the side selling drugs. Removing him would likely lead to a significant impact on the cocaine flow in the midterm, but it wouldn’t end it. As long as Americans want their coke, this will continue.

But I don’t want to take away from the victory here. The bookkeeper has been brought in, and that will absolutely have significant impacts.

Now, about that other topic you want me to talk about, Biden’s withdrawal from the race. It really doesn’t change things. I made the call two years ago on how this election is going to go, and I don’t see any reason to adjust that now. I made some minor adjustments a few weeks ago during the presidential debate, which showcased the mental incompetence of both candidates. But I would just add one thing: a lot of Americans, roughly 20 to 25% of voters and the vast majority of America’s true independents, have been saying for months that they want someone else to choose from. They don’t want to choose between two people they’ve had to choose from before. Independents are fickle voters; they hate voting for the same person a second time. Well, with Biden out and Harris in, they no longer have to. So what was likely to be a lopsided contest in favor of the Democrats already is now likely to be a rout for the Republicans, unless Vice President Harris absolutely messes things up in some way in the next few months. And that doesn’t seem to be her style.

Okay, that’s all I’ve got. Take care.

Is Chinese Nuclear Tech Better Than the US?

Photo show three nuclear power plant reactors

*This video was recorded in mid-July, prior to Peter departing on his backpacking trip.

I’ve been asked to address the claim that China has surpassed the US as a nuclear power. On paper, China might have the upper hand, but that doesn’t always translate to real life.

China has been busy building the world’s largest nuclear fleet, and the US hasn’t built a plant since the 70s (even if they have had more recent expansions). However, the technology being used in the Chinese plants is dated and ignores major safety concerns. The US has struggled to keep a labor force large enough to operate new plants, but there’s potential for modular reactors and new tech to shift the tides in favor of the US in the coming decades.

Now onto the explosive stuff. The US nuclear arsenal is top-notch, well tested and maintained. The Chinese are expanding their arsenal, but precision manufacturing and testing are limiting that growth.

So, the Chinese may have the numbers leaning their way for nuclear power, but in the areas that really matter (like nuclear weapons) the US is still sitting comfy.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know 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. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides 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. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Hey, everybody. Peter Zeihan here, coming to you from a stormy day in Colorado. Hopefully, we won’t have a lightning strike close enough to make things too exciting. Anyway, today we’re taking a question from the Ask Peter forum. The question is about recent reports suggesting that the United States is falling behind China in nuclear technology. What are my thoughts on that?

This is a complex issue with both yes and no aspects. Let’s start with where China is doing well, which primarily concerns nuclear power generation and the deployment of new nuclear power facilities. Since the Three Mile Island incident in 1979, the United States has only built one nuclear facility, the Vogtle plant, constructed by Southern Company. A major issue they faced was talent and labor. When you haven’t built new nuclear power facilities for nearly 50 years, there aren’t many people entering that field, and those who were in it have mostly retired. As a result, the U.S. has had to reinvent certain skill sets and recruit former Navy nuclear engineers, like those who worked on submarines, to fill the ranks. This is a very costly process.

In contrast, China is building out what will easily become the world’s largest nuclear fleet. This means there’s a whole generation of nuclear engineers and construction workers in China who are experienced in this field. So, it’s not that Americans can’t do it or that we’ve lost the technology; we’ve lost the labor force. From a practical standpoint, that’s almost as bad. But it’s important to note that the type of nuclear reactors used in both the U.S. and China are typically light water reactors, a technology dating back to the 1950s. While China is developing a more robust and redundant labor force for 1950s and 1960s technology, this doesn’t necessarily mean they’re getting ahead in innovation.

If the United States decides to re-enter the nuclear power generation field, the likely approach would be through small modular reactors (SMRs). The advantage of large nuclear facilities is that they can generate over a gigawatt of power, enough to supply many cities. However, the problem with light water reactor technology is the potential for meltdowns, like a lighter version of the Three Mile Island incident. Public resistance to having these reactors near cities is a major reason why the U.S. hasn’t built more. In China, where public opinion and safety concerns are less of an issue, they’re building them rapidly.

The advantage of SMRs is their small size—they can fit on the back of a truck and be plugged into existing systems, like decommissioned coal plants. They are mobile and can be moved to where they’re needed. This makes them a good partner for renewable energy sources like wind and solar, which are intermittent, or for decarbonizing energy production. You can take an SMR to a decommissioned coal plant that already has all the infrastructure and simply set it up and run it. This technology could be a real game-changer.

However, building the prototype is a significant challenge. A company that was trying to break into this space faced setbacks last November when contracts fell apart, setting the effort back to the drawing board. While other companies are working on it, none are likely to have a working prototype within the next 3 to 5 years. Without a prototype, mass production of the technology is unlikely within the next decade. While SMRs are an interesting concept, they’re not progressing rapidly at the moment. As far as I know, China isn’t focusing on this direction either, as they’re more concerned with building large reactors.

There is also the possibility of using fourth-generation reactors, such as pebble-bed reactors. The French are working on this, but we’re not yet at the stage of having a functional prototype, so it’s too early to draw any conclusions. Even if the prototype is perfect, actual construction might not begin until 2035 to 2040.

Now, let’s talk about nuclear weapons. Nuclear materials aren’t just used for generating electricity; they can also make very dangerous weapons. The United States was not only the first country to build and use an atomic bomb but also the first to develop a hydrogen bomb. American nuclear weapons are likely still the best in the world, although we haven’t used one in quite some time. We’ve developed ways to use computer simulations to ensure our arsenal is effective and safe. The U.S. remains the world leader in maintaining and refurbishing nuclear reactor cores to ensure they don’t degrade.

However, the only way to know for sure how well these systems work would be to engage in a full-scale international intercontinental nuclear missile exchange—a test that, thankfully, we don’t want to conduct. But I’m confident that American weapons are still the most advanced. From the last time we had insight into Russia’s nuclear capabilities, they’ve likely slipped from being the second-best to something like ninth in the world. They still have many warheads, but the question is whether these warheads have degraded. Considering the poor performance of other Russian military equipment in Ukraine, it would be surprising if their nuclear arsenal were the one thing still functioning perfectly. This doesn’t mean we should provoke Russia into a nuclear conflict, but if such a situation arose, the blast radius of their bombs might be less than expected. It would still be a disastrous event.

As for China, they currently have only a few hundred deliverable nuclear weapons. They’re working on expanding this force and aim to reach some form of numerical parity over the next 15 years. This goal involves overcoming significant challenges, primarily related to precision manufacturing. Building a plutonium bomb requires creating an explosive core with a series of synchronized explosions around the core to force it to collapse and trigger a reaction. The Chinese can do this, but scaling it up is a challenge. They also need to miniaturize the warhead and ensure it can survive the forces of launch and re-entry. While the Chinese are not lagging in these areas, achieving all these requirements together is complex and untested in real-world conflict scenarios.

If they fail, it won’t be for lack of trying.

The End of the World is Just The Beginning

Disunited NAtions

The Absent Superpower

The accidental superpower

The End of the World is Just The Beginning

Disunited Nations

The Absent Superpower

The Absent Superpower

The End of the World is Just The Beginning

Disunited NAtions

The Absent Superpower

The accidental superpower

The End of the World is Just The Beginning

Disunited Nations

The Absent Superpower

The Absent Superpower

The End of the World is Just The Beginning

Disunited NAtions

The Absent Superpower

The accidental superpower

The End of the World is Just The Beginning

Disunited Nations

The Absent Superpower

The Absent Superpower

The End of the World is Just The Beginning

Disunited NAtions

The Absent Superpower

The accidental superpower

The End of the World is Just The Beginning

Disunited Nations

The Absent Superpower

The Absent Superpower

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