Early Warning for 22 March 2018

Good morning. Here’s your Early Warning for Thursday, 22 March 2018. (All times Eastern.)

Early Warning: The president is expected to announce today another round of trade tariffs aimed at China. Although an initial plan was slated for $30 billion, the number is more likely to come in at $50-60 billion. China is reportedly ready to respond with their own tariffs on soybeans, sorghum, and live hogs; a move which could hurt producers in Trump country and escalate the trade war. President Trump previously said he’s confident that the U.S. could ultimately win. The president is reportedly making arrangements to exempt a number of countries from steel and aluminum tariffs, which might be part of a broader plan to form a coalition that checks China’s unfair trade practices. Still, we could see some volatility in the markets, and longer term ripples in the economy, if a Chinese response is start of a trade war. See today’s Notable Quotable for an alternative look at China’s response.

 

White House
In addition to receiving his daily intelligence briefing, the president is scheduled to sign a Presidential Memorandum targeting China’s unfair economic trade practices. The president will then attend a panel discussion for the Generation Next Summit (an organization of young entrepreneurs), and then celebrate Greek independence day.

 

State Department
Outgoing SECSTATE Rex Tillerson is scheduled to give his farewell address to State Department employees today. Next month, current CIA director Mike Pompeo is expected to be confirmed as the next Secretary of State.

 

Defense Department
SECDEF James Mattis will be meeting with the Saudi Crown Prince and his delegation at the Pentagon today. The top general at U.S. Northern Command (NORTHCOM) is scheduled to give testimony to the Senate today on ballistic missile defense programs.

Aircraft carrier Carl Vinson (CVN-70) remains in the South China Sea, and the Theodore Roosevelt (CVN-71) is operating in the Persian Gulf. Other aircraft carriers are in their home ports, and conflict requiring a Carrier Strike Group does not appear imminent.

The annual Foal Eagle joint U.S-South Korea military exercise will begin on 01 April.

 

Congress
The House and Senate are in session this week and we’ll be covering a number of hearings. (1) House Armed Services Committee hearing on State/Non-State Actor Influence Operations. (2) House Foreign Affairs Committee hearing on China’s Foreign Influence Operations. We’ll generate reporting for subscribers on these hearings, if necessary.

 

Federal Reserve/Economy
(1) Yesterday, the Federal Reserve voted unanimously to raise the federal funds rate, and signaled more interest rate hikes in the future. The Fed is trying to play things “just right” — first to achieve modest inflation and then to avoid causing a recession. (2) In his speech yesterday, Fed chair Jerome Powell spoke about the potential for a trade war with China, saying: “This is a new risk … a low profile risk that has become a more prominent risk to the [overall economic] outlook.”

 

Yesterday’s Significant Reporting
Political infighting hampering Trump’s ability to deal with Putin
U.S. still leads in quantum computing — for now

 

Notable Quotable
“Global supply chains and trade wars. You are China and unhappy about the new tariffs. You identify a few Chinese plants crucial to the supply chains of a couple of US firms. You send a hygiene inspector, who finds a rat, and closes the plant for a month. You are done.” Oliver Blanchard, via Twitter, on how China could respond to U.S. tariffs without raising their own in response


 



Samuel Culper is a former military intelligence NCO and contract Intelligence analyst. After 39 months of deployment time to Iraq and Afghanistan, he's now the conflict and warfare researcher at Forward Observer.

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