Good morning. Here’s your Daily Situational Awareness for Thursday, 02 December 2021. You can receive this daily briefing by signing up at https://forwardobserver.com/daily-sa
TODAY’S BRIEFING:
- Defense Department showdown with the National Guard
- European Union opens Belt and Road competitor
- Some U.S. retailers shift production to Western hemisphere
- Telecom disruption over Chinese hardware
SITUATIONAL AWARENESS
NATIONAL GUARD SHOWDOWN: Secretary of Defense Lloyd Austin updated guidance on vaccine mandates to all subordinate services, including the National Guard Bureau. In his letter, Secretary Austin said National Guard units must comply with the Pentagon’s vaccination requirements or lose access to drill pay and training opportunities. The update is in direct response to Oklahoma Governor Kevin Stitt’s suspension of vaccine requirements for National Guard troops. (Analyst Comment: The Pentagon is concerned other states will follow in Oklahoma’s footsteps, impacting the ability of National Guard units to participate in Pentagon deployments or taskings. U.S. District Court Judge Van Tatenhove halted vaccine mandates for healthcare workers and federal contractors in 10 states, a precedent that could be used by state national guard forces. Combined with the 6th Circuits’ injunction on OSHA’s vaccine mandates, a Supreme Court decision will likely settle the various lawsuits. – D.M.)
EU OPENS BELT AND ROAD ALTERNATIVE: The European Union unveiled its long-awaited infrastructure drive on Wednesday, with European Commission President Ursula von der Leyen calling it a “true alternative” to China’s Belt and Road Initiative. The plan, known as Global Gateway, promises to provide up to €300 billion (US$340 billion) between 2021 and 2027 for infrastructure projects in developing countries. (AC: Many developing nations are disillusioned with China’s infrastructure aid programs, referring to them as debt colonization which ends up undermining governments and local economies. Chinese investors, for instance, are threatening to assume ownership of an airport in Entebbe, Uganda because the country may default on a debt payment. The EU program may not be any better but it will undermine China’s use of infrastructure aid to co-opt developing nations. – M.M.)
U.S. RETAILERS SHIFT PRODUCTION TO WESTERN HEMISPHERE: U.S. furniture companies are facing significantly delayed orders and depleted inventories due to Vietnam’s recently ended three-month coronavirus lockdown. Industry leaders say they expect to carry low inventories well into 2022 – resulting in higher prices for American consumers. Companies like La-Z-Boy, Pottery Barn and Williams Sonoma are expecting lower than normal Q3 earnings as a result of these supply chain disruptions. La-Z-Boy and Williams Sonoma are working to shift manufacturing out of Vietnam to plants in Mexico and the U.S. in order to expand its supplier base outside of Asia. (AC: This COVID-induced supply chain disruption in Vietnam is a preview for even greater disruptions that could occur in the event of future armed conflict over Taiwan. – M.M.)
US RURAL CARRIERS FACE SUPPLY CHAIN DELAYS: Officials at small and rural telecommunications companies are facing delayed orders and rising prices due to supply chain disruptions and increased costs of raw materials. The telecoms are replacing equipment manufactured by Chinese companies Huawei and ZTE due to the U.S. government concerns that the hardware contains spyware meant to transfer U.S. data to Beijing. (AC: Price increases of as much as 40%, due to the equipment swap out, will likely be passed onto rural and small-town consumers. – M.M.)
HAZARDS/WX:
In today’s Early Warning, we look into lackluster expectations for the Infrastructure bill. Upgrade your Situational Awareness to Early Warning here: https://forwardobserver.com/subscribe