November 26 2024

1. Trumps Vows to Impose 25% Tariff on Mexico, Canada, additional 10% on China
2. Tariffs Could Reshape North American Trade
3. Medicare proposes covering weight-loss drugs, teeing up clash with RFK Jr.
4. The Biden DOJ brings Trump election and classified documents cases to a close
5. RUSSIA’S NEW MISSILE “ORESHNIK” A GAME CHANGER: A Strong Warning to the US, NATO and Ukraine
November 26, 1941: Japanese task force departs for Pearl Harbor

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1. Trumps Vows to Impose 25% Tariff on Mexico, Canada, additional 10% on China

A. President-elect Donald Trump said Monday he will issue executive orders imposing new tariffs on all imported goods from China, Mexico and Canada, the nation’s three largest trading partners, as one of his first acts on Inauguration Day. Trump said the tariffs of 25 percent on Mexican and Canadian goods and 10 percent on Chinese merchandise would be aimed at halting an “invasion” of drugs and migrants into the United States. “This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country! Both Mexico and Canada have the absolute right and power to easily solve this long simmering problem. We hereby demand that they use this power, and until such time that they do, it is time for them to pay a very big price!” Trump wrote in a post on Truth Social

B. President-elect Donald Trump’s tariff threat rippled through overseas markets, knocking the Mexican and Canadian currencies, denting industrial metals and hurting shares of global automakers. The immediate response in U.S. markets was to take Trump's pledge in stride. Stock futures inched up. Treasury yields remained well below their highs from last week, after Scott Bessent’s nomination as Treasury secretary sparked a bond rally on Monday. The Canadian dollar and Mexican peso fell sharply against the greenback. The Chinese yuan weakened modestly offshore.

Article Source: WaPo, WSJ

2. Tariffs Could Reshape North American Trade

More than $1.3 trillion worth of goods came from the three countries in 2023, according to U.S. Census Bureau data, including gas, cars and smartphones. The proposed tariffs could have a seismic effect on all four countries. They could raise the price of everyday items for U.S. consumers, if companies add the additional cost to sale prices. They could change the playing field for local producers, and other nations that trade with the United States, if their products are not hit with tariffs. They could also result in retaliatory tariffs against U.S. businesses  

The United States conducts more trade with Mexico than any other country. It imported $475 billion in goods from Mexico last year and exported almost $323 billion. About 80 percent of Mexican exports go to the United States, and the vast majority of those last year were manufactured goods, according to bank BBVA. The United States imported more than $400 billion worth of manufactured goods, compared with about $20 billion of products from the Mexican agriculture, forestry and livestock sectors; and about the same from the oil, gas and mining sectors, according to the bank. Goods included cars and car parts, computers and other electrical equipment, beverages, medical instruments and household appliances.  

Canada is the United States’ second-ranked trading partner: The United States imported more than $418 billion in goods from Canada in 2023, and exported $354 billion. The top goods that the United States imports from Canada are crude oil and related products such as petroleum gas; vehicles such as cars and car parts; and machinery such as turbines, engines and construction equipment parts, according to global research firm Trading Economics.  

China is the United States’ third-largest trading partner. The United States imported almost $427 billion in goods last year and exported almost $148 billion.  

Editors note: While these tariffs are significant for the United States' three largest trading partners, two of which are in free trade pact USMCA, the greatest impact is likely to be on imports of Canadian crude oil.  The United States consumes approximately 20 million barrels of crude oil per day. The 3.9 million barrels per day imported from Canada represent roughly 20% of total U.S. demand. This significant share underscores Canada’s critical role in the U.S. energy supply chain, particularly for refineries configured to process heavier crude oils. Even though the U.S. is net energy independent, these imports are essential to meet the specific requirements of many refineries. Imposing a tariff on Canadian imports will raise the cost of this crude supply, increasing refinery expenses and ultimately driving up gasoline and diesel prices for consumers. The impact would likely be more pronounced in the Midwest and less so in the Gulf Coast, which depend heavily on Canadian crude.  

My own view is that markets are highly adaptive, and the impact of this tariff is uncertain. Mr. Trump is known for using tariffs as a starting point in negotiations. It would not shock me if this tariff were later reduced or if exemptions for oil imports were introduced.

Article Source: WaPo

3. Medicare proposes covering weight-loss drugs, teeing up clash with RFK Jr.

The Biden administration Tuesday will propose expanding coverage of weight-loss medications for millions of Medicare and Medicaid beneficiaries, a late-term proposal that officials said would boost public health and which puts pressure on the incoming Trump administration to finalize the benefit.  The proposal is “a game changer. It helps us recognize that obesity is with us,” Health and Human Services Secretary Xavier Becerra said in an interview late Monday. “It’s severe. It’s damaging our country’s health. It’s damaging our economy.”  Becerra said the proposal would expand coverage of antiobesity drugs to 7.5 million people enrolled in Medicare and Medicaid, which his agency projected would add $25 billion in Medicare costs and $11 billion in Medicaid costs during the next decade. States would also assume $4 billion in additional costs as part of their share of the Medicaid program, he said. The Trump administration is not required to finalize any or all of the proposal. Robert F. Kennedy Jr. — whom Trump has selected to be the next HHS secretary, if confirmed by the Senate — is an avowed critic of weight-loss drugs such as Ozempic, which he has blamed for obfuscating the root causes of poor health in America.

Article Source: WaPo

4. The Biden DOJ brings Trump election and classified documents cases to a close

The special counsel Jack Smith asked two courts on Monday to effectively shut down the federal criminal cases he brought against President-elect Donald J. Trump last year, bowing to a Justice Department policy that says it is unconstitutional to pursue prosecutions against sitting presidents. The twin requests by Mr. Smith — made to judges in Washington and Atlanta — were an acknowledgment that Mr. Trump will re-enter the White House in January unburdened by federal efforts to hold him accountable through charges of plotting to subvert the last presidential election and holding on to a trove of highly classified material following his first term in office.

Article Source: NYT

5. RUSSIA’S NEW MISSILE “ORESHNIK” A GAME CHANGER: A Strong Warning to the US, NATO and Ukraine

The Ukrainians, NATO and the United States have been alarmed about Russia's use of the Oreshnik Intermediate Range Ballistic missile on a defense manufacturing plant in Dnipro (formerly Dnipropetrovsk).  The Russians say the missile was hypersonic, which it was, but that is only a small part of the story.  

Use of the missile has serious implications for Ukraine, NATO and the United States. The Oreshnik was not any common ballistic missile.  It mounted a hypersonic glide vehicle with MIRV/MARV capability.  MIRV means Multiple Independently Targeted Reentry Vehicles.  MARV means Maneuverable Reentry Vehicle (sometimes denoted as MaRV). In the case of the Oreshnik (probably a version of another hypersonic platform called KEDR or Cedar), reports say that the glide vehicle released six warhead packages and each package released six submunitions.  This means that 24 weapons hit the Dnipro facility. There is much speculation about the damage done at the Dnipro Yuzhmash aerospace manufacturing facility.  However, enough is known to make it clear that this strike on the Dnipro facility had unique characteristics While we have no accounting as to how much was actually destroyed, again witness accounts say the working part of the facility was turned into dust… This has significant implications for underground targets elsewhere, as surely the Ukrainians grasped immediately.  In effect, the Russians have put a Damoclean Sword on Zelensky's head, as he operates from an underground bunker.   It also sent a warning to NATO.  As Russian President Putin said in a nation-wide address, Oreshnik could hit any target in Europe.  Thus all NATO bases, command centers, and missile sites could be destroyed by Oreshnik. Likewise the US got a wake up call insofar as America's missile bases and air defenses are concerned.  

4 min video explaining strike implications

My take on the implications with CHINA America’s hypersonic Achille’s Heel

Article Source: Weapons and Strategy

November 26, 1941: Japanese task force departs for Pearl Harbor

Sources

1. A https://www.washingtonpost.com/business/2024/11/25/trump-tariffs-china-mexico-canada-percent/
B https://www.wsj.com/livecoverage/stock-market-today-dow-sp500-nasdaq-live-11-26-2024?st=DbEeSE&reflink=article_copyURL_share

2. https://www.washingtonpost.com/business/2024/11/26/what-us-imports-canada-mexico-china-trump-tariffs/

3. https://www.washingtonpost.com/health/2024/11/26/ozempic-wegovy-medicare-medicaid-weight-loss-drugs/

4. https://www.nytimes.com/2024/11/25/us/politics/jack-smith-trump-election-documents-charges.html?smid=nytcore-ios-share&referringSource=articleShare

5. https://open.substack.com/pub/weapons/p/implications-of-the-oreshnik-strike?r=d9vo5&utm_medium=ios