Zerohedge

Authored by James Rickards via DailyReckoning.com,

With so much attention focused on U.S. stock markets, it seems timely to pivot away from stocks for the moment and consider the global perspective. Globalization may be dying in terms of trade and supply chains, but financial markets are inextricably linked in ways that relatively few understand.

King Dollar Still Rules

The dollar still dominates the global financial system despite the cracks in the foundation and the valid criticisms. If there’s a dollar problem in Eurodollar banks, it’s sure to echo from Tokyo to Shanghai and New York. And problems in those locales affect everything else.

I’ve just returned from separate visits to India, Japan and Jekyll Island, Georgia. India has the largest population in the world, has the fifth largest economy, is a nuclear power and a key member of BRICS. Japan is the fourth largest economy in the world and is a key geopolitical ally of the United States in its faceoff with China. Jekyll Island is a lovely ocean resort but is best known as the site of a secret meeting in 1910 where the Morgan, Rockefeller and Warburg interests dreamed up the Federal Reserve System.

I continually urge people to get away from their desks, stop staring at screens and go out and talk to real people. There’s no substitute for walking the streets around the world (including the poorest areas) if you really want to know what’s going on.

While India, Japan and Jekyll Island could hardly be more diverse and geographically scattered, they share a common thread. It’s their economic linkage through the U.S. dollar. The following are some impressions I gathered during these visits that reflect the volatile situation facing markets today.

A Reasonable Response to Tariffs

India and Japan had the most reasoned response to Trump’s new tariff policies. Trump quickly backed off his high “reciprocal” tariffs (27% for India and 24% for Japan) and reverted to his blanket 10% tariff on all imports for every country in the world except China.

Responses varied from retaliation tariffs (proposed by Canada, China and the EU) to a much more reasonable approach of simply asking the White House for a meeting to sit down and discuss the issue amicably with a view to lowering tariffs in both directions. Japan and India fell into this latter category and are being rewarded by being included among the first countries that will actually have that opportunity. (Mexico has also taken the moderate route by engaging in discussions rather than retaliation).

There will be some give and take. Some U.S. tariffs on certain items are likely to remain in place. But the optimal solution is not to cut down on U.S. purchases from those countries but for them to buy more from the U.S.

That trims the U.S. trade deficit without reducing world trade and so constitutes a win-win resolution with both India and Japan. India will likely buy more military hardware and semiconductors from the U.S. Japan will likely buy more agricultural goods including soybeans and beef. The result will be higher growth in the U.S.

Bilateral deals like this have losers. Taiwan may miss out on some semiconductor sales (although they are investing hundreds of billions of dollars to build semiconductors in the U.S.). Russia may miss out on military sales to India although they will remain a major energy supplier. Still, the U.S. is done being the “consumer of last resort” to the world and wants to increase its profile as a seller. Trump’s policies move the U.S. in that direction.

Take Care of Your Own

There is little question that the new U.S. tariff policy will hurt some countries around the world. Not to sound harsh, but that’s their problem. Trump’s job is to make America great again. President Xi’s job is to make China great again. Chancellor-in-waiting Merz’s job is to make Germany great again.

The U.S. cannot carry the world on its back. If other countries (rich or poor) took Trump’s growth-oriented approach instead of free riding on America, the entire world would be better off. That’s certainly the view from the White House and is a good guide to U.S. policy going forward.

Defenders of China point to the fact that Chinese exports are not a particularly large percentage of their total GDP. (Germany is the worst offender by that metric). The problem with that data point does not come from the Chinese export number; I’m sure that’s roughly correct. The distortion comes from the GDP denominator. Chinese GDP is overstated by 100% (at least) perhaps more, and China may already be in a recession.

The reason is that China shows about 45% of its GDP as investment, mostly in the form of government backed construction. I’ve been to the ghost cities in China and seen more on the horizon. I got mud on my boots on the construction sites (except I was wearing Italian loafers). There is real steel, glass and copper in the buildings and it takes real labor to build them. That all counts as GDP.

But they’re all empty. If you used GAAP or international accounting principles, you would write that investment down to zero immediately. You can’t put a ghost city into inventory. Buildings age rapidly and take enormous amounts to maintain. I saw this in the Congo in the early 1980s. They had a commodity boom in the 1970s and wasted much of the money on skyscrapers and other showcase projects.

By the time I arrived there, the windows were falling out and rust stains ran down the sides of their showcases. The same thing will happen in China. Once you make that accounting adjustment for wasted investment, GDP shrinks, and the Chinese export/GDP ratio goes up exponentially. China is much more dependent on exports for any real growth than most analysts realize. Trump and Scott Bessent have this right.

It All Depends on Conditions

Tariffs are not automatically good or bad for an economy. Their impact depends on initial conditions when the tariffs are imposed. Tariffs are a tool that should be applied judiciously. A country that overinvests and under consumes will be hurt by tariffs. The tariffs will increase investment and restrain consumption, making the imbalance worse. That’s what happened to the U.S. under the Smoot-Hawley Tariffs in 1930 and later.

A country that over consumes and underinvests will benefit from tariffs. That’s the situation in the U.S. today. The tariffs will increase investment as foreign and domestic investors build new plants behind tariff walls. Tariffs will channel consumer dollars from consumption into savings, which is also desirable. In the end, consumption will expand not because of cheap imports but because of high-paying U.S. jobs.

China is in the category that overinvests (much of it wasted) and under consumes. China’s best strategy would be to lower its own tariffs and allow its people to spend their savings on imported goods from the U.S. and EU along with their own production. That would reduce China’s trade surplus with the U.S., increase China’s GDP and improve the well-being of its own people. It would also make an excellent opening move in any effort to get the U.S. to reduce its tariffs on China.

The U.S. is making good use of tariffs. China is doing the opposite. China may be fighting to a draw in the rhetorical war, but it will definitely lose the trade war. Japan, India and Mexico are models of how to make progress. China is the poster child for how to fail.

Global supply chains will no doubt be disrupted by the tariff and trade wars now erupting. Reconfiguring supply chains will be a one-to-two-year transition. But once it’s done, the new supply chains will prove durable. Volkswagen blundered badly by putting its new Audi Q5 plant in Mexico. Their U.S. sales are booming right now (beat the tariffs!) but will fall off a cliff once dealer inventories are drained and tariffs apply. Still, that’s a management blunder not a global disruption. Supply chains are adaptable with a lag. U.S. soybeans will soon be on their way to Japan if China doesn’t want them.

As an aside, Elon Musk’s shelf life in the White House pantry will soon expire. Musk sparked a pointless feud with White House trade and manufacturing czar Peter Navarro. I know Peter fairly well (a conversation with him is like a graduate level oral exam but that’s another matter). When Elon attacked Navarro, he messed with the wrong guy. Navarro took a bullet for Trump by serving four months in a federal penitentiary rather than answer a subpoena that sought to pierce the veil of executive privilege between the two. That’s the kind of loyalty Trump respects. Navarro also happens to be right about tariffs despite Musk’s whining.

The Silent Financial Crisis

With regard to the Federal Reserve System that emerged from the swamps around Jekyll Island, the Fed has fallen into complete irrelevance. They have modest impact on the short-end of the yield curve (Treasury bills) but have no material impact on the intermediate- and long-end of the yield curve (Treasury notes and bonds).

U.S. national debt and spending will never be brought under control. But sustainable growth can be stimulated by sound fiscal policies, if not by the Fed. As long as nominal growth is greater than nominal debt increases, then the U.S. debt-to-GDP ratio will shrink. That’s the simple formula behind Scott Bessent’s Three Arrows plan and it can feed on itself in a virtuous circle.

What the Fed and the Treasury have done (mostly under Biden) is to create a global dollar shortage, which is now morphing into a global liquidity crisis. China is not dumping Treasuries because they’re distancing themselves from the dollar. Quite the opposite. China is selling Treasuries because they’re desperate for dollars and can’t get them from Japanese banks who have their own problems with carry trade unwinds.

The liquidity crisis then goes back to European banks who can’t fund in Eurodollars and U.S. hedge funds who can’t find collateral to support their derivatives basis trades. India is not immune.

The best description of a financial crisis I’ve ever heard is that “Everybody wants his money back.” We’re dangerously close to that situation right now. If it gets worse, trade, tariffs and stock markets will be a sideshow. Watch Treasury yields and foreign exchange markets if you really want to know what’s going on.

Russia’s top military leaders as well as President Vladimir Putin have on Saturday declared the full liberation of Russia’s Kursk region, after Ukrainian forces invaded and occupied huge swathes of it starting last August.

The final fight was for the village of Gornal, which lies on the Ukrainian border. Fighting on the vicinity of the settlement became fierce earlier this month, and the tide was definitely in Moscow forces’ favor after the capture of a key monastery complex. Russian forces accused the Ukrainian army of using the monastery as a military forward operating position.

Putin in a Saturday video address thanked Russian service members “who took part in defeating the neo-Nazi groups” who for over six months held hundreds of square kilometers of sovereign Russian territory. He declared the utter ‘failure’ of the invasion attempt.

“The Kiev regime’s adventure has completely failed, and the huge losses suffered by the enemy, including among the most combat-ready, trained and equipped, including by Western models of equipment… will certainly be reflected along the entire line of combat contact,” he said.

Chief of the general staff Gen. Valery V. Gerasimov, informed Putin that the military had “completed the defeat of the Ukrainian armed forces that attacked the Kursk region.”

At the height of the cross-border offensive which began last August, Ukraine’s military had seized just over 530 square miles, but regional reports beginning last weekend said that significant figure was down to less than just 20 square miles. Gornal was the last Ukrainian holdout in Russian territory.

President Putin’s video announcement:

‘I congratulate all personnel of all military units that took part in the defeat of neo-Nazi formations that invaded Kursk’ — Putin

‘The defeat of the neo-Nazi regime is approaching’ https://t.co/qEfZI7b4gE pic.twitter.com/bZImKeVHtW

— RT (@RT_com) April 26, 2025

The operation to retake Kursk had clearly become more highly prioritized by the Kremlin over the last couple months, and likely Putin wanted to achieve its full liberation quickly as talks with the US are underway in order to avoid negotiating an exchange of territory. What little leverage Zelensky had regarding Kursk has now been effectively quashed. 

The timing seems intentional as the White House has admitted that Zelensky holds none of the cards. This without doubt puts Moscow in even more control both on the battlefield and at the negotiating table.

Authored by Jonathan Turley,

“This is not normal.” Those words from Sen. Amy Klobuchar, D-Minn., are undeniably true after the arrest of Wisconsin Judge Hannah Dugan. However, the reason it is not normal is far more debatable. Dugan is accused of becoming a lawbreaker in seeking to obstruct an effort to arrest a man wanted by federal authorities. If true, that is manifestly not “normal.”

As soon as the news of the arrest was reported, Democrats declared another constitutional crisis. Klobuchar added that the arrest “is a drastic move threatening the rule of law” and a “grave step and undermines our system of checks and balances.”

That is a curious claim unless Klobuchar believes that the officers are lying. If not, Klobuchar is suggesting that a judge should be allowed (or at least not held accountable) for actively shielding a wanted person and facilitating their evasion of law enforcement.

Sen. Tina Smith, D-Minn., also condemned Dugan’s arrest, stating, “If [FBI Director] Kash Patel and Donald Trump don’t like a judge, they think they can arrest them. This is stunning — we must stand up to this blatant power grab. Republicans: How is this not a red line for you?”

Yet, what is the “red line” for judges if the allegations are true? This judge is accused of conduct that has resulted in charges for other citizens. The judicial robe is not some form of invisibility cloak that allows judges to engage in alleged criminal acts.

The Wisconsin media is reporting:

Sources have told the Journal Sentinel that ICE officials arrived in Dugan’s courtroom on the morning of April 18. When they went to the chief judge’s office, Dugan directed the defendant and his attorney to a side door in the courtroom, directed them down a private hallway and into the public area on the 6th floor.

If true, that would be an active effort to help the suspect elude police who were carrying out a lawful function.

According to the criminal complaint, Flores-Ruiz allegedly attacked three individuals after an altercation with his roommate about playing loud music. Flores-Ruiz allegedly struck his roommate approximately 30 times with a closed fist and then attacked his girlfriend and a third person. Some of the injuries required hospital treatment.

The evasion of police at the courthouse required officers to chase down Ruiz, which could have resulted in a more serious confrontation on the street.

This is not the first time that a judge has been accused of participating in or directing such obstruction.

I previously wrote about the case of Massachusetts judge Shelley M. Richmond Joseph who was charged with allegedly helping an illegal immigrant evade ICE agents in April 2018. Joseph and court officer Wesley MacGregor were charged with conspiracy to obstruct justice, obstruction of justice, aiding and abetting and obstruction of a federal proceeding.

I was critical of the handling of the case. While Joseph was suspended for three years, charges were dropped in 2022 during the Biden Administration.

The Dugan case occurred at the same time that a New Mexico judge was arrested for harboring an unlawful immigrant and an alleged TdA gang member.

Former Doña Ana County Magistrate Judge Joel Cano and his wife were arrested on Thursday. Notably, Cano reportedly admitted to officers that he smashed the phone of Cristhian Ortega-Lopez after the 23-year-old was arrested in a raid at the judge’s home.

As I said on Fox last night, I am perplexed by Democrats rushing to denounce the arrest of Dugan before we know whether these allegations are supported. If she escorted the suspect to a non-public door to facilitate his escape, that is conduct and would constitute a shocking abandonment of judicial ethics. She can certainly use her authority to address matters properly before her in the form of judicial orders, but actively assisting in an escape is well beyond the pale.

I have often criticized the reckless rhetoric directed against judges, including those who have ruled against the Trump Administration. We need to maintain our civility and respect as we work through these often difficult questions.

However, that works both ways. Judges have to reinforce respect for the judiciary in their own conduct. That includes showing restraint and respect in relation to the countervailing powers of the Executive Branch. It certainly includes avoiding actions that could be viewed as criminal or unethical in resisting this Administration.

That is also a “red line.”

*  *  *

Jonathan Turley is the author of best-selling book “The Indispensable Right: Free Speech in an Age of Rage.” 

Indian and Pakistani troops have exchanged border fire for a second straight day, in an increasingly volatile and highly dangerous crisis which could develop into full-scale war between longtime nuclear-armed rivals.

Islamic militants killed 26 Indian tourists who had been in a picturesque, mountainous and popular spot in Indian-administered Kashmir on Tuesday. India quickly blasted Pakistan for harboring terrorists in the disputed border area, a charge which Pakistani leaders vehemently rejected, instead suggesting it was a ‘false flag’ orchestrated by New Delhi.

Pakistan’s PM Sharif meanwhile said his country is ready to defend its sovereignty but offered willingness to establish a “neutral” international investigation into the attack.

Days into the crisis and land borders have been shut, visas and military exchange programs mutually canceled, and a landmark water treaty has been suspended.

Al Jazeera writes that Indian “Armed police and soldiers are searching homes and forests for fighters in Kashmir, and India’s army chief reviewed security in the region,” amid the hunt for the killers.

As for the two consecutive days of border fire, it’s unclear precisely where this took place or whether either side took on casualties. Several military outposts reported exchanges of fire.

On former diplomat has warned the region could descend into full-blown war:

Maleeha Lodhi, a former Pakistani diplomat, has told Al Jazeera that there is “a somber mood” in Pakistan with a great deal of apprehension about what might happen next.

“The tensions between the two countries have already pushed the region into an uncharted territory,” she said.

Lodhi added: “The nuclear neighbors are on the brink of a more dangerous confrontation, so there are fears, especially because of speeches by Prime Minister Modi as well as the Indian media.”

Below is President Trump’s reaction aboard Air Force One…

#WATCH | On #PahalgamTerroristAttack, US President Donald Trump says, “I am very close to India and I’m very close to Pakistan, and they’ve had that fight for a thousand years in Kashmir. Kashmir has been going on for a thousand years, probably longer than that. That was a bad… pic.twitter.com/R4Bc25Ar6h

— ANI (@ANI) April 25, 2025

According to Reuters, citing military sources:

The Indian Army said it had responded to “unprovoked” small arms fire from multiple Pakistan Army posts that started around midnight on Friday along the 740-km (460-mile) de facto border separating the Indian and Pakistani areas of Kashmir. It reported no casualties.

Indian Prime Minister Narendra Modi has vowed to pursue the attackers to “the ends of the earth” and a significant military build-up has been observed in the Jammu and Kashmir regions. Likely Pakistan is also sending additional troops.

On top of everything, Indian airlines are having to reroute all of their flights to avoid Pakistani airspace, amid tit-for-tat airspace closures. The tensions have had a negative effect on Indian markets, also as business brace for higher costs.

Authored by Steve Watson via Modernity.news,

Weird AI videos and pictures depicting President Trump and Vice President JD Vance are being virally shared on Chinese social media as a response to the ongoing tariff trade war.

The videos, widely shared across platforms like TikTok, Douyin, and X, depict Trump as (ironically) a Communist dictator and Vance as “eyeliner man,” poking fun at their policies and public personas.

The meme campaign began in response to Trump’s aggressive tariff hikes on Chinese imports, which Vance defended on Fox News, controversially referring to “Chinese peasants.”

The CCP’s propaganda is taking aim at the Trump administration.

An AI-generated music video, inspired by the iconic 1960s revolutionary song “We March on the Great Road,” features characters resembling Trump, Vance, Secretary of State Marco Rubio, and Elon Musk, all holding… pic.twitter.com/U8DfB0Boxz

— NFSC Red Leaf Canada (@hli953777191713) April 25, 2025

Chinese commentators using state-backed accounts have been producing odd content that reimagines Vance in drag with exaggerated makeup or as Chairman Mao, while portraying Trump in absurd scenarios, like applying mascara to Vance in a pink bedroom.

China continues to troll VP Vance and President Trump 👀 pic.twitter.com/mJcoO0vh3M

— Ai Times (@timeforainews) April 25, 2025

One notable video, racking up hundreds of thousands of views, features a satirical “Song of MAGA” with Trump, Vance, secretary of state Marco Rubio and Elon Musk marching through the streets under red socialist banners, carrying Chairman Mao’s ‘Little Red Book’.

The lyrics of the song are changed to ‘Led by Chairman Trump, we shout “MAGA”,’ with the footage then depicting the four working in a factory wearing blue overalls, an attempt to mock Trump’s efforts to revive domestic manufacturing in the US.

The memes also contend that Vance’s “luscious lashes” will cost more due to tariffs, while some suggested halting eyeliner exports as “precision retaliation.”

🇺🇸🇨🇳 They thought they could wage an info war on China.
Then AI entered the chat… and it wasn’t on their side.

Chinese netizens just digitally dismantled Trump’s ex-press secretary and Senator Vance – turning them into virus-themed memes that went viral for all the wrong… pic.twitter.com/ZEDM4h8l1J

— 𝘊𝘰𝘳𝘳𝘪𝘯𝘦 (@OopsGuess) April 21, 2025

Earlier this week, Trump appeared to suggested a potential de-escalation with regards to the tariffs on China, noting that the high tariffs on Chinese goods, currently at 145%, will “come down substantially, but it won’t be zero.”

He further emphasised that the tariffs “won’t be anywhere near that high” and expressed a desire to avoid playing “hardball” with China, indicating a willingness to negotiate a deal.

Trump also claimed that the U.S. and China are “actively” discussing tariff resolutions, though China’s Foreign Ministry contradicted this on Thursday, stating that no consultations or negotiations have occurred.

On Friday, reports emerged that China has exempted certain U.S. goods from its 125% retaliatory tariffs, focusing on semiconductors and integrated circuits. The Shenzhen HJET Supply Chain announced on Chinese social media that eight tariff codes related to these products were reduced to zero, a move confirmed by multiple businesses and reported by Reuters.

Additionally, some U.S. pharmaceutical products, medical gear, and aerospace equipment parts, such as engines and landing gear, have also been granted exemptions, as noted by the American Chamber of Commerce in China and French company Safran.

*  *  *

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Authored by Ryan Morgan via The Epoch Times (emphasis ours),

Defense Secretary Pete Hegseth expressed his dismay on April 25 after a new report found that more than two-thirds of U.S. military reserve personnel are overweight.

Washington-based think tank American Security Project (ASP) published a white paper this week that found that nearly 68 percent of reserve troops are overweight or obese.

In 2018, when the Department of Defense last surveyed obesity rates in the reserve military components, it found that around 65 percent of reserve troops were considered overweight or obese.

“The number of young adults interested in military service remains sufficient to maintain current force strength. However, as overweight and obesity disqualify thousands of applicants each year, services are incentivized to violate body composition enlistment standards to meet recruitment goals,” the new ASP report reads.

Hegseth took to social media platform X on Friday to call the report’s findings “completely unacceptable.”

“This is what happens when standards are IGNORED — and this is what we are changing. REAL fitness & weight standards are here,” the defense secretary said. “We will be FIT, not FAT.”

HEGSETH: “Troops… need to be fit, not fat.” pic.twitter.com/qhZuLwM3Hn

— Daily Caller (@DailyCaller) April 23, 2025

Fitness standards remain a multi-faceted challenge for the military.

The Army rolled out its Future Soldier Preparatory Course in 2022 as a means of helping prospective recruits meet the minimum fitness and academic standards to serve. The Navy launched a similar preparatory course in 2024.

While pre-ascension courses can help prospective recruits get in shape to serve, the ASP report raises concerns about current active and reserve component members.

“Although the reserve component’s obesity-related challenges are similar to those in the active component, commanders and policymakers will not be able to combat these trends with a uniform approach,” it reads.

The report notes that reserve components face unique challenges in keeping their troops in shape.

“Armed with far less data and public attention, the reserve component faces an uphill battle reconciling complex systems of duty status-dependent health care benefits, a force spread all over the world and across 54 states and territories, and critical medical records siloed between DOD and private providers,” it reads.

Last month, the defense secretary ordered a military-wide review of fitness standards.

Hegseth had been outspoken about his concerns with fitness standards in the military even before taking on his current role as the defense secretary. Several of his past comments have focused on whether women should serve in combat roles.

During his confirmation process, senators asked Hegseth to elaborate on his views on women in combat and other issues concerning military fitness standards.

“It’s not about the capabilities of men and women, it’s about standards,” he said.

Update (1338ET):

Iranian state-owned news media Press TV reported that at least four people died and 700 were injured after a fuel tanker exploded for unknown reasons at Shahid Rajaee port in Hormozgan Province.

A separate report from the Associated Press said the explosion that rocked Iran’s second-largest container port—located on the Strait of Hormuz, a critical maritime chokepoint—originated from containers reportedly linked to chemical ingredients linked to missile propellant.

The state-run IRNA news agency said that the Customs Administration of Iran blamed a “stockpile of hazardous goods and chemical materials stored in the port area” for the explosion at the port. The outlet did not provide details on the chemical ingredients.

In this aerial footage of the Iran port explosion there are three locations- with some distant from one another- burning. Iran says investigations are pending. pic.twitter.com/44dNYYE1Gz

— Farnaz Fassihi (@farnazfassihi) April 26, 2025

With one of Iran’s largest commercial ports paralyzed, the economic disruption could be devastating for Tehran:

Trade Disruption:

• Shahid Rajaee handles 85% of Iran’s total cargo traffic.

• Disruption would effectively spark supply chain disruptions for Iran’s import-export economy, causing shortages of consumer goods, industrial equipment, food, and medicines.

• Iran’s limited alternative ports (like Chabahar) would have trouble absorbing even a fraction of that volume quickly.

Oil and Fuel Export Disruption

• The port is a major terminal for refined oil products (gasoline, naphtha, gas condensate, etc.).

• Iran already faces sanctions on crude oil; losing its refined product export capacity would cut off a key source of hard currency.

• This would intensify Iran’s already precarious foreign exchange crisis, sending the rial lower.

With Shahid Rajaee Port in chaos and closed, the question now is: What will be Tehran’s economic fallout?

Also keep in mind, this blast occurred just as Iran and U.S. officials wrapped up the third round of negotiations in Oman’s capital of Muscat. 

*   *   * 

 

At least 500 people were injured after a massive explosion rocked Iran’s largest and most strategically significant maritime hub in the southern Hormozgan Province on the Strait of Hormuz. 

Iranian state media outlet Tasnim reported that the blast occurred on Saturday at the Shahid Rajaee Port. The outlet said, “The port remains in a state of chaos,” and many buildings have been destroyed. 

#Iran Emergency Department spokesperson: The number of injured from Shahid Rajaee Port explosion reaches 516. https://t.co/h0FIYU3eaR pic.twitter.com/OL7HWMqrOD

— Iran Nuances (@IranNuances) April 26, 2025

Visual confirmation that the explosion at Rajaiee port of #BandarAbbas took place in a previously known depot of Bana Gostar company which the #IRGC Quds Force had often stored ammunition and explosive material in containers prior to be exported to its proxies from #Iran. https://t.co/3FQTdWvrjI pic.twitter.com/4WG9bSO6QC

— Babak Taghvaee – The Crisis Watch (@BabakTaghvaee1) April 26, 2025

Tasnim reported that a fuel tank had “exploded for an unknown reason,” and port operations had been shuttered. A report from the state media outlet IRIB stated that the explosion occurred in the port’s chemical and sulfur area. 

Footage shows the moment a powerful blast struck Iran’s Shahid Rajaee port in Bandar Abbas.

Follow our live blog for the latest updates on the explosion at Iran’s southern port:https://t.co/oNw2zJ2IAl pic.twitter.com/TguPLizIbB

— Iran International English (@IranIntl_En) April 26, 2025

BREAKING | A massive explosion has been reported at the Port of Shahid Rajaee, one of two sections within the Port of Bandar Abbas, located on the north shore of the Strait of Hormuz in southern Iran.

According to Mehr News Agency, a fuel tank in the port exploded due to unknown… pic.twitter.com/vN8r4yHyCT

— The Cradle (@TheCradleMedia) April 26, 2025

Designated as a Special Economic Zone, Shahid Rajaee Port handles about 85% of Iran’s total port cargo operations. Its annual capacity is about 70 million tons, including 6 million TEUs of containerized cargo. The port spans 2,400 hectares and features 40 berths and 19 hectares of warehouses.

The port also serves as a critical node for Iran’s oil exports, equipped with docks that can accommodate large tankers. These facilities enable the annual export of around 34 million tons of oil products, including gasoline, naphtha, gas condensate, marine fuel, and mazut. 

At the same time, Iran and U.S. officials began the third round of negotiations in Oman’s capital of Muscat about the fate of the Islamic Republic’s nuclear program. Here’s more color on the second round.

The negotiations aim to suppress Iran’s nuclear program in exchange for the U.S. lifting some economic sanctions it has imposed on the Islamic Republic. 

President Trump has threatened to launch airstrikes targeting Iran’s critical infrastructure if a deal is not reached. 

Last month, the U.S. began deploying stealth bombers to Diego Garcia—often referred to as Washington’s “unsinkable aircraft carrier”—located between Africa and Indonesia, about 1,000 miles south of India. The island serves as a critical launch point for stealth bombers in the event of a war with Iran. Staging the bombers on the island, well within striking distance, has made Tehran deeply uncomfortable.

Let’s take a step back to an October op-ed in The Wall Street Journal, penned by David Asher—a senior fellow at the Hudson Institute and a former U.S. State Department official who worked on counterterrorism operations in the Middle East—who advocated for neutering the Iranian regime’s “oil-export capacity to deprive the regime of its financial lifeblood.” 

Any event on the critical maritime chokepoint of the Strait of Hormuz—such as an explosion at a major port—could spark uncertainty among energy traders and push Brent crude futures higher on Sunday evening.

Already rattled by the Trump administration’s efforts to slash its bloated ranks, the US government employee workforce is about to be hit with a new source of agitation, as House Republicans are proposing to cut benefits and increase premiums associated with federal employee pensions. As is typically the case where the timing of potentially controversial news is concerned, the announcement of the proposed cost-cutting moves came on Friday night, via House Oversight Committee and Government Reform Committee Chairman James Comer. 

House Republicans are working to identify at least $2 trillion in spending cuts to put a dent in the price of extending the broad tax cuts instituted by 2017’s Tax Cuts and Jobs Act (TCJA), which is slated to expire on Dec. 31. Comer said the proposed changes to federal employee pensions would yield more than $50 billion in reduced net federal spending. Engaging in the usual DC budgetary obfuscation, Comer’s statement doesn’t assign that number to a time period — knowing naive citizens and journalists will assume it’s a recurring annual benefit. However, from another document circulating on Capitol Hill, we conclude he’s talking about savings over a 10-year period. 

The most substantial of the proposed changes would increase pension premiums that longer-tenured employees pay into the Federal Employee Retirement System (FERS). Today, those premiums, which are automatically deducted from salary payments, vary by the year in which an employee entered federal service:

• 2012 and earlier: 0.8%
• 2013: 3.1%
• 2014 and after: 4.4%

The Oversight Committee proposal does away with that distinction, seeking to charge all employees in the FERS system a uniform 4.4%, raising $30.7 billion in revenue over the next 10 years. A little under half of federal employees are paying less than 4.4% today, according to FEDweek. The rate hike is projected to boost revenue by $30.7 billion over 10 years. 

Another proposal takes aim at one of those rich government benefits that are virtually unheard-of in the private sector. Believe it or not, long-serving federal employees who retire with a full pension before Social Security age currently receive a supplemental payment on top of that calculated pension. The “FERS Annuity Supplement” is supposed to approximate their age-62 Social Security income attributable to their federal employment. The head-scratchingly lavish goal: Saving early retirees from having to make do with less total money than they’ll eventually rake in at age 62 — even though they’re receiving a full federal pension in the interim. Oversight Committee Republicans want to kill the supplement — except for federal employees in jobs subject to mandatory early retirement, such as federal cops and firefighters. (God forbid we apply austerity measures to these “heroes” retiring at 57 on a hefty, inflation-adjusted federal pension.) Projected savings from this move: $10.1 billion over 10 years. 

A third move would change how pension payments are calculated in both FERS and the Civil Service Retirement System (CSRS), the latter of which generally covers some employees hired before Jan. 1. 1984. Today’s formula keys off the average of a given employee’s highest three years of earnings; the committee wants to change that to the highest five years, projecting $4.75 billion in savings in 10 years.  

In a non-pension move, the House GOP proposal also has a provision requiring a “comprehensive audit” of employee dependents currently enrolled in Federal Employees Health Benefits (FEHB) plans. By dis-enrolling ineligible relatives, it’s hoped the audit will save $1.5 billion over 10 years. 

The Oversight Committee will have a full markup meeting to consider, debate and potentially amend these and other cost-cutting proposals at 10am on Wednesday. Once finalized, they’ll be added to President Trump’s promised “big, beautiful bill” that Republicans hope to pass by summertime. 

In the meantime, here comes another round of leftist wailing and gnashing of teeth...

Submitted by American Truckers United‘s Gord Magill, 

The American trucking industry continues to face a growing number of challenges in 2025, with economic turbulence downstream of President Trump’s tariff reforms merely the latest bump on a very poorly maintained road. Many within the freight, logistics, and supply chain industries are predicting the ride to get even bumpier, with thousands of trucking companies at risk along the way. Will small-time trucking businesses survive?

An aspect of supply chain shocks experienced during Covid is known as the ‘accordion effect’, where a disruption in one part of the chain take time to be felt in another, but then the shock arrives at speed, good and hard. This tweet offers an explanation of Trump’s tariffs and how that shock is expected to affect trucking.

“The White House has put itself and the country in a bad situation but doesn’t realize it yet. Around April 10th China to USA trade shut down. It takes ~30 days for containers to go from China to LA. 45 to Houston by sea, 45 to Chicago by train. 55 to New York by sea. That means that there are no economic effects of what was done on April 10th until about May 10th.

“Around that time (it’s already started to happen) trucking work is going to dry up. Warehouses will start doing layoffs because no labor is needed to unload containers and some products will be out of stock, reducing the need for shipping labor.”

The White House has put itself and the country in a bad situation but doesn’t realize it yet.

Around April 10th China to USA trade shut down.

It takes ~30 days for containers to go from China to LA.

45 to Houston by sea, 45 to Chicago by train.

55 to New York by sea.

That… pic.twitter.com/8vnGDMWCpt

— molson 🧠⚙️ (@Molson_Hart) April 24, 2025

The problem for America’s truckers is that the situation is already dire, and has been for some time. News of small and medium-sized trucking companies going out of business has been a near-daily occurrence since 2023, and that is just what we know from being reported – how many single-truck independent owner-operators have gone out of business in the same time? Tracking those numbers is very difficult to almost impossible, over and above the cavalier attitude from the government towards the plight of these people.

How many more will go out of business given predictions that already below cost trucking rates are going to go even lower?

“In 2008, some of the largest truckload carriers offered to haul freight at $.80/mile to anywhere. They simply wanted to cover driver wages and fuel, but keep the trucks moving to avoid losing all of their drivers. If things get bad, it could happen again.”

In 2008, some of the largest truckload carriers offered to haul freight at $.80/mile to anywhere. They simply wanted to cover driver wages and fuel, but keep the trucks moving to avoid losing all of their drivers.

If things get bad, it could happen again.

— Craig Fuller 🛩🚛🚂⚓️ (@FreightAlley) April 26, 2025

How did the trucking market find itself in this position?

The market for truck drivers has long been juiced by the government, as they have been deceived by mega carriers and their corporate lobbyists into believing that there is a shortage of truckers. This narrative has existed for decades now, and has resulted in one of the longest-running stealth corporate welfare programs in the nation, where the taxpayer shovels out millions upon millions of dollars at these carriers to finance the training of new drivers, without anyone ever asking why the industry can’t keep them around. If the taxpayer wasn’t on the hook for a system that burns through so many people that many trucking companies have 90% plus annual turnover rates, the market would have maintained its own equilibrium. 

Another way the government has flooded the market is through the use and misuse of insourced labor. Under the 2021 ‘Biden Harris Trucking Action Plan’, an apparent scheme began to take place where ‘red tape’ cutting resulted in many states handing out CDLs to migrants and refugees, part of which was made possible by loopholes created during the Obama Administration that saw enforcement of English language proficiency requirements for CDL holders waived. Statistics compiled by American Truckers United…

🚨BREAKING: ATU EXCLUSIVE🚨

American Truckers United has uncovered SHOCKING CDL activity in 10 key “Labor Dumping” states (TX, CA, FL, IL, MN, NY, OR, SC, KY, NV) + Puerto Rico!

📈Check the data: Skyrocketing CDL counts, for newly registered carriers (e.g., Oregon’s 98,899… pic.twitter.com/yWG0JtzR5H

— American Truckers (@atutruckers) February 20, 2025

… indicate that production of CDLs doubled from 2021 to 2022. Of course, this flooding of the market by Biden was going to result in fierce rate slashing and many trucking companies going out of business.

And also…

I’m so glad we flooded the country with people who can’t speak English to drive 80,000lbs road missiles. https://t.co/ImOEUajPNO

— Γρηγόριος 🇬🇷 🇺🇸 (@realgreggd) April 26, 2025

Yet in the face of this, companies largely made up of migrants continue to thrive.

What gives? Even the American Trucking Association, whom have been artificially inflating the number of truckers for decades, has had to admit there is a problem here. In a recent interview given to Overdrive Magazine, the ATA appears to be cynically attempting to get ahead of a problem they themselves have caused and benefitted from, citing problems discussed years earlier by the likes of American Truckers United.

“In a recent letter to Department of Transportation Secretary Sean Duffy, ATA President Chris Spear, echoing what the Owner-Operator Independent Drivers Association recently told Congress, called for DOT to “begin better tracking the number of new CDLs issued on a state-by-state basis, including, but not limited to, the number of non-domiciled CDLs that are issued on an annual basis.””

Is DOT Secretary Duffy listening to anyone, though? His publicly available commentary about the trucking industry has been sparse to non-existent; he appears to be busy attempting to define what an astronaut is instead.

The U.S. commercial space industry is an inspiring project which showcases American ingenuity and exceptionalism. But the last FAA guidelines under the Commercial Space Astronaut Wings Program were clear: Crewmembers who travel into space must have “demonstrated activities during… https://t.co/n2DxpNh4Hy

— Secretary Sean Duffy (@SecDuffy) April 17, 2025

America’s truck drivers are facing a crisis: A massive problem created by the Biden Administration now runs into the corrective economic measures taken by Trump’s tariff program, which will include an uncomfortable period of trade rebalancing. As ZeroHedge describes in the note “All Quiet On The Western Ports… Is This The Calm Before The Trade War Storm?”

Secretary Duffy, along with new FMCSA head Derek Barrs, must immediately investigate what went on with Biden’s ‘Trucking Action Plan’ and how it flooded the market with insourced labor of dubious skill and even more dubious legality, and take steps to remove that insourced labor from the roads by enforcing existing laws which are meant to keep the American motoring public safe, and the domestic trucking market functional. 

American Truckers United’s Shannon Everett warned: “If we don’t act swiftly, a tidal wave of American trucking companies will face bankruptcy, accelerating a devastating replacement cycle that could cripple the industry.” 

NATO Secretary General Mark Rutte after meeting with President Donald Trump and Norway’s PM Jonas Gahr Støre on Thursday proclaimed that all Western leaders, including Trump, are on the same page viewing Russia as a “long-term threat” to NATO territory.

Rutte was optimistic about Trump helping to potentially end the Russia-Ukraine war, saying that “huge steps” have lately been made which put the onus on Russia to respond by displaying positive action or making concessions.

But it’s clear there’s a lot of tensions and discomfort in the Western military alliance given the optics of more US pressure being brought to bear against Ukraine and Zelensky in particular. This has been seen in the back-and-forth over the fate of Crimea.

Trump on Wednesday unleashed immense criticism on the Ukrainian President for his rejection of a US plan that would given recognition of Russian sovereignty over the Crimean Peninsula. Trump had said on Truth Social in reference to Zelensky,  “if he wants Crimea, why didn’t they fight for it eleven years ago when it was handed over to Russia without a shot being fired”… and “He can have Peace or, he can fight for another three years before losing the whole Country.”

It’s clear that Rutte’s trip to Washington was in large part about lobbying Trump to take the pressure off Zelensky. A prior Financial Times  report had said Rutte would urge the White House “not to force Ukraine to accept a peace deal against its will.”

Presumably this message was also conveyed in the NATO chief’s meetings with Defense Secretary Pete Hegseth, Secretary of State Marco Rubio and National Security Adviser Mike Waltz on Thursday. 

A NATO official had told FT, “The key message is making the Americans understand what’s at stake.” Western officials and mainstream media have at times described Trump’s latest messaging on the conflict as outright ‘pro-Russian’. Trump had said Thursday that Russia’s main concession to Ukraine is not taking over the whole country, which were viewed as highly provocative remarks.

Meanwhile, Trump told reporters Friday, “We’re meeting with Putin right now as we speak” – in reference to Steve Witkoff being in Moscow. “We have a lot of things going on, and I think at the end, we’re going to end up with a lot of good deals, including tariff deals and trade deals, but we’re going to try to get out of war.” He added that he thinks “we’re pretty close” to achieving a peace deal.

Among other things the Russian side has demanded the cessation of Western arms and ammo to Ukraine, but Washington wants Ukraine to be able to maintain the ability to react forcibly, which contradicts Moscow’s desire for the full demilitarization of the country.

* * *

Meanwhile, independent journalist and political commentator Michal Tracey has a strong note of caution regarding where things actually are regarding progress on Ukraine peace…

The most generous interpretation of Trump’s negotiating strategy thus far is that he’s made relatively cost-free conciliatory gestures to Russia, which Putin has to some degree reciprocated. This makes sense, as the party against whom US military assets have been arrayed is Russia, and there had been little or no high-level US/Russian contact for several years.

In order to achieve a settlement to the war, there would have to be some “detente” with Russia, as the cut-off in contacts between 2022-2025 was a huge historical aberration. Even during the most fraught Soviet days, never had there been any comparable cut-off in contacts between the world’s leading nuclear powers. Trump has simultaneously taken a publicly aggressive line toward Ukraine. This also makes sense, as Ukraine is a US client state, and it’s over Ukraine that the US has leverage — not necessarily Russia.

The Biden Administration’s incessant mantra had been “nothing about Ukraine without Ukraine,” thereby purporting to displace US policy agency onto Ukraine, despite the US obviously having the ultimate agency as arms supplier, intel-provider, NATO leader, etc. Trump has shifted that fictional “agency” calculus.

But leaving aside the public gestures and diplomatic posturing (while important), the policy status quo to a large extent persists. US sanctions have not been adjusted. Aside from a brief interruption in March, US arms continue to flow to Ukraine. Europe is re-militarizing, however fitfully. Ukraine has no credible plans to take back major territory currently occupied by Russia. Thus the principal concession that would have to be obtained at this point, in terms of the underlying power dynamic, is from Russia.

Freezing the conflict along the current lines had been previously denounced by Putin as intolerable. Now we hear that the outline of the Trump proposal includes not just freezing the current lines, but allowing Ukraine to control significant parts of what Putin has declared to be eternal territory of the Russian Federation. Along with the US taking control of the Zapohirizia nuclear plant (also located on territory annexed by Putin.) Russia would further be required to abandon its original war aim of “demilitarizing” Ukraine, although it’s possible that this provision could be subject to technical modifications.

All the while, there’s no indication that US/EU/NATO would cease arming Ukraine under the “ceasefire” framework. If anything, the armament could intensify, as Norway’s prime minister pledged in a meeting today with Trump. It’s very easy to imagine Russian “milbloggers” and hawks being utterly infuriated if Putin were to accept the terms proposed by Trump — at least as they have been publicly reported. It could easily be spun as a capitulation by Russia.

US recognition of Crimea might be a nice side perk, but it may not have much direct bearing on the core grievances that gave rise to the 2022 invasion. Russia has never been in serious jeopardy of losing Crimea, so US recognition in practice would be a mostly legalistic change. In totality, it makes little sense for Trump to publicly antagonize Putin at this time. (Notwithstanding his “Vladimir, STOP!” post, which is pretty mild all things considered.) Whether the public gestures are sufficient for Putin to accept ceasefire terms that could be easily spun as a capitulation remains in considerable doubt — but it’s not IMPOSSIBLE that a settlement of some sort could be achieved, if Putin is willing to significantly scale down his 2022 war aims.