Trump plan to ‘clean out’ Gaza of Palestinians will be resisted – Asia Times

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President Donald Trump’s suggestion that the US should “take over” Gaza, displace its current population and turn the enclave into “the Riviera of the Middle East” is unsettling – in both a literal and, to Palestinians, a very personal sense.

The remarks, which followed earlier comments in which the president expressed a desire to “clean out” Gaza, have been taken by some Middle East experts as a call to “ethnically cleanse” the strip of its 2.2 million Palestinian inhabitants.

They worry that such talk will bolster the hopes of Israel’s far-right settlers and their supporters in government, who want to remove Palestinians from Gaza and build Jewish-only settlements on the enclave’s beachfront property.

Following Trump’s remarks, Riyad Mansour, Palestinian envoy to the United Nations, stated: “Our homeland is our homeland.” He added, “I think that leaders and people should respect the wishes of the Palestinian people.”

As a scholar of modern Palestinian history, I know that calls to remove the Palestinians from Gaza are not new – but neither is Palestinians’ determination to remain in their homeland.

For almost 80 years, Palestinians in Gaza have resisted various proposals to displace them from the enclave. In fact, those plans have often spurred resistance to occupation and removal.

U.S. President Donald Trump and Israeli Prime Minister Benjamin Netanyahu hold a news conference in the White House on February 4, 2025. Andrew Caballero-Reynolds/AFP via Getty Images

A people already uprooted

Most people in Gaza are the product of displacement in the first place.

In 1948, over 700,000 Palestinians fled or were expelled from their homes when the state of Israel was established and a war between the new country and its Arab neighbors erupted.

These Palestinians became nationless refugees, placed under the care of the U.N. Relief and Works Agency. In the Gaza Strip, the agency set up eight refugee camps to care for over 200,000 Palestinians who had been forced out of over 190 towns and villages.

In December 1948, the UN General Assembly adopted Resolution 194 stipulating that “the refugees wishing to return to their homes and live at peace with their neighbors should be permitted to do so at the earliest practicable date.”

While Israeli leaders initially expressed a willingness to allow some refugees back, they rejected the refugees’ wholesale return. They argued that doing so would undermine Israel’s security and dilute its character as a “Jewish state.”

As such, Israel’s first prime minister, David Ben-Gurion, looked for ways to “motivate the refugees to move eastward” toward Jordan. He hoped that by moving refugees further away from Israel, they would be less likely to return.

At first, the United States called upon Israel to repatriate a substantial number of refugees. But with Israel consistently refusing to do so, leaders in Washington started turning to the idea of resettlement.

They hoped that the promise of economic prosperity could induce large numbers of refugees to move to other Arab countries – and give up on the idea of returning home. For example, in 1953, Secretary of State John Foster Dulles drew up plans to resettle Palestinian refugees in Syria as part of a large water management project there.

Likewise in 1961, the recently formed US Agency for International Development began funding an irrigation project in Jordan, bringing in Palestinian refugees to work as farmers. US officials hoped that the refugees would start to identify as Jordanians, rather than as Palestinians, and agree to permanently resettle in Jordan.

But it did not work. A survey taken five years later found that the refugees still identified as Palestinians and wished to return to their homeland.

Rejecting resettlement

A further war between Israel and neighboring countries in 1967 resulted in Israel’s occupation of the West Bank and East Jerusalem, which had been under Jordanian rule, as well as the Gaza Strip, which had been previously administered by Egypt.

It also sparked a renewed sense of Palestinian national identity, especially among younger generations who increasingly took up guerrilla-style tactics in a bid to force Israel, and the international community, to recognize their right to return.

In response, Israel looked to resettlement as a way to reduce the Palestinian population in territories it now occupied. In 1969, the Israeli government drew up secret plans to permanently transfer up to 60,000 Palestinians from Gaza to Paraguay.

A line of children and women walk along a dusty track, many with bundles on their heads.
Palestinian refugees are seen fleeing violence in 1948. Photo: Bettman/Getty Images

The scheme came to an abrupt halt when two Palestinians confronted the Israeli ambassador in Asunción about being brought to Paraguay under false pretenses.

Meanwhile, between 1967 and 1979, far-right Israeli Jewish settlers established seven settlements in Gaza. They hoped to see Palestinians removed from the strip so the land could be incorporated into their vision of a “greater Israel.”

Throughout the 1970s and 1980s, Israeli officials proposed various plans to remove refugees from the camps and resettle them elsewhere. This included a 1983 plan to dismantle refugee camps in the occupied Palestinian territories and resettle their inhabitants in better housing in towns and cities.

But Palestinian refugees firmly rejected the offer because it would have required them to give up their refugee status and relinquish their right of return.

The Oslo negotiations of the 1990s rejected the notion of removing Palestinians from Gaza. In fact, keeping the refugees in Gaza was central to the premise of a two-state solution. At the same time, questions over the right of refugees to return to their original homelands in what is now Israel were shelved.

Money can’t ‘replace your homeland’

But with hopes of a two-state solution long since faded, resettlement plans have reemerged.

Shortly after the October 7, 2023, attack by Hamas gunmen in Israel that sparked the widespread bombing and siege of Gaza, the Biden administration asked Congress to fund “the potential needs of Gazans fleeing to neighboring countries.”

The news outraged many Palestinians, who saw it as giving Israel a green light to carry out what many viewed as an attempt to ethnically cleanse Gaza.

In October 2024, far-right Jewish settlers gathered on the border of Gaza and called for the reestablishment of Jewish settlements in Gaza that had been dismantled in 2005. National Security Minister Itamar Ben-Gvir called upon Israel to “encourage emigration” of Palestinians from Gaza. He proposed telling the Palestinians there: “We’re giving you the option, leave to other countries, the Land of Israel is ours.”

Palestinians have responded with their feet. As soon as the ceasefire went into effect on January 19, 2025, hundreds of thousands of Palestinians who had been displaced to southern Gaza walked for hours to reach their homes in northern Gaza. Hundreds posted videos of cleaning out their damaged homes so they can live there once again.

The road to recovery in Gaza will be long. The UN estimates that rebuilding Gaza will cost US$50 billion and take at least 10 years.

I believe Palestinians want help rebuilding, not resettlement. Many of them have already vehemently rejected Trump’s call to move out. As one Palestinian told The Guardian newspaper: “We would rather die here than leave this land.” He insisted, “No amount of money in the world can replace your homeland.”

Resettlement schemes have a long history, yet Palestinians have thwarted them at every turn. There is no reason to think that this time will be any different.

Maha Nassar is associate professor in the School of Middle Eastern and North African Studies, University of Arizona

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Pharmaceuticals become a battlefield in the Sino-US trade war  – Asia Times

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American media has been carefully watching whether the trade conflict did harm China’s supply of drugs to the United States and lead to rate increases as a result of Beijing and Washington’s taxes on each other’s goods this quarter.

China announced that it would impose a 15 % tariff on eight different US energy products, including coal, liquified natural gas, and coking coal, after US President Donald Trump imposed a 10 % tariff on all Chinese goods on February 4. It also imposed a 10 % tax on 72 forms of US products, including agricultural devices, simplistic oil, large displacement trucks and electric cars, from February 10.

Trump stated that he is “in no rush” and will communicate with Chinese President Xi Jinping when necessary.

The American Hospital Association informed Trump on February 4 in a notice to him that the new US tariffs will have an impact on the supply of Chinese medicines, including cancer and heart treatments and antibiotics like antibiotic, according to Reuters. According to the organization, China produces almost 30 % of the raw materials needed to produce essential medicines. &nbsp,

Four lobbyists and one medical professional reportedly contacted the Trump management to request that vital drugs be free from fresh tariffs a few weeks ago according to the Reuters report.

Karen Andersen, a Morningstar scientist, was quoted as saying in the statement that although major drug manufacturers typically produce their biggest hits in the US or Europe, they typically make their basic hit items in the US or Europe. &nbsp,

She claimed that if the US imposed tariffs on Europe, it would be more disturbing for the biggest drug manufacturers in the world. &nbsp,

But, Alex Telford, a San Francisco-based biology writer, holds a different perspective. Next December, he published an article titled,” May all our medicines come from China”?

Telford claims that while many people believe that the main ingredient in China’s medical industry is the natural chemical materials, there is a steady increase in Taiwanese companies sourcing really novel drugs.

He points out that Chinese companies are now responsible for 28 % of new trial starts, compared with 34 % in the US and 23 % in Europe, and that they are particularly active in making drugs for early-stage ( phase I ) clinical trials, oncologt and cell and gene therapy. &nbsp,

Citing a Bloomberg statement, he says that: &nbsp,

  • US pharmaceutical firms AbbVie Inc. and Bristol-Myers Squibb Co. have collaborated with Chinese firms in Shanghai.
  • Roche Holding AG from Switzerland, Bayer AG from Germany and Eli Lilly &amp, Co. from the US have opened or may open incubators for Chinese businesses,
  • Over the next five times, Pfizer may spend US$ 1 billion in China. &nbsp,

He claims that the key factors are:

  • regulation measures,
  • returning skills,
  • business evolution, and
  • opportunity financing.

It has remained to be seen whether US manufacturers of pharmaceuticals and ingredients may experience price increases brought on by Trump’s taxes or whether they can obtain the goods from markets like India, Southeast Asia, and Europe. &nbsp,

In 2023, the world’s top 10 pharmaceutical exporters were Germany ( US$ 120 billion ), Switzerland ( US$ 99 billion ), the US ( US$ 90 billion ), Belgium ( US$ 83 billion ) and Ireland ( US$ 72 billion ).

In 2024, China’s full imports of northern drugs amounted to US$ 54 billion, up 5.7 % from the past month, according to the China Chamber of Commerce for Import and Export of Medicines and Health Products. &nbsp,

China’s exports of pharmaceutical goods ( drugs and tools ) to the US grew 11.7 % to US$ 19 billion last year from 2023. China even exported US$ 8.4 billion of medical products to India, US$ 5.5 billion to Japan and US$ 4.8 billion to Germany. &nbsp,

Biosecure Act&nbsp,

Now, the US does not stop American pharmaceutical companies from forming partnerships with Taiwanese counterparts. Additionally, it does not forbid US businesses and individuals from funding Chinese biotech companies. &nbsp,

In earlier 2023, the Biden administration considered banning US purchases from entering China’s biotech industry, alongside with silicon, AI and quantum areas. However, it removed biotech from the list of targeted industries in August 2023 because it believed that single China’s chip, AI, and quantum sectors do pose a threat to the country’s national security. &nbsp,

Last September, the US House of Representatives passed the Biosecure Act, which would necessitate the US national government and its firms not to use products or service provided by five Chinese firms, which include BGI, MGI, WuXi Biologics, Wu Xi AppTec and Complete Genomics. &nbsp,

The legislation would also prevent federal funds from going to biotech companies linked to five foreign adversaries: China, Russia, Iran, North Korea and Cuba. The Senate is still discussing the legislation. &nbsp,

In a letter to then-Commerce Secretary Gina Raimondo on January 9 this year, John Moolenaar, chairman of the House Select Committee on the Chinese Communist Party, wrote that” we think your organization should look into enforcing an export control requirement for US biopharmaceutical entities seeking to work directly with the People’s Liberation Army ( PLA ).” &nbsp,

According to Moolenaar, the fierce biotechnology battle between China and the US will have effects on both the future of healthcare and the security of American medical data. &nbsp,

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

Read: Beijing criticizes US Embassy for hawkish” China week.”

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Could US forcing Panama to exit China’s Belt and Road set pattern? – Asia Times

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Following Donald Trump’s repeated says that the US needs to “take up” the Panama canal from Foreign power, the US secretary of state, Marco Rubio, visited Panama to require the state lower China’s effect. On the surface, it seems Rubio has succeeded.

On February 3, the Nicaraguan authorities withdrew from China’s international system software, the Belt and Road Initiative. Panama becomes the first Latin American nation to support Belt and Road and to stop assistance in the process.

Local attorneys urged the nation’s highest court on February 4 to revoke the agreement granted to Hong Kong-based CK Hutchison Port Holdings, which grants it the right to work two slots at either end of the Panama Canal. They claim that it violates the constitution of the nation because it gives the port company considerable landholdings and exudes extreme tax breaks. This is still being looked at by the Filipino officials, according to reports.

But what is the fact of China’s appearance in the river, and what does increased US investigation mean for Xi Jinping’s personal project?

US defense and business rely heavily on the Panama Canal. The US accounts for 74 % of canal cargo. But, while Trump’s worries of losing the canal does get natural, his assertions about China’s impact are exaggerated.

The Panama Canal Authority serves as the administration’s representative. Since 1997, CK Hutchison Port Holdings Limited, a Hong Kong-listed company with passions in over 53 ships in 24 states, has operated the Port of Balboa and Port of Cristobal on either end of the river. Out of the five nearby slots, these two are the most important.

One of the top slot traders in the world is CK Hutchison Holdings Limited, which is owned by businessman Li Ka-shing. No direct relationships exist between the business and the jobs with Belt and Road.

The Chinese Communist Party (CCP)’s (CCP ) potential to control the canal and” shut it down” is one of the biggest risks that China’s influence over the canal poses, as the US has suggested.

Washington has also expressed concern that the CCP can gather information about US boats, such as shipping patterns and maritime routes, thanks to its accessibility to dual-use port technology. Additionally, it worries that China might “economic chokehold” the US by imposing rate increases on travel expenses.

The second two points cover possible marine usage by China in ships. But while the People’s Liberation Army army has access to Chinese-owned ships under local laws and policies, they require host nation permission to use Chinese-operated international ports. These ships are also often ill-suited for defense aid and activities.

So the most possible threat concerns cleverness. The CCP may use the 2020 national protection laws to collect sensitive data from Hong Kong-based businesses if it deems it necessary.

As for price hikes, there have been new increases in response to floods, repair investments and desire. Following Rubio’s attend, the US has claimed it is allowed to travel without paying taxes.

This has been denied by Panama’s President, José Raúl Mulino. Due to the 1977 neutrality principle, which was instituted, the charges are imposed evenly. There is no proof that China participated in these price increases.

Panama’s ‘ BRI-xit’ and Trump’s political spend

In the unlikely event that CK Hutchison’s agreement is canceled, what would that mean for China’s appearance in Panama? China’s opportunities in Panama accompany Belt and Road, yet if they have increased since the project’s start.

Due to its location and function in global commerce, the nation holds geostrategic significance. Therefore, it serves as a crucial component in China’s development of a local hub for its economic and political control.

This includes expanding import capabilities and protecting imports of raw materials and energy resources. China’s engagements in Panama include foreign direct investments ( FDI), which amounted to around 0.8 % in 2023 ( compared with 3.6 % by Spain and 19.6 % by the US), primarily in the logistics, infrastructure, energy and construction sectors.

Most Belt and Road promotions were halted or canceled for several, frequently political, reasons.

Withdrawing from the program is unlikely to lead to significant short-term changes because Belt and Road tasks in the river are already quite minimal. CK Hutchison will only be” somewhat afflicted” in case of a deal withdrawal.

What’s more, as the event of Brazil shows, a country may be affiliated with Belt and Road and also receive Foreign opportunities.

So, Chinese activities will definitely begin outside the Belt and Road model. However, even though China has shown restricted sorrow and argued that Panama has made a “regrettable choice”, Sino-Panamanian relations does great until Trump’s attention has turned abroad.

Trump’s comments regarding the Panama Canal may be exaggerated to a domestic audience who supports a” strong man president.” However, it also reflects US concerns about China’s growing influence from the past.

So the administration’s focus on containing China is hardly surprising. Instead, it demonstrates Trump’s broader “make America great again 2.0″ strategy. Therefore, Panama’s” BRI-xit” may bolster US resolve on “reclaiming” the Americas.

The Panamanian authorities seem caught between US pressure to limit China’s influence and the economic boost provided by Chinese “pragmatic” investments. In the upcoming years, they will have to make difficult choices, just like their counterparts in other Belt and Road nations.

The US has significant influence and economic leverage over Panama because it provides the most foreign direct investment ( US$ 3.8 billion annually ) and is the canal’s biggest customer. Conversely, China’s interests and engagements in the country have increased, and Beijing has made it clear that it is patient and wants to continue cooperation and “resist external interruption”.

Residents of Panama have expressed a strong reluctance to return to US rule, and protests have erupted in Panama over Trump’s “muscular approach.” Therefore, the question remains whether this is the “great step forward” for Panama’s ties with the US that Rubio suggests or whether Trump’s actions will ultimately push Panama closer to Beijing.

Tabita Rosendal is a PhD candidate at Lund University studying China.

The Conversation has republished this article under a Creative Commons license. Read the original article.

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More coercive clarity on Trump’s Ukraine peace plan – Asia Times

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Trump’s Special Envoy for Ukraine and Russia, Keith Kellogg, told the&nbsp, New York Post&nbsp, more about how the US senator plans to bring Russian leader Vladimir Putin to the harmony table.

If Kellogg rejects, the US does ratchet up its energy-related sanctions against Russia and related extra types against its customers. This would appear together with more political pressure, good upon China&nbsp, and&nbsp, India&nbsp, to include their leaders convince Putin to evaluate, and” some type of defense pressures and levers that you’re going to employ underneath those”.

In other words, the approach would aim to get Russia to agree to a ceasefire because the quick goal is” to prevent the killing — only quit it— and then you go from it.” This corresponds with what was assessed&nbsp, around &nbsp, in late January about Trump’s programs.

The problem, though, is that Russian Foreign Ministry spokeswoman Maria Zakharova&nbsp, confirmed&nbsp, on the same day as Kellogg’s meeting that” A momentary peace or, as some say, freezing the fight, is unethical” for Russia.

One day earlier, but, Kremlin spokesman Dmitry Peskov&nbsp, suggested&nbsp, that Russia’s position on not holding talks with Volodymyr Zelensky due to the Polish leader’s “illegitimacy” may be reversed for pragmatism’s sake, so the position rejecting a ceasefire could possibly be reversed too.

If Trump coerces Zelensky to withdraw from at least Kursk and the Donbass and declares that Ukraine won’t seek NATO, which would satisfy some of Russia’s objectives, then.

Ukraine would then lift martial law and finally hold long-delayed elections, which could potentially lead to the US replacing Zelensky, as Russia’s foreign spy agency&nbsp, claimed&nbsp, last week is supposedly in the cards.

It can be ruled out that some of the outgoing Biden administration’s Russophobic hawks will continue to hold positions of influence within the US’ “deep state” and could end up dissuading Trump from coercing Zelensky into territorial concessions first. This scenario sequence is in line with Russian and US interests.

It’s unlikely that Putin would agree to compromise on the ceasefire demands of last June, which demanded that Ukraine withdraw from all the territory that Russia claims as its own, and declare that it would never join NATO without Ukraine withdrawing from Kursk and Donbass.

He can accept a delay on implementing the second until after the next parliamentary elections since Ukraine’s goal of NATO membership was enshrined as an amendment to the Constitution&nbsp, in 2019&nbsp, and therefore can’t be removed without parliament’s support.

Even if the US coerces Ukraine into leaving Russia’s Kursk Region as a quid pro quo, Putin would be loath to accept that his current Line of Contact ( LOC ) was being frozen, even if that would suggest that their sneak attack there last summer compelled him to abandon his demands on disputed territory.

If post-election peace negotiations stall in order to coerce more concessions, giving cred to that interpretation could increase the chance that Ukraine launches yet another sneak attack along their international border.

Putin might agree to a ceasefire if Ukraine only withdraws from Kursk and the Donbass, since the first is widely accepted as Russian. The second is at the center of their territorial dispute, and demanding more might compel the US to impose its secondary sanctions against China and India.

According to Kellogg, sanctions enforcement is “only about a three” on a scale of one to ten, which could be raised if necessary. This would put Putin in a difficult position if Chinese President Xi Jinping and Indian Prime Minister Narendra Modi put pressure on him.

If the US imposes strict Iranian-like sanctions on Russia specifically designed to “drill]]its ] export of oil to zero” through full secondary sanctions enforcement, China and India could be forced to drastically reduce or completely stop their large-scale imports of discounted Russian oil.

The consequences of their compliance could&nbsp, spike the price of oil worldwide&nbsp, and throw countless economies into a tailspin, which is why the US has thus far avoided the policy.

Trump has already imposed 10 % tariffs on China, and he is anticipated to work with India on a deal during Modi’s late-week trip to Washington, D.C., which could lead to free trade talks between the two countries.

Each Asian giant has its own compelling arguments to defy US economic pressure in the future. As a last-ditch effort to avoid destabilizing the global market rather than defying the US, they may curtail their imports of discounted Russian oil as a compromise with the US in exchange for no secondary sanctions being enforced.

Even in that scenario, a portion of Russia’s state budget would be hampered by its foreign revenues, which might be in line with their leaders ‘ pressing Putin to reconsider his opposition to a ceasefire because it would directly harm all three countries ‘ economic interests.

If the “military pressures and levers that]the US is ] going to use underneath those” take the form of ramping up arms shipments to Ukraine, including long-range missiles, then it might suffice to prompt a rethink in Moscow.

However, there’s also the possibility that Russia “goes rogue” in the sense of continuing to pursue its&nbsp, maximum goals&nbsp, in the conflict in spite of American, Chinese and Indian pressure, hoping that the Ukrainian frontlines soon collapse and Trump then abandons the geopolitical project instead of trying to salvage it.

This “hawkish” thinking on Moscow’s part could be predicated on decision-makers assuming that Trump would accept this defeat without fear of it ruining his reputation and that he won’t escalate to brinksmanship.

While that’s plausible, Trump’s counterargument is that he doesn’t want to accept responsibility for what would be the biggest geopolitical defeat ever and won’t let the US’s$ 83 billion investment in this conflict go unpunished without at least ensuring control over Western Ukraine.

In that scenario, Russia might still be forced to compromise on its top objectives, but after needlessly destroying diplomatic ties with China and India, it may be isolated in the wake of a conflict.

Trump might find it easier to come to a compromise on his initial demands for this, but only if Ukraine forces itself to leave Kursk and Donbass.

It’s not in US interests to perpetuate the conflict according to MAGA thought leader Steve Bannon, who has warned that Trump&nbsp, risks his own Vietnam&nbsp, at a time Trump is eager to” Pivot ( back ) to Asia” pronto in order to contain China.

Trump would, therefore, do well to coerce Zelensky into withdrawing from those two regions instead of “escalating to de-escalate” against Russia if Putin doesn’t agree to simply freeze the LOC.

As Kellogg told the New York Post,” Very frankly, both sides in any negotiation have to give, that’s just the way it is in negotiations… Is it gonna be acceptable to everybody? No. But you try to run this balance”.

Trump should follow exactly that strategy, because otherwise he runs the risk of stifling his extensive foreign policy agenda.

This&nbsp, article&nbsp, was first published on Andrew Korybko’s Substack and is republished with kind permission. Become an Andrew Korybko Newsletter subscriber&nbsp, here.

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India-Indonesia near BrahMos missile deal aimed at China – Asia Times

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India and Indonesia are reportedly close to concluding a deal that could allow the original to provide the latter with the BrahMos hypersonic missile, which could have a significant impact on security dynamics in the southeastern approaches of the South China Sea.

During Indonesian President Prabowo Subianto’s recent visit to India as a guest of honor on Republic Day, a BrahMos weapon deal was officially discussed. During the vacation, Prabowoo met with Prime Minister Narendra Modi and BrahMos CEO Jaiteerth Joshi.

That was followed by an Indonesian group visit, led by Navy Chief Muhammad Ali, to the Brahmos Aerospace office. India and Russia work together to produce the weapons.

India has indicated that it will be willing to extend a line of credit to Indonesia in order to help the US$ 450 million offer. Indonesia would become the next ASEAN member state to get the fierce 290-kilometer range missile if the deal is approved.

In 2022, the Philippines purchased a$ 375 million anti-ship weapon system from India as fresh water tenses with China arose.

Strong barrier

Considering the Indo-Pacific and South China Sea’s liquid corporate and defense dynamics, marked by China’s growing confidence and rising US-China rivalry, the BrahMos missile had also significantly increase Indonesia’s deterrent capabilities.

The BrahMos hypersonic missile, which travels at a speed faster than Mach 2,8 and is mounted on either shore or ship, is a linguistic combination that derives its name from the Indian Brahmaputra River and the Russian Moskva.

It is a mid-range, ramjet-powered hypersonic cruise missile that can be launched from all three regions – area, air, and water. While it has a range of up to 800 kilometers, due to Missile Technology Control Regime ( MTCR ) restrictions, the range of export versions is capped at 290 kilometers.

Indonesia’s concerns about its ability to secure its Exclusive Economic Zone ( EEZ ) have grown more acute as a result of China’s increasingly aggressive posture in the Natuna Sea, which has recently led to frequent confrontations with the Indonesian Navy.

Largest missiles would inhibit any possible Foreign aggression in the Natuna Sea, but they would also aid Indonesia in achieving its goals for modernizing its defenses.

None of Indonesia’s Surface-to-Air Missile ( SAM ) systems ( French Exocet, Russian P-800 Oniks, and Chinese C-705 and C-802 ) have a range anywhere near the Brahmos ‘ 290-kilometer range.

Additionally, the Philippines ‘ signing of a BrahMos cope with India and Vietnam is likely to bring a similar price shortly, which will rebalance the balance of power between China and rival Southeast Asian applicants in the contested South China Sea.

China is well aware of BrahMos ‘ advanced features, including its dart-like shape for a strong penetration capability, radar-absorbent coating for enhancing stealth, and ramjet engine that slows down adversaries ‘ response times.

Additionally, it has an extremely accurate composite guidance system that includes active and passive radar, satellite navigation systems ( SNS), and inertial navigation systems ( INS ) for advanced targeting.

Underscoring that potency, India deployed BrahMos missiles near India’s Line of Actual Control ( LAC ) in 2021, leading to heated reactions from China.

Indonesia’s Minimum Essential Force ( MEF ) program, launched in 2010, seeks to modernize its aging military hardware while balancing financial constraints. With a projected$ 46.6 billion defence budget for 2024-2029, Indonesia’s focus includes upgrading its air and naval capabilities.

India’s burgeoning defense industry, enabled by initiatives like” Aatmanirbhar Bharat” ( self-reliant India ), is well-positioned to meet Indonesia’s weaponry requirements.

In April 2024, the Indian Embassy in Jakarta hosted the annual India-Indonesia Defense Industry Exhibition-cum-Seminar, showcasing goods from 36 American security firms. The Society of Indian Defence Manufacturers ( SIDM) and Indonesia’s Pinhantans are expected to sign an MoU to promote joint production and technology sharing in response to the momentum.

Indonesia’s 2012 Defense Industry Law, mandating technology transfers for big purchases, aligns properly with India’s skills in producing cost-effective systems like the Tejas fighter jet, BrahMos weapons and advanced naval arteries.

Despite multi-faceted defense engagements such as security dialogues, Joint Defence Cooperation Committee ( JDCC ) meetings, military exercises, and port visits, India’s defense cooperation with Indonesia has so far been limited. However, a deal involving BrahMos missiles would immediately enhance the defense partnership’s depth and significance.

Brothers in arms

As China’s military ambitions spread in Southeast Asia, India’s role as a reliable security partner and weapons exporter to regional countries, including the Philippines and Vietnam, is becoming increasingly significant.

India’s strategic presence in the region needs to be strengthened, and Indonesia, the largest nation in ASEAN and a major maritime player, needs to do so.

A unique opportunity to give military collaboration with India is provided by President Prabowo’s military background and commitment to enhancing defense capabilities.

Unlike former President Joko Widodo’s economics-focused diplomacy, Prabowo’s agenda emphasizes robust defense policies, making this an ideal juncture to deepen bilateral ties.

The BrahMos deal can thus be a game-changer for India-Indonesia ties, giving rise to more robust defense relations while counterbalancing China’s growing military might and assertiveness in Southeast Asia.

Dr Rahul Mishra is a senior research fellow at the German-Southeast Asian Center of Excellence for Public Policy and Good Governance, Thammasat University, Thailand, and Associate Professor at the Centre for Indo-Pacific Studies, School of International Studies, Jawaharlal Nehru University, New Delhi, India. He can be reached at rahul. [email protected] and followed on X at @rahulmishr_

Harshit Prajapati is a doctoral candidate at the Centre for Indo-Pacific Studies, School of International Studies, Jawaharlal Nehru University, India. He can be reached at harshi55_is [email protected]. in&nbsp, and followed on X at @harshitp_47

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US military on an adapt-or-perish techno-precipice – Asia Times

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The US Air Force’s 2050 perception is more than a declaration—it’s a stark reminder that US military supremacy is no longer assured.

In order to counteract China’s growing military challenge, the US Department of the Air Force ( DAF ) released a report in December 2024, which outlined a transformed military force by 2050, focusing on space, artificial intelligence ( AI), autonomy, and long-range precision strikes.

The report anticipates substantial political, technological, and strategic shifts, including Russia’s continued isolation as a powerful but economically unpopular but hostile nation.

The DAF envisions a potential battle shaped by AI-driven decision-making, automatic weapons and space-based war, with businesses extremely contested in cybersecurity and the electric spectrum.

To adjust, the US Air Force plans to move from big, crewed systems to a connected power integrating uncrewed systems and stand-off weapons. Instantly, the US Space Force may improve surveillance, missile defense and combat operations to shop hostile space threats.

The report emphasizes the need for constant technological advancement to keep corporate deterrence, especially as China develops its nuclear arsenal and military capabilities. The DAF calls for significant investment in new warfighting techniques to maintain US air and space dominance as conventional military rewards diminish.

The US military’s use of AI-driven challenge management and fast weapons aims to improve operations, but issues remain with system reliability and autonomy. AI-driven war management is the backbone of the DAF report’s recommendations for future combat.

As Matthew White argues in a December 2024 Wild Blue Yonder article, AI-enhanced systems will revolutionize battlefield awareness by integrating intelligence, surveillance and reconnaissance ( ISR ) data, cutting decision-making cycles and automating targeting processes. Nevertheless, as a SOFREP research warns, these techniques remain error-prone and require continued people supervision to prevent severe problems.

The US Congressional Research Service ( CRS )’s ( PRS ) report from January 2025 ) mentions the push toward hypersonic weapons as a complement to this vision by ensuring that US long-range precision strikes can bypass sophisticated air defenses and neutralize threats before they can react, strengthening deterrence in contested areas.

Transitioning to a techno-centric power presents significant challenges, particularly in freedom, AI and the shipping required to sustain distributed heat functions.

A PaulO’Neill and others ‘ February 2024 Royal United Services Institute ( RUSI) occasional paper examines the resilience of uncrewed systems in high-intensity conflicts, highlighting their vulnerability to electronic warfare, which could lead to high attrition rates. While freedom offers some mitigation, other routing methods and goal recognition remain restricted, affecting engagement effectiveness.

A fundamental change in US airpower strategy is represented by the Agile Combat Employment (ACE ) doctrine, which distributes forces between a network of smaller, scalable bases to improve survivorship against long-range missile threats. This approach, supported by robust command and control ( C2 ) networks, aims to ensure operational flexibility even in contested environments.

Nevertheless, Michael Blaser cautions in a July 2024 Trials post that the ACE theory assumes adversaries—particularly China—cannot destroy several US outposts together. China is improving its ability to detect, trail, and destroy dispersed US forces with AI-enhanced targeting and machine learning algorithms, which is restraining how ACE can be synchronized with long-range flames and adaptable logistics.

Sustaining activities and punishment requires countering advancements in electronic warfare, counter-space features, and philosophical alignment among US and allied forces.

The ACE philosophy reflects a growing change in US airpower—from consolidated air foundations to a separated, resilient network. Dispersing air property makes enemy targets more difficult to target and more resilient, according to Miranda Priebe and colleagues ‘ findings in a July 2019 RAND statement. However, the administrative stress of this model, especially for short-range combatants, poses a vulnerability.

Storage capabilities must be integrated with ground-based and space-based infrastructure to support distributed functions. The importance of resilient command, control, and communications in contested environments is highlighted in the August 2023 Comprehensive Strategy for the Space Force.

These actions are in line with the US National Defense Strategy for 2022, which includes non-kinetic and cyber-space defense strategies to deter adversaries like China and Russia, bolstering deterrence through multinational coalitions, and raising the cost of hostile actions.

While the US prioritizes space dominance, China and Russia actively develop counter-space weapons to challenge American superiority.

According to an April 2024 Center for Strategic and International Studies ( CSIS ) report, China is integrating jamming, directed-energy weapons and cyber warfare to disrupt US and allied space assets, while Russia’s focus on electronic warfare and anti-satellite ( ASAT ) systems like the Peresvet laser underscores its emphasis on space denial.

In a future conflict, adversaries aim to degrade US surveillance, communications, and missile defense networks in space as a result of these developments.

Beyond operational difficulties, institutional incompatibilities with integrated deterrence make strategic stability even more difficult. In a May 2024 publication by the US Army Command and General Staff College, David Bell argues that strategic empathy—the ability to understand the perspectives of allies and partners—is underdeveloped, leading to misaligned expectations and inefficient resource allocation.

Phillip Pattee also points out the lack of clearly positioned national security interests, which leads to operational uncertainty and complicates synchronization between agencies and allies. However, in order to counteract China’s growing military might and maintain stability in a multipolar world, the US must strategically adapt its military and nuclear deterrence strategy.

China is cited by the Chinese Communist Party’s (CCP ) plans for regional dominance and a new global order in the report’s 2020 Elements of the China Challenge report as the greatest threat to US military superiority. China is working on asymmetric capabilities in cyber, space, and missile warfare to outweigh US technological advantages while preventing regional conflict intervention.

At the same time, maintaining a technological edge is central to US strategy. Mohammed Soliman and Vincent Carchidi say in a September 2024 Foreign Policy Research Institute ( FPRI ) article that Washington seeks to maintain military and technological superiority through export controls, domestic investments, and strategic alliances. This strategy aims to promote a global tech coalition among allies, strengthen supply chain resilience, and encircle China’s access to important technologies.

The US nuclear deterrence posture is evolving to address the rise of multiple nuclear-armed adversaries, requiring a more flexible and adaptive approach.

A report from the US International Security Advisory Board ( ISAB) in October 2023 emphasizes the need for targeted deterrence, keeping deterrence strategies credible in the face of China’s growing nuclear arsenal and Russia’s modernization of its strategic forces. Simultaneously, the US must navigate arms control measures and risk reduction strategies, even as China and Russia resist formal engagement.

The future of US military dominance hinges on technology, policy and leadership. The second Trump administration introduces an element of unpredictability into this equation, as George Rachman points out in a December 2024 Financial Times (FT ) article. In the coming years, the US may decide whether it continues to be the dominant military force or cedes strategic ground to its allies as a result of growing great power competition.

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Trump 2.0: How to lose a trade war in just 18 days – Asia Times

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Japan – So far, China has had a little better-than-feared encounter with the Donald Trump 2.0 president.

In reality, Xi Jinping’s Communist Party is probably relieved to discover Trump stifling world markets, torn political relationships, and destroying the soft power that America has come to rely on so much for decades to accumulate in just 18 days.

Elon Musk, a Trump benefactor, is filmed slinging dust into US institutions and using it to espionage sensitive data, affecting trust both domestically and abroad.

Increase in Trump’s concern over his disastrous trade war. Though Trump went away with 10 % levies on Xi’s business, that was just one-sixth of the 60 % he had threatened. At the same time, the Price Man-in-chief backed away from 25 % levies on Canada and Mexico. For today, at least.

But Wall Street now senses Trump’s retreat. The biggest player in the cutting of US companies a few days ago. Today, many investors are concluding Trump’s taxes leg competition is far more wood than bit.

The principles that surround Trump 2.0 and the fear of a stock market collapse and the backlash from the oligarchs who are trying to control the country are varied. Trump’s businessman entourage is evidently worried about their earnings.

It’s possible, too, that Trump’s advisers are warning him that threatening a massive trade war are one point, devastating the world market, and Wall Street with it, is quite another.

Since Trump’s surprise victory in November, Xi has been promoting China as a more robust power than the US as the protector of free business and international economic institutions. Beijing says it stands ready to protect modernization from” serious problems” amid a “new period of volatility and shift” and disruption.

CEOs gathered in Peru for the Asia-Pacific Economic Cooperation ( APEC ) summit in November told Xi,” Dividing an interdependent world is going back in history.”

Xi was harkening again to 2017, when a turbulent Trump 1.0 White House was likewise spooking global markets. Xi in Davos stated to CEOs that trade wars and protectionism may result in “injury and damage to both sides” at the time.

However, according to Stewart Patrick, a senior fellow at the Carnegie Endowment for International Peace,” there is now Washington is located in the scheme equivalent of Tornado Alley, battered by a storm of confusing and norm-shattering professional commands that promise to upend eight years of US internationalism.”

Plan experts, Patrick says, “have become storm-chasers, tracking down the latest offense in the hopes of answering a simple question: Just what is the White House hoping to accomplish with all this conflict”?

No recent step tells us more about Trump’s “disdain for America’s global reputation” than the “reckless and arguably illegal and unconstitutional effort to dismantle” the US Agency for International Development ( USAID ) without legislative approval,” Patrick says.

The episode exposes Trump’s contextual relativism, which recognizes that the US has no purpose in world affairs. These misplaced choices may harm Americans themselves.

Yet as Trump complains about China’s supremacy, he’s paving the way for Asia’s biggest economy to grow its effect at America’s price. Beijing’s Belt and Road Initiative ( BRI ) expands its colossal infrastructure investment strategy around the world, especially in the Global South, by ending US development aid.

” None of these individuals has any thought of how the universe works,” says Stuart Stevens, a lifelong Republican strategist whose latest book is titled” The Conspiracy to Stop America.”” The country’s greatest authority wants to have as little impact as Liechtenstein. ” Either by design or unwittingly, Stevens says, the Trump-Musk label group is” going to give away National energy” to China and Russia.

Yun Sun, director of China programs at the Stimson Center, a Washington-based consider container, adds that any” decay of US management and credibility does gain China.”

That goes, also, for Chinese goods. There is confusion over why Trump’s Treasury Department gave Musk exposure to the US national payments system amid the legislation conflict in Washington.

Owners and Eastern central banks sat on hills of US Treasury securities are already sufficiently concerned about Washington’s persistently high inflation and US$ 36 trillion debt load. Then they may be concerned about a number of tech bros scurrying around Washington’s financial system for enigmatic reasons.

If Tokyo, which holds more than$ 1.1 trillion of US Treasuries, or Beijing, with$ 770 billion, doubt the sanctity of the reserve currency, it might result in titanically large debt sales and surging yields.

Though the economic fallout would rattle China’s 2025, the longer-term gains may be worth the short-term problems. It may, at a minimum, perform into Xi’s fingers as he works to export the yuan. The dollar’s influence on global commerce and finance increased over the past ten years ‘ Xi’s party.

On top of Trump’s extreme strength grabs, he’s pushing to implement another multi-trillion-dollar duty cut, wrestle decision-making power away from the Federal Reserve and apparently degrade the dollar. The odds of credit rating organizations allowing US debt to remain unchanged are decreasing.

Trump’s MAGA plan to end America’s low-cost, high-impact foreign aid programs to help fund tax cuts for the ultrawealthy is a blow to US influence abroad, according to Alan Yu, senior vice president at the Center for American Progress think tank.

Trump, Musk, and their allies are satisfied, but the aid attacks have also stifled trust and uncertainty among American allies and partners, which the United States relies on to maintain world security, Yusays.

The programs Trump is pausing, Yu explains”, strengthen the capabilities of partner nations, deter adversaries, and reduce the need for direct military intervention.”

In particular, he adds, the status of assistance to Ukraine, critical to sustaining Kyiv’s war effort against Russia, remains ambiguous. Military assistance to Taiwan, which relies on US training and equipment to deter Chinese aggression, has also been thrown into uncertainty.

To be sure, many observers think the tariffs will eventually be imposed. The justification is that you don’t talk about the power of trade restrictions and how crucial they are to rebuilding America. Also, the ways in which Xi is pushing back may have Trump’s gang of anti-China advisors, including Peter Navarro, apoplectic.

As such, says Dominique Dwor-Frecaut, chief US economist at advisory Macro Hive”, tariff increases are likely to proceed on two tracks. The long-term track is broad-based, gradual and meant to generate revenues and support reshoring. Meanwhile, the’ opportunistic’ track is country-specific, aggressive and meant to exert leverage on trade partners.”

Dwor-Frecaut notes that during his confirmation hearing, Treasury Secretary Scott Bessent explained that tariff policy had three objectives: revenue generation, reshoring and leverage in trade negotiations”. Because the goals for generating revenue and reshoring are long-term, permanent tariff increases are required. Also, this is likely to lift prices, possibly inflation, and lower growth.”

Thickening the plot, Xi’s party struck back with tit-for-tat tariffs on US energy, manufacturing and minerals while hitting Google with an antitrust investigation. Overall, economists and analysts say, it’s a reasonable and proportional response that leaves the door open to future negotiations.

According to Julian Evans-Pritchard, an analyst for Capital Economics China, “fairly modest” is how it sounds.

However, Ian Bremmer, CEO of Eurasia Group, believes that the prospect of a market-wrecking conflict between Washington and Beijing fundamentally misunderstands both the scope of Trump’s strategy and the nature of US-China relations during the Xi era.

According to Bremmer,” the most geopolitically significant relationship in the world is fundamentally adversarial and devoid of trust.” The Biden administration made a significant effort to create and maintain 25 high-level bilateral channels across the cabinet as the only reason it remained comparatively stable in 2024.

Team Trump, by contrast”, has no interest in putting in that kind of painstaking diplomatic work for a relationship they view as fundamentally adversarial,” Bremmer says”. Without those safeguards, there will be few management and communication strategies to stop even minor incidents from developing into major crises.

Can Trump get past this reality and coerce Beijing into signing a deal? Bremmer thinks not.

” The problem, “he says”, is that his strongman tactics only work against much weaker countries. When he threatens Colombia and Panama with tariffs, they have no choice but to capitulate because, in the event that their economies would collapse, they would have to. However, hitting down is simple. China is a completely different game. It has the power and leverage to retaliate against the US in ways that other nations cannot. And punch back it will.”

According to economist Alicia Garcia Herrero at Natixis, the question that no one can answer is whether Trump might respond to Beijing’s initial retaliation in broader ways. If]Trump ] doubles down, China will have a problem,” she notes.

Agatha Kratz, economist at the Rhodium Group, tells AFP that” given the current economic downturn, China cannot afford – and does not want – to impose excessive trade barriers. China’s economy is in a fragile state, and this limits its ability to act freely. Beijing cannot afford to take reckless actions, and I don’t think it wants to.”

The bottom line is that no one really knows, so perhaps it’s best to remain agile, says Yung-Yu Ma, chief investment officer at BMO Wealth Management”. Be patient and opportunistic – there may be a time to be aggressive, but it isn’t upon us yet,” Ma notes.

According to Ma,” President Donald Trump may be willing to let the US suffer a lot of economic pain in an effort to realize his stated goals of reducing trade deficits, bringing jobs to the US, and improving border security.”

We still anticipate that the US will impose more tariffs on China later this year as part of its larger trade goals, according to Morgan Stanley’s economists, which will only lead to further retaliatory actions from China.

Part of the issue is Trump’s frustration that efforts to date haven’t slowed China’s trajectory. That goes both for Trump 1.0 policies and those of Joe Biden’s White House”. From DeepSeek to Huawei, US tech restrictions on China are backfiring,” says Diana Choyleva at Enodo Economics.

In fact, Choyleva argues, US efforts to curb China’s technological advancements may be having the opposite effect: accelerating China’s move upmarket toward self-reliance and innovation.

Huawei, Huawei, and others are providing case studies on how China Inc. is developing workarounds for US chip and other tech export controls. Along with creating genuine obstacles, decoupling efforts are incentivizing domestic innovation.

China has other opportunities ripened by Trump’s tariffs. For one thing, they’ll cost America’s friends, particularly staunch US allies Japan, South Korea, Taiwan and certain governments in Southeast Asia.

Hard feelings between Washington and top Asian democracies could generate greater distrust, increasing China’s appeal as an alternative. It has given Xi the moral support she needs, and it has made her appear more committed to capitalist principles than tycoon Trump.

Xi’s party is still benefiting from Trump’s unilateral withdrawal from the Trans-Pacific Partnership trade agreement, which later became the Comprehensive and Progressive Agreement for Trans-Pacific Partnership ( CPTPP ) without the US.

Trump 2.0, in contrast, is clinging to misguided interests in bilateral trade agreements over wider efforts to establish a Chinese military fortress.

In particular, Carnegie’s Patrick notes, the demise of USAID is an early win for Beijing. Many innocent people around the world will pass away if the agency does. As for the United States ‘ continued reputation as a nation that values its own self-interest and values itself in international affairs, Patrick concludes,” so will it do so.”

Follow William Pesek on X at @WilliamPesek

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When tariffs make good common sense – Asia Times

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The&nbsp, hazard of US tariffs&nbsp, on Canada and Mexico seems to have abated for today. Both nations made mainly symbolic commitments to border security, which led to Trump’s decision to postpone the tariffs by one month. This suggests that the taxes may be delayed or completely canceled.

This is the least negative results. Although the majority of the world is euphoric, the simple knowledge that Trump may change his mind and impose tariffs on America’s important allies and trading partners at any time will chill business investment. &nbsp, Bloomberg information:

Over a furious 72 hours, President Donald Trump’s danger of punishing fresh tariffs on Canada, Mexico and China …sent manufacturing organizations scrambling for cover…Even after the senator put a&nbsp, one-month hold&nbsp, on the Mexico and Canada tasks on Monday, professionals are still very much on watch for extra taxes …

It was …frantic for Randy Carr, who runs&nbsp, World Emblem, the biggest global manufacturer of emblems and patches …” We have had to suspend every capex project we have for the next 24 months until we better understand the trade situation”, Carr said… World Emblem also paused hiring plans, said the executive, whose company has 1, 300 employees between production bases in the US and Mexico. ” It’s suggestive of the changes we had to make during Covid-19″.

Tariffs benefit private manufacturers by shielding them from foreign competitors, but they also hurt them by raising the price of imported components. One of the two main issues with taxes is that they raise customer costs, which is the other.

Does this imply that tariffs are usually unfair? Some people praised the benefits of free trade in response to Trump’s turbulent tariff announcement, even some Democrats who are typically wary of liberal arguments.

But after years of underdevelopment, for fanatic explanations are improbable to carry much weight. Any ideological blanket denunciation of tariffs will likely face that deep reservoir of ( somewhat justified ) anger. It seems like free trade was America’s sucker’s bet.

In reality, there&nbsp, are &nbsp, some reasonable explanations for when taxes may be useful. These concepts have been the subject of numerous documents written about them that economists have known for centuries. The reasons for tariffs are often discussed in public conversations because economists frequently have an overt attachment to the concept of free trade.

I therefore decided to go over some of these. But notice that all of them are claims for&nbsp, targeted&nbsp, taxes, instead of the large, across-the-board tariffs that Trump threatened against Canada and Mexico.

Federal safety concerns

The most important rationale for taxes, as I see it, is national security. If a war breaks out between the US and China, the US will own to create a whole lot of munitions and weapons quite fast— especially drones, ships, missiles, and so on. It’s crucial to have existing human industries that can be immediately repurposed for defense functions in order to accomplish that, just like automakers built planes and vehicles in World War 2.

A nation’s manufacturing base will collapse and die in a lengthy standard modern war against a rival nation. For instance, if the US finds itself without battery factories — both on its own soil or in a secure area of the country — it won’t be able to produce the FPV drones that have come to be the standard tool on Ukraine’s battlefields. That could be devastating. Therefore, it is important to keep some power production power in the US, Canada, and/or Mexico.

Today, Xi Jinping knows this. One thing he can do is try to crush the US producing industries by outpacing them with targeted surges of cheap exports, as he almost certainly does if he wants to undermine the US. It’s quite possible that this is one motivation behind China ‘s&nbsp, sudden wave of manufactured exports, which is being promoted with below-market bank loans, government grants, and a host of other laws.

Taxes are a means of preventing this forced underdevelopment method. If Xi unexpectedly decides to flood America with affordable Chinese batteries, the US may respond very quickly by raising taxes on Chinese chargers, canceling out the impact of China’s incentives. In reality, this is what Biden did last year, when&nbsp, he levied extremely large tariffs&nbsp, on a variety of China’s proper business.

However, take note that Trump’s tariff proposals for Mexico and Canada don’t exactly suit this technique. Most important, putting taxes on US allies doesn’t protect against forced underdevelopment by China, in truth, it makes the problem&nbsp, worse, by disrupting North American supply stores and raising prices for US manufacturers.

It also makes the US dollar value, making American imports less aggressive. This is a common reason why intended tariffs like Biden’s are more powerful than large, across-the-board tariffs like the ones Trump is threatening.

In fact, dollar appreciation is exactly what happened in 2018-19 after Trump’s initial tariffs, and it’s exactly what’s happening now:

So if you want tariffs for national security reasons, Trump’s proposed tariffs on US allies are &nbsp, exactly the wrong kind.

Our companies vs their companies

Economists don’t typically think about national security, instead, they tend to think good policies are those that produce more growth, more employment, and so on. And if those are your objectives, there are definitely still some reasons why tariffs might be a good thing— at least, from a single nation’s perspective.

The most common reason is all about&nbsp, national champions. Real-world markets aren’t perfectly competitive — some big companies make a ton of profit, by leveraging what economists call&nbsp, increasing returns to scale.

Increasing returns to scale are just anything that gives big companies a cost advantage over smaller ones — maybe network effects, or big fixed costs, or a” superstar” effect that draws in top talent, etc. In a world of increasing returns, the winning companies make a lot of profit, and smaller companies don’t.

A country might, therefore, be able to increase its wealth by using tariffs to guard its own “national champion” companies. The idea is basically to block foreign companies ‘ domestic markets by using tariffs to lower their scale.

This will make it easier for your own nation’s national champions to outshine their international rivals, resulting in greater profit for them on the market. This is called” strategic trade” policy.

James Brander and Barbara Spencer&nbsp, pointed out&nbsp, this argument for tariffs back in the 1980s. Paul Krugman, who helped develop the leading theory of increasing returns and trade, &nbsp, summarized&nbsp, their work on this topic in 1987:

If a nation can somehow make sure that the lucky firm that receives the most money is domestic rather than foreign, it can raise its national income at the expense of other nations. James Brander and Barbara Spencer uncovered in two well-known papers that, when appropriate, government policies like export subsidies and import restrictions can deter foreign companies from entering lucrative markets.

Government policy here serves much the same role that” strategic” moves such as investment in excess capacity or research and development ( R &amp, D) serve in many models of oligopolistic competition —hence the term” strategic trade policy” .…]A ] t least under some circumstances a government, by supporting its firms in international competition, can raise national welfare at another country’s expense.

In fact, there’s some evidence that free trade can make a country poorer by destroying its national champions. This is from&nbsp, Sampson et al. ( 2022 ):

Import liberalization lowers import costs and boosts competition. However, with scale economies, import liberalization can also reduce domestic industry’s productivity by reducing its scale, leading to lower exports.

Evidence from the permanent normalization of US trade relations with China in the early 2000s, as this column demonstrates, demonstrates that increased Chinese import competition did indeed reduce US exports through this channel, implying the existence of industry-level economies in the US.

The point is that America would have been a little wealthier if the US had started importing tariffs to protect some very oligopolistic industries from Chinese competition in the early 2000s.

But again, this argument for tariffs doesn’t apply to Trump’s recent efforts. First of all, it only applies to those sectors where there are few winners and a lot of profits to be made. That implies, again, that&nbsp, targeted&nbsp, tariffs are the way to go.

Broad, across-the-board tariffs will dilute the effect, through exchange rate appreciation. Trump would have imposed tariffs on agriculture, which is a highly competitive sector with few profits to compete for. Simply put, this strategy does not align with the theory of strategic trade.

Second, you probably don’t want to start a trade war with your most significant allies and trading partners if you want your national champions to be able to scale up. They will almost certainly retaliate, denying market access to your own top companies.

If their attempts to buy off Trump with symbolic concessions failed, Canada and Mexico would likely resort to retaliation measures. The top companies in America would lose market share and suffer in their fierce competition with Chinese rivals as a result.

And finally, if you want to increase your national champions ‘ scale, you can probably get a lot more mileage out of&nbsp, export subsidies&nbsp, than tariffs. Tariffs can hurt national champions by denying them access to cheap production inputs, export subsidies, although they cost more in fiscal terms, don’t have this problem.

The American way of protecting the infant industry

In this recent blog post by Anthony Pompliano, many people have questioned my response to the pro-tariff arguments. Please click on the link.

Some of Pompliano’s arguments in this piece are simply bad. For example, he cites the factory construction boom and&nbsp, the reshoring of the solar industry &nbsp, as examples of American industrial successes driven by tariffs.

However, in both of those cases, while tariffs might have been a significant factor, we didn’t really see much progress until Biden introduced industrial policy through the CHIPS Act and the Inflation Reduction Act.

Pompliano also contends that tariffs are less deflationary than income taxes, which is generally true if the subject is the same tax rate. But if you’re talking about raising a set amount of&nbsp, revenue&nbsp, from either income tax or tariffs, then the tariffs are almost certainly much worse.

This is because tariffs are a lot easier to&nbsp, avoid&nbsp, than income taxes, you just buy similar products made elsewhere. Because tariffs are relatively easy to avoid, they don’t raise a lot of revenue. And so if you want to use tariffs to raise, say,$ 1 trillion a year for the US government, you’re going to need to set the tariff rates&nbsp, very&nbsp, high. And that will be very distortionary.

But anyway, Pompliano’s strongest argument is that tariffs for infant industries were useful for America’s economic development back in the 19th century:

Tariffs are widely credited as&nbsp, an essential tool&nbsp, for the success of the Industrial Revolution, which created the American economy we know today…Historical figures like George Washington, Thomas Jefferson, Henry Clay, James Monroe, Abraham Lincoln, William McKinley, and Theodore Roosevelt were all outspoken supporters of tariffs as a necessary tool for America to thrive. Give us a protective tariff, and we shall have the greatest nation on earth, according to the well-known Lincoln quote on tariffs.

This is what economists refer to as an “infant industry argument.” Basically, American leaders in the early days of the republic wanted to promote the creation of new industries in the US Alexander Hamilton wrote his famous&nbsp,” Report on Manufactures” &nbsp, in 1791.

He claimed that tariffs would enable domestic champions to have the same level of scale as foreigners, which was in line with the strategic trade theory developed a century later. Hamilton added that shielding brand-new American industries from competition would give them more time to “learn” about how to compete with established foreign rivals.

In some cases, infant industry arguments are plausible; Pompliano certainly exaggerates when he claims that tariffs built America, but they were likely a result of helping some important American industries start their own businesses rather than being replaced by floods of British imports.

But here too, the specifics of Trump’s plans are at odds with the economics. Once again, the economic argument is for&nbsp, targeted tariffs&nbsp, in very specific cases— in this case, new industries facing competition from big foreign incumbents. Trump’s across-the-board tariffs are almost entirely targeting&nbsp, non-infant&nbsp, industries. ( Also, in general, &nbsp, import quotas are more helpful&nbsp, for infant industries than tariffs. )

Two more speculative arguments

So those are the three basic arguments in favor of tariffs — national security, national champions, and infant industries. All of them are pretty solid arguments, though they all imply that Trump’s preferred approach to tariffs is highly suboptimal. However, there are still some intriguing tariff debates that merit discussion.

One of these is&nbsp, Michael Pettis ‘ theory&nbsp, that tariffs on China will help to correct global trade imbalances, and could force China to change its economic model to a more consumption-focused one. I discussed this concept here.

Basically, I think this makes sense as a&nbsp, China-specific political-economic&nbsp, argument. The idea is that Chinese companies will quickly become unprofitable ( due to overproduction and over competition ) if tariffs force them to concentrate more on their domestic market.

This unprofitability could prompt China’s government to reduce its subsidies for industrial overproduction. That’s my personal interpretation of Pettis ‘ ideas, and I’m not sure how plausible it is, but it’s certainly an interesting thought. I would note, however, that this is a purely&nbsp, China-specific&nbsp, idea, rather than a justification for tariffs on Mexico and Canada.

Another theory, &nbsp, courtesy of Sam Hammond, is that tariffs are the first step in a forced de-dollarization of the global economy:

The US intentionally undermines the stability of the dollar as a trade currency by imposing universal tariffs, which I believe is the case because disruption forces other nations to consider reducing dollar holdings or considering alternative reserve arrangements, thereby enabling a monetary reset.

I don’t put much credence in this theory. The reason, as I’ve explained a number of times, is that tariffs make the US dollar more expensive, not less.

Anyway, I believe that national security, as well as the traditional economics justification for tariffs, such as strategic trade and infant industry protection, are still the strongest arguments in favor of tariffs. And every single one of them raises doubts about the tariffs Trump is proposing. Trump’s threatened tariffs on Canada and Mexico are incredibly unlikely to be those that are, even if some tariffs are acceptable in some circumstances.

This&nbsp, article&nbsp, was first published on Noah Smith’s Noahpinion&nbsp, Substack and is republished with kind permission. Become a Noahopinion&nbsp, subscriber&nbsp, here.

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How wars end… and why Ukraine’s may drag on – Asia Times

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Steve Bannon, no longer in Donald Trump’s inner circle, but no less politically savvy for it, remarked recently,” If we aren’t careful, it]Ukraine ] will turn into Trump’s Vietnam. That’s what happened to Richard Nixon. He ended up owning the war and it went over as his war, no Lyndon Johnson’s”.

Bannon reacted to President Trump’s handling of his Special Envoy for Russia and Ukraine, retired Lt. Gen. Keith Kellogg, with ending the Ukraine conflict in 100 days … 99 days afterwards than candidate Trump had bragged. To Bannon, that is an ominous pause that will only increase the likelihood of the US getting sucked deeper into a conflict he believes is unwinnable and isn’t in the country’s national attention.

I agree. Failure to act swiftly on a ceasefire, and failure to make a clean break with the neocon Ukraine/Russia strategy candidate Trump promised brings back into play the tired old peace-through-strength fantasies and magical sanctions ( “ruble to rubble” ) of the Biden administration, strategies that failed for Johnson in Vietnam with the Gulf of Tonkin Resolution, for George W Bush with the January 2007 surge in US forces in Iraq, and for Barack Obama with the 2010 surge in Afghanistan.

The Pentagon’s popular phrase is “escalate to de-escalate”. The issue is that de-escalation rarely occurs. You didn’t fine-tune battle. Military game theory Herman Kahn realized the tough way that you didn’t “game” it the way Robert McNamara, the defence minister of the Vietnam War, did. The monster did encircle you.

How do war stop? In particular, how will this battle close? Carl von Clausewitz, a general and military theory in Prussia, sees war as a tool of coverage and lists three main ways in which it ends:

1. One or both flanks abandon their policy goals.

If President Trump had made it clear to Vladimir Putin and the universe that the United States and its NATO partners have abandoned the east NATO expansion and that Ukraine will never become a NATO member, he might have succeeded in doing so. The shoe had

therefore have jumped on the other end, making Putin the inculpable figure for any more warfare.

2. When one or both sides reach the point where they are unable to carry out effective attacks, a stalemate forms, which leads to ceasefire negotiations.

3. Due to the fall in open and/or military confidence, one side loses the ability or ability to fight.

The Korean War is an example of a conflict that ended in response to the second incident. It started on June 25, 1950, when North Korean army crossed the 38th horizontal where Korea was divided after World War II. After significant shifts of the front lines occurred in the intervening time, a deadlock started at the 38th parallel when it all began.

On the caveat that no nuclear weapons were to be used, both parties had reached their pinnacle points. Truce negotiations broke off on July 27, 1951, but it took two more years of continuous fighting and two more years before the armistice was declared.

A new US president ( Dwight Eisenhower took office in January 1953 ) and a new Soviet leader ( Joseph Stalin died in March 1953 ) had no intention of resolving the conflict. No peace agreement between the two Koreas and the other fighting events has been signed up as of yet, despite the ceasefire being in place.

Some people believe that the conflict in Ukraine can be modeled after the results of the Korean War. I disagree. There is no standoff and no turning point for Russia, contrary to what some NATO tones would have us feel. Without the underlying political issues that initially caused war, no armistice in the heart of Europe will have any lasting impact.

A war’s finish, according to Clausewitz’s second circumstance, is appropriate to Ukraine. The traditional law, widely, is the conclusion of World War I.

The German High Command under Hindenburg and Ludendorff launched a number of massive offensives on the Western Front ( March 21 – July 18, 1918 ) aimed at breaking Allied ( French, British ) lines before the arrival of significant American reinforcements after nearly four years of attrition warfare with little movement of the frontlines after initial German territorial gains in 1914.

Troops no longer needed on the Eastern top after the Treaty of Brest-Litovsk, which took Russia out of the battle, were deployed to the American insurgencies, and advances were achieved. But 70 meters apart from Paris, the attack ground to a halt. German troops ‘ potential had culminated.

An Allied counter-offensive started in August 1918 (” Hundred Days Offensive” ), reinforced by over a million fresh American troops, which pushed German forces back. Both factors had suffered over 500, 000 deaths.

But German labor deposits were now exhausted. By September, Ludendorff told the Kaiser that an truce had to be sought. On October 4, a newly appointed Chancellor Prince Max von Baden ( October 3, 1918 ) wrote to US President Woodrow Wilson asking for armistice terms based on his Fourteen Points.

By later October/early November, Baden’s desire for ceasefire conditions had de facto morphed into seeking terms for surrender. The homefront had collapsed, and continued fighting on the Western before was out of the problem now that the sailors of the High Seas Fleet’s rebellion on October 29 was joined by military ‘ revolts and fraternization with socialist and communist revolutionaries in most major European cities, including Berlin’s money.

The only thing left to do was to bring the armistice line and establish the defense will until a peaceful resolution is reached. Kaiser Wilhelm II renounced and fled to Holland on November 9. Baden resigned and handed Friedrich Ebert, the socialist head in the political chamber, the chancellorship. The Empire was no more.

The Allied delegation led by Supreme Commander Marshal Ferdinand Foch were set to impose the harshest conditions at the armistice talks in a railroad car in the Compiegne Forest: German forces would withdraw from all occupied territories ( and Alsace-Lorraine ), the Rhineland would fall under Allied military rule, and German forces would be disarmed throughout.

In Clausewitz’s words, reduction of the will to fight had subjected Germany fully to the will of the victor. The Armistice ended at 11 am on November 11 and the artillery ceased to exist.

In the ensuing Treaty of Versailles ( 1919 ), the harshest conditions were imposed on Germany. It was the bad course of action. Another world war broke out between the same functions within 20 years, with unprecedented murder.

The situation in Ukraine and the possible end of the war that have striking similarities and training from World War I. The Russian troops’ attempted summer counteroffensive of June through November 2023 reached its pinnacle way through.

Russian forces in the southern ( Zaporozhe ) and central ( Donetsk ) sections of the front line had created extensive defensive infrastructure, including ditches, trenches, artillery positions, and landmines. Russian development was painfully slow, great in fatalities, and technology was lost. And Russia, at all times, maintained weather superiority. By mid-September, progress had slowed to a turtle’s rate. By mid-November, unpleasant businesses petered out.

Since December 2023/early January 2024, Ukrainian troops, having lost some of their best modules, have been on the defense. In addition, the rigorous retention campaign waged by the Russian troops is putting a lot of strain on both people and machines. Large steamroller-style, Russian divisions at full power move forwards against Ukrainian under-strength people.

There are becoming more and more instances of fighting confidence dropping at the firm and brigade levels. As literally millions of Ukrainian men in their military service years have emigrated to points west, to Poland, and other Eastern European nations, but primarily to Germany, the unemployment rate is high ( 100, 000 since 2022 ), and fresh recruits are becoming ever more difficult to find.

While Russian “reports” see much higher Russian fatalities than Ukrainian, those reviews are most definitely fake. The Russians are not conducting highly portable difficult operations, but rely heavily on large artillery and air assault, therefore do somewhat small-unit army attacks.

Certain, they have deaths, but it’s a stretch to believe they are larger than the Ukrainians. Bottom line: By 4:1, Russian workforce reserves outnumber Russian ones.

This image does not yet reflect the European troops ‘ ability to fight in October/November 1918. However, it is moving in that direction, and any important Russian advance was quickly lead to a rout.

In these instances, Trump must first make it clear to Putin that Ukraine will never be offered NATO account. This is a prerequisite for him to get the negotiator. Putin’s main motivation is to also consider that. As Trump has suggested, threatening force through additional sanctions is a failure and was not even the Russian side’s point of view.

Over the truce collection and conditions, there is a major negotiation going on. It is incorrect to assume that the line of combat contact is the proper one, as in the case of the Asian stalemate. Putin can continue to grind it out and accomplish his social objectives. Trump and NATO could.

When martial beat is near, and in accordance with Clausewitzean theory, Ukraine will most likely cede control of the entire Donetsk and Luhansk operational regions, as well as the now under Russian rule, to the Kherson and Zaporozhe oblasts, and leave the Kursk notable in Russia.

A later peace agreement that can last will need to be embedded in a wider new European security architecture like the one that was possible at the time of the Soviet Union’s collapse, which was not executed and rather gave way to the continuous expansion of NATO eastward, the main reason for the Ukraine battle disaster.

Uwe Parpart is editor-in-chief of Asia Times.

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Trump’s Gaza ‘ownership’ critics wrong to tout Marshall Plan model – Asia Times

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Many people who oppose President Trump’s plan to renew Gaza lack a clear knowledge of what he meant by “owning”? Were the vendors involved in building roads, valves, apartments, and commercial properties instead of caves?

While numerous critics argue against the totally unimportant and ineffective subtitute idea of using the Marshall Plan to reconstruct Gaza, even though the historical original appears to have only had a passing impact upon closer inspection. &nbsp, &nbsp, &nbsp, &nbsp, &nbsp, &nbsp,

Recall that at the end of World War II, when Berlin and Dresden were in remains, the Allies&nbsp, stayed in command, &nbsp, executing Nazi officials and de-radicalizing Germany ( the way they did in Japan ), changing significantly the country’s organizations.

But, contrary to modern myths, the Marshall Plan’s influence in revitalizing Germany was trifling.

Never mind that Middle Eastern players and UN agencies then pounce on its perceived validity as a unit, with even the Jerusalem Post reporting as if money were the main issue with such a program.

They all omit some details, among people that the US and Allies “owned” Germany and Japan for a few years.

Between 1944 and 1948, Eastern and Central Europe had expelled approximately 12 million experienced Europeans whose families had resided there for a long time. The majority of those were resettled in West Germany.

In 1945-6, after the war ended, West Germany faced economic conflict, with prices raging at 19, 000 percent per month, dark industry thriving, and a tax rate at a confiscatory 95 % at relatively low wages.

Germany changed its fiscal and monetary policies considerably. Ludwig Erhard, West Germany’s new finance minister, in 1948 stabilized the coin and carried out extreme fiscal changes, considerably lowering tax rates and scrapping cost controls. According to The Deutsche Bundesbank, the changes” changed women’s lives from one day to the future.”

The Marshall Plan was simply put into effect in 1948. &nbsp, From 1948 to 1951, the US contributed$ 13.2 billion to German treatment. Of that,$ 3.2 billion went to the United Kingdom,$ 2.7 billion to France,$ 1.5 billion to Italy, and only$ 1.4 billion to the Western-occupied zones of Germany.

Additionally, decades of research have demonstrated that the Marshall Plan did not provide funding for the restoration of the city’s crumbling equipment. Instead, the reconstruction was quite little full before the strategy was executed. &nbsp, &nbsp,

Although no doubt the$ 1.4 billion offered some assistance ( and there is no point showing what percentage of the “gross national product” it reflected, since the latter was utterly mismeasured and underestimated ), what brought about the post-World War II West German miracle was Erhard’s policies combined with the&nbsp, massive arrival of skilled people.

For “miracles” happened around the world when significant numbers of people arrived in specific locations. They were unrelated to any foreign support.

The mystery of 17th-century Europe was neither Spain nor Portugal – both of which fit the “finding gold” mildew– but below-sea-level Amsterdam and Holland, whose fortunes were created despite normal hurdles.

Immigrants, some of whom were or became merchants and bankers, were drawn to the new republic because of its unprecedented openness to all religions and its laws allowing the practice of finance ( Amsterdam had the world’s first stock market ). Immigrants and Huguenots, discriminated against somewhere in Europe, were popular among them.

Many of the money flowing into Amsterdam was both owned by foreigners or by Amsterdamers of foreign descent. They transformed Amsterdam into the monetary and trading hub of the 17th-century world.

Perhaps this is what Trump, the president of another nation whose development has benefited from such immigration, is trying to convey when he uses the term “ownership” despite the absence of any indications that qualified individuals from other countries may immigrate to Gaza or that any governing body that might be established that would do any shifting policies.

Hong Kong, Singapore, and Taiwan’s histories are similar to those of Germany after World War II and of Amsterdam in the 17th century. The state provided an umbrella of law and order, imposed relatively low taxes, and gave people stakes in what the business society was doing, which was able to draw in immigrants and businesspeople from all over the world.

At the start of the 19th century, Sir Stamford Raffles built Singapore as a port and supported it with an open-to-allracial educational system. &nbsp, Trade and security brought prosperity to the penniless immigrants from Indonesia and, in particular, China.

Immigration opportunities were provided to immigrants in China’s densely populated Taiwan, Singapore, and Hong Kong, which were initially dominated by warlords and a status-conscious bureaucracy and later by a communist bureaucracy.

Hong Kong benefited from the waves of Chinese immigrants, particularly the inflow of Shanghai merchants and financiers when Mao Zedong “liberated” China in 1949.

Of course, the example of Israel, which decentralized and opened its financial markets from the late 1980s ( turning into the” Start-up Nation” ) and benefited from waves of skilled immigrants, fits the historical patterns of previous centuries. &nbsp, &nbsp, &nbsp,

None of these historical experiments have a chance of being compared to Gaza or, for that matter, the majority of the Middle East.

It is important to discard perhaps once and for all the” Marshall Plan” government-foreign-aid-aggrandizing mythology as a solution for failed societies. &nbsp, It is as important to use words with precision – such as just what “ownership” or” control” may mean and whether or not it is applicable to start with.

As of now Hamas, Hetzbollah and theocratic Iran are labeled as “terrorist” organizations or” axis of evil”, but with no Nuremberg trials on the horizon for their leaders. &nbsp, &nbsp,

Briefly: No matter which way one looks at Gaza, Marshall Plans,” controls” ( in the post-World War II sense ), “ownerships” and expectations of “miracles” are nonstarters. &nbsp, Nobody wants to move there although if Egypt, or Jordan with a majority-Palestinian population already, opened their borders, perhaps some Gazans would move there.

The article draws on Brenner’s books Force of Finance ( 2001 ) and Labyrinths of Prosperity ( 1994 ) and his articles” Venture Capital in Canada”, ( 2010 ), and” Venture Capital Secret Sauce” ( 2019 ).

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