Informal Institute for National Security Thinkers and Practitioners

Quotes of the Day:

"The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy."

– Martin Luther King, Jr.

"We must, indeed, all hang together or, most assuredly, we shall all hang separately."

– Benjamin Franklin

"If you don't like something, change it. If you can't change it, change your attitude."

– Maya Angelou

1. Expectations on the end of Putin' War in UKraine and Contradictory Reporting

2.Pentagon Names Remaining Unidentified Crew Member Killed in Washington Crash

3. Trump to Order Aid Agency to Be Put Under State Department

4. Trump imposes tariffs on Mexico, Canada and China, risking trade war

5. China denounces Trump tariff: 'Fentanyl is America's problem'

6. Commentary: Does Volvo’s Chinese ownership threaten US national security?

7. AI Is Wall Street’s Modern Gold Rush. Here’s How Investors Are Placing Their Bets.

8. What DeepSeek, Russian Sanctions and Guitar Amplifiers Teach Us About Global Competition

9. Musk aides gain access to sensitive Treasury Department payment system

10. Trump Favors Blunt Force in Dealing With Foreign Allies and Enemies Alike

11. Trump’s Tariff Wall: Can Canada and Mexico Overcome Fortress America?

12. The profundity of DeepSeek's challenge to America

13. Too late, US Commerce nominee calls DeepSeek a technology ‘thief’

14. My Decade with Donald Trump By Salena Zito

15. Trump puts tariffs on Canada, Mexico and China, spurring trade war as North American allies respond

16. Shadow Games (Afghanistan Retrospective)

17. Trump’s Government Is Built on Secrecy

18. Fifty-two years after a U.S. spy plane was shot down over Laos, a family still fights for answers: Did the crew all perish or were half of them LEFT BEHIND?

1. Expectations on the end of Putin' War in UKraine and Contradictory Reporting

A friend and former colleague at National who is a former CIA military analyst who retired in 2023, who closely followed the Ukraine War, then and now provided me with the following comments and links to a number of articles.

Note that he is not predicting an end to the Ukraine war this year, just flagging an “expectation” of that.

1. A few thoughts, while 2025 is still young:

There is an “expectation” in Moscow, Kyiv, and Washington that this is **probably** the last February of this war. Thus. . .

In February, 1865, after 4 years of war, US Army intel (BMI) believed Lee’s army was spent, and just one more big punch would cause its collapse (and it had told Grant this since at least May of the year before).
In February, 1918, after 3.5 years of war, everyone knew what would happen when the storm broke in the spring. But the only real surprise was that after its culmination in July, violent upheaval on the home front (as in Russia the year before) caused the unexpectedly rapid collapse of the German Army.
In February, 1945, after 3+ years of war, US Army intel underestimated the forces available to Japanese home defense by an order of magnitude. Nobody had any illusions about the Japanese will to defend the home islands however.
In February, 1968, after 2.5 years of war (Da Nang intervention) , . . oh never mind.

2. I offer the bullets above b/c this first February weekend of 2025, the bullets bellow are so starkly contradictory. In military analysis (and every other kind of analysis), the rule is that you seldom actually have contradictory reporting. Rather, it’s incomplete.

Contradictory reporting means one of your sources is probably wrong—or, even if accurate, isn’t reporting what you need to know. Something is missing. And reporting that ordinarily would be considered an outlier is over-weighted, while a critical datapoint is marginalized.

In other words, a particularly perilous time for an analyst.

Frontline report: Russian commanders handcuff soldiers to prevent desertion near Pokrovsk

Ukrainian drones expose mass casualties as wave after wave of Russian assaults is crushed by artillery and reconnaissance-guided strikes.

...the Russian assault near Pokrovsk descends into chaos as poorly executed operations, inhumane treatment, and the sending of wounded soldiers on assaults led to devastating losses and ever-decreasing Russian morale. With Russian commanders resorting to handcuffing their soldiers together to prevent desertions, underlying issues remain unsolved, and Russian soldiers become increasingly unwilling to throw away their lives.

— https://euromaidanpress.com/2025/01/31/frontline-report-russian-commanders-handcuff-soldiers-to-prevent-desertion-near-pokrovsk/

Reuters: Russia advances “day and night” at Pokrovsk – while for the first time sparing troops and artillery

Moscow has abandoned its “trademark” mass assaults in favor of small-unit tactics and reduced artillery fire. Russian forces are gradually encircling Pokrovsk, a vital Ukrainian logistics center in the east, threatening to cut off crucial supply lines as the war approaches its third year, Reuters reports. — https://euromaidanpress.com/2025/01/31/reuters-russia-advances-day-and-night-at-pokrovsk-while-for-the-first-time-sparing-troops-and-artillery/

Forbes: Elite Ukrainian unit overwhelmed with 900 volunteers each month while army forces draft

Ukraine faces a critical manpower shortage nearly three years into the Russian invasion, with widespread reluctance to join the armed forces. Military-age citizens are increasingly evading recruitment efforts, with some attempting to flee the country illegally. The situation has become so dire that recruitment teams now patrol streets in unmarked vans, forcibly taking eligible men to military processing centers. — https://euromaidanpress.com/2025/01/31/forbes-elite-ukrainian-unit-overwhelmed-with-900-volunteers-each-month-while-army-forces-draft/

HUR: Russia plans to recruit 126,000 prisoners and debtors for war in Ukraine in 2025

Russia plans to recruit 126,000 prisoners and debtors in 2025 to replace war losses, targeting 10,000 ‘special contingent’ soldiers monthly amid intensified fighting in Ukraine. … Overall, Russia intends to mobilize at least 280,000 soldiers in 2025 to replace losses in military units and formations in the war against Ukraine.

https://euromaidanpress.com/2025/01/30/hur-russia-plans-to-recruit-126000-prisoners-and-debtors-for-war-in-ukraine-in-2025/

UK/MoD weighs in:

2. Pentagon Names Remaining Unidentified Crew Member Killed in Washington Crash

Without explanation?

This seems to be the explanation. What more needs to be explained? The parents requested it be withheld. What more explanation is there for the delay?

Excerpts

Lobach’s name was withheld at the request of her family, which later agreed to let the Army disclose it, officials said. There has been no explanation for the delay. A statement by the family released by the Army didn’t address the issue, though it asked for privacy “as we grieve this devastating loss.”

The cause of the crash is still under investigation. President Trump and Defense Secretary Pete Hegseth have suggested without evidence that diversity policies may have contributed to the deadly accident, which killed all 64 passengers and crew on the jet and the three in the military helicopter.

Pentagon Names Remaining Unidentified Crew Member Killed in Washington Crash

Co-pilot’s identity had been withheld—without explanation—after President Trump suggested diversity policies played a role in midair collision

https://www.wsj.com/us-news/pentagon-names-remaining-unidentified-crew-member-killed-in-washington-crash-266f213a?mod=hp_lead_pos9

By Gordon Lubold

Feb. 1, 2025 7:57 pm ET

A rescue craft patrols the shores of the Potomac River Saturday near the crash site of the U.S. Army Black Hawk helicopter and American Airlines Flight 5342. Photo: Samuel Corum/Getty Images

WASHINGTON—The Army released the name of the third crew member who died Wednesday when the helicopter she was co-piloting collided with an American Airlines jet near Ronald Reagan Washington National Airport.

Cpt. Rebecca M. Lobach, of Durham, N.C., who served as an Army aviation officer since July 2019, was identified Saturday by the Army after her name wasn’t disclosed a day earlier along with two other crew members killed in the accident—Chief Warrant 2 Officer Andrew Lloyd Eaves and Staff Sgt. Ryan Austin O’Hara.

Lobach’s name was withheld at the request of her family, which later agreed to let the Army disclose it, officials said. There has been no explanation for the delay. A statement by the family released by the Army didn’t address the issue, though it asked for privacy “as we grieve this devastating loss.”

The cause of the crash is still under investigation. President Trump and Defense Secretary Pete Hegseth have suggested without evidence that diversity policies may have contributed to the deadly accident, which killed all 64 passengers and crew on the jet and the three in the military helicopter.

Lobach was completing a training flight, Army officials have said. Eaves was the instructor pilot in the Black Hawk and O’Hara was the crew chief.

“Rebecca was a warrior and wouldn’t hesitate to defend her country in battle,” the family’s statement said. “Her life was short, but she made a difference in the lives of all who knew her.”

Lobach was commissioned as an Army officer after graduating from the University of North Carolina, where she was in the Reserve Officers’ Training Corps program and in the top 20% of cadets nationwide, the statement said. She had more than 450 hours of flight time, and earned “certification as a pilot-in-command after extensive testing by the most senior and experienced pilots in her battalion.”

“Rebecca was brilliant and fearless, a talented pilot and a PT stud,” said Davis Winkie, a journalist who said he met Lobach while both were ROTC cadets at North Carolina, in a post on X on Saturday. PT refers to physical training.

She served in the Biden White House as a social aide, as well as a certified sexual harassment and assault response advocate.

Trump suggested without evidence that diversity, equity and inclusion personnel policies he has vowed to erase from the federal government may have contributed to the accident. “We have to have our smartest people,” he said referring to air-traffic controllers at the White House Jan. 30.

Hegseth also made unsubstantiated suggestions at the same event at the White House that such policies might have played a role in the collision.

“Color blind and merit based, the best leaders possible, whether it is flying Black Hawks, flying airplanes, leading platoons or in government, the era of DEI is gone at the Defense Department and we need the best and the brightest, whether it is in our air-traffic control, or whether it is in our generals, or whether it is throughout our government,” Hegseth said.

Her family said she hoped to become a physician after the Army. “No one dreamed bigger or worked harder to achieve her goals,” the statement said.

Write to Gordon Lubold at gordon.lubold@wsj.com

2. Trump to Order Aid Agency to Be Put Under State Department

Maybe we need a new National Security act of 1947 and a government-wide Golwater-NIchols (not just DOD) in 2025.

From Commander in Chief (CINC) to truly the Disruptor in Chief.

Trump to Order Aid Agency to Be Put Under State Department

Democrats say the move is illegal without congressional approval

https://www.wsj.com/politics/policy/trump-to-order-aid-agency-to-be-put-under-state-department-74120757?mod=latest_headlines

By Alexander Ward

, Michael R. Gordon

and Laura Kusisto

Feb. 1, 2025 2:27 pm ET

Aid workers moving bags of yellow lentils in Ethiopia. Photo: Jemal Countess/Getty Images

President Trump is preparing an order to fold the U.S. Agency for International Development into the State Department, according to administration officials, previewing a move that throws the future of America’s foreign assistance into doubt as Washington battles China for influence in the developing world.

The directive, which could come as early as next week, is expected to shrink the size of the 10,000-person, $40 billion agency and rein in its autonomy, the officials said. It will give the State Department greater authority over the contracting and aid-distribution process, and put more decision-making power in the hands of Secretary of State Marco Rubio and his foreign-assistance team, officials said.

Democrats insist Trump doesn’t have the unilateral authority to restructure USAID and further erode USAID’s historically independent mission, as its existence is codified in federal law.

The deeper integration, should Trump successfully go through with it, would allow him to align foreign aid with his “America First” vision, advocates of the move say. The approach could mean fewer funds for longstanding programs to help poor nations develop their economies, strengthen the rule of law, cope with climate change and boost gender equality.

That could save billions of dollars but leave fragile societies more vulnerable and cede space to China, which has sought to influence others through its infrastructure projects around the world, former diplomats and USAID officials said.

As of Saturday afternoon, USAID.gov, the agency’s website, was offline.

USAID and the State Department didn’t return requests for comment. The National Security Council at the White House declined to comment.

President Trump departing from the White House on Friday. Photo: Yuri Gripas – Pool via CNP/Zuma Press

The idea for downsizing USAID, stripping it of its independence and merging it into the State Department has been discussed in Washington for years. The Project 2025 blueprint for the Trump administration called for fusing the two agencies together and included a proposal that would make the USAID chief simultaneously the head of State’s foreign assistance office.

Proponents of USAID say that its separate status has enabled it to focus on its assistance and development mission. The emerging Trump plan marked a sea change from the Biden administration, which sought to elevate the role of USAID and gave its head, Samantha Power, a seat on its National Security Council.

The order is already facing political challenges, and it may face legal questions since money for USAID is appropriated by Congress and its authorities are ratified in the Foreign Assistance Act of 1961. While former President John F. Kennedy created USAID via an executive order, its independent status was codified in 1998 legislation and reaffirmed by Congress last year. Democrats insist that Congress must pass legislation before there is a bureaucratic reorganization.

“This’d be illegal and against our national interests,” Senate Minority Leader Chuck Schumer posted on social media Friday night as rumors about the planned order began to circulate.

The Biden administration sought to elevate the role of USAID and gave its head, Samantha Power, a seat on the National Security Council. Photo: Hennadii Minchenko/Zuma Press

Other senior Democrats, including Sen. Jeanne Shaheen (D., N.H.) and Gregory Meeks (D., N.Y.), the top two Democrats on the Senate and House foreign affairs committees. urged the acting USAID boss in a Friday letter to ensure that his agency remains as separate from State as it is now.

The transition adds to the confusion at USAID, which issued “stop work” orders last week as part of a 90-day review of the U.S. aid programs. After an outcry about the broad scope of the freeze, Rubio issued a directive saying that “core life saving” programs providing medicine, medical care, food and shelter to needy countries could continue.

But multiple aid organizations, including those involved in combating AIDS, say that the execution of that order has been confusing and that some organizations haven’t received the authorization to continue spending federal dollars. Hundreds of contractors have been laid off and around 60 senior staff were put on administrative leave.

An attorney who represents contractors and nongovernmental organizations that carry out foreign assistance programs, Robert Nichols, plans to file a lawsuit next week charging that the abrupt stop-work orders violate the administrative procedures act, which prohibits arbitrary agency actions.

Alima, a French aid group that provides healthcare services across Africa, had five of its 12 programs shut down from the stop-work order, according to Susan Shepherd, a senior adviser with the group. One of those paused programs, which provides medicine and maternity care to people in Mali, heard from a USAID official in the capital of Bamako that it couldn’t use any more federal funds. That same official still hasn’t said Alima could continue using federal dollars for the program, even after the waiver, Shepherd said.

“This is pointless chaos that will result in people dying,“ she said.

The man behind the stop-work order, Peter Marocco, is expected to play an outsize role in dictating the new working arrangement of USAID under State. Marocco, who was allegedly inside the Capitol with his wife during the Jan. 6 attack, is currently leading the foreign aid office and is known as an aid skeptic.

He is currently reviewing proposals from aid programs seeking waivers so they can continue their work, State and USAID officials said, creating a bottleneck that critics say is slowing down the aid-waiver process despite Marocco’s promises internally to make decisions within 36 hours of receipt. The State Department declined to comment on behalf of Marocco.

State will also soon announce that it is shutting down consulates and other American diplomatic facilities abroad in Brazil, Germany, France and Italy. Two U.S. officials expressed concern that those closures will give China more influence in the cities Americans are leaving. One of them, Hamburg, home to a key German port, hosts a large Chinese consulate and is a major banking hub.

Gabriele Steinhauser contributed to this article.

Write to Alexander Ward at alex.ward@wsj.com, Michael R. Gordon at michael.gordon@wsj.com and Laura Kusisto at Laura.Kusisto@wsj.com

4. Trump imposes tariffs on Mexico, Canada and China, risking trade war

Trump imposes tariffs on Mexico, Canada and China, risking trade war

Fishing boats tied up in St John's, Newfoundland, Canada, Feb 1, 2025 after tariffs were imposed by the US on Canadian exports. (File photo: REUTERS/Greg Locke)

02 Feb 2025 07:27AM

(Updated: 02 Feb 2025 11:43AM)

US President Donald Trump on Saturday (Feb 1) ordered 25 per cent tariffs on Canadian and Mexican imports and 10 per cent on goods from China starting on Tuesday and declared that they would remain in place until a national emergency over the drug fentanyl and illegal immigration to the US ends.

Energy products from Canada will have only a 10 per cent duty, but Mexican energy imports will be charged the full 25 per cent, officials told reporters.

A White House fact sheet on the duties said they would remain in place "until the crisis alleviated", but it did not provide details on what actions the three countries would need to take to win a reprieve.

The moves follow through on a repeated threat Trump has made since shortly after winning last year's presidential election, and they likely will trigger retaliation and risk igniting a trade war that could cause broad economic disruption for all countries involved.

The three countries are the top US trade partners, sparking fears that the duties will lead to higher prices.

Provincial officials and business executives in Canada reacted with outrage, calling for forceful tariffs on imports from the US. A senior Mexican official said Mexico would respond with retaliatory tariffs.

Tariff collections are set to begin at 12.01am EST (0501 GMT) on Tuesday, according to Trump's written order. But imports that were loaded onto a vessel or onto their final mode of transit before entering the US prior to 12.01am Saturday would be exempt from the duties.

Trump has declared the national emergency under the International Emergency Economic Powers Act and the National Emergencies Act to back the tariffs, which allows the president sweeping powers to impose sanctions to address crises.

However, they are untested for broad tariffs, according to trade lawyers.

White House officials said there would be no exclusions from the tariffs and if Canada, Mexico or China retaliated against American exports, Trump would likely increase the US duties.

Ontario Premier Doug Ford said in an X social media post that Canada "now has no choice but to hit back and hit back hard".

"As Premier of Ontario, the federal government has my full support for a strong and forceful response that matches US tariffs dollar for dollar," Ford said.

Nova Scotia's Premier Tim Houston said he directed that all alcohol imported from the US be removed from the province's store shelves.

Canadian Prime Minister Justin Trudeau, who has previously threatened strong retaliation if Trump imposed tariffs, was expected to speak later on Saturday.

Mexico's Economy Ministry said it did not have an immediate comment. But a senior Mexican official told Reuters that Mexico would respond with retaliatory tariffs later on Saturday.

The White House officials said that Canada specifically, would no longer be allowed the "de minimis" US duty exemption for small shipments under US$800.

The officials said Canada, along with Mexico, has become a conduit for shipments of fentanyl and its precursor chemicals, into the US, via small packages that are not often inspected by customs agents.

TWO-WEEK TARIFFS

Trump, who golfed at his Mar-a-Lago estate in Florida on Saturday before signing the order, was not scheduled to speak to reporters about the tariffs.

Trump threatened the tariffs to press for strong action to halt the flow of the opiate fentanyl and precursor chemicals into the US from China via Mexico and Canada, as well as to stop illegal immigrants crossing US borders.

Less than two weeks into his second term, Trump is upending the norms of how the United States is governed and interacts with its neighbors and wider world.

On Friday, he pledged to proceed with the levies despite acknowledging they could cause disruption and hardship for American households.

A model gauging the economic impact of Trump's tariff plan from EY Chief Economist Greg Daco suggests it would reduce US growth by 1.5 percentage points this year, throw Canada and Mexico into recession and usher in "stagflation" at home.

"We have stressed that steep tariff increases against US trading partners could create a stagflationary shock - a negative economic hit combined with an inflationary impulse - while also triggering financial market volatility," Daco wrote on Saturday.

That volatility was evident on Friday, when the Mexican peso and Canadian dollar both slumped after Trump vowed to fulfil his threats. US stock prices also fell and Treasury bond yields rose.

channelnewsasia.com

5.China denounces Trump tariff: 'Fentanyl is America's problem'

China denounces Trump tariff: 'Fentanyl is America's problem'

Canada and Mexico have announced that they will retaliate against the US tariffs.

The Chinese and United States flags are flown outside the China International Supply Chain Expo in Beijing, Nov 27, 2024. (File photo: AP/Ng Han Guan)

02 Feb 2025 11:37AM

(Updated: 02 Feb 2025 01:12PM)

China's government on Sunday (Feb 2) denounced the Trump administration's imposition of a long-threatened 10 per cent tariff on Chinese imports while leaving the door open for talks with the US that could avoid a deepening conflict.

Beijing will challenge President Donald Trump's tariff at the World Trade Organization and take unspecified “countermeasures” in response to the levy, which takes effect on Tuesday, the finance and commerce ministries said.

The response stopped short of the immediate escalation that had marked China's trade showdown with Trump in his first term as president and repeated the more measured language Beijing has used in recent weeks.

Trump on Saturday ordered 25 per cent tariffs on Canadian and Mexican imports and 10 per cent on goods from China, saying Beijing needed to stanch the flow of fentanyl, a deadly opioid, into the United States.

China's commerce ministry said in a statement that Trump's move "seriously violates" international trade rules, urging the US to "engage in frank dialogue and strengthen cooperation".

Filing a lawsuit with the WTO would be a largely symbolic move that Beijing has also taken against tariffs on Chinese-made electric vehicles by the European Union.

For weeks, Chinese Foreign Ministry spokesperson Mao Ning has said Beijing believes there is no winner in a trade war.

China's sharpest pushback on Sunday was over fentanyl, an area where the administration of Trump's predecessor, Joe Biden, had also been urging Beijing to crack down on shipments of the China-made precursor chemicals needed to manufacture the drug.

"Fentanyl is America's problem," China's foreign ministry said. "The Chinese side has carried out extensive anti-narcotics cooperation with the United States and achieved remarkable results."

Canada and Mexico have also announced plans to hit back.

Canada's Prime Minister Justin Trudeau said on Saturday the country will retaliate against Trump's new tariffs by imposing 25 per cent tariffs on US goods from drinks to appliances.

As relations between the long-time allies who share the world's longest land border reach a new low, Trudeau told a news conference he was slapping tariffs on C$155 billion (US$107 billion) of US goods.

Those on C$30 billion will take effect on Tuesday, the same day as Trump's tariffs, and duties on the remaining C$125 billion in 21 days, he said.

Trudeau warned the coming weeks would be difficult for Canadians and that Trump's tariffs would also hurt Americans.

Addressing Americans, he said: "They will raise costs for you, including food at the grocery store, gas at the pump. They will impede your access to an affordable supply of vital goods."

The Canadian leader said tariffs would include American beer, wine and bourbon, as well as fruits and fruit juices, including orange juice from Trump's home state of Florida. Canada would also target goods including clothing, sports equipment and household appliances.

Canada is considering non-tariff measures, potentially relating to critical minerals, energy procurement and other partnerships, Trudeau said.

Trudeau encouraged Canadians to buy Canadian products and vacation at home rather than in the US.

"We didn't ask for this but we will not back down," Trudeau said.

MEXICAN RETALIATORY TARIFFS

Mexican President Claudia Sheinbaum on Saturday also ordered retaliatory tariffs.

In a lengthy post on X, Sheinbaum said her government sought dialogue rather than confrontation with its northern neighbour, but that Mexico had been forced to respond in kind.

"I've instructed my economy minister to implement the plan B we've been working on, which includes tariff and non-tariff measures in defence of Mexico's interests," Sheinbaum posted, without going into detail on what US goods her government will target.

The United States is by far Mexico's most important foreign market, while Mexico in 2023 overtook China to become the top destination for US exports.

Mexico has been preparing possible retaliatory tariffs against imports from the US, ranging from 5 per cent to 20 per cent, on pork, cheese, fresh produce, as well as manufactured steel and aluminum, according to sources familiar with the matter. The auto industry would initially be exempt, they said.

US exports to Mexico accounted for more than US$322 billion in 2023, Census Bureau data showed, while the US imported more than US$475 billion worth of Mexican products.

In her post, Sheinbaum also rejected as "slander" the allegation by the White House that drug cartels have an alliance with the Mexican government, a point used by the administration of Trump to explain why it had imposed the tariffs.

Trump said the tariffs against Mexico were due to the country's failure to stop fentanyl getting into the United States as well as what he describes as uncontrolled migration.

Sheinbaum also touted her government's record since she took office in October - seizing 20 million doses of deadly synthetic opioid fentanyl, in addition to detaining over 10,0000 individuals tied to drug trafficking.

channelnewsasia.com

6. Commentary: Does Volvo’s Chinese ownership threaten US national security?

Excerpts:

I suspect the Trump administration won’t be all that interested in who designed Volvo or Polestar’s tech; US President Donald Trump is more transactional than scientific. His views on banning TikTok have turned out to be quite malleable, for example, and he’s open to Chinese automakers building plants in the US.

By making this dispute partly about ownership, as opposed to just technology, the US now holds all the cards: Most of the vehicles Volvo sells in the US are imported, which puts it in Trump’s bad books and leaves it vulnerable to tariffs.

The connected vehicle regulations allow non-compliant companies to request an exemption; the location of technology development as well as corporate structure and security practices would be “an important factor” in whether to grant one, the rules note.

Volvo could also try to curry favour with Trump by announcing a massive factory expansion in the US. But the outcome is uncertain.

Li is already in the process of restructuring his automotive empire and must now consider ways to de-risk US-exposed investments. He’s been a good steward of Volvo – but, if necessary, those deliberations should include how to extricate himself.

Commentary: Does Volvo’s Chinese ownership threaten US national security?

A bifurcated market is bad news for the auto industry and consumers, and it’s particularly troublesome for Geely, says Bloomberg Opinion’s Chris Bryant.

https://www.channelnewsasia.com/commentary/us-china-volvo-geely-car-ev-national-security-4900926

Composite photo of the Volvo logo and the logo of Chinese automobile manufacturer Geely. (Reuters/Andrew Kelly, Reuters/Maxim Shemetov)

BERLIN: Is Volvo Cars a threat to United States national security? Washington appears to think it might be, and the consequences could be profound for Chinese majority-owner Zhejiang Geely Holding Group, as well as car buyers everywhere.

A brand renowned for safety (and lauded by US conservatives for its family values), could in theory be prohibited from selling cars stateside from 2027 due to new regulations designed to block China from spying on US citizens or carrying out a cyberattack. Modern cars are highly sophisticated computers on wheels, creating vulnerabilities that hackers can exploit.

While most people think of Volvo as Swedish – it’s headquartered in Gothenburg and listed on the Nasdaq Stockholm exchange – Geely acquired Volvo from Ford Motor for US$1.8 billion in 2010. And that’s now a potential problem.

NO STRAIGHTFORWARD OPTIONS FOR GEELY

US Department of Commerce rules finalised in the last days of the Biden administration prohibit the sale or import of so-called connected vehicles containing advanced data-connectivity equipment and automated driving software if these systems are designed or produced by Chinese or Russian entities.

Furthermore, automakers owned, controlled or subject to the jurisdiction or direction of these adversaries are barred from selling connected vehicles in the US regardless of who designed the relevant hardware and software or where they’re made, meaning Volvo’s electric SUV, the EX90, might not get a pass even though it’s built at a plant in South Carolina with around 2,500 employees. (Compliance deadlines vary, but the ownership stipulation takes effect from the 2027 model year. The rules officially become effective in March of this year.)

Volvo told me it’s reviewing the regulations and says it’s too early to speculate about potential consequences, adding it is committed to working with the US on all technical aspects of the rule. Geely, controlled by Chinese billionaire Li Shufu, said it had nothing to add to Volvo’s statement.

Abandoning the US market would be a huge blow: Volvo sold around 125,000 vehicles in the US last year, or about 16 per cent of its total deliveries.

Investors already view Volvo as subscale compared to premium rivals BMW and Mercedes-Benz. The company has struggled to generate cash due to heavy investments in electric vehicles (EVs), and the stock has sagged since a 2021 initial public offering (IPO) and is a favourite target of short-sellers.

The alternatives aren’t straightforward: Either Geely must reduce its 79 per cent stake in Volvo, cauterise its US operations or convince the Trump administration it isn’t a security threat.

Commentary: Japan has learnt a hard lesson about US friendship

Commentary: Chinese EVs are putting a high-tech spin on 'Made in China' label in Southeast Asia

CONSUMERS LEFT WITH FEWER CHOICES AND HIGHER PRICES

A serial acquirer of international car brands and the only Chinese firm with significant US sales, Geely is uniquely affected by Washington’s crackdown: Volvo’s money-losing EV offshoot Polestar, which is majority owned by Li and Geely affiliates, faces much the same issues and warned in an October government filing that the rules would “effectively prohibit” it from selling cars in the US, including ones manufactured at Volvo’s South Carolina facility.

Lotus Technology, which is also majority owned by Li and Geely affiliates, has also warned of a potential sales impact.

But there are wider repercussions. Automakers have long tapped local suppliers and adapted cars for local tastes, particularly in China. Yet as supply chains bifurcate to expunge Chinese tech from US vehicles, the industry faces increased complexity and duplicated spending, compounding the financial and operational headaches from tariffs and the differing speeds in which countries are adopting electric vehicles.

Automakers “may increasingly ringfence their ‘in China for China’ or ‘in the US for the US’ operations,” note researchers at Rhodium Group. Consumers may be left with fewer choices and less innovation, or pay more than they otherwise would, or all of the above. (The US has already imposed a 100 per cent tariff on Chinese EVs.)

Volvo collaborates with other Geely-owned entities in areas such as research and development, procurement and manufacturing; its fast-selling EX30 electric compact SUV shares technical underpinnings with other Geely models, for example.

Volvo EX90, the company's new electric SUV, is unveiled during a launch event in Stockholm, Sweden Nov 9, 2022. (Photo: Anders Wiklund/TT News Agency/via Reuters)

ANTICIPATING ISSUES RELATED TO CHINESE OWNERSHIP

Nevertheless, Volvo’s annual report describes it as an “independent Swedish company” subject to Swedish legislation and corporate government rules, and with “autonomy as a standalone legal entity.”

Volvo had time to prepare for potential issues related to its Chinese ownership: Its 2021 IPO prospectus warned that incorporating information and communications technology and services supplied by Geely-linked companies into US vehicles could result in import restrictions. In hindsight, its decision that year to list shares in Sweden rather than merge with Hong-Kong listed Geely Automobile Holdings was prudent.

At an investor event last year, Volvo spoke at length about its new high performance “in-house” developed software and safety tech, its technology partnerships with US firms such as Alphabet’s Google, Qualcomm and Nvidia, and its data-privacy safeguards.

While Volvo declined to discuss specifics about who develops key technologies, Polestar boss Michael Lohscheller sounded optimistic about finding a solution by the 2027 deadline, telling the Financial Times last week it would replace any Chinese software and component suppliers to remain compliant.

However, Barclays analyst Dan Levy was more circumspect, telling clients that Polestar may “either need to exit the US or be spun out into an independent company with no control from Geely nor usage of Geely technologies.”

Commentary: US will leave a void in climate leadership. Can China fill it?

Commentary: China’s overcapacity may become a Southeast Asia problem if Trump’s tariffs materialise

IN DONALD TRUMP’S BAD BOOKS

I suspect the Trump administration won’t be all that interested in who designed Volvo or Polestar’s tech; US President Donald Trump is more transactional than scientific. His views on banning TikTok have turned out to be quite malleable, for example, and he’s open to Chinese automakers building plants in the US.

By making this dispute partly about ownership, as opposed to just technology, the US now holds all the cards: Most of the vehicles Volvo sells in the US are imported, which puts it in Trump’s bad books and leaves it vulnerable to tariffs.

The connected vehicle regulations allow non-compliant companies to request an exemption; the location of technology development as well as corporate structure and security practices would be “an important factor” in whether to grant one, the rules note.

Volvo could also try to curry favour with Trump by announcing a massive factory expansion in the US. But the outcome is uncertain.

Li is already in the process of restructuring his automotive empire and must now consider ways to de-risk US-exposed investments. He’s been a good steward of Volvo – but, if necessary, those deliberations should include how to extricate himself.

Source: Bloomberg/ch

7. AI Is Wall Street’s Modern Gold Rush. Here’s How Investors Are Placing Their Bets.

Follow the money (and stocks)

AI Is Wall Street’s Modern Gold Rush. Here’s How Investors Are Placing Their Bets.

The financing bonanza echoes previous booms around fiber-optic cable and fracking

https://www.wsj.com/tech/ai/ai-wall-street-investments-companies-0baba8d9?mod=latest_headlines

By Matt Wirz

and Vicky Ge Huang

Feb. 2, 2025 5:30 am ET

Data-center giant Digital Realty had its biggest fundraising year in 2024. Photo: Jason Andrew for WSJ

Artificial-intelligence evangelists such as Sam Altman want to reshape the world, but they need mountains of money to do it. That is sparking a modern-day gold rush on Wall Street.

Tech and power companies are raising cash every which way: issuing shares, loans and bonds on publicly traded markets and in private deals. Large firms, or hyperscalers, such as Amazon.com and Microsoft could easily spend about $3 trillion by 2030 to build and operate data centers for their businesses, according to BlackRock Investment Institute.

The trick for financiers is avoiding the losers in a new industry that can turn treacherous on a dime, as it did last week when Chinese upstart DeepSeek triggered a selloff in AI stocks. The recent frenzy echoes previous bonanzas such as fiber-optic cable, which boomed in the 1990s, busted in the 2000s and ultimately paid out. Fracking for oil and natural gas went through a similar cycle over the past 15 years.

Here’s a look at some of the big financial bets being placed in the new digital economy:

Blue Owl builds a Stargate

Stargate, a joint venture between Altman’s Open AI, Oracle and SoftBank, will start with a data center in Abilene, Texas, but none of the partners ponied up the money to build it. Blue Owl Capital, an up-and-coming private-fund manager, provided the billion-dollar bankroll.

The deal started with a cold email Blue Owl sent to Oracle 18 months ago. Best known for its private-credit funds, Blue Owl had grown quickly through acquisitions, and its global real-estate head, Marc Zahr, had an idea to expand even faster through data centers.

President Trump with Oracle’s Larry Ellison, SoftBank’s Masayoshi Son and OpenAI’s Sam Altman announcing Stargate last month. Photo: Andrew Harnik/Getty Images

Oracle responded in 24 hours to the email and agreed to meet. Company founder Larry Ellison had adopted a strategy of finding financial partners to build data centers to compete with bigger tech giants in AI.

The companies hashed out a deal in six months. Blue Owl would invest $1 billion and raise a $2.3 billion loan to build the Abilene facility. Oracle leased the data center for 15 years and shouldered all tax, insurance and maintenance expenses. The project includes its own natural-gas power plant, a crucial feature because there is not enough electricity in the U.S. to supply coming data centers.

Blue Owl controls about $13 billion of data centers and is targeting $50 billion by December 2026.

Digital Realty’s big year

Digital Realty has been a public company for two decades, but never had a fundraising year like 2024. The company is an investment trust that builds data centers for rent to corporate clients. It raised $8.5 billion last year selling stock and debt to fund its AI-fueled growth, a 25% jump from 2023.

The flurry of dealmaking shows no signs of slowing. In the past four months, the company raised $4 billion by selling euro-denominated bonds, stock and convertible bonds. In 2023, it raised about $1.4 billion through commercial mortgage-backed securities.

Digital Realty's public company status and investment-grade rating have enabled it to tap different capital markets for funding.

Jason Andrew (2)

Also in 2023, it formed a venture with private-equity giant Blackstone to develop $7 billion in data centers. Blackstone has an 80% ownership stake in the venture and made an initial capital contribution of $700 million.

The fundraising frenzy has kept members of Digital Realty’s finance team up for some all-nighters.

“There’s always last-minute things that need to be buttoned up, information that needs to flow back and forth, conversations that you’re having with banks and investors to bring in and close the deal,” said Matt Mercier, chief financial officer of Digital Realty.

Facebook’s green energy

When Silicon Ranch started building solar-panel farms in 2011, landing a contract to build a one-megawatt project to power a Walmart store was a huge win. The Nashville, Tenn.-based company turned to a local bank for construction loans and help financing tax credits from the project, said co-founder and Chief Financial Officer Reagan Farr.

Sheep clear grass from solar farm in Jeff Davis County, Georgia that powers a Meta data center. Photo: Silicon Ranch

Now the company is building or operating 16 solar farms that generate 1,500 megawatts for Meta Platforms-owned data centers in Georgia and the Tennessee Valley. Each farm requires loans for hundreds of millions of dollars from national banks. The tax credits get sold to large corporations ranging from grocery chains to auto-parts suppliers.

Silicon Ranch, which is owned by private-equity firms and oil company Shell, is investing more than $3 billion into the projects. The money pays for land, equipment, transmission lines and labor, including herds of sheep used to trim grass that would otherwise block panels from sunlight.

Big as the sums are, they barely register to hyperscalers, Farr said. “My hyperscale colleagues are like, ‘$4 billion sounds like a lot, but that’s nothing to us,’” he said. “The average person doesn’t appreciate the scale of these infrastructure projects because we’ve not built like this in America since the interstate system.”

Silicon Ranch has turned to infrastructure investors to raise more cash, but even that likely won’t be big enough, Farr said. Ultimately, the company and others will need to tap the biggest pool of money there is, the U.S. stock market, he said.

Banking on CoreWeave

CoreWeave, a Nvidia affiliate, is preparing to test stock investors’ appetite. The company, fresh off a private fundraising binge, has hired JPMorgan Chase, Goldman Sachs and Morgan Stanley to lead its initial public stock offering.

Once focused on providing data centers for cryptocurrency, CoreWeave parlayed its access to Nvidia’s chips into a string of Wall Street deals that turned it into a hyperscaler virtually overnight.

In the past year, CoreWeave raised $1.1 billion of private equity from funds like Magnetar Capital and Fidelity, took out a $7.5 billion private-credit loan and issued an additional $650 million of private equity. It also took out a $650 million revolving loan—the corporate equivalent of a credit card—from the banks arranging its IPO.

Catherine O’Donnell runs JPMorgan’s tech leveraged-finance effort in San Francisco. She also led the bank’s energy lending team during the rise of oil and natural-gas fracking. In some ways investing in tech companies is even more complex, she said.

The bank focuses on picking companies that have a large head start over competitors and in making loans that amount to a fraction of the borrowers’ estimated valuations.

“You need to back the right companies because the disruption risk is much higher than in gas,” she said. “There’s always something new coming out.”

Generators sit outside of the new Digital Realty Data Center in Sterling, Va. Photo: Jason Andrew for WSJ

Write to Matt Wirz at matthieu.wirz@wsj.com and Vicky Ge Huang at vicky.huang@wsj.com

8. What DeepSeek, Russian Sanctions and Guitar Amplifiers Teach Us About Global Competition

Charts and data at the link:

https://www.wsj.com/finance/stocks/what-deepseek-russian-sanctions-and-guitar-amplifiers-teach-us-about-global-competition-c6ab8103?st=3fkHTW&reflink=desktopwebshare_permalink

What DeepSeek, Russian Sanctions and Guitar Amplifiers Teach Us About Global Competition

History suggests laggards can catch up quickly. For investors, that means looking beyond the U.S.

By Jon Sindreu

Feb. 2, 2025 6:00 am ET

U.K. Prime Minister Keir Starmer, right, visiting a Siemens Energy plant in Berlin last year. Photo: Justin Tallis/Zuma Press

In 1962, high import taxes made it impossible for Jim Marshall, a music-store owner in London, to meet demand for popular American-made Fender amplifiers, and he set out to create his own. The resulting Marshall amplifiers came out with a different sound but were the foundation for bands such as The Who and Led Zeppelin, which spread British hard rock all over the world.

Similar phenomena are now playing out, including China’s ability to catch up with the U.S. in the artificial-intelligence race despite Biden-era policies aimed at capping what it can buy from U.S. semiconductor firms.

Investors trying to build a portfolio in an era of protectionism and heightened geopolitical competition should take note: Laggards can overcome constraints—but need clear aims. There could be important lessons for Europe’s industrial sector, which on Friday was threatened with having further tariffs imposed on it by President Trump.

Wall Street is angsty about a string of Chinese AI firms, including DeepSeek, which, spurred by trade restrictions, have developed more efficient models to rival OpenAI and Alphabet. By Friday’s close, the U.S.’s “Magnificent Seven” technology giants had shed $410 billion of value from a week earlier.

Meanwhile, the Stoxx Europe 600 has risen 6.3% this year, more than twice as much as the S&P 500, with its industrial subcomponent up 6.6%. Analysts are starting to wonder if this is akin to the final stretch of the dot-com bubble in 1999, which marked the start of a period of underperformance for U.S. equities relative to other developed markets.

“It’s not hard to imagine the news about DeepSeek kick-starting a similarly sustained bout of U.S. underperformance,” Thomas Mathews at Capital Economics told clients Friday, but he added that it is “too soon” to make that call.

Similar to DeepSeek, the aftermath of the 2022 invasion of Ukraine has been another example of the limits of resource constraints: While Western nations thought that harsh sanctions would torpedo Russia’s gross domestic product, the country returned to growth in 2023. Yes, Moscow has shifted commodity exports and high-tech imports to friendly countries, chiefly China, but it has also managed to foster domestic alternatives in areas such as computers and gas turbines.

That necessity is the mother of invention is hardly a new insight. The Great Depression, a time of scarcity, high tariffs and geopolitical tensions, gave us nylon, Nescafé instant coffee and the jet engine. Germany’s painful reforms in the 2000s were in part a response to an overvalued exchange rate both before and after introduction of the euro, which forced manufacturers to enhance productivity. By contrast, Italian industry was helped by devaluations in the 1980s and 1990s, but as a consequence got stuck in a medium-value segment that was soon filled by Chinese goods.

Now Europe is in need of another reboot. The export-led growth model centered on Germany’s industrial core appears broken. Europe doesn’t have many tech firms, and the pivot toward making competitive electric vehicles amid structurally higher energy costs and reduced access to Chinese and American markets is floundering. In Britain, high electricity prices have contributed to a steep fall in export volumes since 2022.

Official data for the fourth quarter of 2024 released Thursday showed the eurozone’s gross domestic product flatlining and the U.S.’s expanding by 0.6% from a quarter earlier.

However, the German DAX has surprisingly outperformed the S&P 500 over the past year, powered by its own “Magnificent Seven”: SAP, Deutsche Telekom, Allianz, Siemens, Siemens Energy, Munich Re and Rheinmetall.

Perhaps this reflects markets anticipating an economic recovery, which recent purchasing managers’ surveys suggest could be near. Also, European industrial stocks had gotten ridiculously cheap: In October, their price/earnings ratios relative to U.S. peers hit an extreme discount.

American tech is now a bigger chunk of global stock-market capitalization than the entirety of European equities, Dhaval Joshi at BCA Research points out.

He thinks this is because of the “highly implausible” notion that the big winners of the earlier Web 2.0 revolution will emerge on top of the AI race, rather than going the way of the first digital giants such as Cisco and International Business Machines—or, looking to former incumbents in other sectors, Kodak, Nokia and Blockbuster.

Europe already has innovators. Airbus, Novo Nordisk and ASML are leaders in aerospace, obesity drugs and photolithography for chips, respectively. Venture capital is propping up AI startups in France, such as Mistral AI.

Like Russia and China, Europe has deep technical expertise and a big internal market. Unlike them, it is already wealthy. If catching up to the U.S. becomes more of an urgent shared political project in the Trump era, Europe’s ability to do so might prove underrated.

Last week, the European Union’s “Competitive Compass” report confirmed officials’ welcome shift toward cutting red tape, investing in innovation and introducing a “Made-in-Europe” preference in public procurement. Yet the EU’s plans are sparse in detail and, crucially, lack the explicit commitment to beat the competition through any means necessary. This is something that Beijing’s economic planning, Biden’s industrial policies and Trump’s tariffs—as well as his $500 billion “Stargate” AI project—do have, regardless of their individual merits.

Politics aren’t yet playing the tune needed for a true European challenge. But investors shouldn’t assume that export restrictions, tariffs or cheaper energy will keep U.S. equities forever on top.

Write to Jon Sindreu at jon.sindreu@wsj.com

9. Musk aides gain access to sensitive Treasury Department payment system

To what end? How does this serve the public good?

Excerpts:

Typically, only a small group of career employees control the payment systems, and former officials have said it is extremely unusual for anyone connected to political appointees to access them.

Musk has sought to exert sweeping control over the inner workings of the U.S. government, installing longtime surrogates at several agencies, including the Office of Personnel Management, which essentially handles federal human resources, and the General Services Administration, which manages real estate. DOGE is now housed in a White House office formerly known as the U.S. Digital Service but now called the U.S. DOGE Service and has broad visibility into technology across the government.

Musk aides gain access to sensitive Treasury Department payment system

The access — granted by Scott Bessent, Trump’s newly confirmed treasury secretary — comes after the ousting of the agency’s top career official.

February 1, 2025 at 5:07 p.m. ESTYesterday at 5:07 p.m. EST

2 min

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Elon Musk walks through the Capitol complex with his son on his shoulders during meetings about the “Department of Government Efficiency” in December. Musk allies now have access to sensitive payment systems run by the Treasury Department. (Maansi Srivastava for The Washington Post)

https://www.washingtonpost.com/business/2025/02/01/elon-musk-treasury-payments-system/

By Jeff Stein

Billionaire Elon Musk’s deputies have gained access to a sensitive Treasury Department system responsible for trillions of dollars in U.S. government payments after the administration ousted a top career official at the department, according to three people who spoke on the condition of anonymity to describe government deliberations.

On Friday, Treasury Secretary Scott Bessent approved access to the Treasury’s payments system for a team led by Tom Krause, a Silicon Valley executive working in concert with Musk’s “Department of Government Efficiency,” the people said.

David A. Lebryk, who served in nonpolitical roles at Treasury for several decades and had been the acting secretary before Bessent’s confirmation, had refused to turn over access to Musk’s surrogates, people familiar with the situation told The Washington Post. Trump officials placed Lebryk on administrative leave, and then he announced his retirement Friday in an email to colleagues.

Spokespeople for Treasury and DOGE declined to comment.

The sensitive systems, run by the Bureau of the Fiscal Service, control the flow of more than $6 trillion annually. Tens of millions of people across the country rely on the systems. They are responsible for paying Social Security and Medicare benefits, salaries for federal personnel, payments to government contractors and grant recipients, and tax refunds, among tens of thousands of other functions.

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Typically, only a small group of career employees control the payment systems, and former officials have said it is extremely unusual for anyone connected to political appointees to access them.

Musk has sought to exert sweeping control over the inner workings of the U.S. government, installing longtime surrogates at several agencies, including the Office of Personnel Management, which essentially handles federal human resources, and the General Services Administration, which manages real estate. DOGE is now housed in a White House office formerly known as the U.S. Digital Service but now called the U.S. DOGE Service and has broad visibility into technology across the government.

The New York Times was first to report that Musk’s deputies had gained control of the systems.

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Democrats have strongly criticized the idea of giving Musk surrogates access to the payment systems.

“To put it bluntly, these payment systems simply cannot fail, and any politically motivated meddling in them risks severe damage to our country and the economy,” Sen. Ron Wyden (D-Oregon) said in a letter to Bessent on Friday. “I can think of no good reason why political operators who have demonstrated a blatant disregard for the law would need access to these sensitive, mission-critical systems.”

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By Jeff Stein

Jeff Stein is the White House economics reporter for The Washington Post. He was a crime reporter for the Syracuse Post-Standard and, in 2014, founded the local news nonprofit the Ithaca Voice in Upstate New York. He was also a reporter for Vox.follow on X@jstein_wapo

10. Trump Favors Blunt Force in Dealing With Foreign Allies and Enemies Alike

“I can stand brute force, but brute reason is quite unbearable. There is something unfair about it's use. It is hitting below the intellect.”

― Oscar Wilde, The Picture of Dorian Gray

Trump Favors Blunt Force in Dealing With Foreign Allies and Enemies Alike

With Canada, Mexico, China, Colombia and the Middle East, President Trump has wasted no time threatening to use American might to force recalcitrant countries to back down and do what he wants.

https://www.nytimes.com/2025/02/02/us/politics/trump-tariffs-migrants-power.html

President Trump arriving at Palm Beach International Airport on Friday.Credit...Haiyun Jiang for The New York Times

By Peter Baker

Peter Baker, the chief White House correspondent, is covering his sixth presidency and reported from Washington.

Feb. 2, 2025, 5:00 a.m. ET

Want to stay updated on what’s happening in Central America, East Asia and the Middle East? Sign up for Your Places: Global Update, and we’ll send our latest coverage to your inbox.

Soft power is out. Hard power is in. Since returning to the White House, President Trump has demonstrated that he prefers to bludgeon, not bargain, his way to foreign policy goals.

With counterparts from Asia, the Middle East and North and South America, Mr. Trump has shown a willingness to use American power in a way that most of his modern predecessors have not. His favorite blunt instrument is not military force but economic coercion, like the tariffs he ordered on Saturday on goods from Canada, Mexico and China.

Image

Cargo trucks wait in line to enter Mexico near the U.S.-Mexico border on Saturday.Credit...Ariana Drehsler for The New York Times

The tariffs, set to take effect Tuesday, amount to a declaration of economic war against America’s three largest trading partners, which have threatened to retaliate in a tit for tat that could escalate beyond any such conflict in generations. Mr. Trump’s decision to follow through on his tariff threat raises the stakes in his hard-edged America First approach to the rest of the world, with potentially profound consequences.

If he makes the targeted countries back down quickly in response to his demand to do more to stop drug trafficking, Mr. Trump will take it as a validation of his strategy. If not, and the tariffs take force and remain in place for a prolonged period, American consumers could pay a price through higher costs on many goods.

Even as he opts for strong-arm tactics, Mr. Trump is dispensing with other traditional tools of American foreign policy. He has suspended much of the international aid provided by the United States and may try to dismantle the U.S. Agency for International Development, whose website went offline on Saturday. Such aid, while a tiny fraction of the overall federal budget, has for generations been seen as a way to build good will and influence around the world.

“President Trump’s confrontational style has resulted in foreign policy gains and can result in more — provided he is careful about the targets of his pressure and the specific implied or actual threats,” said Evelyn N. Farkas, executive director of the McCain Institute at Arizona State University and a former Pentagon official.

Image

U.S. Agency for International Development distributed relief aid for victims of super typhoon Haiyan in 2013.Credit...Cheryl Ravelo/Reuters

The objective, she said, “should be to pressure China and Russia,” not “bullying our allies and partners” or seeking to claim the territory of other countries.

“The cost of taking any punitive actions against our allies and partners,” she added, “will likely be shared by U.S. citizens and interests, and would thereby erode U.S. power and influence.”

A brief flare-up with Colombia a week ago demonstrated just how quickly Mr. Trump is ready to climb the escalatory ladder. The dispute was the kind of minor wrinkle usually handled by diplomats: Colombia refused to accept U.S. military flights of deported migrants unless they were treated with more “dignity.”

Even though Colombia has been an important U.S. ally, Mr. Trump did not bother with traditional diplomacy and went instantly to his version of DEFCON 1 by threatening a trade war. It worked. Colombia backed down.

Similarly, Mr. Trump’s warning even before his inauguration that “all hell will break out” in the Middle East if Israel and Hamas did not reach a cease-fire agreement in Gaza that would free hostages helped push negotiators across the finish line.

“One thing we’re going to be demanding is, we’re going to be demanding respect from other nations,” Mr. Trump declared via a teleconference with the global financial and political titans attending the World Economic Forum in Davos, Switzerland, a few days after taking office.

His has relished his early victories and warned other nations to pay attention. “We may have tough talk from others, but it’s not going to mean anything,” Mr. Trump said a few days after forcing Colombia to back down on accepting migrants. “They’re going to all take them back,” he continued, then added with tough-guy bravado, “and they’re going to like it, too.”

The quick turnaround with Colombia cheered Republicans who argued that President Joseph R. Biden Jr. had been perceived as weak, undercutting American ability to assert its national interests on the world stage.

“This sends a clear message to all the leaders: Don’t mess with the United States right now, that we have a new sheriff in charge,” Senator Roger Marshall, Republican of Kansas, said on Fox Business after the Colombia face-off.

Mr. Trump sought to promote that idea, posting an illustration of himself in a gangster-like image wearing a pinstripe suit and fedora hat with “FAFO” written on a sign next to him. (F.A.F.O. stands for “Fool Around, Find Out,” except the first word is actually a cruder four-letter term.)

But veterans of foreign affairs and international trade said that quick and easy wins may do long-term damage. By basing relations with other countries on brute economic force and naked self-interest rather than shared values and mutual goals, they said, Mr. Trump may push some away from the U.S. orbit and toward the likes of President Vladimir V. Putin of Russia or President Xi Jinping of China.

“Our allies struggle to differentiate Trump from Putin or Xi,” said Daniel M. Price, a managing director at Rock Creek Global Advisors and a former trade adviser to President George W. Bush. “They feel not like allies but like vassals. U.S. coercion and bellicosity create incentives for increased alignment with, or at least accommodation, of our geopolitical rivals.”

For the most part, Mr. Trump seems inclined to use economic power rather than military force to achieve his aims. During his campaign last year, he boasted of not having started any wars while he was president and talked in his Inaugural Address of the importance of avoiding them.

Image

A view of a small town in Greenland. President Trump has said he wants Denmark to cede the island to the United States.Credit...Ivor Prickett for The New York Times

But as he raises the temperature on Denmark to cede Greenland to the United States or on Panama to give back the Panama Canal, Mr. Trump pointedly did not disavow using force when asked by reporters. Asked this past week by his former colleagues on Fox News whether Mr. Trump would use military force against drug cartels in Mexico, Pete Hegseth, the newly sworn-in defense secretary, said “all options will be on the table.”

Mr. Trump has used threats so far to leverage concessions, but the tariffs ordered this weekend on Canada, Mexico and China may test how far he is willing to go and how much pain he is willing to absorb to get his way.

“At some point, to keep those threats credible, he will need to kill a chicken to scare the monkeys — take down an enemy or a recalcitrant ally in order to frighten others that he is serious,” said Mark Dubowitz, the chief executive of the Foundation for Defense of Democracies, a policy institute focused on strengthening national security.

“He’s counting on the hope that no one wants to be that first chicken,” Mr. Dubowitz added. “But at some point, someone will challenge him. The monkeys are watching.”

Moreover, there are some nations that are not likely to be at all swayed by tariff threats. Looking for a way to keep his promise to end the war in Ukraine, Mr. Trump has vowed to impose sanctions and tariffs on Russia if it does not come to the negotiating table. But U.S.-Russian trade has already fallen by 90 percent since the 2022 invasion of Ukraine. The United States now imports less than $3 billion a year in Russian goods, leaving almost nothing to apply tariffs to.

Hard power has long been an instrument of influence for American presidents, going back to the days of gunboat diplomacy through more than two decades of war after the terrorist attacks of Sept. 11, 2001. But the United States has also employed what is called soft power, a term and concept popularized in the 1990s by Joseph S. Nye Jr., former dean of the Harvard’s Kennedy School of Government, who served in President Bill Clinton’s administration.

Soft power is noncoercive and includes foreign aid to fight disease and poverty while encouraging development, which beyond altruism has been viewed as beneficial to the United States. Among other things, experts say, it can discourage illegal immigration to the United States — a Trump priority — by helping improve living conditions in other parts of the world.

Soft power also encompasses products as diverse Hollywood movies and denim jeans that fuel America’s popularity around the world and thus its influence. The United States could sometimes get what it wanted, the theory went, because other countries aspired to be like the United States or to be its friend.

“Trump does not understand soft power — the ability to get what you want by using attraction rather than coercion or payment,” Mr. Nye said last week. “In the short term, hard power usually trumps soft power, but the long-run effects may be the opposite.”

“And even in the short run,” he added, “while you may have to use hard power, if you also have soft power, you can economize on the costs of sticks and carrots. Trump is squandering this resource. It may work in the short run, but will cost the U.S. in the long term.”

To Mr. Trump, though, the old ways did not work. Rather than the key to American dominance of the world, all the quiet diplomacy over the course of generations in his view just led to the country being shafted by friends and foes alike. In his America First school of thought, threats and toughness are the best way to handle a world that wants to take advantage of the United States. And if the rest of the world does not like it, Mr. Trump has made clear he does not really care.

Peter Baker is the chief White House correspondent for The Times. He is covering his sixth presidency and sometimes writes analytical pieces that place presidents and their administrations in a larger context and historical framework. More about Peter Baker

11. Trump’s Tariff Wall: Can Canada and Mexico Overcome Fortress America?

Trump’s Tariff Wall: Can Canada and Mexico Overcome Fortress America?

19fortyfive.com · by Andrew Latham · February 2, 2025

Fortress America: Trump’s New Trade War Targets Canada & Mexico with Tariffs – Bernard Lewis once said, “America is harmless as an enemy and treacherous as a friend.” The historian’s sharp aphorism was aimed at U.S. foreign policy in the Middle East.

Still, it resonates just as powerfully in trade and economic policy under Donald Trump. American allies who assumed that their trade relationships with the United States would remain predictable, or at least subject to the logic of negotiation and the terms of the USMCA, found themselves confronted with something more uncompromising.

Donald Trump Begins Slapping Tariffs On Big Trade Partners

Trump’s tariffs are not mere bargaining chips meant to extract conventional trade concessions. They are instruments of a broader economic strategy aimed at reconfiguring the very foundations of America’s engagement with the global economy.

Trump is not seeking a better deal within a trade framework he fundamentally accepts; he is trying to unravel that framework in favor of a more self-sufficient United States.

The dominant narrative in mainstream commentary treats Trump’s tariffs as traditional protectionist measures to pressure trading partners into making concessions. According to this view, Trump’s imposition of tariffs on Chinese goods, European automobiles, and even Canadian and Mexican steel was designed to bring trading partners to the table to secure more favorable terms for the United States.

Indeed, Trump often framed tariffs as a tool of leverage, compelling rivals and allies to offer better terms in trade negotiations. This perspective assumes that Trump’s tariffs operate within the standard logic of economic statecraft, where protectionist measures serve as temporary bargaining tools rather than long-term strategic imperatives.

However, this interpretation fails to account for a deeper ideological current that is running through Trump’s economic nationalism. While tariffs have often been wielded as tools of coercion in trade negotiations, Trump’s worldview suggests something different: a belief that America should not merely win better trade deals but disentangle itself from reliance on foreign economies altogether.

From the 2016 campaign onward, his rhetoric has consistently emphasized a return to domestic production, a retreat from global economic integration, and a rejection of the idea that economic interdependence—so central to the neoliberal order—is an asset.

Trump’s protectionism is not conditional; it is aspirational.

Donald Trump Wants Fortress America

In many respects, this vision of economic autarky is a repudiation of the entire post-Cold War neoliberal consensus on global economic integration. While the Clinton, Bush, and Obama administrations largely accepted the premise that economic interdependence was inevitable and desirable, Trump views it as a vulnerability.

His actions as president reflect this conviction. He withdrew the U.S. from the Trans-Pacific Partnership (TPP), sought to renegotiate NAFTA into the USMCA, and pursued tariffs not as a means to an end, but as an end in themselves. His administration’s rhetoric around “bringing jobs back to America” and “decoupling” from China was not about securing marginally better trade terms—it was about fundamentally reordering the structure of American production and consumption.

Now, with Trump having returned to office and following through on his long-threatened tariffs on Canada and Mexico, the shift toward economic autarky is no longer speculative—it is reality. As confirmed by the U.S. administration, the new tariffs will take effect on February 4, hitting key Canadian and Mexican industries at a moment of economic vulnerability. His economic advisors reflect his autarkic instincts, and key constituencies within the Republican Party have embraced an agenda of economic nationalism.

Far from representing a return to standard transactional protectionism, Trump’s second term is making tariffs and economic decoupling from China—and even some allies—a permanent fixture of U.S. economic policy.

In essence, Trump’s vision resembles a modernized version of the “Fortress America” doctrine—a policy orientation that, much like its 1940s antecedent, prioritizes self-sufficiency and disengagement from entangling economic commitments abroad.

Tariff Time: What Will Canada and Mexico Do?

This presents a profound strategic challenge for Canada and Mexico, America’s closest economic partners.

The economic interdependence once underpinned North American stability is eroding, replaced by uncertainty and outright hostility. Canada, reliant on access to U.S. markets for its resource exports and industrial base, now faces an America that no longer sees value in those linkages.

Former President of the United States Donald Trump speaking with attendees at the 2023 Turning Point Action Conference at the Palm Beach County Convention Center in West Palm Beach, Florida.

Mexico, deeply embedded in automotive and manufacturing supply chains, must confront the possibility that nearshoring will not replace lost integration but merely serve as a prelude to further exclusion. The space for negotiation is shrinking, and the economic pillars of North America’s partnership are being dismantled brick by brick.

The question, then, is whether Canada and Mexico can forge a new path forward—or whether both nations will find themselves staring at the ramparts of a Fortress America—watching, waiting, and ultimately realizing that those walls may prove unscaleable.

About the Author: Dr. Andrew Latham

Andrew Latham is a non-resident fellow at Defense Priorities and a professor of international relations and political theory at Macalester College in Saint Paul, MN. Andrew is now a Contributing Editor to 19FortyFive. You can follow him on X: @aakatham.

19fortyfive.com · by Andrew Latham · February 2, 2025

12. The profundity of DeepSeek's challenge to America

Excerpts:

For China, there is another historical precedent —Wilhelmine Germany, devised by Bismarck, in the late 19th and early 20th centuries. Back then, Germany imitated Britain, surpassed it, and turned “Made in Germany” from a mark of shame into a symbol of quality.

Germany became more educated, free, tolerant, democratic—and also more aggressive than Britain. China could choose this path without the aggression that led to Wilhelmine Germany’s defeat.

Will it? Is Beijing ready to become more open and tolerant than the US? In theory, this could allow China to overtake America as a technological icebreaker. However, such a model clashes with China’s historical legacy. The Chinese empire has a tradition of “conformity” that it struggles to escape.

For the US, the puzzle is: can it unite allies closer without alienating them? In theory, this path aligns with America’s strengths, but hidden challenges exist. The American empire today feels betrayed by the world, especially Europe, and reopening ties under new rules is complicated. Yet a revolutionary president like Donald Trump might want to attempt it. Will he?

The path to peace requires that either the US, China or both reform in this direction. If the US unites the world around itself, China would be isolated, dry up and turn inward, ceasing to be a threat without destructive war. If China opens up and democratizes, a core reason for the US-China conflict dissolves.

If both reform, a new global order could emerge through negotiation.

The profundity of DeepSeek's challenge to America - Asia Times

Chinese AI system shows US tech restrictions have failed, meaning America needs a new holistic strategy to avoid a world war

by Francesco Sisci

February 2, 2025

asiatimes.com · by Francesco Sisci · February 2, 2025

The challenge posed to America by China’s DeepSeek artificial intelligence (AI) system is profound, calling into question the US’ overall approach to confronting China. DeepSeek offers innovative solutions starting from an original position of weakness.

America believed that by monopolizing the use and development of sophisticated microchips, it would forever cripple China’s technological advancement. In reality, it did not happen. The inventive and resourceful Chinese found engineering workarounds to bypass American barriers.

It set a precedent and something to consider. It could happen every time with any future American technology; we shall see why. That said, American technology remains the icebreaker, the force that opens new frontiers and horizons.

Impossible linear competitions

The issue lies in the terms of the technological “race.” If the competition is purely a linear game of technological catch-up between the US and China, the Chinese—with their ingenuity and vast resources— might hold an almost insurmountable advantage.

For example, China churns out four million engineering graduates annually, nearly more than the rest of the world combined, and has a massive, semi-planned economy capable of concentrating resources on priority objectives in ways America can hardly match.

Beijing has millions of engineers and billions to invest without the immediate pressure for financial returns (unlike US companies, which face market-driven obligations and expectations). Thus, China will likely always catch up to and overtake the latest American innovations. It might close the gap on every technology the US introduces.

Beijing does not need to scour the globe for breakthroughs or conserve resources in its quest for innovation. All the experimental work and financial waste have already been done in America.

The Chinese can observe what works in the US and pour money and top talent into targeted projects, betting rationally on marginal improvements. Chinese ingenuity will handle the rest—even without considering possible industrial espionage.

Meanwhile, America may continue to pioneer new breakthroughs but China will always catch up. The US might complain, “Our technology is superior” (for whatever reason), but the price-performance ratio of Chinese products could keep winning market share. It could thus squeeze US companies out of the market and America could find itself increasingly struggling to compete, even to the point of losing.

It is not a pleasant scenario, one that might only change through drastic measures by either side. There is already a “more bang for the buck” dynamic in linear terms—similar to what bankrupted the USSR in the 1980s. Today, however, the US risks being cornered into the same difficult position the USSR once faced.

In this context, simple technological “delinking” may not suffice. It does not mean the US should abandon delinking policies, but something more comprehensive may be needed.

Failed tech detachment

In other words, the model of pure and simple technological detachment might not work. China poses a more holistic challenge to America and the West. There must be a 360-degree, articulated strategy by the US and its allies toward the world—one that incorporates China under certain conditions.

If America succeeds in crafting such a strategy, we could envision a medium-to-long-term framework to avoid the risk of another world war.

China has perfected the Japanese kaizen model of incremental, marginal improvements to existing technologies. Through kaizen in the 1980s, Japan hoped to overtake America. It failed due to flawed industrial choices and Japan’s rigid development model. But with China, the story could differ.

China is not Japan. It is larger (with a population four times that of the US, whereas Japan’s was one-third of America’s) and more closed. The Japanese yen was fully convertible (though kept artificially low by Tokyo’s central bank’s intervention) while China’s present RMB is not.

Yet the historical parallels are striking: both Japan in the 1980s and China today have GDPs roughly two-thirds of America’s. Moreover, Japan was a US military ally and an open society, while now China is neither.

For the US, a different effort is now required. It must build integrated alliances to expand global markets and strategic spaces—the battleground of US-China rivalry. Unlike Japan 40 years ago, China understands the importance of international and multilateral spaces. Beijing is trying to transform BRICS into its own alliance.

While it struggles with it for many reasons and having an alternative to the US dollar international role is farfetched, Beijing’s newfound global focus—compared to its past and Japan’s experience—cannot be ignored.

The US should propose a new, integrated development model that broadens the demographic and human resource pool aligned with America. It should deepen integration with allied nations to create a space “outside” China—not necessarily hostile but distinct, permeable to China only if it adheres to clear, unambiguous rules.

This expanded space would amplify American power in a broad sense, strengthen international solidarity around the US and offset America’s demographic and human resource imbalances.

It would reshape the inputs of human and financial resources in the current technological race, thereby influencing its ultimate outcome.

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Bismarck inspiration

For China, there is another historical precedent —Wilhelmine Germany, devised by Bismarck, in the late 19th and early 20th centuries. Back then, Germany imitated Britain, surpassed it, and turned “Made in Germany” from a mark of shame into a symbol of quality.

Germany became more educated, free, tolerant, democratic—and also more aggressive than Britain. China could choose this path without the aggression that led to Wilhelmine Germany’s defeat.

Will it? Is Beijing ready to become more open and tolerant than the US? In theory, this could allow China to overtake America as a technological icebreaker. However, such a model clashes with China’s historical legacy. The Chinese empire has a tradition of “conformity” that it struggles to escape.

For the US, the puzzle is: can it unite allies closer without alienating them? In theory, this path aligns with America’s strengths, but hidden challenges exist. The American empire today feels betrayed by the world, especially Europe, and reopening ties under new rules is complicated. Yet a revolutionary president like Donald Trump might want to attempt it. Will he?

The path to peace requires that either the US, China or both reform in this direction. If the US unites the world around itself, China would be isolated, dry up and turn inward, ceasing to be a threat without destructive war. If China opens up and democratizes, a core reason for the US-China conflict dissolves.

If both reform, a new global order could emerge through negotiation.

This article first appeared on Appia Institute and is republished with permission. Read the original here.

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asiatimes.com · by Francesco Sisci · February 2, 2025

13. Too late, US Commerce nominee calls DeepSeek a technology ‘thief’

As one of our former students described in 2009-2010 - Chinese R&D strategy is "steal to leap ahead."

Accumulate or innovate (or both)?

Excerpts:

Xiang Zhiping, a Hubei-based IT writer, finds that plausible. “It’s no surprise if DeepSeek has 50,000 H100 chips. Any Chinese internet giant could have accumulated a lot of Nvidia chips,” Xiang says.

Even if DeepSeek has many chips, he says, it will use software and new IT frameworks to win the game, instead of following in the US firms’ footsteps to boost computing power endlessly.

The US banned the exports of A100 and H100 chips to China in October 2022, and then the slower A800 and H800 chips in October 2023. After this, Nvidia tailor-made the even-slower H20 chips for the Chinese markets.

On January 14, 2025, the Biden administration announced a regulatory framework to restrict the exports of American AI chips and models. The framework took effect on January 31.

Some observers have said the step-by-step strengthening of the chip ban gave China too much time to accumulate high-end AI chips.

Too late, US Commerce nominee calls DeepSeek a technology ‘thief’ - Asia Times

Chinese pundits acknowledge firm accumulated tens of thousands of Nvidia chips, thwarting US plan to guard the tech

by Yong Jian

February 1, 2025

asiatimes.com · by Yong Jian · January 31, 2025

US Commerce Secretary nominee Howard Lutnick has accused DeepSeek, a Hangzhou-based artificial intelligence (AI) firm, of stealing US technology and getting around US export controls to obtain high-end Nvidia chips.

In the nomination hearing with the US Senate on January 29, Lutnick said DeepSeek could create its AI models “dirt cheap” because it was able to purchase a large quantity of Nvidia chips and steal data from Meta’s open platform.

“I take a very jaundiced view of China,” he said. “They only think about themselves and seek to harm us, and so we need to protect ourselves. We need to drive our innovation, and we need to stop helping them. Meta’s open platform let DeepSeek rely on it. Nvidia’s chips – which they bought tons of, and they found their ways around [export controls] – drive their DeepSeek model. It’s got to end.”

Lutnick said he will coordinate and empower the Bureau of Industry and Security (BIS)’s export controls to stop China from using American tools to compete with the US.

Beijing has so far not responded to Lutnick’s comments as it is celebrating the Chinese New Year from January 28 to February 4.

David Sacks, former PayPal Chief Operating Officer and an advisor to the White House on AI and cryptocurrency matters, told Fox News that there was “substantial evidence” that DeepSeek used a method called “distillation” to extract data from Microsoft’s OpenAI models for its own use.

IT experts said “distillation” or “knowledge distillation” is commonly used in AI training. It is a technique where outputs from a larger AI model are used to train and improve a smaller one.

DeepSeek, in this process, can be understood as a student who keeps asking questions to a knowledgeable teacher, for example ChatGPT, and uses the answers to fine-tune its logic. At some point, DeepSeek will be as smart as ChatGPT.

The “distillation” process requires much less computing power than what OpenAI has used to train ChatGPT.

OpenAI told the Financial Times that it had seen some evidence suggesting that DeepSeek may have tapped into its data through “distillation.” It criticized DeepSeek for violating its intellectual property.

Some Chinese IT experts agree that DeepSeek was created through “distillation.”

Wang Zhiyuan, a Beijing-based IT columnist, writes in an article that it’s obvious DeepSeek V-3, released on December 26, 2024, had used the “distillation” technique in training. He says he came to that conclusion after analyzing the characteristics of DeepSeek.

He says a lot of other Chinese AI models have also used distilled data from ChatGPT o1, released on September 12 last year. He says that an academic paper published by a group of Chinese researchers on November 25, 2024, has already explained the distillation process and its effectiveness in detail.

He says an AI model made with distilled data may not be able to answer very difficult questions but is enough to solve high school-level problems. In his view, all small AI models should improve themselves with distilled data before entering the markets.

“Don’t laugh at those who took a short-cut!” Wang says. “DeepSeek used a special method to save computing power. After all, its training cost is only US$5.58 million, 1.1% of US$500 million of Meta’s Llama 3.1.”

After releasing the DeepSeek-R1 on January 20, 2025, a group of DeepSeek researchers published a paper on January 22, saying that its latest AI model achieves performance comparable to ChatGPT-o1.

They said the training of DeepSeek-R1 used the distilled data from Alibaba’s Tongyi Qianwen (Qwen) and Meta’s Llama. They said the DeepSeek-R1-Distill-Qwen version outperforms ChatGPT-4o.

50,000 H100 chips?

DeepSeek said it used only 2,000 units of Nvidia’s H800 chips to train its AI model. Its parent High Flyer, a Chinese hedge fund, said that it had amassed a cluster of 10,000 A100 chips before the US banned the exports of the chips to China in October 2022.

But now Lutnick suspects that DeepSeek bypassed the US export controls by importing high-end Nvidia chips via third-countries, such as Singapore.

The Wall Street Journal reported last July that some dodgy institutions in Singapore purchased Nvidia’s A100 chips and paid Chinese students to bring them back to China.

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Without providing any evidence, Alexandr Wang, chief executive of the US-based Scale AI, told CNBC that DeepSeek has 50,000 units of H100 chips, the most advanced Nvidia chips on the market.

Xiang Zhiping, a Hubei-based IT writer, finds that plausible. “It’s no surprise if DeepSeek has 50,000 H100 chips. Any Chinese internet giant could have accumulated a lot of Nvidia chips,” Xiang says.

Even if DeepSeek has many chips, he says, it will use software and new IT frameworks to win the game, instead of following in the US firms’ footsteps to boost computing power endlessly.

The US banned the exports of A100 and H100 chips to China in October 2022, and then the slower A800 and H800 chips in October 2023. After this, Nvidia tailor-made the even-slower H20 chips for the Chinese markets.

On January 14, 2025, the Biden administration announced a regulatory framework to restrict the exports of American AI chips and models. The framework took effect on January 31.

Some observers have said the step-by-step strengthening of the chip ban gave China too much time to accumulate high-end AI chips.

Yong Jian is a contributor to the Asia Times. He is a Chinese journalist who specializes in Chinese technology, economy and politics.

Read: Beijing calls Biden a ‘liar’ and says hello to Trump

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asiatimes.com · by Yong Jian · January 31, 2025

14. My Decade with Donald Trump By Salena Zito

Insights I have not read from anyone else.

Conclusion:

This Monday, Trump will be sworn in as the 47th president in Washington, D.C. I won’t be there. The best way for me to cover Trump, or any elected official, has always been on my home turf, listening to the people who put him in office. And, this time around, I hope the media takes him less literally. Although I think everyone takes him pretty seriously by now.

My Decade with Donald Trump

https://www.thefp.com/p/my-decade-with-donald-trump-salena-zito

He chased her with hair spray. She saw him get shot. Salena Zito is the journalist who knows Trump—and his voters—better than anyone.

By Salena Zito

01.18.25 — The Big Read

The manila envelope was stamped: From the Office of President-Elect Donald Trump.

It arrived with a knock on my front door, a couple of days before Christmas.

Inside was a scarlet-red holiday card signed in gold ink, from Melania, Barron, and Donald J. Trump. Enclosed was a page torn out of the New York Post, an article about Trump’s message of unity during his winning campaign. An arrow, drawn in fat black marker, pointed toward three paragraphs in the piece, which referenced the themes of my reporting, and my (misspelled) name was written next to it in all-caps: SELENA ZETO.

It was an unexpected greeting, I admit, but by then I’d had many missives like this from the 45th—and soon to be 47th—president.

Trump maintains an informal relationship with many journalists, calling them spontaneously or sending them articles ripped out of newspapers with his handwritten thoughts out of the blue. But I guess you could say I know him better than most. I was the only journalist to predict he would win in 2016. My former editor at the New York Post used to call me the “Trump Whisperer.” I am also the reporter who popularized the phrase coined by Republican strategist Brad Todd: “the press takes him literally, but not seriously; his supporters take him seriously, but not literally.” And I was four feet away when a bullet hit Trump in 2024.

Plenty of journalists have disparaged me for being too sympathetic to Trump. They’ve blasted me for not being critical enough of his crimes, his coarseness, his history with women. But all I’ve ever done is report on what I see. I grew up among his base, and I know why they love him.

I was born in western Pennsylvania—in the coal country of Appalachia—and, like most of my ancestors, I never left. Unlike the majority of journalists who write about Trump, I never graduated from college. I’ve been a hairdresser, a waitress, and a shop assistant, and I got into journalism the old-fashioned way.

In the late ’90s, when I was a young mother in my 30s, I worked as a staffer for the then–GOP senator Arlen Specter; after that, I became a political journalist for the Pittsburgh Tribune-Review. That’s where I was working when Trump first announced his candidacy for president. And as he surged in the polls, I found myself wondering how a three-times-married playboy who’s a regular on Howard Stern’s show was becoming so popular with conservatives.

In 2016, I covered his campaign stops in Pennsylvania, and I noticed that Trump was visiting parts of the state that nobody else goes to. Forgotten towns like Ambridge and Wilkes-Barre and Johnstown and Butler. Nobody goes to Butler!

What I remember most is how Trump came alive on shop floors, speaking to steelworkers, truckers, and plumbers. He really listened to the kind of people who historically voted Democrat. It didn’t surprise me when he got the GOP nomination for president—beating people like Marco Rubio and Ted Cruz.

Then, on September 1, 2016, I decided to take a buyout from the paper where I had worked for 11 years, because I figured the next stage would be layoffs. I remember walking out of the building and thinking, I’m 57 years old, and there’s no job for me. Mine wasn’t the only local paper that was shrinking. And then, a couple weeks later, I got a call from one of Trump’s campaign advisers, an old friend I knew from when we worked together for Senator Specter.

He said: “Do you want an interview with Trump tomorrow?”

I couldn’t believe my luck.

The next day, I wore cowboy boots. I remember feeling like my big hair was like a rat’s nest. Trump wore a dark suit. We met in a backstage room at the Shale Insight Conference at Pittsburgh’s main convention center, where he was scheduled to make an appearance to talk about how to Make America Great Again. It was September 22, just six weeks until the election.

When I first saw him, he struck me as polite and well-mannered. He made good eye contact and asked me questions about my family, congratulating me on becoming a grandmother. When I asked him about his relationship with the media, he said, “You know, I consider myself to be a nice person. And I am not sure they ever like to talk about that.”

Afterward, he took me on a tour of the complex, introducing me to the people there—oil and gas workers from Texas, Colorado, and Pennsylvania. They were all in casual clothing—a lot of flannel, no suits. Trump pumped their hands and asked them questions about what they do, seeming genuinely interested in their answers. I could see how a billionaire could connect with the American working class. People like this worked for him and his father on construction sites and helped build their real estate empire. Also, Trump is not so polished himself.

Just before he had to go out onstage, he turned to me and said a line he’s repeated to me so many times in the years since, it’s become a running joke: “Well, I gotta go out there. You want to come out with me?”

I just laughed.

In the weeks that followed, while the polls showed Hillary Clinton was well in the lead, I traveled throughout the Rust Belt and spoke to voters who convinced me Trump would beat her.

The legacy media focused on his rhetoric about Mexicans and Muslims, his behavior toward women, but I knew none of that mattered to the working-class voters who wanted a brawler to stand up for them. I took a lot of flack from other journalists for predicting Trump would win. But I was just relaying what I saw. “People believe he is listening to them,” one voter from East Liverpool, Ohio, told me. “That’s a potent feeling for an area like this.”

On Election Day, I was covering a GOP party in Pittsburgh. Trump was still the underdog, but as the results came in, it slowly dawned on everyone that he was cleaning up. By the wee hours of the morning, every Midwestern swing state that was once a Democratic stronghold had gone for Trump. I wasn’t surprised, but I was shocked when I looked around and saw a couple of other journalists tearing up over the results. These were local reporters, who’d spent time among the same voters as I had in Pennsylvania. But they could not understand how Trump could win.

The next day, I got a call out of the blue. It was a booker from CNN who wanted me on the air.

Immediately, I spat out: “What did I do wrong?”

They said: “You’re the only reporter that got it right.”

You could say Trump rewarded me for correctly calling the election. My next interaction with him was on the hundredth day of his presidency. His staff had accepted my request to interview him in the Oval Office. He sat at the Resolute desk, and I perched across from him, wearing my cowboy boots.

He looked restless, like a caged lion. I could see that D.C. didn’t suit him as much as the shop floor. We talked about the executive orders he had signed, the state leaders he had met. Then he turned to an Andrew Jackson painting behind him, and wondered aloud why more people didn’t ask the question: “Why was there the Civil War? Why could that one not have been worked out?”

At the time, the media was obsessed with Russiagate, and desperate to find reasons to delegitimize Trump’s win. So the papers went crazy when I reported those Civil War comments. On CNN the next day, I was asked questions like: “Was he denying there was a Civil War? Or was he denying there should have been a war?”

I remember thinking: He was just riffing! This reaction is insane!

It had been less than a year since I’d written, “The press takes him literally, but not seriously; his supporters take him seriously, but not literally.”

This was just one more example of that.

It was a while before I met Trump again. In 2018, right before the midterms, I attended his campaign event at a hockey arena in Erie, Pennsylvania. In the green room, an adviser walked me over and said: “President Trump, do you remember Salena?”

“Of course I remember Salena,” Trump replied. “She has the best hair in America!”

During the interview, we talked about his Supreme Court nominee Brett Kavanaugh, who had just been grilled during his confirmation hearing over allegations that he had sexually assaulted Christine Blasey Ford. Trump said he was so incensed by the treatment of Kavanaugh that he “didn’t even think about” withdrawing his support. “I felt that it would be a horrible thing not to go through with this,” Trump told me, even though “the easier path” would have been to drop him.

After we were done talking, he said: “Come with me.”

As he had before, Trump led me toward the stage where he would be speaking. When we got backstage, he pulled back the curtain a little, revealing more than 10,000 people waiting for him to speak. By this point, he’d faced so many crowds like this, but he still seemed delighted by the sight of all these people. “Look out there,” he said to me. “Look at that.”

Someone must have spotted him, because a second later, everyone started waving and shouting his name.

Trump turned to me and said, again: “You want to come onstage with me?”

The next time I met Trump was in May 2020, mid-pandemic. The president was visiting a medical supply company in Allentown, Pennsylvania, to encourage Americans to “stop the spread.” Hundreds had turned out to see him, and although they had to sit six-feet apart, the atmosphere was joyful. I remember the Tom Petty song “Free Fallin’ ” playing on the speakers. People were clapping to the beat.

Our interview took place in the stockroom. I was waiting there when I heard his voice booming across the room, asking for me.

“Where’s my Salena?!”

He was wearing his standard dark suit and a huge smile. I was supposed to stand on a big X on the floor, and he was supposed to stand on an X six-feet away from me. But, of course, he couldn’t keep still and kept wandering off it. He wasn’t wearing a mask—the whole thing about him being a “germaphobe” is bullshit—but I was, and at one point, he just said: “Can you take that off?”

I felt a swell of relief, and thought: Thank you.

Salena Zito interviews Trump during his visit to a medical supply company in Allentown, Pennsylvania, during the early days of the Covid-19 pandemic in May 2020. (Courtesy of the author)

By then, Trump was running for reelection, and Joe Biden had just announced that he was, too. During the interview, Trump slammed Biden’s mental faculties, telling me, “Joe has absolutely no idea what’s happening.”

But Biden appealed to just enough blue-collar voters to win the election that year. And in the months that followed, I saw another side of Trump. His lowest point was, of course, January 6, 2021. As I reported in the New York Post, his reckless behavior betrayed his base. I also argued that it jeopardized his political future. It was clear he would run for president again in 2024, but now I thought he didn’t have a chance.

As Biden settled into the Oval Office, Trump sank in the polls. His 2022 midterm picks lost their races. I started covering other candidates who I thought could lead the Republican Party forward, including Ron DeSantis. I guess the profile I wrote of the Florida governor kind of irked Trump, because two days after it published, he let me have it with both barrels on Truth Social:

In writer Salena Zito’s Fake News “puff piece” about DeSantis. . . why doesn’t she mention that he wants to cut Social Security & Medicare, loves losers like Jeb Bush, Paul Ryan, and Karl Rove, and it [sic] getting CLOBBERED in the polls by me.

I didn’t respond. I actually found it pretty funny. As a reporter, I don’t care if politicians like me; I care about accurately representing the people whose votes politicians have to earn. And I thought Trump had lost sight of that in that moment.

But right after I interviewed DeSantis, there was a train derailment in East Palestine, Ohio, which led to a devastating leak of toxic waste. I raced to the scene to talk to the people who lived there. And guess who else was there? Donald J. Trump.

He had arrived with two 18-wheelers filled with water bottles, and bought everybody around him McDonald’s. He wandered through the town in galoshes, stepping in puddles. You could see the slime and scum in the water. His appearance that day sent a message that was, essentially, I see you. I’m here for you. I’m not leaving you.

I hung back in the crowd and wore a baseball cap over my huge hair, because I knew, this time, he wasn’t going to welcome me with open arms.

But I remember scribbling in my notebook that this might be a turning point. As he had in 2016, Trump was showing everyone that he understood America’s forgotten men and women. Soon after, national polls showed he had pulled ahead of the other Republicans vying for the presidential nomination. One year later, on March 12, 2024, he clinched it.

Around that same time, I was babysitting my grandchildren when I got a call from a restricted number. I picked it up and was greeted by his buoyant voice. “Hey, Salena, how are you?”

I can’t say what we talked about, because it was off the record, but Trump acted like he’d never slammed me on social media. He gave me his cell-phone number, and I filed it under President Donald Trump.

I didn’t see him again until a hot day in Butler, Pennsylvania, a few months later. Trump was there for a campaign event, and there was so much anticipation in the air, it felt like a Jimmy Buffett concert—except instead of Parrotheads and Hawaiian shirts, people were wearing stars and stripes. The date was July 13, 2024.

Right before Trump was set to appear, I got the nod to come backstage. He was meeting with all these regular people who had been pulled out of the crowd, talking to them and hugging them. Then he saw me. “Salena! Look at that hair! Doesn’t she have the best hair in America?” he boomed. “Look at her hair, everybody.” I wanted to die of embarrassment.

He asked about my grandchildren, as usual—and checked I was going to fly to Bedminster, New Jersey, with him after his speech to do a fuller interview. I said I would, and then his aides guided me to a spot four feet away from the podium. I stood next to photographers covering the event, including my photojournalist daughter and her husband.

Trump came out. The crowd went wild. I’d seen this happen a hundred times. But then, six minutes in, he did something he never does. He turned to look at a chart that was on the stage, showing how border crossings were at their lowest point ever when he was president. That’s when I heard: Pop! Pop! Pop! Pop!

I saw Trump grab his ear. Blood streaked across his face, and he ducked down. Later, I realized: If he hadn’t turned to look at that chart for a split second, he would have been killed.

Suddenly, everyone was on the ground—including me. A campaign press liaison had leapt on top of me. But I could still see Trump, and hear the entire conversation going on between him and his agents. They were talking about the shooter, saying, “Mr. President, we’ve got to get him.”

Then they said, “We have to stand up.”

“I gotta get my shoes on,” Trump said. Somehow, they had fallen off in the commotion.

I was still on the ground when a man in full camo came over and pointed a gun at four of us on the ground. He must have been part of the president’s security. I was a suspect for a moment. I think everybody was.

Then Trump was on his feet. That’s when he defiantly punched the air, in a pose that will go down in history.

Donald Trump is surrounded by U.S. Secret Service agents after he was shot at a campaign rally, on July 13, 2024, in Butler, Pennsylvania. (Evan Vucci via AP Photo)

It was weird how calm and slow everything felt, despite the horror. It felt like we were in a terrible dream. Afterward, we learned that a firefighter, who had two daughters, had been tragically killed by one of the bullets.

The next morning, I was sitting at my kitchen table drinking a cup of coffee, when Trump called me and asked: “Salena, are you okay?”

And I said, “Mr. President, yes, but are you freaking kidding me? You were just shot, right?”

He told me, “I’m so sorry about Corey”—the firefighter who had been killed. “I just want to do right by Corey and his family.” It shook him to think that someone could be killed simply because they had supported him.

We ended up having seven different phone conversations that day. He kept getting interrupted, but would call me back. We talked about his decision, in that moment, to raise his fist at the crowd.

He said it was important to show that the country is “still strong and we are resilient.” He said he felt like he had an obligation—as a former president—to prove he would never surrender.

Trump was back on the road within days. Two weeks later, we met at a rally in Harrisburg, Pennsylvania. He took me to a back room where there were snacks and a table with a mirror and brushes. We sat on the sofa, facing each other, and he seemed a little different. Humbled, perhaps, by what had almost happened to him. But as I was leaving, his funny side reemerged.

“Salena,” he said, “do you use hair spray?”

I said, “My hair is big enough, sir.”

That’s when he picked up a can of hair spray from his table and started spritzing me with it. I have photos of him chasing me with this spray and laughing, and I just thought: Another crazy day with Donald J. Trump.

Trump spritzes Salena Zito with hair spray while backstage at a 2024 campaign rally in Harrisburg, Pennsylvania. (Courtesy of the author)

Up until the election, Trump kept visiting voters throughout Rust Belt Pennsylvania. Westmoreland County, Allegheny County, Armstrong County, Indiana County, and back to Butler County. People lined up to see him in the small towns and big cities, standing on top of buses, trucks, and tractors. Everywhere, there were road closures. I’ve never seen anything like it.

I thought: It’s over, right? It’s totally over. I knew Kamala Harris was never going to be elected. Though she arguably won the single presidential debate, when I talked to the voters around me, they didn’t care. They felt they didn’t know her. Trump, they knew.

On election night, the results came in fast. I texted him: I told you you’d win Pennsylvania.

I didn’t hear back from him—until I got that Christmas card.

This Monday, Trump will be sworn in as the 47th president in Washington, D.C. I won’t be there. The best way for me to cover Trump, or any elected official, has always been on my home turf, listening to the people who put him in office. And, this time around, I hope the media takes him less literally. Although I think everyone takes him pretty seriously by now.

—As told to Margi Conklin

Salena Zito is a reporter for the Washington Examiner, a contributor to The Free Press, and the author of the upcoming book, Butler: The Untold Story of the Near Assassination of Donald Trump and the Fight for America’s Heartland.

The Free Press earns a commission from any purchases made through all book links in this article.

15. Trump puts tariffs on Canada, Mexico and China, spurring trade war as North American allies respond

Has anyone asked: Will these tariffs solve (or at least significantly contribute to solving) the fentanyl crisis?

What is the analysis about how effective these tariffs will be?

What about fundamental American values?

Free Trade

In throwing open our ports to the commerce of the world we shall far better secure their safety than by fortifying them with all the “protected” plates that our steel ring could make. For not merely would free trade give us again that mastery of the ocean which protection has deprived us of, and stimulate the productive power in which real fighting strength lies; but while steel-clad forts could afford no defense against the dynamite-dropping balloons and death-dealing air ships which will be the next product of destructive invention, free trade would prevent their ever being sent against us. The spirit of protectionism, which is the real thing that it is sought to defend by steelplating, is that of national enmity and strife. The spirit of free trade is that of fraternity and peace. …

And a republic wherein the free-trade principle was thus carried to its conclusion, wherein the equal and unalienable rights of men were thus acknowledged, would indeed be as a city set on a hill.

Henry George

Found in: Protection or Free Trade

The American free trade advocate Henry George (1839-1897) thought the best way to spread the idea of liberty was not the use of “steelplated” naval vessels or “death-dealing air ships” but the removal of all “impediments to trade and travel”:

https://oll.libertyfund.org/quotes/henry-george-on-a-free-trade-america-as-the-real-city-set-on-a-hill-1886

Trump puts tariffs on Canada, Mexico and China, spurring trade war as North American allies respond

AP · by JOSH BOAK · February 1, 2025

WASHINGTON (AP) — President Donald Trump on Saturday signed an order to impose stiff tariffs on imports from Mexico, Canada and China, drawing swift retaliation and an undeniable sense of betrayal from the country’s North American neighbors as a trade war erupted among the longtime allies.

The Republican president posted on social media that the tariffs were necessary “to protect Americans,” pressing the three nations to do more to curb the manufacture and export of illicit fentanyl and for Canada and Mexico to reduce illegal immigration into the U.S.

The tariffs, if sustained, could cause inflation to significantly worsen, threatening the trust that many voters placed in Trump to lower the prices of groceries, gasoline, housing, autos and other goods as he promised. They also risked throwing the global economy and Trump’s political mandate into turmoil just two weeks into his second term.

Trump declared an economic emergency in order to place duties of 10% on all imports from China and 25% on imports from Mexico and Canada. Energy imported from Canada, including oil, natural gas and electricity, would be taxed at a 10% rate. Trump’s order includes a mechanism to escalate the rates charged by the U.S. against retaliation by the other countries, raising the specter of an even more severe economic disruption.

“The actions taken today by the White House split us apart instead of bringing us together,” Canadian Prime Minister Justin Trudeau said in a somber tone as he announced that his country would put matching 25% tariffs on up to $155 billion in U.S. imports, including alcohol and fruit.

He channeled the betrayal that many Canadians are feeling, reminding Americans that Canadian troops fought alongside them in Afghanistan and helped respond to myriad crises from wildfires in California to Hurricane Katrina.

“We were always there standing with you, grieving with you, the American people,” he said.

Mexico’s president also ordered retaliatory tariffs.

“We categorically reject the White House’s slander that the Mexican government has alliances with criminal organizations, as well as any intention of meddling in our territory,” Mexican President Claudia Sheinbaum wrote in a post on X while saying she had instructed her economy secretary to implement a response that includes retaliatory tariffs and other measures in defense of Mexico’s interests.

“If the United States government and its agencies wanted to address the serious fentanyl consumption in their country, they could fight the sale of drugs on the streets of their major cities, which they don’t do and the laundering of money that this illegal activity generates that has done so much harm to its population.”

The premier of the Canadian province of British Columbia, David Eby, specifically called on residents to stop buying liquor from U.S. “red” states and said it was removing American alcohol brands from government store shelves as a response to the tariffs.

China’s Ministry of Foreign Affairs said the country’s government “firmly deplores and opposes this move and will take necessary countermeasures to defend its legitimate rights and interests.”

China began regulating fentanyl-related drugs as a class of controlled substances in 2019 and conducted “counternarcotics cooperation with the U.S.,” the ministry said, calling on the U.S. government to correct what it considers wrongful actions.

The Ministry of Commerce in China said it would file a lawsuit with the World Trade Organization for the “wrongful practices of the U.S.” and take measures to safeguard its rights and interests.

The tariffs will go into effect on Tuesday, setting up a showdown in North America that could potentially sabotage economic growth. A new analysis by the Budget Lab at Yale laid out the possible damage to the U.S. economy, saying the average household would lose the equivalent of $1,170 in income from the taxes. Economic growth would slow and inflation would worsen, and the situation could be even worse with retaliation from other countries.

Democrats were quick to warn that any inflation going forward was the result of Trump’s actions.

“You’re worried about grocery prices. Don’s raising prices with his tariffs,” Senate Democratic leader Chuck Schumer of New York wrote in a series of posts on X. “You’re worried about tomato prices. Wait till Trump’s Mexico tariffs raise your tomato prices,” read another. “You’re worried about car prices. Wait till Trump’s Canada tariffs raise your car prices,” read another.

A senior U.S. administration official, speaking on condition of anonymity to brief reporters, said the lower rate on energy reflected a desire to minimize disruptive increases on the price of gasoline or utilities. That’s a sign White House officials understand the gamble they’re taking on inflation. Price spikes under former President Joe Biden led to voter frustration that helped return Trump to the White House.

The order signed by Trump contained no mechanism for granting exceptions, the official said, a possible blow to homebuilders who rely on Canadian lumber as well as farmers, automakers and other industries.

The official did not provide specific benchmarks that could be met to lift the new tariffs, saying only that the best measure would be fewer Americans dying from fentanyl addiction.

The order would also allow for tariffs on Canadian imports of less than $800. Imports below that sum are currently able to cross into the United States without customs and duties.

“It doesn’t make much economic sense,’’ said William Reinsch, senior adviser at the Center for Strategic and International Studies and a former U.S. trade official. “Historically, most of our tariffs on raw materials have been low because we want to get cheaper materials so our manufacturers will be competitive ... Now, what’s he talking about? He’s talking about tariffs on raw materials. I don’t get the economics of it.’’

With the tariffs, Trump is honoring promises that are at the core of his economic and national security philosophy. But the announcement showed his seriousness around the issue as some Trump allies had played down the threat of higher import taxes as mere negotiating tactics.

The president is preparing more import taxes in a sign that tariffs will be an ongoing part of his second term. On Friday, he mentioned imported computer chips, steel, oil and natural gas, as well as copper, pharmaceutical drugs and imports from the European Union — moves that could essentially pit the U.S. against much of the global economy.

Trudeau warned of economic pain as the tariffs take effect and encouraged Canadians to “choose Canadian products and services rather than American ones.” But he also voiced optimism in the enduring relationship between the two countries.

“It is going to have real consequences for people, for workers on both sides of our border. We don’t want to be here. We didn’t ask for this, but we will not back down in standing up both for Canadians and for the incredible successful relationship between Canada and the United States,” Trudeau said.

___

Boak reported from Palm Beach, Florida, Sherman reported from Mexico City and Gillies reported from Toronto. Associated Press writer Paul Wiseman in Washington contributed to this report.

AP · by JOSH BOAK · February 1, 2025

16. Shadow Games (Afghanistan Retrospective)

Classic resistance and unconditional warfare by our adversaries.

Excerpts:

A Final Lesson

The Taliban saw every blind spot we left open, and they exploited them all. They turned our weaknesses into their greatest strengths. The question now isn’t just what went wrong in Afghanistan—it’s whether we’ll let it happen again somewhere else.

Shadow Games

https://substack.com/inbox/post/155598222?utm

by Simone Ledeen

Signals and Strategies

Jan 24, 2025

When I deployed to Afghanistan in 2009 as the Senior Treasury Representative to ISAF, I believed we could still turn the tide. General Stanley McChrystal inspired confidence as a leader, not just because of his own abilities but because of the strong team he built around him. I had worked with then-Major General Mike Flynn in the past, and he was a key part of the strong team McChrystal built. His intelligence expertise and strategic thinking were second to none, and knowing I would be serving under both of them made me eager to be part of their command. Together, they created an environment of trust and clarity that pushed everyone to perform at their best. For a while, it seemed like this team might succeed in untangling the mess we had built for ourselves.

But hope didn’t last long.

McChrystal pushed my colleagues and me to uncover two critical mysteries during that tour: the truth about Afghan-American power broker Ahmed Wali Karzai, and the Taliban’s primary revenue streams. Both efforts revealed not just the limits of our strategy but the deep cracks in our entire approach to Afghanistan.

Ahmed Wali Karzai: The Mob Boss of Kandahar

In Kandahar, Ahmed Wali Karzai loomed large—President Hamid Karzai’s half-brother and a critical power broker in southern Afghanistan. Rumors painted him as both a CIA asset and a drug lord, a man who controlled Kandahar’s narcotics trade while supposedly advancing U.S. interests. McChrystal said he wanted the truth. He ordered us to dig.

We scoured old intelligence reports, coordinated with home agencies, and sifted through data collected on the ground. We found nothing that could pass as hard evidence. Ahmed Wali, (or AWK) wasn’t sloppy or stupid- he kept himself insulated, running his criminal enterprises through intermediaries. Those middlemen never led a trail directly back to him. It didn’t matter that the circumstantial evidence was overwhelming. The result of our deep dive: no smoking gun, therefore no action taken against AWK.

Our arbitrary standards, set ridiculously high, required us to catch him red-handed or secure an admission akin to a Bond villain’s confession. That never happened. So AWK remained untouchable. We knew his influence undermined everything we were trying to build, but no one could—or would—do anything about it. He was assassinated a year later with many breathing a sigh of relief.

How the Taliban Got Rich Off NATO

McChrystal also zeroed in on a bigger problem: how the Taliban funded itself. The prevailing wisdom blamed Afghanistan’s opium trade, which dominated the country’s economy. McChrystal wasn’t convinced, and asked the team to take a careful look at all possible Taliban funding sources, both internal and external to Afghanistan.

What we found shocked him—and me.

Opium wasn’t the Taliban’s primary cash cow, nor were foreign donations. Sure, they brought in revenue, but the Taliban’s most profitable scheme came from extortion. They infiltrated our supply chains- local subcontractors hauling goods for the coalition were forced to pay protection money that followed back to the Taliban. Every truck that carried fuel, food, or supplies for NATO filled Taliban coffers.

We briefed McChrystal in a small meeting space off his famous Situational Awareness Room (SAR). The SAR was a big room with a U-shaped table where his advisers sat behind computers, facing multiple screens displaying intelligence reports, news headlines, and operational updates. It was always buzzing with people moving in and out. The meeting room, by contrast, was plain and quiet. McChrystal sat at the head of the table, leaning forward with a pen in hand, not saying much at first but scribbling notes as we talked. Flynn nodded along and chimed in when something caught his attention.

It wasn’t dramatic or overly formal—it felt more like a team trying to make sense of a mess we already knew was spiraling. The tension wasn’t from McChrystal or the room; it came from the weight of the information we were laying out, and the unspoken acknowledgment that even with all this data, none of us really had the answers. I remember the look on our Commander’s face as we told him: we funded the insurgency we were fighting.

McChrystal immediately ordered a sweeping review of our contracting practices. Some changes followed, I was part of the team evaluating and implementing them. but they didn’t go far enough. The Taliban’s extortion network remained intact, funneling millions into their operations year after year. This wasn’t an oversight—it was a failure to act with the urgency and decisiveness the moment demanded. When McChrystal got fired and replaced by Petraeus, I also returned home, leaving behind the last of my illusions. Petraeus brought in HR McMaster to lead a very public “anti-corruption” effort. Back home the reporting kept coming- Taliban revenue from our supply chain not disrupted. The war dragged on ten more years after that. Ten years.

The Consequences of Inaction

The connection between Ahmed Wali Karzai’s drug trafficking and the Taliban’s financial operations was clear—they were both fueled by a toxic mix of dishonesty and self-interest on the part of our senior military and political leadership. Despite all our rhetoric about accountability, there was none. Worse, we carried on with the war for ten more years, fully aware that we were funding the Taliban—and that some of our own intelligence assets were complicit.

When President Obama fired McChrystal and we all left Afghanistan, it was clear to me then that we had missed our window (if it had ever existed) to fix the foundational issues. The Taliban grew stronger, not because of their battlefield victories, but because we allowed them to outmaneuver us financially and politically.

A Final Lesson

The Taliban saw every blind spot we left open, and they exploited them all. They turned our weaknesses into their greatest strengths. The question now isn’t just what went wrong in Afghanistan—it’s whether we’ll let it happen again somewhere else.

17. Trump’s Government Is Built on Secrecy

"Perfect freedom is as necessary to the health and vigor of commerce as it is to the health and vigor of citizenship."

–Patrick Henry

This quote could have come from someone from the north Korean diaspora describing life in the north.

Excerpt:

“You don’t trust anyone at work right now. I don’t trust any coworkers and coworkers don’t trust each other. People are deleting files,” said one federal employee. “They are very secretive. It literally feels like they’re finding their allies internally with the career folks and using them to make this new police internally. It’s scary. It’s psychologically torture.”

Trump’s Government Is Built on Secrecy

The ‘flood the zone’ strategy is designed to grab attention. The real work is being done far from public view.

Sam Stein

Jan 31, 2025

https://www.thebulwark.com/p/trump-government-built-on-secrecy-federal-executive-cryptic?isFreemail=false&post_id=156216747&publication_id=87281&r=7i07&triedRedirect=true&utm

thebulwark.com · by Sam Stein

(Photo by Chip Somodevilla/Getty Images)

THE PREVAILING WISDOM about Donald Trump’s first two weeks in office is that he is, to borrow a cliché, flooding the zone—releasing a torrent of information that overwhelms even the most seasoned political observer.

The real story of Trump 2.0 is exactly the opposite.

White House operations have so far been defined not by the spotlight they’ve commanded but by the secrecy they’ve imposed. People inside and outside of government are confused about who is staffing—or even leading—agencies. Federal employees have been thrust into a state of paranoia about the status of their jobs. Even lawmakers say they are utterly in the dark, unable to reach contacts at federal agencies to get key information about which parts of the government are functioning and which aren’t.

“There’s no clarity about which federal funds are frozen and which are left untouched,” Rep. Ritchie Torres told The Bulwark in an interview. “I’m not aware of any member of Congress who has been—any Democratic member of Congress—who’s been kept in the loop about the scope of the executive order.”

The crypticity is a stark difference between Trump 1.0—an often unruly, directionless, and very public mess—and Trump 2.0., which presidential aides are determined to make more efficient and consequential. And it has thrown much of Washington, D.C. into chaos, as lawmakers, civil servants, state and local governments, nonprofits, companies, and even foreign governments scramble to figure out just how dramatically our governing institutions are being altered or altogether undone.

Trump’s team entered the White House on January 20 looking to swiftly enact its agenda in two ways: abruptly halting major swaths of government operations and pushing to get federal workers (whom they view as hindrances) to resign. To do both, they centralized operations, often by forcing out preexisting leadership, and kept external communications confined and vague.

The first indication of this approach came in the opening days, when groups that rely on government grants suddenly discovered they could not access portals or contact officials who served as points of contact. Days later, the Office of Management and Budget issued a two-page memo saying that all federal grant funding would be frozen. That memo was subsequently rescinded. But the original executive order putting a pause on various areas of federal spending remains in place. So too has the freeze on external communications.

One official with the group Meals on Wheels, which works to alleviate hunger among seniors, said they were “not hearing anything from our typical contacts within” the Department of Health and Human Services. Asked where they were turning to for guidance, the official replied: “Just the news and the leaked memos.” Another official, who works with the Social Security Administration in an office outside the capital, said their field official “has no idea what is going on” and has received no direct guidance about return-to-work policies despite the White House insistence that every employee head back to the office. A top congressional aide said offices on Capitol Hill were trying to decipher tweets from White House Press Secretary Karoline Leavitt as if they were Indus script.

Share The Bulwark

IT’S NOT UNUSUAL for incoming administrations to terminate certain government functions and replace personnel. But the sheer scope and lack of transparency around the current transition is unprecedented.

Angst, rumor, and innuendo have filled the vacuum left by the absence of government communication. In conversations throughout the week, officials at NGOs and various government agencies shared fears that government websites would be taken offline and critical work would be lost. On Friday afternoon, some of those fears came true: The Department of Agriculture began scrubbing references to climate change from its website. Aides to Elon Musk were reportedly locking employees out of their computer systems at the Office of Personnel Management. The homepage for the Census Bureau went dark for about an hour. And the Centers for Disease Control and Prevention began removing published studies from its website. Each of these happened without public explanation, adding to the sense of opacity around the administration’s operations.

“The question I’ve asked is, are these pages coming down temporarily?” said one advocate in the scientific research community. “Is this a temporary bring-it-down so that you can scrub out DEI [references] and then put it back? Or is this, ‘It’s down and tough shit, deal with it’?”

Inside the civil service, the search for reliable information was no less frantic. Federal employees have congregated on Reddit forums to share guidance they had received and to discuss how individual offices were responding.

These are dark days. Look for the light: Keep up with all Bulwark coverage of Trump 2.0 by signing up today:

One memo sent within the Environmental Protection Agency—and obtained by The Bulwark—identified recipients as newer employees who were likely on a “probationary/trial period” and therefore enjoyed fewer protections. The note appeared designed to strong-arm recipients into taking a “deferred resignation.” And it sparked fear among those recipients that they would be targeted. An official with the American Federation of Government Employees, the union that represents federal workers, signaled that they, too, were looking for information about the memo and others like it. All they would say is that they had seen the memo “from one agency at least.”

Elsewhere, communications sent to employees were so vague and ominous that employees began to anticipate their arrival (late in the afternoon from an email address they didn’t recognize). There had been two “Fork in the Road” memos from the reportedly Musk-dominated Office of Personnel Management. And on Friday, departments began sending a follow-up note from OPM insisting that the original offer to receive paid leave was “valid, lawful, and will be honored.” The Bulwark was forwarded two such emails—one from the Department of Commerce, the other from the Department of Justice.

The follow-ups have left the impression among some workers that Trump and Musk (who appears to be in charge of much of the purge effort) are not getting the results they want. And, indeed, a number of workers told The Bulwark that the attempt to get them to leave had made them more determined to remain in their jobs.

“Those I have spoken with don’t believe it’s a legit offer,” said one federal government employee, who declined to reveal their name or place of work for fear of retaliation.

But what if the intended result wasn’t just to spark a mass exodus but to create a culture of uncertainty, unrest, and secrecy—not to hollow out the government, but to hamstring it? On that front, some workers said, the new administration was clearly succeeding.

“You don’t trust anyone at work right now. I don’t trust any coworkers and coworkers don’t trust each other. People are deleting files,” said one federal employee. “They are very secretive. It literally feels like they’re finding their allies internally with the career folks and using them to make this new police internally. It’s scary. It’s psychologically torture.”

Please take a moment to share this article with a friend, family member, or federal employee of you acquaintance.

thebulwark.com · by Sam Stein

18. Fifty-two years after a U.S. spy plane was shot down over Laos, a family still fights for answers: Did the crew all perish or were half of them LEFT BEHIND?

Another tragic mystery we still need to have solved.

Fifty-two years after a U.S. spy plane was shot down over Laos, a family still fights for answers: Did the crew all perish or were half of them

LEFT BEHIND?

https://thewarhorse.org/what-happened-to-crew-of-us-spy-plane-shot-down-by-north-vietnamese/?mc_cid=73b5c07789

BY KEN MCLAUGHLIN

February 2, 2025

The tragic story of an American spy plane with the radio call sign Baron 52 began like so many other midnight missions over Indochina.

Shortly after 11 p.m. on Feb. 4, 1973, the plane left a Thai air force base with a crew of eight whose mission was to eavesdrop on the Ho Chi Minh Trail, North Vietnam’s shadowy, serpentine jungle artery for moving soldiers, tanks, arms and supplies south.

At 1:25 a.m., the flight crew of the EC-47Q radioed Moonbeam, an airborne command and control center, that several artillery rounds were fired at the plane over southern Laos, but it was not hit. Fifteen minutes later, the flight crew reported that the plane was taking on heavy anti-aircraft fire. It was the last time anyone heard from Baron 52 before the converted cargo plane fell out of the sky and landed in the dense Laotian jungle.

But this was no routine shootdown. Only eight days earlier, the United States and its South Vietnamese allies had signed the Paris Peace Accords with North Vietnam and the Viet Cong. A key part of the pact was that the North Vietnamese would return hundreds of U.S. prisoners of war—and the first POWs were set to be released in seven days. The last thing the Americans needed was an international incident to complicate or even nix the deal.

“From the beginning, it was embarrassing to the U.S. because the peace treaty was signed and American prisoners were about to be released—and then all of a sudden there’s a spy mission over the Ho Chi Minh Trail,” recalled former New Hampshire GOP Sen. Bob Smith, who was vice chairman of the Senate Select Committee on POW/MIA Affairs in the early ’90s.

President Richard Nixon announced the preliminary approval of a peace treaty aimed at ending U.S. involvement in Vietnam on Jan. 23, 1973, four days before the agreement was signed. (White House photo)

The downing of the reconnaissance plane set off a series of events shrouded in mystery, intrigue, alleged coverups and never-ending questions that remain unanswered today, even as the U.S. gets ready to mark the 50-year anniversary of the ignominious fall of Saigon to Vietnamese communists on April 30, 1975.

To shine a light on the vexing case, The War Horse spent the past two months reviewing hundreds of military and government documents—many of them once top secret and now declassified, or simply gathering dust on archival shelves and never publicized before.

The tale that emerges from the documents, oral histories and video testimonies is one of bureaucratic intransigence and inattention—and one American family’s half-century quest for accountability and truth. The story also drives home the magnitude of the gnawing pain of the families of the nearly 1,600 Americans still listed as “unaccounted for” from the Vietnam War.

CIA’s Secret War

What made the aftermath of Baron 52’s fiery demise even more mysterious was that landlocked Laos during the Vietnam War was the “black hole” of Indochina. The technically neutral country was where the CIA had directed a secret war from the early ’60s to prevent the spread of communism in Southeast Asia by countering the influence of the Pathet Lao, a political and military organization allied with North Vietnam and the Soviet Union.

Baron 52 was shot down by North Vietnamese soldiers in Laos about 20 miles from the border of South Vietnam. The bare area at right is the site of the crash after it was excavated in early 1993, the 20th anniversary of the shootdown. (Graphic by Hrisanthi Pickett of The War Horse)

An aggressive search for Baron 52 involving a flock of U.S. planes was launched 15 minutes after its flight crew didn’t check in with Moonbeam at two a.m. But it took two days to locate the plane in a mountainous region of Laos, about 20 miles from the border of South Vietnam. From the air, search crews reported, it appeared that the plane had fallen to earth, bounced once, landed upside down and burned.

On Feb. 9, a Sikorsky HH- 3E Jolly Green Giant helicopter lowered three Air Force parajumpers and a communications specialist to investigate the crash site after at least one missile was fired at the helicopter. While two of the parajumpers set up a security perimeter, the other two men examined the wreckage. They found the bodies of three members of the flight crew, still strapped into their seats in their fire-resistant Nomex flight suits. And the team found another body partially underneath the fuselage.

The wreckage of Baron 52 was spotted by U.S. Air Force search-and-rescue crews two days after the spy plane crash-landed in a mountainous region of southern Laos. (Photo courtesy of U.S. Air Force)

But there was no sign of the other four crew members in the main cabin: the navigator and the so-called backenders who operated the sophisticated eavesdropping equipment. The search-and-rescue team determined that all the equipment had been destroyed in the fire. But in part because team members feared booby traps, they didn’t enter the fuselage to sift through the wreckage to look for evidence of the backenders’ demise, such as shredded pieces of Nomex suits. And because one of the mission’s two helicopters was running low on fuel, the search-and-rescue team spent only about 40 minutes on the ground and was able to retrieve the remains of only one of the pilots, 1st Lt. Robert Bernhardt.

Officers at the Front Door

A couple of days later and half a world away on New York’s Long Island, Sgt. Joseph Matejov’s 15-year-old sister, Mary, the sixth of 10 children of Stephen and Mary Matejov, was home sick from school when she peered out the window and spotted two uniformed Air Force officers walk up to the front porch and ring the doorbell.

She had seen similar scenes at the movies and immediately knew something terrible had happened to her fun-loving brother Joe. She told the officers her mother wasn’t home, so they waited in their car for her to return.

“I didn’t even know he was over in Vietnam,” said Mary Matejov Salzinger, a retired nurse who now lives in Portland, Oregon. “I only knew that he was based in Thailand and that I was glad the war had ended without him having to go to Vietnam.”

The Matejov clan in the front yard of their home in East Meadow, N.Y., circa 1969. Top row (left to right): Steve, John, and Joe. Middle row: Kate, Anne, and parents Mary and Stephen. Front row: Theresa, Judy, Mary, Jim, and Mike. (Photo courtesy of Matejov family)

The news of the fiery crash shattered the Matejov family, but a letter from Col. Francis Humphreys, commander of the 8th Tactical Fighter Wing, based in Ubon, Thailand, offered some hope.

“I feel that there is a possibility that one or more crew members could have parachuted to safety,” Humphreys wrote to Joe’s parents on Feb. 13.

But the Matejovs’ hopes were crushed when they received a letter dated Feb. 24 from Humphreys saying he had reluctantly concluded that all eight men were killed in the crash.

“A careful review of all available facts has been made and there is no reasonable doubt that there were no survivors,” Humphreys wrote. “Due to the severity of the crash, the apparent total destruction of the aircraft, the intense fire and the fact that no contact of any kind was established with any member of the crew, the decision was made to declare your son killed in action.”

‘Conclusive Evidence of Death’

The decision was questioned from the start. Many of the U.S. airmen at the Ubon Royal Thai Air Force Base felt there wasn’t enough evidence to declare the men in the back of the plane dead because Air Force regulations authorize commanders to make a killed-in-action determination only when “conclusive evidence of death” is obtained at any time during the search.

Then, on Feb. 28, the U.S. State Department sent a telegram to its embassy in Vientiane, the Laotian capital, making it clear who should be included on the POW lists being provided to the political wing of the Pathet Lao and the International Committee of the Red Cross. The telegram listed the names of the eight Baron 52 crew members—but it said they “should not be included.”

Sgt. Joe Matejov and his mother, Mary, in front of their Long Island home during a leave after he enlisted in the Air Force after high school. At right is Joe and his father, Stephen, who retired as an Army major after earning a Silver Star for valor in the Korean War. (Photos courtesy of Matejov family)

The Air Force quietly encouraged the Matejovs and the families of the other backenders to hold funerals to help bring about some closure. But the service for Joe, who had turned 21 three days before Baron 52 went down, did little to ease the family’s grief.

The pain felt unbearable when the family watched the joyful, emotional televised scenes on airport tarmacs showing the children, sisters, brothers and wives of returning POWs greeting the men over the next several weeks.

John Matejov, 13 months younger than his brother, felt like he lost part of his soul. Joe and John had been inseparable. The duo had always shared a bedroom and, after they became rambunctious teenagers, would often climb out the bedroom window in the middle of the night to create minor mischief in East Meadow, the sleepy suburban town where they grew up.

After the funeral, the family tried hard to get back to their lives. Some of the Matejov kids went off to college, others to the military.

The oldest sibling, Steve, had joined the Navy, and John the Marines, following in the footsteps of their father, a West Point graduate who earned a Silver Star for valor in the Korean War. After the Baron 52 crash, Theresa went to West Point to begin her Army career.

Sgt. Joseph Matejov was nicknamed Kiwi by his Air Force colleagues because he was admired for his “spit and polish.” Kiwi Shoe Polish is a global brand originally developed in Australia. (Photo courtesy of Matejov family)

“We closed our ranks and began a new life as best as we could,” John said.

Then, one summer morning in 1978, investigative journalist Jack Anderson dropped a bombshell.

“Pentagon officials realized this within days of the crash, yet the Air Force never told the families of these men that their loved ones were probably alive,” Anderson reported.

The families of the backenders were shocked. Joe’s mom ripped the “My country right or wrong” bumper sticker off her car. And the Matejovs and other relatives of the backenders began writing members of Congress, questioning the accuracy of military reports and confronting Pentagon officials.

87,000 Vietnam Veterans May Qualify for $844 Million in Benefits. How Come Nobody Told Them?

Eventually, the military released the details of the intercept Anderson’s staff had dug up. The documents showed that a U.S. reconnaissance plane flying along the coast of South Vietnam had picked up a communique about six hours after the crash of Baron 52. “Presently Group 210 has four pirates,” a communist soldier reported. “They are going to the control of Mr. Văn. They are going from 44 to 93. They are having difficulties moving along the road.”

In the following months, as all 591 American POWs were gradually released, numerous Air Force officials continued to express serious doubts that the decision to declare the entire crew of Baron 52 dead was the right one.

Even Humphreys seemed to be hedging his bets, conceding in an April 7 letter to Matejov’s family that his decision was partially based on “a certain amount of conjecture in trying to visualize the events as they took place.”

April 1973 letter from Col. Francis Humphreys to Sgt. Joe Matejov’s parents.

Air Force Col. Lionel Blau had been one of the first to ring the alarm in mid-February 1973. Then a captain who was the operations officer with the 6994th Security Squadron, Blau had the high-level security clearances to examine the intercept and photos of the plane wreckage. He thought Humphreys needed to know exactly what he knew.

“I went in and simply told the colonel, ‘Please do not make that decision yet until we can get straightened out what this [intercept] is about,’” Blau said in a 2023 interview with John Bear, a Colorado researcher and host of the Stories of Sacrifice podcast who volunteers much of his free time to use his forensic genealogy skills to track down the remains of MIAs from past wars through DNA testing.

“I remember very well standing in front of Col. Humphreys and telling him that we had information that indicated that our four guys were still alive, and that I would be glad to show it to him if he would get a top-secret” clearance, Blau told Bear. “And he said, ‘I had one, but I don’t have it now, and I don’t want one.’”

Undeterred, Blau then asked Humphreys to at least let him show him how the plane actually landed in the jungle.

“It did not come in nose first, I told him,” Blau said, contradicting the assessment of the search-and-rescue team that the World War II-vintage EC-47Q plummeted to the ground vertically. “And he said, ‘I’ve flown them, and once they start spinning, nobody’s going to get out. I said, ‘Colonel, that plane was not spinning.’ It came in straight [and horizontally]. The frontenders were still flying that airplane when it came in. And he said, ‘Nope.’ I said, ‘There is no way that they were all KIA at that site.’ He absolutely refused to listen to me.”

A few days later, Humphreys recommended to his higher-ups that all eight Baron 52 crew members be declared killed in action.

The Four-Page Missive

First Lt. Michael Moore might have been killed as well. He was originally on the flight manifest. But at the last minute he took an emergency leave to fly back to Sacramento, California, to be with his wife, Betty, who was having a biopsy for suspected thyroid cancer, according to the Moores’ daughter, Heather Moore Atherton, who lives in nearby Rocklin.

Lt. Bernhardt, the only Baron 52 crew member whose remains were retrieved from the crash site by the search-and-rescue team, took Moore’s place.

After returning from the war, Atherton said, her father struggled for decades with depression, and she always suspected “it was more than just survivor’s guilt.”

Two years after he died in 2017 at age 69 of kidney disease caused by Agent Orange poisoning, Atherton and her mom had a locksmith crack open his safe and discovered the source of his darkness in the safe’s internal chamber.

Moore had left behind a four-page missive about the events surrounding Baron 52 that she found disturbing, said Atherton, who shared her dad’s note with The War Horse, the first time it has ever been made public.

Lt. Michael Moore bared his soul in 2008, but kept his written thoughts about the tragic crash of Baron 52 locked in a safe.

Before her dad flew back to Thailand, he was relieved to find out his wife didn’t have cancer. But the feeling of relief was short-lived. When Moore stopped at a post exchange in the Philippines on the way back to Thailand, he was shocked to pick up a newspaper and learn about the crash.

The 361st Tactical Electronic Warfare Squadron posed for a group photo at the Ubon Royal Thai Air Base in April 1973, two months after Baron 52 was shot down. First Lt. Michael Moore, in the Tom Cruise sunglasses, is the second from the right in the second row. (Photo courtesy of Heather Moore Atherton)

And when he arrived back at the base, he found the rank and file in open revolt because they thought the Air Force had taken too long to reach the crash site and believed some of the men may have either parachuted out of the plane or survived the crash and walked away from it.

Some members of Sgt. Matejov’s squadron, Moore wrote, were refusing to fly because they believed the Air Force had made the decision to leave men behind out of political expediency.

When Humphreys presented Moore with a report on the crash that concluded all eight were killed, he was asked to sign it. He refused because he considered it “inaccurate and speculation at best,” contrary to intelligence reports and “a serious betrayal of these men and effectively a ‘death warrant’” for them, he wrote in the missive.

But the commander told Moore it was a “direct order,” so he eventually gave in and signed the report.

“I was forced into becoming a part of the conspiracy to cover up the fact that some crew members bailed out,” he wrote.

Missing Cargo Door

Atherton, who believes her father wrote the words in 2008, said finding the note inspired her in 2020 to join the Matejov family’s decades-long fight to have Joe declared MIA rather than KIA. That, the family says, would allow U.S. POW/MIA officials to treat the case more seriously and investigate the many remaining questions.

John Matejov, a Wyoming resident who had taken over the all-consuming family battle after his mother died of a stroke in 2010, had declared himself “done” just months before Atherton introduced herself over the phone a decade later. But her intense interest in the case inspired him to keep going.

First Lt. John Matejov, pictured here in 1986 when he was stationed with the 27th Marine Regiment in Twentynine Palms, California, says his family “closed our ranks and began a new life as best we could” after his brother Joe’s spy plane was shot down over Laos in February 1973. (Photo courtesy of Matejov family)

In a 1989 Air Force oral history project, Chief Master Sgt. Ronald Schofield, the communications specialist on the search-and-rescue team, said he had changed his mind and no longer believed all of the Baron 52 crew members had perished in the crash. His conversion came when he remembered that the cargo door was missing from the plane when he searched the wreckage.

“These aircraft flew with the doors on. If that aircraft had crashed with the door on, there would have been a little bit of it left at the top,” Schofield said. “There was absolutely nothing. It was gone. It looked like it had been kicked off.”

Roger Shields, the deputy assistant secretary of defense for POW/MIA Affairs at the time, told The War Horse that the shootdown of Baron 52 had jolted U.S. officials involved in POW issues because it indicated the likelihood of U.S. service members being captured after the ceasefire was already in place.

“I had not encountered an intercept from the enemy that so closely described a loss that we knew had occurred,” Shields said from his Florida home. “It was unique.”

He insisted “there was no pressure from the defense secretary or from me—or anybody who had the authority to speak for the department—to declare those men dead,” he said. But he acknowledged that “some individuals in DOD may have tried to apply pressure by speaking for themselves.”

“If anything,” he added, “it could be said that I was the source of pressure in the other direction, with me telling the secretary of the Air Force: ‘I don’t think you’ve made a good decision.’”

But Shields said he was reluctant to get involved because he was outside the chain of command. “It wasn’t my call,” he said.

Jubilant American POWs cheer as an Air Force C-141 Starlifter took off from Hanoi’s airport on March 28, 1973. (Photo by Air Force Sgt. Robert N. Denham)

The POW/MIA issue reached a crescendo in the early ’90s when the Clinton administration moved to end the punishing U.S. trade embargo against Vietnam and establish diplomatic relations with its former enemy. As part of that process, the Senate Select Committee on POW/MIA Affairs held hearings for 14 months beginning in November 1991.

Massachusetts Democratic Sen. John Kerry, a Vietnam vet who had turned against the war, chaired the committee. New Hampshire Sen. Smith, like Kerry, was a Navy vet who served in Vietnam, and was the vice chairman.

Kerry was allied with Arizona GOP Sen. John McCain, who spent more than five years in the Hanoi Hilton as a POW after his Navy plane was shot down in 1967. Both men were determined to forge a new relationship with Vietnam to heal the wounds of the past.

That left Smith as a counterforce. He became a passionate advocate for the families of service members missing in action, calling for full transparency and government accountability.

When Smith asked Robert Destatte, a senior analyst at the U.S. Defense Intelligence Agency, about the “four pirates” intercept, he claimed it had nothing to do with Baron 52. He said as far as the agency could tell, the “pirates” had been captured near Vinh, a city near the coast in North Vietnam that is about 240 miles away from the Baron 52 crash site.

Destatte said the intercept happened at a time when there were at least three South Vietnamese army helicopters down in an area where captured prisoners would have been routed through Vinh.

“And in fact, a personal friend of mine who was a pilot in the [South] Vietnamese Air Force is aware of a friend of his who was the pilot of one of those helicopters. He is aware that the friend, in fact, was captured with his crew and moved to North Vietnam,” Destatte said at the hearing.

It was the only time the Matejovs heard about that theory from anyone in the Defense Intelligence Agency.

Tracking Down Mr. Văn

Bear, the Colorado researcher, believes he might have unraveled the mystery surrounding Mr. Văn with the help of some trusted intelligence sources.

The linguists who translated the radio transmission in February 1973 might have assumed it originated in the Vinh area because the 210th AAA Regiment was historically assigned there, Bear said. Scrolling through a Vietnamese website dedicated to documenting the history of the Ho Chi Minh Trail, Bear discovered that the regiment also fought in the general area of the Baron 52 crash site.

In Vietnam, Văn is an extremely common middle name for males. But it is rarely a given name (which comes last in the Vietnamese order).

The unusual name made it easier for Bear to track down the name of Lương Khánh Văn, who was a political officer of the North Vietnamese army’s 377th Air Division, which oversaw the 210th AAA Regiment, according to CIA records declassified in 2009. Bear found Văn and his division listed on the Ho Chi Minh Trail website.

On Feb. 15, 1973, 10 days after Baron 52 was shot down, the 210th was just south of the crash site near the town of Attapeu in Laos, according to the CIA document.

The reference to “44” in the intercept could have been a reference to Binh Tram 44, which was only about 15 miles from the crash site, Bear said. Binh trams were self-contained military units that oversaw a specific segment of the Ho Chi Minh Trail and were responsible for, among other things, logistical support and air defense.

Americans and Laotians joined forces in early 1993 to excavate the site of the Baron 52 crash site.

A Tooth, Four Revolvers

A joint U.S.-Lao group in 1993 conducted an excavation of the Baron 52 crash site around the 20th anniversary of the shootdown. Among other items, the excavators found five lap belt buckles (only three in the locked position), a tooth, three dog tags, and four of the crew’s service revolvers.

The initial report on the excavation said 23 bone fragments were discovered, but that number varied wildly in follow-up reports. Unexplained discrepancies were a continual problem in the Baron 52 documents examined by The War Horse. And the scientists at the U.S. military’s Honolulu laboratory ultimately admitted that they couldn’t say with “100 percent certainty” that the bone fragments were “of human origin,” let alone perform a successful DNA analysis on them.

The diggers also found about two dozen V-rings from at least seven parachutes, but the Matejovs and their lawyers have pointed out that Col. Blau and other members of Joe Matejov’s 6994th Security Squadron have told them they almost always carried extra parachutes.

In a November 1992 survey at the crash site in advance of the excavation, U.S. officials found a dog tag belonging to Matejov on the ground. But crash experts said that meant little because the backenders often chose not to wear their tags, flying “sanitized” in case they were ever captured. Even if Matejov was wearing his dog tag that night, experts said, it could easily have fallen off when the plane turned upside down after impact.

Despite the lack of DNA evidence, the Air Force recommended that the bone fragments be buried in one coffin at Arlington National Cemetery in 1996.

A controversial tombstone erected in 1996 at Arlington National Cemetery, contains the names of all eight Baron 52 crew members. (Photo by Heather Moore Atherton)

A large tombstone was erected with all eight names on it: Capt. George Spitz, aircraft commander; 1st Lt. Severo Primm III, co-pilot; 1st Robert Bernhardt, co-pilot; Capt. Arthur R. Bollinger, navigator; Sgt. Dale Brandenburg, electronic warfare systems specialist; Staff Sgt. Todd Melton, linguist; Sgt. Peter Cressman and Sgt. Joseph Matejov, airborne Morse systems operators.

As far as the Defense POW/MIA Accounting Agency was concerned, all of the men had now been “accounted for.”

Sen. Smith and some close relatives of the backenders strenuously objected to the collective funeral and burial, arguing that the controversy over Baron 52 was still very much alive.

John Matejov said his mom initially refused to attend the event. But her children convinced her to be there to honor the other families.

Over the objections of the Matejov family, the U.S. Air Force in 1996 held a collective funeral for the eight Baron 52 crew members. (Photo courtesy of Matejov family)

No Crater at Crash Site

For years, the Matejovs had begged the Air Force to hold a hearing rather than a funeral. And the family got its wish in 2016 after John Matejov appealed to Defense Secretary Chuck Hagel in a letter during the Obama administration.

Four attorneys working pro bono and Ralph Wetterhahn, a famed plane crash investigator, showed up to present their case for changing Joe’s status from KIA to MIA. The Matejovs were told the two-hour hearing, attended by all of Joe’s siblings, couldn’t be recorded and that Wetterhahn couldn’t show a short video depicting how he believes Baron 52 landed in the jungle because the Pentagon didn’t have the right software to play it.

Wetterhahn had gotten involved in the Baron 52 case when John Matejov hired him about 15 years ago. After investigating the crash through documents and other records, Wetterhahn decided the case was so egregious that he offered to work for free.

A former fighter pilot in Vietnam, Wetterhahn says the Air Force was dead wrong to conclude that the plane had plummeted vertically and hit the ground nose first.

Scrutinizing photos taken from the air during the 1993 excavation, he said, it was obvious the plane came in horizontally on top of the triple-canopy jungle and skipped like a stone on water, flipping over and getting most of its wings sheared off before coming to rest about 400 yards from the point of initial impact.

If the plane had plunged vertically and hit the ground, it would have left a small crater and the plane’s nose would have been crushed. Neither happened, he said.

The cushioned landing would have allowed the backenders to survive the crash and take off on foot, he concluded.

Wetterhahn told The War Horse that declaring all the crew members KIA was a conclusion of convenience to wrap up the case quickly. “They all needed to be dead,” he said.

Mary Matejov Salzinger, a sister of Sgt. Joe Matejov, keeps mementos and photos of her brother’s military service in a drawer in the family room of her home in Portland, Oregon. (Photo by Mike Frankel of The War Horse)

Captured Alive, Died in Captivity?

Just weeks before the 2016 hearing, attorney Tony Onorato had discovered new evidence through a sweeping document search that he and the Matejovs thought might swing the Air Force their way.

The documents, found at the Sam Johnson Vietnam Archive at Texas Tech University, suggested that the Defense Intelligence Agency still had “as yet unspecified information that some U.S. Air Force personnel lost in February 1973 had been captured alive and had died in captivity.”

The documents were written by Sedgwick Tourison, a former Defense Department intelligence officer who in the ’90s had exposed a headline-grabbing scandal about hundreds of South Vietnamese soldiers who were sent to North Vietnam on spy missions for the U.S. in the early 1960s, only to be abandoned for decades in enemy prison camps.

Tourison discovered that in February 1974 the Defense Intelligence Agency was maintaining a separate MIA accounting system from the Pentagon and had listed the status of the Baron 52 backenders as KK, the code for “died in captivity.” The Pentagon listed Matejov and the other Baron 52 backenders as BB, the code for “killed in action—body not recovered.”

“There is no explanation…that some had been captured alive and then may have been killed, information totally inconsistent with the Air Force’s official version,” wrote Tourison, who did extensive research for the Senate committee.

See a slideshow the Matejovs’ attorneys presented to POW/MIA officials during a 2016 hearing.

Shields, the former top POW/MIA official at the Pentagon, told The War Horse he was aware of the separate accounting systems.

In fact, he said he encouraged DIA staffers that he relied on for intelligence relating to prisoners and MIAs “to follow for their own use their perceptions of an individual’s status even if it were contrary to the official, formal status.”

The new evidence, however, made no difference. Eight months after the hearing, John Matejov got a call from a three-star Air Force general saying the secretary of the Air Force had declined the family’s request to change his brother’s status from KIA to MIA.

All the family’s efforts “landed us right back at the starting line,” Matejov said. “It was the same experience for my mom and dad back in the 1970s.”

‘No Man Left Behind’

Many of the key sources who could directly answer the numerous lingering questions surrounding the saga of Baron 52—including Humphreys, Tourison and Schofield—died in the past two decades. The War Horse reached out several times to the Pentagon public affairs office, asking if it could provide a media spokesperson for this story. But we received no response.

One of the major questions is why it took 20 years for the U.S. military to return to the crash site. Initially, the area was deemed too hostile to launch another search operation that would risk more American lives. But even after the Royal Lao government and the Pathet Lao signed a peace treaty and agreed to a ceasefire on Feb. 21, 1973, the U.S. failed to successfully negotiate with the new coalition government to return to the site to meticulously sift through the wreckage of Baron 52 and retrieve more of the crew’s remains.

Mary Matejov Salzinger holds a poster created by the National League of Families to call attention to “unaccounted for” service members from the Vietnam War. (Photo by Mike Frankel of The War Horse)

“To this very day, I am more than ever convinced that the government I had once believed in had literally abandoned Joe in a most egregious manner that totally contradicted the ethos of ‘no man left behind,’ ‘fullest possible accounting,’ and honor,” John Matejov said. “Our family finds itself aligned with so many other families who, I now know, share this very same shameful realization.”

Smith, the former senator, said he sympathized deeply with Matejov because he also felt the same frustrations as vice chairman of the Senate Select Committee—a panel that was created through legislation he wrote.

The Pentagon needs to come clean on the Baron 52 case, Smith said, arguing that it makes little sense to keep so much information classified for so long.

“Unfortunately, there are still dozens of cases like Baron 52,” Smith said.

“Fifty-two years later, we’re still screwing around with these families. Why do they have to pry everything out of the government? Why can’t they just give them all the information all at once? Let them read it, and let them make up their minds.”

Since 1973, the remains of more than 1,000 Americans who died in the Vietnam War have been identified and returned to their families so they can be buried with full military honors, according to the Defense POW/MIA Accounting Agency.

Of the nearly 1,600 Americans still “unaccounted for” from the divisive war, hundreds of bodies are deemed to be “nonrecoverable.” And the agency says it only rarely determines that new leads on MIA cases are strong enough to bring a case back to active status.

This War Horse investigation was reported by Ken McLaughlin, edited by Mike Frankel, and copy-edited by Mitchell Hansen-Dewar. Hrisanthi Pickett wrote the headlines.

Ken McLaughlin

Ken McLaughlin is a freelance writer based in Scotts Valley, California, who spent 35 years at the San Jose Mercury News, where he was a reporter, editorial writer and editor. He’s written extensively about politics, marine science, Vietnam, immigration, and race and demographics. He has a master’s in journalism from Stanford University and taught aspiring science writers for a decade at UC Santa Cruz.

De Oppresso Liber,

David Maxwell

Vice President, Center for Asia Pacific Strategy

Senior Fellow, Global Peace Foundation

Editor, Small Wars Journal

Twitter: @davidmaxwell161

Phone: 202-573-8647

email: david.maxwell161@gmail.com

De Oppresso Liber,

David Maxwell

Vice President, Center for Asia Pacific Strategy

Senior Fellow, Global Peace Foundation

Editor, Small Wars Journal

Twitter: @davidmaxwell161

email: david.maxwell161@gmail.com

If you do not read anything else in the 2017 National Security Strategy read this on page 14:

"A democracy is only as resilient as its people. An informed and engaged citizenry is the fundamental requirement for a free and resilient nation. For generations, our society has protected free press, free speech, and free thought. Today, actors such as Russia are using information tools in an attempt to undermine the legitimacy of democracies. Adversaries target media, political processes, financial networks, and personal data. The American public and private sectors must recognize this and work together to defend our way of life. No external threat can be allowed to shake our shared commitment to our values, undermine our system of government, or divide our Nation."

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