Good morning, and welcome to the Global Situation Report for Wednesday, 02 October 2024.
- U.S. PRESSURES MEXICO TO ADDRESS CHINESE INTERNET-CONNECTED VEHICLES: Last week President Biden proposed preventing Chinese software and hardware in connected vehicles, effectively barring Chinese cars and trucks from American markets and banning new vehicles produced in Mexico by Chinese automakers.
- This week Congress sent a letter requesting Mexico establish a national review and send a delegation to the United States by early 2025 for talks.
- China has already positioned itself as a main car supplier in Mexico, with exports reaching $4.6 billion in 2023.
- China has long viewed Mexico as a base for entering the U.S. automotive market and attempting to circumvent tariffs and other regulations.
Why It Matters: The amount of data already produced by Chinese vehicles and components in the United States poses a significant national security threat, and as of yet there are few controls and no way of measuring the impact. Additional restrictions will surely exacerbate tensions with China amid ongoing trade and national security disputes, as well as place a higher premium on vehicles and components in U.S. markets. Mexico’s new president will play an outsized role in these ongoing tensions. – M.N.
- ISRAEL-IRAN SITREP: Here is what we know so far:
- The Strike
- Israeli Defense Forces (IDF) report 200 missile launches from Iran.
- Iran immediately took credit as retaliation for the killing of Hezbollah leader Hasan Nasrallah, an Iranian Revolutionary Guard Corps (IRGC) general attending a meeting with Nasrallah, and the July attack which killed the Hamas leader, Ismail Haniyeh. Iran has promised that this is just the first wave.
- Iran reportedly informed the U.S. and Russia prior to the attack.
- Jordan reportedly intercepted missiles that entered its airspace.
- Casualties so far: one Gaza resident in the West Bank, two lightly wounded in Tel Aviv, and an unspecified number wounded while making their way to shelter.
- The Israeli Response
- The IDF Spokesman Admiral Daniel Hagari has promised retaliation. Iranian officials promised further strikes if Israel retaliates.
- Israeli Prime Minister Benjamin Netanyahu promised retaliation in his address, stating, “Iran made a big mistake and will pay the price for it.”
- The U.S. Response
- President Biden ordered the U.S. military to shoot down missiles headed to Israel.
- West Texas Intermediate and Brent crude each rose about 5% to $72 and $75 per barrel, respectively, in direct response to the attacks. S&P 500 down 1.16% as of this afternoon.
- Pentagon Spokesman General Pat Ryder confirmed two U.S. Navy destroyers fired a dozen interceptors but would not elaborate on their effectiveness.
- Global Rollup
- The U.S. government avoided retaliatory sanctions from China by assuring Chinese officials that the electric vehicle sanctions would not “change everything in the economic relationship,” according to Jay Shambaugh, Treasury undersecretary for international affairs. (China likely views this as U.S. capitulation and will seek similarly weak sanctions in the future. – J.V.)
- The Chinese Coast Guard (CCG) crossed into the Arctic Ocean for the first time yesterday on a joint patrol with Russian Coast Guard ships. The U.S. Coast Guard reported the patrol in the Bering Sea four days ago. (This is China’s latest assertion over the Arctic. China and Russia likely waited to coincide chopping into the Arctic to make the exact day line up with China’s National Day on 01 October 2024 for symbolic purposes. – J.V.)
- Panama’s Maritime Authority announced it will automatically cancel the registration (“deflag”) of any ship caught committing illegal activities or evading international sanctions. (Panama is one of the most prolific ship registries in the world, only falling to the second-largest a couple years ago. This is likely to make a significant impact on smuggling and the “Russian dark fleet” for a short time before they reflag. However, any ship caught in the act will likely have their MMSI and IMO numbers, two unique identifiers for ships, tagged for future tracking and sanctions enforcement. – J.V.)
THAT’S A WRAP: This does it for today’s edition. Thank you for reading. If you know folks who would also like to receive this email, would you please forward it to them? We appreciate you spreading the word. – M.S.