Newly declassified documents released Thursday by Director of National Intelligence Tulsi Gabbard show that a U.S. national laboratory assessed the COVID-19 lab-origin hypothesis as a serious possibility as early as May 2020, as well as evidence of U.S.-funded coronavirus research that included planning for spike-protein modifications, receptor-adaptation experiments, and testing in humanized mice in collaboration with researchers at the Wuhan Institute of Virology. The documents also prove that Anthony Fauci lied under oath. Today, on my final day as Director of National Intelligence, I’m releasing never-before-seen communications and documents exposing how Dr. Fauci provided millions in US taxpayer dollars to fund dangerous gain-of-function research at the Wuhan lab, worked with politicized elements… pic.twitter.com/ZMdliW4zyS The release, issued on Gabbard’s last day on the job, includes an eight-page May 27, 2020, assessment from Lawrence Livermore National Laboratory’s Z Program. That assessment concluded that “ all of the necessary conditions for an accidental release of a laboratory-modified coronavirus - specifically a coronavirus adapted to recognize human cell receptors - were present at the Chinese Wuhan Institute of Virology in mid-to-late 2019 .” It assigned equal weight to a laboratory-modification hypothesis and a natural-origin scenario. Meanwhile, Recall that while the government was locking us down, Dr. Anthony Fauci and those in his orbit were actively fabricating a 'wet market' narrative that would conceal US research as a possible origin - despite his own advisors initially insisting that COVID-19 looked manmade. In his January 2024 transcribed interview, Fauci was asked about conversations concerning the same three topics - COVID origins, WIV, and EcoHealth . When asked about the CIA, he answered yes: he said he was briefed “once or twice” in a secure NIH facility and also recalled a briefing in a White House situation room. The newly released documents then show a June 4, 2021 briefing involving CIA/WCP personnel, NSC officials, and Fauci , during which Fauci offered views on pangolin research, sick WIV researchers, single-lineage vs. multi-lineage evidence, and recommended scientists for the IC to contact. A separate CIA-context email says that same 40-minute secure video teleconfrenece involved CIA/WCPMC officials and that Fauci gave thoughts on the 4 May 2021 COVID-origin briefing and recommended U.S. scientists to consult. So, he lied. According to a statement released with the files, " Fauci worked with politicized career leadership in the Intelligence Community (IC) to suppress the truth about his actions , the virus’ lab-leak origins, and his role in directing U.S. funding for this dangerous research that caused immeasurable harm and countless lost lives. These documents expose Fauci’s direct role in influencing and manipulating IC assessments on COVID-19, and how Fauci lied to Congress in 2024 , when under oath he denied knowledge of or participation in discussions with intelligence officials about viral research." The files include the Year 5 progress report for EcoHealth Alliance’s NIH grant 5R01AI110964-05. Under Specific Aim 3, the project outlined plans to: This research track overlaps with work described in the 2018 DEFUSE proposal , which involved EcoHealth Alliance, Peter Daszak, Ralph Baric of the University of North Carolina, and Shi Zhengli’s team at WIV. The proposal sought to create chimeric bat coronaviruses with enhanced human infectivity, including consideration of furin cleavage site insertion to improve lung-cell entry, and to test the resulting viruses in humanized mice originally developed in Baric’s lab. A 2016 WIV paper included in the release describes a synthetic shuttle vector system for assembling large DNA fragments, with demonstrated capability up to 31 kilobases. The authors presented the method as a tool for “genome-scale DNA reconstruction,” a technique relevant to synthetic biology and virus engineering. Surveillance work under the same NIH grant reported that 9 of 1,497 rural residents in southern China (0.6%) were seropositive for bat SARS-related or HKU10 coronaviruses. And from leaked emails three years ago: Among other things, the NIH helped fund experiments at WIV t hat infected genetically engineered mice with “chimeric” hybrids of SARS-related bat coronaviruses in what some scientists have described as unacceptably risky research . ... Andersen laid them out plainly in an email to Fauci that same evening. “ The unusual features of the virus make up a really small part of the genome (<0.1%) so one has to look really closely at all the sequences to see that some of the features (potentially) look engineered, ” Andersen wrote in the email. “I should mention,” he added, “that after discussions earlier today, Eddie, Bob, Mike and myself a ll find the genome inconsistent with expectations from evolutionary theory . But we have to look at this much more closely and there are still further analyses to be done, so those opinions could still change.” - The Intercept A June 8, 2021, internal email in the release references a 2016 New York Academy of Medicine meeting at which Peter Daszak reportedly discussed colleagues in China “manipulating the spike protein on coronavirus to make them more virulent.” Other 2020–2021 emails show officials debating technical concerns, including references to a DOD report on a “suspicious added furin-site” and FBI reporting containing unusual genetic descriptions. One analyst noted the risk that non-experts could misinterpret technical data while still calling for scrutiny. Another observed that “the IC took direction straight from NIH… the people that funded the Wuhan Lab” and referenced “a complex web of money and politics influencing analysis.” July 2021 emails concerning the selection of outside reviewers for COVID-origin assessments show officials rejecting several candidates for political sensitivity or conflict-of-interest reasons: These materials provide primary-source documentation that a U.S. national laboratory assessed a laboratory origin as equally plausible to natural emergence at a time when prominent scientific publications were publicly emphasizing a natural zoonotic source and characterizing alternative hypotheses as conspiracy theories. This includes the February 2020 Lancet letter and the March 2020 Nature Medicine paper “The Proximal Origin of SARS-CoV-2”, along with subsequent amplification by NIH leadership. The research details in the declassified grant reports and proposals involved techniques and modifications - spike-protein engineering, receptor adaptation, humanized-mouse testing, and consideration of furin cleavage sites - that later featured prominently in scientific debate over SARS-CoV-2’s characteristics.

• • • A judge accuses Trump of defying a court order. Surprise Not. Judge Finds Trump Administration Violated Court Order NBC Reports Judge Finds Trump Administration Violated Court Order Halting Funding Freeze A federal judge in Rhode Island on Monday said that the Trump administration had violated his order halting a sweeping federal funding freeze and ordered the government to “immediately restore frozen funding.” U.S. District Judge John J. McConnell handed down the order after the plaintiffs in the case, a coalition of 22 states, said the government had not restored funding in several programs despite his Jan. 31 order temporarily halting the wide-ranging Office of Management and Budget directive that had caused chaos and confusion across the country. “The States have presented evidence in this motion that the Defendants in some cases have continued to improperly freeze federal funds and refused to resume disbursement of appropriated federal funds,” McConnell wrote , even though his order lifting the freeze had been “clear and unambiguous.” It’s the first time since President Donald Trump’s second inauguration that a federal judge has accused his administration of defying a court order. “The Defendants now plea that they are just trying to root out fraud. But the freezes in effect now were a result of the broad categorical order, not a specific finding of possible fraud,” McConnell wrote. “The broad categorical and sweeping freeze of federal funds is, as the Court found, likely unconstitutional and has caused and continues to cause irreparable harm to a vast portion of this country.” He said the “pauses in funding violate the plain text” of the temporary restraining order he issued on Jan. 31, and ordered that funding be immediately restored for the duration of the time his TRO is in effect. The order is expected to remain in place until at least a hearing on a preliminary injunction later this month. In a separate case Monday, unions suing the administration over U.S. Agency for International Development employees’ being placed on administrative leave alleged the agency wasn’t complying with a different judge’s order temporarily reinstating those employees. Their filing said they had “become aware that Defendants have not fully complied with the terms of this Court’s order,” including by continuing to lock employees out of their computer system. “Those members, therefore, cannot assess whether they have been reinstated from leave,” it said. They requested an emergency hearing. Correct Rulings We are a nation of laws. I did not like it when Biden put himself above the law and I don’t like it when Trump does the same. Restoring funding is the correct legal ruling, and I applaud it. Trump will lose on the leave issue, and I will applaud that too. “But mommy, Biden did it too” is not a legal excuse. Third Federal Judge Blocks Trump’s Birthright Citizenship Executive Order CBS News reports Third Federal Judge Blocks Trump’s Birthright Citizenship Executive Order A federal judge in New Hampshire on Monday blocked President Trump’s executive order seeking to end birthright citizenship, becoming the third judge to do so amid more than half a dozen legal challenges to the president’s directive. U.S. District Judge Joseph Laplante said at the end of a brief hearing that he would grant the request for a preliminary injunction sought by New Hampshire Indonesian Community Support, LULAC and Make the Road New York. The three groups filed the first federal lawsuit challenging Mr. Trump’s executive order, which he signed on his first day in office. Laplante’s order comes on the heels of two others issued by federal judges in Washington and Maryland last week that barred enforcement of Mr. Trump’s birthright citizenship order nationwide. The Justice Department has appealed one of those decisions, from U.S. District Judge John Coughenour, to the U.S. Court of Appeals for the 9th Circuit. In the hearing before Laplante, Cody Wofsy, a lawyer for the American Civil Liberties Union who argued on behalf of the immigrant-rights groups, said Mr. Trump’s order is a “fundamental attack” on the Constitution and is “straightforwardly illegal” under Supreme Court precedent. Not Even Close Given the US Supreme Court has already twice ruled on the constitutionality of birthright citizenship, it would be shocking if any District or Appeals Court would rule any other way. On January 21, I wrote Trump’s Executive Order Ending Birth Citizenship Is Headed to the Gutter Let’s review Trump’s unconstitutional order ending citizenship by birth. There’s over a dozen challenges already. On January 23, I wrote A Court Appointee of Reagan Correctly Blocks Trump’s Birthright Citizenship Order As predicted in this corner, a District Court quickly blocked Trump’s unconstitutional order eliminating birthright citizenship. During a hearing on the matter, Judge Coughenour said of Trump’s executive order, “ I’ve been on the bench for over four decades, I can’t remember another case where the question presented is as clear as this one is. This is a blatantly unconstitutional order. ” CATO comments When the 14th Amendment was drafted, the phrase “subject to the jurisdiction thereof” had a settled meaning: It referred to a person who was subject to U.S. law. Foreigners who visit are required to follow American laws. They are, in every sense, subject to U.S. “jurisdiction,” or control. An exception is the children of diplomats, who are immune from American laws . Additionally, certain Native Americans born on sovereign tribal lands were also exempted, though the Indian Citizenship Act of 1924 made them citizens by birth. Every case since has affirmed citizenship, especially United States v. Wong Kim Ark 1898, and Regan v. King 1943. Since the Supreme Court has already twice ruled on this matter, the District and Appeals Courts have nothing to do but uphold the law of the land. So, expect Trump to lose in the U.S. Court of Appeals for the 9th Circuit. Trump can then appeal to the US Supreme Court and lose one of two ways. First, this case is so easy, the Supreme Court might refuse to hear the case at all. Second the Supreme Court may hear the case. If so, I expect no worse than 6-3 against Trump, and quite possibly 9-0 which I believe should be the case. This boils down to my January 24, post What Were the US Senators Thinking When They Debated the 14th Amendment? I commented “The question is not realistically subject to logical debate, and I can prove it.” You are free to disagree, and be wrong. Secondly, please consider what a constitutional expert friend of mind has to say about this issue. A Terrible Policy as Currently Practiced? I can easily see why some people would believe that. But they are wrong. This is a subject that came up with friends of mine, one of whom has argued many cases before the Supreme Court. Friend One (studied law but is not a lawyer): I am not a lawyer, but I am very much an originalist (and that makes you put a lot of emphasis on the text as written at that time). To me this a clear put down on Trump. Too much time has passed and society and the government has had a common shared view on this for many, many decades. In a logical world this should be 9-0. Friend Two (Constitutional Expert): Well, you have stated very well the rationale that underlies the doctrine of res judicata . Generations of immigrants — and by extension, their offspring — have literally for hundreds of years relied on the common understanding of the law. Even if that was technically wrong in retrospect, res judicata says that you cannot unsettle the lives of law-abiding people who have relied on what the courts said the law was. I cannot think of a clearer case for its application. It would open a hornets’ nest, since most 19th century immigrants were never naturalized — it was understood that one’s kids were Americans by birthright — and thus most of the US population would be rendered aliens. We have no precedents to deal with this and it would be a total judicial mess. Res Judicata Res judicata refers to the principle by which one judgment has a binding effect on subsequent proceedings. My friend comments “I cannot think of a clearer case for its application.” This might even apply to me. My grandfather came over on a boat. My father was born here. Was he a citizen by birth? If not, then arguably neither am I. Recent cases may be easier to understand. What about a couple who came into the US illegally 25 years ago at age 35? They had kids who are now suddenly not citizens. Those kids might have kids who are not citizens then either. Q: Is the Supreme Court really going to mess with this? Let Trump say it only starts now? A: No and No. The Elon Musk Sponsored, Ted Mack Legal Amateur Hour It’s not the least bit surprising these cases are going against Trump. On Sunday, I commented The Elon Musk Sponsored, Ted Mack Legal Amateur Hour The problem with the DOGE approach is the mission may backfire spectacularly. What to Expect from a USAID Shutdown My constitutional law expert says “ Contractors will sue. There will have been no valid legal basis for stopping contract payments. So, under the contracts, the federal government will pay a bundle in penalties and equitable adjustments. “ The courts will force a reversal. And no good will come from this approach. This is the Elon Musk sponsored, Ted Mack Legal Amateur Hour. That is the problem I have with this, and I have been correct. I am not against DOGE. I am not against Trump either. In fact, I am openly cheering DOGE. All I ask, and unfortunately it seems too much to ask, is Presidents uphold the law. Now we have more rulings against Trump, as fully expected in this corner, as as deserved as well. I don’t object to the idea the CIA is a political swamp. But I do question demanding buyouts. Team DOGE has no authority to pay staffers 8 months to do nothing. Moreover there are contracts in place. Team DOGE has no legal right to cancel contracts either. For further discussion, please see USAID Cancellation by Trump, the Good, the Bad, and the Ugly Details Once again, I am not arguing against the DOGE idea. I openly cheer the idea behind DOGE. Instead, I am arguing against the methods. Hypocrites may be happy with the approach, but I assure you that Trump can achieve much more by going about this in a constitutional manner. Here is the sad fact of the matter, the more Trump tries to skirt the law, the harder it will be to get a deal with Democrats than can clear a Senate filibuster. Judge Finds Trump Administration Violated Court Order NBC Reports Judge Finds Trump Administration Violated Court Order Halting Funding Freeze A federal judge in Rhode Island on Monday said that the Trump administration had violated his order halting a sweeping federal funding freeze and ordered the government to “immediately restore frozen funding.” U.S. District Judge John J. McConnell handed down the order after the plaintiffs in the case, a coalition of 22 states, said the government had not restored funding in several programs despite his Jan. 31 order temporarily halting the wide-ranging Office of Management and Budget directive that had caused chaos and confusion across the country. “The States have presented evidence in this motion that the Defendants in some cases have continued to improperly freeze federal funds and refused to resume disbursement of appropriated federal funds,” McConnell wrote , even though his order lifting the freeze had been “clear and unambiguous.” It’s the first time since President Donald Trump’s second inauguration that a federal judge has accused his administration of defying a court order. “The Defendants now plea that they are just trying to root out fraud. But the freezes in effect now were a result of the broad categorical order, not a specific finding of possible fraud,” McConnell wrote. “The broad categorical and sweeping freeze of federal funds is, as the Court found, likely unconstitutional and has caused and continues to cause irreparable harm to a vast portion of this country.” He said the “pauses in funding violate the plain text” of the temporary restraining order he issued on Jan. 31, and ordered that funding be immediately restored for the duration of the time his TRO is in effect. The order is expected to remain in place until at least a hearing on a preliminary injunction later this month. In a separate case Monday, unions suing the administration over U.S. Agency for International Development employees’ being placed on administrative leave alleged the agency wasn’t complying with a different judge’s order temporarily reinstating those employees. Their filing said they had “become aware that Defendants have not fully complied with the terms of this Court’s order,” including by continuing to lock employees out of their computer system. “Those members, therefore, cannot assess whether they have been reinstated from leave,” it said. They requested an emergency hearing. Correct Rulings We are a nation of laws. I did not like it when Biden put himself above the law and I don’t like it when Trump does the same. Restoring funding is the correct legal ruling, and I applaud it. Trump will lose on the leave issue, and I will applaud that too. “But mommy, Biden did it too” is not a legal excuse. Third Federal Judge Blocks Trump’s Birthright Citizenship Executive Order CBS News reports Third Federal Judge Blocks Trump’s Birthright Citizenship Executive Order A federal judge in New Hampshire on Monday blocked President Trump’s executive order seeking to end birthright citizenship, becoming the third judge to do so amid more than half a dozen legal challenges to the president’s directive. U.S. District Judge Joseph Laplante said at the end of a brief hearing that he would grant the request for a preliminary injunction sought by New Hampshire Indonesian Community Support, LULAC and Make the Road New York. The three groups filed the first federal lawsuit challenging Mr. Trump’s executive order, which he signed on his first day in office. Laplante’s order comes on the heels of two others issued by federal judges in Washington and Maryland last week that barred enforcement of Mr. Trump’s birthright citizenship order nationwide. The Justice Department has appealed one of those decisions, from U.S. District Judge John Coughenour, to the U.S. Court of Appeals for the 9th Circuit. In the hearing before Laplante, Cody Wofsy, a lawyer for the American Civil Liberties Union who argued on behalf of the immigrant-rights groups, said Mr. Trump’s order is a “fundamental attack” on the Constitution and is “straightforwardly illegal” under Supreme Court precedent. Not Even Close Given the US Supreme Court has already twice ruled on the constitutionality of birthright citizenship, it would be shocking if any District or Appeals Court would rule any other way. On January 21, I wrote Trump’s Executive Order Ending Birth Citizenship Is Headed to the Gutter Let’s review Trump’s unconstitutional order ending citizenship by birth. There’s over a dozen challenges already. On January 23, I wrote A Court Appointee of Reagan Correctly Blocks Trump’s Birthright Citizenship Order As predicted in this corner, a District Court quickly blocked Trump’s unconstitutional order eliminating birthright citizenship. During a hearing on the matter, Judge Coughenour said of Trump’s executive order, “ I’ve been on the bench for over four decades, I can’t remember another case where the question presented is as clear as this one is. This is a blatantly unconstitutional order. ” CATO comments When the 14th Amendment was drafted, the phrase “subject to the jurisdiction thereof” had a settled meaning: It referred to a person who was subject to U.S. law. Foreigners who visit are required to follow American laws. They are, in every sense, subject to U.S. “jurisdiction,” or control. An exception is the children of diplomats, who are immune from American laws . Additionally, certain Native Americans born on sovereign tribal lands were also exempted, though the Indian Citizenship Act of 1924 made them citizens by birth. Every case since has affirmed citizenship, especially United States v. Wong Kim Ark 1898, and Regan v. King 1943. Since the Supreme Court has already twice ruled on this matter, the District and Appeals Courts have nothing to do but uphold the law of the land. So, expect Trump to lose in the U.S. Court of Appeals for the 9th Circuit. Trump can then appeal to the US Supreme Court and lose one of two ways. First, this case is so easy, the Supreme Court might refuse to hear the case at all. Second the Supreme Court may hear the case. If so, I expect no worse than 6-3 against Trump, and quite possibly 9-0 which I believe should be the case. This boils down to my January 24, post What Were the US Senators Thinking When They Debated the 14th Amendment? I commented “The question is not realistically subject to logical debate, and I can prove it.” You are free to disagree, and be wrong. Secondly, please consider what a constitutional expert friend of mind has to say about this issue. A Terrible Policy as Currently Practiced? I can easily see why some people would believe that. But they are wrong. This is a subject that came up with friends of mine, one of whom has argued many cases before the Supreme Court. Friend One (studied law but is not a lawyer): I am not a lawyer, but I am very much an originalist (and that makes you put a lot of emphasis on the text as written at that time). To me this a clear put down on Trump. Too much time has passed and society and the government has had a common shared view on this for many, many decades. In a logical world this should be 9-0. Friend Two (Constitutional Expert): Well, you have stated very well the rationale that underlies the doctrine of res judicata . Generations of immigrants — and by extension, their offspring — have literally for hundreds of years relied on the common understanding of the law. Even if that was technically wrong in retrospect, res judicata says that you cannot unsettle the lives of law-abiding people who have relied on what the courts said the law was. I cannot think of a clearer case for its application. It would open a hornets’ nest, since most 19th century immigrants were never naturalized — it was understood that one’s kids were Americans by birthright — and thus most of the US population would be rendered aliens. We have no precedents to deal with this and it would be a total judicial mess. Res Judicata Res judicata refers to the principle by which one judgment has a binding effect on subsequent proceedings. My friend comments “I cannot think of a clearer case for its application.” This might even apply to me. My grandfather came over on a boat. My father was born here. Was he a citizen by birth? If not, then arguably neither am I. Recent cases may be easier to understand. What about a couple who came into the US illegally 25 years ago at age 35? They had kids who are now suddenly not citizens. Those kids might have kids who are not citizens then either. Q: Is the Supreme Court really going to mess with this? Let Trump say it only starts now? A: No and No. The Elon Musk Sponsored, Ted Mack Legal Amateur Hour It’s not the least bit surprising these cases are going against Trump. On Sunday, I commented The Elon Musk Sponsored, Ted Mack Legal Amateur Hour The problem with the DOGE approach is the mission may backfire spectacularly. What to Expect from a USAID Shutdown This is the Elon Musk sponsored, Ted Mack Legal Amateur Hour. That is the problem I have with this, and I have been correct. I am not against DOGE. I am not against Trump either. In fact, I am openly cheering DOGE. All I ask, and unfortunately it seems too much to ask, is Presidents uphold the law. Now we have more rulings against Trump, as fully expected in this corner, as as deserved as well. I don’t object to the idea the CIA is a political swamp. But I do question demanding buyouts. Team DOGE has no authority to pay staffers 8 months to do nothing. Moreover there are contracts in place. Team DOGE has no legal right to cancel contracts either. For further discussion, please see USAID Cancellation by Trump, the Good, the Bad, and the Ugly Details Once again, I am not arguing against the DOGE idea. I openly cheer the idea behind DOGE. Instead, I am arguing against the methods. Hypocrites may be happy with the approach, but I assure you that Trump can achieve much more by going about this in a constitutional manner. Here is the sad fact of the matter, the more Trump tries to skirt the law, the harder it will be to get a deal with Democrats than can clear a Senate filibuster. Subscribe to MishTalk Email Alerts. Subscribers get an email alert of each post as they happen. Read the ones you like and you can unsubscribe at any time. This post originated on MishTalk.Com Thanks for Tuning In! Mish Mike Shedlock Comments to this post are now closed. In the case of recent illegals having children just deport the mother. It is time we got rid of the infestation. Mish, may I ask you and your constitutional law expert who believe that res judicata requires us to continue the practice of birthright citizenship, how is that even relevant? Trump’s order is prospective not retrospective. Your relatives’ claim of birthright citizenship is not being challenged at all. By pretending this is a “good argument” you are introducing a false but highly emotional charge to garner support for your rational arguments. You are better than this, as evidenced by your courage in stating a legal opinion that is contrary to that of many of your subscribers. Ask yourself this. By what authority can Trump change the constitution from here going forward? Since he can’t, you have your answer and there is no need to waste his time. So stop the nonsense. Trump does not have any authority to change the Constitution. But he does have the authority for enforcing the nation’s laws and in doing so every President must first decide how to interpret them. His interpretation is different than yours and perhaps mine (I am an attorney but have no opinion on this issue until I see the briefs of those who have spent a lot more time studying the precedents and appropriate writings of drafters at the time the 14th Amendment was written), but the Supreme Court will correct him if he is wrong. Then we will have the answer to the question. Until then, everybody has an opinion and we are all free to call each other’s opinions nonsense. The bottom line is this is all theatre. There will be very little government cost savings unless congress defunds some programs. It’s all a show for the goobers. The last paragraph on Mish’s column seems to indicate that both parties would agree to do this and uphold the law if followed. Unfortunately, this is a naive opinion. I do agree that a constitutional discussion is in order to settle the migrant issue once for all. If the present senators and congress is unable to come to a conclusion, then it is on us voting public to make it an issue and send representatives who support this to the next congress. that is my humble opinion. I noted that at CNN Trump continues to have a good approval rating. My guess is that should Trump continue on then the Democrats will stop demanding judicial adverse rulings. The more questionable things that are unearthed will add to Trumps popularity as this goes on and if he can keep t going to the midterms there will be real change in the air for once. Is there a principle of legal interpretation whereby any law should never be interpreted in such a way that it benefits criminals (e.g., people who break U.S. immigration law)? If not, there should be. It’s common sense. We all know that the 14th Amendment was one of 3 Reconstruction amendments designed to protect African Americans. Who cares what how many interpretations were piled on it afterwards? Those interpretations can be reversed. Raise your hand if you think the original framers of the 14th Amendment would have agreed with this statement: “the children of people who are not legally supposed to be in the U.S. will now be entitled to become citizens”. I just don’t believe that, regardless of the personal invectives that Mish may rain upon me. The Supreme Court got it wrong in the Dredd Scott case, and again with inferring a Constitutional right to abortion. I wouldn’t be surprised at all if we get a 5-4 Supreme Court decision upholding Trump’s EO. Who are these Americans, according to recent polling, who have serious doubts about whether Donald Trump will respect the Constitution and follow the law, but this majority overlaps with those who voted for Trump and give him favorable job performance ratings so far? I cannot square the idea that someone would vote for a person that they have serious doubts will uphold the Constitution as President and give that President high marks so far in spite of the almost unquestionable unconstitutional actions that have been taken so far. Add to this the indefensible dropping of the Eric Adams corruption case that was proceeding forward after evidence was presented to a grand jury and he was indicted on that evidence and the order to not enforce a law that was put in place to prevent corporate bribery by U.S. companies when doing business internationally. These are undoubtedly the actions of a person who has no respect for the law and does not have the ability to separate right from wrong. Oh you mean like the imprisonment of J6 people without trial. That kind of Constitutional Law run by Biden DOJ There were not only trials, there were for most of the cases jury trials and with many admissions of guilt. Maybe you should read the Constitution about a fair and speedy Trial. Not placed in a Cell without due process for an in-determinant amount of time. Also the part where 5000 FBI personnel were employed to go after 1600 people. Most of whom were guilty of unauthorized Trespass. Oh there was the guy who put his feet up on Pelosi’s desk that in Biden fantasy world called Garland, was really serious criminality. It does not matter what your group thinks the whole Nation is witness to how fast Borders got closed under Trump as opposed to being lied to by Biden administration that nothing could be done. In U.S. v. Wong Kim Ark, the justices held that the 14th Amendment “affirms the ancient and fundamental rule of citizenship by birth within the territory . . . including all children here born of resident aliens.” Wong’s parents were legal resident aliens. No court has held that the children of illegals get automatic citizenship. Cato suggests that the phrase “subject to the jurisdiction thereof” means everyone who is in the US, because foreigners who visit the US are required to follow American laws. That interpretation makes the phrase redundant because the Amendment already states it applies to “All persons born or naturalized in the US.” We are referring to people who are already in the US. The rules of statutory construction require that all words in the statute should be given meaning. It makes sense the phrase applies to all those who are here legally, because in applying for entry they submitted themselves to US Jurisdiction. Whereas, those who entered illegally did not. It makes sense to think clearly. Ans you don’t. Your position refuted many times. And… we have BINGO : ) A judge’s order appeared , ex parte —meaning only one side could speak. No warning. No defense allowed. Just a wall erected between Treasury officials and their own department’s data. New York Attorney General Letitia James, a Democrat whose office is leading the case, welcomed the ruling, saying nobody was above the law. Democrats lie that no one is above the law. Dictator Trump gets bandied about quite a bit. Why he said he wanted to turn Gaza into a paradise in Mid East. Course that means relocation of Gazans. All kinds of people upset with that vision. Geez almost as if those same countries in Mid East had some skin in game in their area of the Globe. Would never had known it given how long things have been out of bounds. Almost as if some dictator intervened and said straighten this out or we will. Enough is enough says Trump the dictator. Myself kind of Glad someone said it. Local governments all up in protest. Guess they will have to find common ground and stop the carnage. Hey kids, Daddy’s home and boy oh boy is he pissed. He’s the rage bait. I’m the dictator. Expect Jacksonian action by the Trump administration. Activist judges will be ignored. They have no army and, if the new military recruitment numbers are true, Trump will certainly have one soon. It’s amazing to me how many commentors here rightfully bitched and moaned about Biden overstepping his authority, but now cheer when Trump does the same. Hypocrits of the highest order. You all preach constitutional restraint when the opposing party is in power, then preach against it (out of vengeance) when your chosen party is in power. Just cut the crap and admit you want a dictator. Simps simpin’ for me. Hypocrisy is inseparable from politics. Best not to play that game and focus on improving your own life. it’s the result of understanding that rule of law is applied selectively. If only there was a way to not do that…..hmmm. Trump is now the king of the United States of America. He will not abide by any court rulings that he doesn’t agree with. Who is going to stop him? He’s not the king. I am. Don’t care. Trump will do what he wants. He is above the law now. The constitution means nothing to him. I accept that. What bothers me is his wimping out on tariffs. I thought his 25% tariffs on all imported steel and aluminum would start right away. But no. Wait till March 1. Then watch him back down; again. He will claim a few meaningless “wins” from other countries. And his supporters will eat it up, like they always do. How the heck is he going to bring back manufacturing and jobs, and rake in all that tariff money if he keeps backing down? Also, i see that US Gulf coast refiners are refusing Mexican oil as the water content of their oil has increased from 1% to 6% recently and can’t be used in US refineries. Which means more imported oil from Canada and Columbia. Did you care about the Constitution during the pandemic? No. Pound salt. Haha! You believe this without any evidence whatsoever! You get a gold star! Indeed, I know vaxx-tard covidiots when I see them.😉 I don’t even know why I bother anymore.🤷‍♂️ You shouldn’t bother. Best to go back to hiding in your parents basement while you wait for the covid zombie apocalypse. It was you fearmongers who cancelled the Constitution in the face of a puny China virus. Your kind attack people who just didn’t want to take your mediocre, ineffective, and untested vaxx-product. Take your DEI-CRT-BLM-LGBTQIIAP-globo-homo self elsewhere. We Americans don’t want anything to do with you, you cotton? That puny virus killed over 1 million Americans over a two-year period, which is more American deaths than were attributed to the puny war fought against the Nazis and the Empire of Japan in the 1940s. You say our response to a highly contagious novel virus was not Constitutional. What was unconstitutional in the context of a national emergency? The stats you are trying to quote do not reflect what you think they do. I work on those kinds of databases. The cause-of-death is not listed as “SARS-CoV-2.” Rather, that statistic is a union of a positive SARS-CoV-2 PCR test and any-cause mortality. Therefore, in the U.S., we have no choice but to look at all-cause mortality: indeed, there was some excess all-cause mortality in 2020, and it was marginally higher than the last bad flu year vis-à-vis population. However, if the virus EcoHealth Alliance and NIAID created in Wuhan is so lethal, then how come we unvaxxed are not dead?🤔 How come the homeless population was not eradicated? And why did highly-vaxxed America fare no better than un-vaxxed Africa? Everyone I know came down with something in the subsequent two years, vaxxed or not: their outcomes were the same. The vaxx-product did nothing. Scientifically and medically this makes complete sense, as the R number of coronavirus is too high to effectively vaccinate against. Take any therapeutic you want—I won’t stop you—but don’t force non-sterilizing, experimental vaxx-products on others. Do your “excess mortality” numbers adjust for the significant drop in vehicle fatalities because driving declined significantly? Did they adjust for the lower number of elective surgery and related complications that result in a certain number of deaths and so on? Did people at risk contract Covid-19 and die of COPD or some other condition that became severe as a result of having Covid-19, sure. But Covid-19 was the catalyst that resulted in these deaths just like diabetic people do not die of diabetes, they die of chronic conditions caused by having much higher blood glucose levels than non-diabetic people for an extended period of time. Your trying to make a distinction that for most practical purpose is meaningless and you are using meta-data statistics without adjusted for extraordinary circumstances. The thing is, these are all leaps that we do not have the data to substantiate. All of the data is dirty. There are confounding variables everywhere. (And, yes, if you died in a traffic accident, your corpse would’ve been swabbed for C19, and your death listed as a C19 death if it were positive.) Nevertheless, you neglected the main point: why did the ‘unvaxxed’ populations fare no worse? Uttar-Pradesh—a province of 200-million people with almost no vaxx uptake—had no excess mortality. Therefore, across-the-board it fails the null-hypothesis. But beyond that, it comports with nigh-everyone’s anecdotal observations. Put another way: if the vaxx-product was so good, and the virus so obviously dangerous, you wouldn’t have had to force people to take it. Most of the deaths were iatrogenic. Dr.s Fareed and Tyson early treated some 20,000 Covid patients with zero deaths. The CDC wasn’t interested in how they did that. Covid was never actually treated as a public health crisis. That’s what I was getting at in a roundabout way with reference to Uttar-Pradesh.😅 Wasn’t Trump the one who championed the vaccine? Yeah, he did. DJT was proud of “Operation Warp Speed.” However, he’s clearly on the record stating that he never wanted to mandate anything. Cancelled the constitution? Wait till you see what *I* am doing to it… He can’t. Mom says chicken tendies have gotten too expensive. I don’t waste much time on things that I can’t control. Lol! “I” cancelled the Constitution? That’s pretty funny. “I” don’t even vote. Perhaps you forget that Trump was in charge when the “puny China virus” appeared. Everything that happened after that was on him. He crowed about how “everyone in the world” was impressed with his amazing response to the China virus. He’s our pandemic hero. You should bow down before him rather than ragging on poor little old me. “…Perhaps you forget that Trump was in charge when the “puny China virus” appeared. Everything that happened after that was on him…” Didn’t you just tell me above that hypocrisy and politics go together, and that I should avoid pointing it out and focus on myself? I 100% agree with that assessment by the way and thanks for pointing that out. However, aren’t you doing the same thing here? Not trying to play gotcha, just saying, buddy. Yes. Hypocrisy and politics go together. If you engage in politics, then you engage in hypocrisy. The difference is that I am not engaged in politics. I am merely an external observer. I do not vote. I do not care which party is in power. I have no vested interest in politics at all. Other than to observe and profit from it. This might be the first time you uttered something worth considering. Since all presidents are now operating above the law, one might ponder the possibility of congress wrestling some of that control back. nah, that’ll make it harder to fundraise. Reading your column, I do recommend that you read a book called: When China Attacks by Col. Grant Newsham. It is an eye opening view of the Chinese and if you see what is happening globally, you will understand what China is doing without a war in true sense. If every American understands what China is doing without going into war, it is mind boggling that most of the nations are not able to face Chinese in a manner that needs to be dealt with. God help us ! In a fascist state laws don’t mean anything. Eventually, everyone that voted for Trump will get to the FAFO stage. FO what? Welcome to gitmo, sinner! Ask the MAGA farmers who had contracts with USAID that were summarily shredded. Ask the Latino guy in FL whose Venezuelan wife had her protected status suddenly canceled & she has to be sent back to Venezuela. a 90 day pause = contracts shredded or just chirping MSM talking points now Laws comes to mean nothing when judicial activism prevails over sober and just application of law. We have crossed that line long ago and have entered interesting times. Trump is just blatantly breaking laws. If a judge rules against Trump’s criminal behavior that’s hardly “judicial activism”. admit it. you kind of have a thing for him. When SCOTUS would overrule Biden’s attempts at loan forgiveness, his administration would “ narrow the scope ” on subsequent attempts. Fact Check: Did Biden Ignore Supreme Court Over Student Loan Forgiveness? Trump prefers the shotgun approach. Trump “wants to convince Americans as much as foreigners that he’s tough. And that perceived toughness is, to him, an end itself, often in spite of damage his approach has done to alliances, or even to the stated goals of Trump’s own foreign policy.” Trump veers toward the ‘madman theory’ while his aides are trying to sound sane | CNN Politics When the method employed is effectively shooting oneself in the foo t… there is no method to the madness … only madness in the method . Can’t be tough with boobs as big as his. If congress doesn’t vote to raise the debt limit and the Government isn’t allowed to borrow more money, and only money coming in can be used, who gets to decide what programs get funded ? Is it Mish , the judge or the president ? Does the judge issue ruling making congress vote the way he wants so the programs all get funded . This is silly talk so the judicial branch is going to take over the treasury ? Ha Ha . In 2020 we elected a eunuch and they made him president. In 2024 we elected a president and they made him a eunuch. Go figure. He only ever had a little mushroom to begin with. Congress is the only one who can stop him so they have to decide if what the judge says has merit. If they allow the president to proceed then they think the judge is wrong. The previous congress thought the supreme court was wrong to rule Biden couldn’t forgive student loans so they let him continue. The government majority ruled 2-1. All hail Trump because he is the king for the next four years. He should ignore all the judges. He is only responsible to the House or Representatives. Huzzah!!! As he should be, the house of representatives represents the people of the country. You utterly misunderstand the way the system is basically set up. I say this as a professional and professor multiple decades. “Biden got away with something” is not a legal defense or reason to hastily trash the system. There may be a reason for the American people, through Congress or Constitutional Amendment (all under the Constitution) to debate this, deliberate, and reform something, but not at all in the way you say it. There is a spectrum between “trash everything now” and “never change anything.” Our setup is a very careful balance in this spectrum, bequeathed to us by the founders. It has procedures, not anything some uninformed bystander supposes it might be. There is a path, just not what you said.’Congress (allegedly) did something once under Biden’ does not describe that path at all. I am not advocating for the path that was taken, merely pointing out that it exists. It’s kind of like congress vetoing the judicial branch in the same way they can veto the executive branch. And it is noteworthy that our Founders didn’t put anything in place to force the executive branch to obey the judicial branch, they seem to have left that up to congress. But take a step back and look at what our Founders intended…that the majority of the people get to decide the direction we go. Congress represents the people so if congress doesn’t step in, then the people are deciding what should be taking place. You also have to remember that judges/justices are not God/perfect and it’s up to the people to decide if they are making a mistake. Very similar to Trump being convicted as a felon, but still getting elected as president. The power is to the people. yeah we should allow this to continue, rogue judges, ex parte, not following civil procedure to protect this grift…LOL https://x.com/DataRepublican/status/1889172190282821690 Birth right citizenship I agree with. However, these ex parte cases from lower federal courts without defendents present or able to defend themselves and judges not following US code of civil procedures rule 65c by waiving bonds for these liberal AGs filing cases is bullsheet. I would ignore them and tell them to issue bench warrants and send the FBI. If judges are NOT going to follow civil procedures why does Trump have to abide by a ruling. Stopping people from voluntary resignations, capping overhead draws on grant money is comical they are even fighting this waste of tax payer dollars. You are confusing two issues. Looking at the data – and mass firings that are illegal Cancelling all of USAID illegal We don’t care. If you don’t care, then you do not deserve all of the freedoms and opportunities that our liberal democracy has created over the last 80 years. I deserve a trillion dollars and the title of World Emperor, nothing less. I am not following. USAID is not cancelled, it’s a 90 day pause. How do you prove harm or standing for a pause in payments, Ex Parte and not following civil procedures. Where are the mass firings? He’s offered voluntary buyouts? If the case is centered around mass firings, when did that happen? If the ruling is about mass firings that have not happened how did the plaintiff prove standing or harm for an event that hasn’t happened. Rhode Island Judge McConnell orders unfreezing DOE grants and the judges daughter works for the DOE and no conflict of interest in that ruling? Ex Parte ruling that restricts the congressionally confirmed Treasury Secretary from accessing treasury and did not following civil procedure. Trump has no authority to pay people 8 months to do nothing. The idea is ridiculous and even if not it violates contracts. As for harm, it is equally ridiculous to suggest no one was harmed by the delays. Many people were. Can I not pay you for 90 days? Would you be harmed? The ruling is proper, expected, and now upheld by an Appeals Court. I have a post on this tomorrow. thanks for the clarifying point in today’s article…”Had DOGE sought to block just fraudulent payments we would not be in this situation” so bull in a china shop approach backfired Yes, that is my position. Again, I am 100% in favor of DOGE stopping this nonsense. But the correct approach is case-by-case. $40 billion in payments go out through this system. Musk Blocked all of them. Innocent parties were illegally harmed. Adding this to my post. good addition… If judges aren’t going to follow civil procedures, they should be removed. The President has executive authority, the Judge has no authority to stop him. Trump needs to move ahead. Did you sleep through civics class? The only one that can stop him is the House of Represtatives. Math class with exponents bats clean-up. What does executive authority mean to you? Are there any constraints on executive authority in your view? If you believe that there are constraints what are those constraints and how are they enforced? I don’t care. Ignore them. They have no enforcement mechanism. Face it. The Constitution is a dead letter. The agencies being audited are themselves unconstitutional. Adhering to it will not make the Left behave any better should they ever return to power. Isn’t it ironic that the “defenders of democracy” rely on lawsuits covertly funded with taxpayer funds filed before unelected judges appointed by presidents elected as long as 4 decades ago? Reagan should have done this 40 years ago. The old fool looks like a bigger disaster every passing year. If fraud and theft were eliminated then the entire eCONomy would collapse. Some District Judge in Rhode Island is not the final word. Not even close. Fraud vitiates all agreements. Any contract made under fraudulent pretext has no basis to demand payment. The judge demands he make payments to anyone with a contract regardless of if the contract was entered into legally or not. We of course should pay attention to the headlines, but that is always a bait to keep our eyes and minds off the the CONSTANT theft going on in Government Circles. Nothing is gonna happen, positive or negative, without the Two-ring Circus (minus the cool animals). So, the leviathan, U.S. government bureaucracy rolls on. It is bankrupting us all and will be difficult to stop. The funding of all these corrupt activities is the responsibility of congress. Both parties have been responsible for this bad behavior since the Kennedy Admin. It will be the responsibility of voters to put more honest people in congress. Until then we will have $2T deficits, that turn into $3T. Nothing get fixed until lobbying is illegal. Until then, we have a republic, if we can keep it. “JD Vance and Elon Musk question judges’ authority over Trump” What “patriots,” threatening the very foundation of our government established when we punked England. “The executive power shall be vested in a President of the United States “ … unless some district judge in Rbode Island doesn’t like what the president does. lol Americans are too stupid to see it… even dumber than the ones that post here. USA is a colony of South Africa now! The US have the best laws that money can buy. A bargain, really. With all due respect, Biden NEVER put himself above the law. He and his administration lost their cases in court, and they respected the outcome. Trump has put himself above the law since he entered politics. In his first term, Trump was fortunately surrounded by some adults who actually knew the law and managed to uphold it against Trump’s urges. Nevertheless, Trump ended up attempting a coup against the US government on J6. Since he got away with that coup attempt, he doesn’t see a reason to respect the law anymore, and we are now heading straight toward a constitutional crisis. See you on the other end. three willful ignoramus downvotes. The ignorami are ascendant! The constitution was written by wussies for wussies. Real men, real patriots, force their will upon the rest. Citizens properly become subjects. Once he takes Canada and Greenland, King Donald will become Emperor Donald. And we subjects will properly bow before him. Not him… me. I believe Mr. Biden willfully went against the Supreme Court by continuing to forgive Student Loans after it had been struck down by SOTU Biden NEVER went against the Supreme Court. You seem not to be able to understand US legal proceedings. But I admit that understanding legal proceedings in our new authoritarian state is not really useful anymore. With all due respect? Except for the truth. must have forgetten he flat out said he will ignore SCOTUS and still provide student loan relief…your selective memory and faux outrage is comical And I railed against that. But “Biden did it too” is no excuse I know you did, I read it. Biden SL case was not Ex Parte in the lower courts…Trumps DOJ was not allowed to defend the president, speak or warned about the proceedings and the judge did not following civil procedures. If they waived bond it was not written anywhere in the TROs anywhere. You’re right inviting 15 million unvetted third worlders to waltz across the border and begin accessing government services is completely in keeping with the law and American norms! Take the plastic bag off your head… “just an elderly man with a poor memory”. lol. A much more detailed explanation here: https://johnalucas6.substack.com/p/more-revolution-from-the-insurrectionist Inferior judges are going to get a slapdown. Jeff Childers had a good take too *: https://www.coffeeandcovid.com/p/heil-slurpy-tuesday-february-11-2025?utm_source=post-email-title&publication_id=463409&post_id=156922407&utm_campaign=email-post-title&isFreemail=true&r=ch1ue&triedRedirect=true&utm_medium=email The Washington Post ran a troubling story yesterday under the headline, “ Trump allies suggest defying court orders after stinging legal rebukes. ” It is true there is a lot of that kind of talk surging around on our side, but defying court orders would be a terrible idea. We are nowhere close to a “defy the courts” moment. Don’t panic until I give the signal. It is true that a pleonastic series of left-wing judges have been tossing out wokabulary-packed TRO’s like obscenely shaped candy tossed in hairy handfuls from a Pride Parade float. “The president,” WaPo crowed, “has lost nearly every battle in court in the opening weeks of his administration, with some judges using biting and incredulous language to push back on administration plans they have deemed unconstitutional, ill-planned or cruel.” Indeed, yesterday a Massachusetts federal judge blocked the prefectly sensible 15% overhead cap on NIH grants.

• • • Technology stocks are hammered today over AI concerns and a failure of US export bans. China’s DeepSeek AI Models Raise Doubts The Wall Street Journal reports China’s DeepSeek AI Models Raise Doubts Over U.S. Tech Dominance Global chip stocks slumped Monday after Chinese artificial-intelligence company DeepSeek said it had developed AI models that nearly matched American rivals despite using inferior chips, raising questions about the need to spend huge sums on advanced gear provided by Nvidia and other tech giants to train AI models. DeepSeek said last week that the performance of its latest R1 model was on par with OpenAI’s o1-mini model that the ChatGPT maker released in September. The announcement came after DeepSeek said in a late-December report that it used a cluster of more than 2,000 Nvidia chips to train its other V3 model, compared with the tens of thousands of chips that are normally used for training models of a similar size. The company said training one of its latest models cost $5.6 million, compared with the $100 million to $1 billion range cited last year by Dario Amodei, chief executive of AI company Anthropic. “There is a new AI challenger in town and investors are spooked at what they’ve discovered,” AJ Bell investment director Russ Mould wrote in a note to clients. “Its assistant is free to use and runs off lower-cost chips and less data—implying a major challenger to the established AI names in the West.” DeepSeek’s perceived success risks intensifying the AI war between the U.S. and China, Quilter Cheviot’s Ben Barringer said in a note to investors, particularly after the recent announcement of Stargate—a joint venture between OpenAI, SoftBank Group, Oracle and MGX to build data centers in the U.S. for OpenAI. News Corp, owner of Dow Jones Newswires and The Wall Street Journal, has a content-licensing partnership with OpenAI. Is AI Spending Justified? AI spending is just one of the concerns that Sends U.S. Tech Stocks Reeling. The sudden popularity of a Chinese artificial intelligence model called DeepSeek pummeled stocks Monday, with the tech-focused Nasdaq composite index down 2.7 percent in morning trading. Several tech companies that have banked on a surge of AI interest sold off, with U.S. chipmaker Nvidia down more than 12 percent at the opening bell. Microsoft lost around 3.5 percent, Meta Platforms lost 1.6 percent, and Oracle dropped more than 7 percent. Analysts said the sell-off underscores anxieties about whether the massive spending on artificial intelligence ― and the specialized chips, data centers and related power infrastructure ― are justified. Nvidia has exploded in value in recent years because it dominates the market for the chips at the center of the global AI race. It’s now one of three companies with a market capitalization above $3 trillion. But some analysts have raised questions about how soon those investments will translate into straightforward moneymaking use cases for U.S. companies. The emergence of a low-cost Chinese competitor adds to skepticism over those investments. The emergence of the model from China has escalated concerns about the U.S. adversary’s tech prowess amid a global race to develop advanced artificial intelligence. China’s advancements in the technology are viewed as a national security threat to the United States, and the success of DeepSeek has only exacerbated those concerns. DeepSeek is a China-based start-up that last week launched a free AI assistant that it says can operate at a lower cost than American AI models like ChatGPT. The company was founded in 2023 by Liang Wenfeng, co-founder of the hedge fund High-Flyer. By Monday, it had rocketed to the top of downloads in the Apple Store.It also reported outages and limited registrations due to “large-scale malicious attacks” amid the uptick in interest. President Donald Trump has said that the United States needs to remain competitive with China in developing artificial intelligence, and he appeared focused on the technology during his first week in office. He told reporters Saturday that he was considering using emergency powers to provide the “tremendous energy” that U.S. companies need to develop AI models. We’re already leading,” Trump said on Air Force One. “Very shortly, we’re going to be leading by a lot.” Longtime technology investor Marc Andreessen, a Trump ally , called DeepSeek’s AI model “one of the most amazing and impressive breakthroughs I’ve ever seen” and “a profound gift to the world” in a post on X . Leading tech firms have spent billions building out artificial intelligence technology for sale to large businesses. Meta chief executive Mark Zuckerberg said in a Facebook post last week that his company plans to invest between $60 billion and $65 billion on AI and build a massive data center. OpenAI, Oracle and SoftBank recently announced a Trump-supported joint venture, called Stargate, that seeks to spend up to $500 billion building out data centers to support AI projects. China’s DeepSeek Turns AI on its Head Sherwood reports China’s DeepSeek turns AI on its Head DeepTrouble The weekend buzz around the large language model — the fact that it “thinks” before it speaks, shows its workings, and matches OpenAI’s most powerful model, the o1, on a range of metrics — seems to have left much of Silicon Valley wowed and worried, in almost equal measure. Per DeepSeek’s own figures , the R1 model outperforms the OpenAI o1 on a variety of key tests, shining particularly brightly in math, where it beats the latest model from Sam Altman’s company on three different tests. While it’s less consistent on coding and language tests — it fared particularly badly on the “SimpleQA” (not shown in chart above), a test evaluating the simple factual accuracy of the info that LLMs spit out — the differences are fairly slim, making the cost-effective R1 look impressive. The Chinese company’s slimmed-down training costs, use of cheaper chips, API, and open-source model have hauled the endless drive for more chips and compute that’s driven much of the market for the last 18 months into question. Meta is planning to spend more than $60 billion on capital expenditures just this year. At a time when people are wondering if we can trust TikTok due to Chinese government ties, many have similar questions about DeepSeek. Tech evangelist Marc Andreessen was among those singing R1’s praises over the last few days — though he may not have asked it about Tiananmen Square yet. Another Sanction Failure Biden placed numerous exports bans on chip technology to prevent this from happening. Instead DeepSeek said in a late-December report that it used a cluster of more than 2,000 Nvidia chips to train its AI. No one should be surprised by this. To Those Hard of Learning, Here’s a Repeat Lesson on Why Sanctions Fail On September 26, 2024, I commented To Those Hard of Learning, Here’s a Repeat Lesson on Why Sanctions Fail Let’s discuss a claim that sanction failures are due to a lack of political will. Robin Brooks on X : “When someone tells you that sanctions can’t and won’t work, that’s basically pro-Russian propaganda. Are we seriously to believe that nothing can be done to stop the shameful flood of transshipments to Russia via Central Asia? Come on. This is just about a lack of political will. “ I am pretty sure that “someone” is me because we have gone round and round on this. When someone tells you that sanctions do work. Ask them for evidence. The above post was on oil-related sanctions. The next article is how and why chip sanctions failed. On August 26, 2024, I commented China Gains Secret Access to Nvdia Microchips by Renting Computers The US has blocked export of Nvdia chips to China. But where there’s profit, there’s a way. Know Your Customer’s Customer’s Customer China sets up an AI company in Singapore. AI developers buy cloud time through a subsidiary that further masks the operation by paying in Bitcoin. In turn, the subsidiary buys time from a company Dubai or Singapore that hosts the servers. US politicians are outraged. But some of us are amused knowing full well that sanctions don’t work. So instead of cloud profits going to US corporations, the profits go to Saudi Arabia, Singapore, Dubai, and South Korea. Only Amazon is forced to “know your customer”. Where Art Thou EU? Trump secured pledges to spend $500 billion on data centers. However, If the benchmarks are accurate, China caught up on AI development by renting NVDIA chips. Meanwhile, the EU is doing nothing but attempting to regulate AI to death. For discussion, please see The EU Will Suffer Because it Is Hostile Territory for the AI industry China’s DeepSeek AI Models Raise Doubts The Wall Street Journal reports China’s DeepSeek AI Models Raise Doubts Over U.S. Tech Dominance Global chip stocks slumped Monday after Chinese artificial-intelligence company DeepSeek said it had developed AI models that nearly matched American rivals despite using inferior chips, raising questions about the need to spend huge sums on advanced gear provided by Nvidia and other tech giants to train AI models. DeepSeek said last week that the performance of its latest R1 model was on par with OpenAI’s o1-mini model that the ChatGPT maker released in September. The announcement came after DeepSeek said in a late-December report that it used a cluster of more than 2,000 Nvidia chips to train its other V3 model, compared with the tens of thousands of chips that are normally used for training models of a similar size. The company said training one of its latest models cost $5.6 million, compared with the $100 million to $1 billion range cited last year by Dario Amodei, chief executive of AI company Anthropic. “There is a new AI challenger in town and investors are spooked at what they’ve discovered,” AJ Bell investment director Russ Mould wrote in a note to clients. “Its assistant is free to use and runs off lower-cost chips and less data—implying a major challenger to the established AI names in the West.” DeepSeek’s perceived success risks intensifying the AI war between the U.S. and China, Quilter Cheviot’s Ben Barringer said in a note to investors, particularly after the recent announcement of Stargate—a joint venture between OpenAI, SoftBank Group, Oracle and MGX to build data centers in the U.S. for OpenAI. News Corp, owner of Dow Jones Newswires and The Wall Street Journal, has a content-licensing partnership with OpenAI. Is AI Spending Justified? AI spending is just one of the concerns that Sends U.S. Tech Stocks Reeling. The sudden popularity of a Chinese artificial intelligence model called DeepSeek pummeled stocks Monday, with the tech-focused Nasdaq composite index down 2.7 percent in morning trading. Several tech companies that have banked on a surge of AI interest sold off, with U.S. chipmaker Nvidia down more than 12 percent at the opening bell. Microsoft lost around 3.5 percent, Meta Platforms lost 1.6 percent, and Oracle dropped more than 7 percent. Analysts said the sell-off underscores anxieties about whether the massive spending on artificial intelligence ― and the specialized chips, data centers and related power infrastructure ― are justified. Nvidia has exploded in value in recent years because it dominates the market for the chips at the center of the global AI race. It’s now one of three companies with a market capitalization above $3 trillion. But some analysts have raised questions about how soon those investments will translate into straightforward moneymaking use cases for U.S. companies. The emergence of a low-cost Chinese competitor adds to skepticism over those investments. The emergence of the model from China has escalated concerns about the U.S. adversary’s tech prowess amid a global race to develop advanced artificial intelligence. China’s advancements in the technology are viewed as a national security threat to the United States, and the success of DeepSeek has only exacerbated those concerns. DeepSeek is a China-based start-up that last week launched a free AI assistant that it says can operate at a lower cost than American AI models like ChatGPT. The company was founded in 2023 by Liang Wenfeng, co-founder of the hedge fund High-Flyer. By Monday, it had rocketed to the top of downloads in the Apple Store.It also reported outages and limited registrations due to “large-scale malicious attacks” amid the uptick in interest. President Donald Trump has said that the United States needs to remain competitive with China in developing artificial intelligence, and he appeared focused on the technology during his first week in office. He told reporters Saturday that he was considering using emergency powers to provide the “tremendous energy” that U.S. companies need to develop AI models. We’re already leading,” Trump said on Air Force One. “Very shortly, we’re going to be leading by a lot.” Longtime technology investor Marc Andreessen, a Trump ally , called DeepSeek’s AI model “one of the most amazing and impressive breakthroughs I’ve ever seen” and “a profound gift to the world” in a post on X . Leading tech firms have spent billions building out artificial intelligence technology for sale to large businesses. Meta chief executive Mark Zuckerberg said in a Facebook post last week that his company plans to invest between $60 billion and $65 billion on AI and build a massive data center. OpenAI, Oracle and SoftBank recently announced a Trump-supported joint venture, called Stargate, that seeks to spend up to $500 billion building out data centers to support AI projects. China’s DeepSeek Turns AI on its Head Sherwood reports China’s DeepSeek turns AI on its Head DeepTrouble The weekend buzz around the large language model — the fact that it “thinks” before it speaks, shows its workings, and matches OpenAI’s most powerful model, the o1, on a range of metrics — seems to have left much of Silicon Valley wowed and worried, in almost equal measure. Per DeepSeek’s own figures , the R1 model outperforms the OpenAI o1 on a variety of key tests, shining particularly brightly in math, where it beats the latest model from Sam Altman’s company on three different tests. While it’s less consistent on coding and language tests — it fared particularly badly on the “SimpleQA” (not shown in chart above), a test evaluating the simple factual accuracy of the info that LLMs spit out — the differences are fairly slim, making the cost-effective R1 look impressive. The Chinese company’s slimmed-down training costs, use of cheaper chips, API, and open-source model have hauled the endless drive for more chips and compute that’s driven much of the market for the last 18 months into question. Meta is planning to spend more than $60 billion on capital expenditures just this year. At a time when people are wondering if we can trust TikTok due to Chinese government ties, many have similar questions about DeepSeek. Tech evangelist Marc Andreessen was among those singing R1’s praises over the last few days — though he may not have asked it about Tiananmen Square yet. Another Sanction Failure Biden placed numerous exports bans on chip technology to prevent this from happening. Instead DeepSeek said in a late-December report that it used a cluster of more than 2,000 Nvidia chips to train its AI. No one should be surprised by this. To Those Hard of Learning, Here’s a Repeat Lesson on Why Sanctions Fail On September 26, 2024, I commented To Those Hard of Learning, Here’s a Repeat Lesson on Why Sanctions Fail Let’s discuss a claim that sanction failures are due to a lack of political will. Robin Brooks on X : “When someone tells you that sanctions can’t and won’t work, that’s basically pro-Russian propaganda. Are we seriously to believe that nothing can be done to stop the shameful flood of transshipments to Russia via Central Asia? Come on. This is just about a lack of political will. “ I am pretty sure that “someone” is me because we have gone round and round on this. When someone tells you that sanctions do work. Ask them for evidence. The above post was on oil-related sanctions. The next article is how and why chip sanctions failed. On August 26, 2024, I commented China Gains Secret Access to Nvdia Microchips by Renting Computers The US has blocked export of Nvdia chips to China. But where there’s profit, there’s a way. Know Your Customer’s Customer’s Customer China sets up an AI company in Singapore. AI developers buy cloud time through a subsidiary that further masks the operation by paying in Bitcoin. In turn, the subsidiary buys time from a company Dubai or Singapore that hosts the servers. US politicians are outraged. But some of us are amused knowing full well that sanctions don’t work. So instead of cloud profits going to US corporations, the profits go to Saudi Arabia, Singapore, Dubai, and South Korea. Only Amazon is forced to “know your customer”. Where Art Thou EU? Trump secured pledges to spend $500 billion on data centers. However, If the benchmarks are accurate, China caught up on AI development by renting NVDIA chips. Meanwhile, the EU is doing nothing but attempting to regulate AI to death. For discussion, please see The EU Will Suffer Because it Is Hostile Territory for the AI industry Subscribe to MishTalk Email Alerts. Subscribers get an email alert of each post as they happen. Read the ones you like and you can unsubscribe at any time. This post originated on MishTalk.Com Thanks for Tuning In! Mish Mike Shedlock Comments to this post are now closed. The Chinese product is supposedly rife with hallucinations. so exactly the same as chat- gpt Clearly, DeepSeek does not have any DEI hires on the staff. never miss a change to blame black folks for all the worlds problems AI is a tough sell because all of it’s users are brainless. Deep Seek can’t discuss Tiananmen Square or the killing of all those sparrows by the CCP that caused millions to die. Things will shake out. There is lots of room in AI for everyone to censor what they need to censor. most business that are investing in AI arent doing so because they want to build bots that talk about politics. the trillion dollar wall street investment is with the hope that they can create business applications that can lead to cost cutting. deepseek works just as well and siginfigantly cheaper and open source… undercutting investers wild dreams Oh thank God. Value investing is back A big aspect of this AI situation is Altman changing the now misnamed openAI to closed source private operation killing innovation. These “tech titans” should know better but nothing like short term greed interfering with long term what’s best for the US. What a massive squandering of resources. Lina Khan and Elon Musk were correct, let’s give them the credit they deserve. DeepSeek trade secret REVEALED: All queries are actually referred directly to classrooms of Chinese 4th graders who provide the needed info in real time. This technology is so vastly superior that all other AI attempts are doomed from the start. Lol. Command economy at its best. What better use for 1 billion 4th graders? The AI bubble was going to pop sooner than later. My significant other has tried several AI tools for writing. One highly rated tool gave the same character 3 different names within 10 pages. Another used the same descriptions frequently. She is attempting to feed one AI tool’s output into another. She finds there is little time savings since more is now used for distilling good ideas from mundane, as well as increased time editing in general. Same issue with AI coding On a lighter note we find out that the Covid did start in the chinese lab with grants from the US and Fauci. They were trying to treat chinese bats . Anyone who spoke out on the social media about these things were locked out for spewing misinformation marginalized and ridiculed . Millions of lifes lost many millions suffered extreme sickness from covid or from the vaccine affects . You wonder why it took 4 years to get the truth out . To think we are worried about a few thousand illegal invaders being rounded up and flown out to where they came from . Go figure . And Fauci got a pardon. Disgraceful So did 1600 of my favorite violent morons! Pardons for all! Ratcliffe confirms what everyone else has known for 5 years — The Covid virus came from Wuhan lab where they were conducting gain of function research on bat viruses while searching for a SARS Vaccine. https://x.com/ More to come… Not my post, but relevant and I thought a good summary: First we have the grant applications from the NIH to EcoHealth Alliance and Dr. Peter Daszak for Gain of Function research on SARS COV1 in 2014 that continued all the way up through 2019. The sub award was to the Wuhan Institute of Virology. Specifically this grant was for conducting research to determine the spillover propensity to humanized mice (i.e. humans) using the SARS COV 1 backbone. Specifically, they cut the spikes off the original SARS COV1 virus and swapped it with a spike that was more capable of infecting humans. This is exactly the definition of gain of function research that the Obama administration put a moratorium on. Here is the link to the NIH grant application if anyone doubts ( https://reporter.nih.gov/project-details/8674931 ) Second, we know through our own intelligence agencies that researchers at the WIOV were infected as early as November 2019. Here is the link to a CBS news article covering this (www.nbcnews.com/…) Third, the spike protein on SARS COV2 was a commonly known spike protein (ACE2) that was used in GoF research because of its likelihood to bind to ACE2 receptors in the lungs. The grant application clearly spells this out. Additionally, the genetic sequencing between SARS1 and SARS2 is so similar that we would have seen clusters of infections near known bat habitats if it were a natural event, rather than it conveniently popping up in and around the WIOV without any other recorded infections.. Fourth, the actions of the NIH are very telling. In May of 2020, Dr. Fauci publicly stated that the evidence “was very very strong” supporting a natural zoonotic spillover event, even though the NIH can’t produce a shred of evidence to support this claim. A good scientist evaluates all evidence before making a conclusion and putting their reputation on the line. I find it extremely odd that the NIH and Fauci would issue a definitive statement as such, without having a wealth of evidence to support it. The CIA’s own analysis, that was conducted under the Biden administration, claims that it most likely came from the WIV. Here is a link to the New York Times if you don’t believe me (www.nytimes.com/…) Sorry, I believe nothing coming from the NY times they have been exposed as habitual liers . They are nothing but a liberal government mouth piece . They lied about Hunters Laptop , Russia collusion , covid to name a few . NY times and W Post are nothing more than a propaganda arm of the US government . The only thing truth that ever leaks out of the NYT or WaPo is when they accidentally make an admission against interest usually around the 19th paragraph . Will Trump ban DeepSeek for “national security reasons? They compete with my stuff. You bet he will. Thanks for confirming Mr. President. its open source. it runs locally. There is not way to “ban” it We had a choice: harness the talents of millions of brilliant, educated Chinese for profit, or tariff the hell out of everyone and fall into obscurity. We chose wrong out of egoism and ignorance. Idiotic post. China tariffs us more than them on most items. But faux outrage is my fave. All goods imported into China are subject to the nation’s value-added tax (VAT) of either 13 percent or 17 percent. The 13 percent tax is available for certain goods that fall mainly within the categories of agricultural and utility items, while the 17 percent tax applies to other goods subject to the VAT tax. If it is a VAT it also applies to Chinese domestic goods. USA has sales taxes in many states. Only an army of H1Bs can save us! Americans are too dumb. (double post) Maybe NVDA isn’t really worth 30 times sales. LOL… And also: Because Trump wants to use military—not civilian—flights to transport deportees, “American taxpayers are paying 300% more for Trump’s immigration plan than they should. “ The important part isn’t deporting immigrants. It’s putting on a popular show for the rednecks. The chains were my idea! Those military planes would be doing touch and go practice if they did not deport illegal aliens. Something that’s getting lost in yesterday’s was-it-or-wasn’t-it US-Colombia trade war: “Colombia accepted 475 deportation flights from the US from 2020 to 2024. “ Trump won this one. He was ahead of the MSM the whole time and the story is over. Normally, I scrutinize “stories” like Colombia refusing the planes because there’s always more to the story. It’s a moot point to rebut Trump because, as I said, Trump won this one. The planes didn’t land. The stinky guy failed. That’s what I keep him around for. Hope you have a little more cash for coffee. I know you can’t afford eggs now. Depending on how good DeepSeek turns out to be, this could be our generations ‘Sputnik’ moment where we suddenly realize that that we do not have anywhere near the tech lead we think we do. Whether that spurs an equivalent prioritizing of research equivalent to what happened in the space race remains to be seen. Sputnik led to a huge increase in funding for primary and technical education. I’d love to see that happen again but I don’t think we’re interested anymore. Sanctions and tariffs work. Look at the price of the rouble and yuan since they were announced. The goal of tariffs was to increase export – It failed The goal of sanctions was to stop exports – failed everywhere We just need more sanctions to reach the Golden Age! I thought the goal of tariffs was to force deadbeat Marxist countries to take back their criminal aliens here in the US? The goal of sanctions and tariffs is to reduce the advantages of low cost (i.e. low wage) nations from eroding the wages in the issuer nation. Most studies focus and GDP, or sales, as a measure of success. What you need to look at the pace of reduction of discretionary income for the average worker post tariffs and the time it gives the issuer nation to rebalance the economy. Low tariffs always benefits the rich people as they always benefit from labor arbitrage. Tariffs gives local substitutes a better chance and gives you time to adjust. You need to look at the bigger picture over the longer term for the median consumer, not the rich equity holder… China is doing amazing things in biotech, too. In some cases, they are ahead of US efforts and US pharmas are now in-licensing their stuff. Scientists from China come to the US where they provide cheap labor to academic labs, and then return to China with the know-how. Much easier to test experimental therapeutics there, and so they are in the lead in some areas. What to do? John Thune recently lamented our diminished number of Navy ships. I think he’s trapped in the ’90’s. Or listens to Hugh Hewitt – also trapped in the ’90’s. I have read that China is investing heavily in photonic chips, so they’re probably not worried about catching NVIDA et al with regards to traditional semiconductor chips. They’re trying to get to next level ASAP. So are we, of course, and everyone should expect Chinese companies will periodically make these announcements that remind us that they got tech mojo. And they avoid the woke mind virus. China knows how detrimental wokeness can be to a country, which is why they directly support it here in the US. They call it baizuo and laugh at us for it. Photonic chips execute algorithms, like silicon ones. So that has more to do with TSMC and Intel than Nvidia. Photonic chips are what’s coming after semiconductor technology. I would imagine China, like America, is trying to incorporate photonic chips with quantum computing. That would be the Holy Grail. I don’t think the NVDA bubble has popped. This is just a temporary correction. I think the whole AI bubble has a ways to go. Hundreds of billions more need to be spent and wasted before it has played itself out and pops. Another Y2K dot.bomb collape? What companies are peddling today is not AI. It’s a very good parlor trick, based on statistics. Geoffrey Hinton, AI pioneer, once said that the approach we’re using today will not achieve AGI, though I can’t find that quote anymore. Necessity, the mother of AI invention…and this is open source! Hmm, a financial guy I know says the Chinese lie about everything and thinks China is just focusing on “low end” AI. Could be true, or could be yet another “Exceptional American” whistling past the graveyard? I don’t know, but the story and post is fascinating. Thanks, Mish. China’s AI is 3 kids in a raincoat. If not China, there will be other competitors. Ten dedicated software developers could build a system that beats current techniques by 10x, and it will happen over the coming years. Last time I checked, the cost of supporting 10 exceptional software developers and a high powered building of compute servers is well below $500 billion. There are politicians to be bribed out of that… the smarter ones are expensive. I saw a quote on CNBC on this today, “I’d have to be crazy to have my developers keep paying ChatGPT when Deepseek is cheaper.” It’s amazing what you can do with enough cheap quasi-slave labor aint it? NVIDIA has lost $500 billion in market cap today. 600 at one point. Let the bubble burst My SPY puts are up 24% today but still underwater. I have until Jun 30 to cash out though…..wait till Feb 1 tariff mania starts and watch it fly! Bloated market. Antagonistic Fed moving forward. A long way down. All asset prices are absurd. An eccentric chemistry professor in upstate NY has said the market is overvalued by 3x for the past 2 years. Nothing to do with Trump and Tariffs. Greenspam turned the whole thing into a Greater Fool Ponzi. Powell is gone in June 2026. I’ll put someone in there that will get rates back to 0… maybe even let the stinky guy send out some personally signed checks. It makes him feel like he’s in charge. This is why H1Bs are the path to American Greatness, just like the old days. There is a great discussion on H1Bs between Lex Fridman and Andreesson on Fridman’s youtube channel. Andreesson is in the club. I’m sure he comported himself properly. It’s been in a massive speculation bubble for many years now over AI. Now a lot of people are going to lose a lot of money. I presume you are readying your put options on NVidia. I mentioned NVidia was going to crash last evening in one of Mish’s threads because of this (even posted a link). I had the misses sell her stake plus her Oracle stock late last night even though she didn’t want to because I knew it was going to be a bloodbath. You will receive all messages from this feed and they will be delivered by email.

• • • Normal trade math does not add up. US imports and China exports are not in sync. China’s Bermuda Triangle UBS comments on China’s Bermuda Triangle ( Download ) When looking at Sino-US trade, the value of China’s exports to the US should be less than the value of US imports from China. This is true for any bilateral trade relationship. Export numbers record the value of the goods exported when sitting on a ship about to leave a country. Import numbers record the value of goods when they arrive in a country. In between the two is the cost of transporting and insuring those goods, so the import values will automatically be higher than the export values. Critically, import values do not include any trade taxes—those are paid by domestic consumers after the goods have arrived . If we look at China’s exports to Europe, or US exports to China, this is exactly what we find. The value of exports and imports move in sync, with the value of imports somewhat higher than the value of exports. This used to be true for China’s exports to the United States. But in recent years, China’s customs data has shown China to be exporting more than the US is importing. The shift is not small—China claims to export almost 19% more than the US claims to be importing. Even that large gap understates the problem—China’s export values should be about 15% lower than US import values, given transport costs. Therefore, this change in the data either overstates China’s exports or understates US imports by over 30%. Unless 30% of ships are disappearing in some kind of midPacific equivalent of the Bermuda triangle, this suggests mismeasurement of the data. This anomaly is something that only happens with China’s exports to the US (not with US exports to China, or China’s trade with other countries). It also does not apply evenly across all sectors— furniture, machinery and equipment, electrical equipment, and plastics are areas where significant anomalies take place. Tariffs do not directly affect the values measured by the data, because US consumers pay trade taxes on the value of imported goods (i.e., after the import data cited here has been calculated). However, rerouting supply chains in response to this might have led to this anomaly. Goods from China that are routed via Vietnam or Mexico (for example) may be classed as exports to the US by China, but as imports from Vietnam or Mexico by the US. Apparent Supply Rerouting When considering the impact of the Trump trade taxes, it is the US data that should be used. Tariffs will be paid by US consumers and calculated off US import data, so what matters is not what China thinks it is exporting to the US but what the US thinks it is importing from China. If the US believes the goods come from somewhere else, they will not be impacted by China-specific tariffs. The above paragraph strikes me as wrong. But it depends on whether you want to measure tariffs collected or Trump’s effort to collect them. I asked Brad Setser, senior fellow for international economics at the Council on Foreign Relations, and Director of International Economics, for the United States Department of the Treasury to comment. Brad Setser Comments Chinese exports started exceeding US imports only in those categories with tariffs, and only after the tariffs were imposed — which provides the basic answer. We know the US isn’t counting 1 billion small value (de minimis) packages in the trade data, and that alone is at least $60b in missing US imports that appear in the Chinese trade data. There are other sorts of tariff avoidance/ circumvention as well. So right now the Chinese export data is better guide to US China trade than the US import data — which is why I now emphasize the $500b or so China reports in exports to US rather than the $400b or so the US reports in imports This appears to be an amusing case of China cleverly avoiding US tariffs but not clever enough to hide it better. US Trade Deficit US balance of trade, chart by Mish. The above chart shows the US trade deficit with China improved but at the expense of increased deficit elsewhere. It’s now unclear if the deficit with China really improved at all. In practice the deficit might really be $100 billion larger than I show. Whereas Setser says use China export data, UBS says use US data. It depends on what your angle is. Do you want an accurate estimate of imports from China, or do you want tariff collection numbers that match incorrect US import measurements? Who Pays Tariffs? Trump says China pays the tariff. That’s ridiculous. To the extent tariffs are collected at all (not avoided by rerouting through Vietnam or Mexico etc.), US consumers or importers pay the tariffs. Tariffs are a tax. The combined impact of rerouting trade, strengthening of the dollar, and the genuine buying of goods from countries other than China negated much of the damage of the tariffs. Tariff Policy The Congressional Research Service comments on U.S. Tariff Policy . Who Makes U.S. Tariff Policy? The Constitution grants Congress the power to lay and collect duties and to regulate commerce with foreign nations. Because tariffs are no longer a major element of domestic tax policy, they have instead become an instrument of U.S. foreign policy and trade promotion. As such, Congress often works with the President to set tariff policy by authorizing the President to negotiate trade agreements and to adjust tariffs in certain circumstances. What Has U.S. Tariff Policy Been? Over the past 70 years, tariffs have never accounted for much more than 2% of total federal revenue. In FY2024, for example, CBP collected $77 billion in tariffs, accounting for approximately 1.57% of total federal revenue . Instead, the United States has generally used its tariff policy to encourage global trade liberalization and pursue broader foreign policy goals. Since 1934, the United States has reduced or eliminated many tariffs as part of bilateral and multilateral trade agreements. By supporting the creation of the GATT and the WTO, the United States Congress sought to reduce tariff rates globally within a rules-based trading system. Roughly 70% of all products enter the United States duty free. Issues for Congress For more than 80 years, Congress has delegated extensive tariff-setting authority to the President, who was more insulated from domestic protectionist pressures than individual Members of Congress. This delegation led to an overall decline in global tariff rates. However, it has meant that the U.S. pursuit of a low-tariff, rules-based global trading system has been the product of executive discretion. While Congress has set negotiating goals, it has relied on Presidential leadership to achieve those goals. The Trump Administration was openly critical of low-tariff policies and made extensive use of authorities delegated to the President to increase tariffs on certain goods. As a result, duties paid on U.S. imports doubled from FY2015 to FY2020 from approximately $37 billion to $74 billion. The Biden Administration has maintained many of those policies with CBP collecting $77 billion in FY2024. Some Members have supported the increased use of tariffs; however, others have expressed concern about the economic impact of increasing tariffs. Some Members and committees have also expressed concerns about the President raising tariffs without congressional approval. Related Posts September 26, 2024: Trump Claims Tariffs Will Reduce the Trade Deficit. Let’s Fact Check. Trump proposes 60 percent tariffs on China. Would that reduce the trade deficit? Where? How? If Trump imposed 60 percent tariffs on China, I believe all trade with China would cease. The US would not collect a cent on those tariffs. That’s the good side actually because would be US consumers who paid the tax. November 22, 2024: Trump’s Proposed Tariffs Are a Tax on Consumers, Primarily the Poor For the poorest fifth of Americans, who will have incomes of less than $29,000 in 2026, the tariffs will impose a tax increase equal to 5.7 percent of their income that year. November 25, 2024: Trump Threatens 25 Percent Tariffs on Mexico and Canada on Day One Trump says he will unilaterally scrap his own allegedly “Best in History” USMCA trade deal and impose huge tariff hikes on our top two trading partners. Is this constitutional? Either this is a Bluff, or Trump is a fool. It could be both. But Trump would have to break his own “Best Deal in History” to do what he says. The deal renews in June of 2026. I believe Trump will wait until then to do anything drastic, if even then. There would be serious ramifications to break a trade deal that Trump himself negotiated. No one could possibly believe any deal he negotiated. How Much Revenue Can Trump Realistically Bring in From Tariffs? Given that Trump, AKA Tariff Man, is going to hike tariffs, the key question is How Much Revenue Can Trump Realistically Bring in From Tariffs? There are many moving parts to this question including Congress, retaliations, and consumer impacts. The Tax foundation provides an estimate. Mine is lower because Trump is not going to unilaterally break USMCA. Click on the above link for details. China’s Bermuda Triangle UBS comments on China’s Bermuda Triangle ( Download ) When looking at Sino-US trade, the value of China’s exports to the US should be less than the value of US imports from China. This is true for any bilateral trade relationship. Export numbers record the value of the goods exported when sitting on a ship about to leave a country. Import numbers record the value of goods when they arrive in a country. In between the two is the cost of transporting and insuring those goods, so the import values will automatically be higher than the export values. Critically, import values do not include any trade taxes—those are paid by domestic consumers after the goods have arrived . If we look at China’s exports to Europe, or US exports to China, this is exactly what we find. The value of exports and imports move in sync, with the value of imports somewhat higher than the value of exports. This used to be true for China’s exports to the United States. But in recent years, China’s customs data has shown China to be exporting more than the US is importing. The shift is not small—China claims to export almost 19% more than the US claims to be importing. Even that large gap understates the problem—China’s export values should be about 15% lower than US import values, given transport costs. Therefore, this change in the data either overstates China’s exports or understates US imports by over 30%. Unless 30% of ships are disappearing in some kind of midPacific equivalent of the Bermuda triangle, this suggests mismeasurement of the data. This anomaly is something that only happens with China’s exports to the US (not with US exports to China, or China’s trade with other countries). It also does not apply evenly across all sectors— furniture, machinery and equipment, electrical equipment, and plastics are areas where significant anomalies take place. Tariffs do not directly affect the values measured by the data, because US consumers pay trade taxes on the value of imported goods (i.e., after the import data cited here has been calculated). However, rerouting supply chains in response to this might have led to this anomaly. Goods from China that are routed via Vietnam or Mexico (for example) may be classed as exports to the US by China, but as imports from Vietnam or Mexico by the US. Apparent Supply Rerouting When considering the impact of the Trump trade taxes, it is the US data that should be used. Tariffs will be paid by US consumers and calculated off US import data, so what matters is not what China thinks it is exporting to the US but what the US thinks it is importing from China. If the US believes the goods come from somewhere else, they will not be impacted by China-specific tariffs. The above paragraph strikes me as wrong. But it depends on whether you want to measure tariffs collected or Trump’s effort to collect them. I asked Brad Setser, senior fellow for international economics at the Council on Foreign Relations, and Director of International Economics, for the United States Department of the Treasury to comment. Brad Setser Comments This appears to be an amusing case of China cleverly avoiding US tariffs but not clever enough to hide it better. US Trade Deficit The above chart shows the US trade deficit with China improved but at the expense of increased deficit elsewhere. It’s now unclear if the deficit with China really improved at all. In practice the deficit might really be $100 billion larger than I show. Whereas Setser says use China export data, UBS says use US data. It depends on what your angle is. Do you want an accurate estimate of imports from China, or do you want tariff collection numbers that match incorrect US import measurements? Who Pays Tariffs? Trump says China pays the tariff. That’s ridiculous. To the extent tariffs are collected at all (not avoided by rerouting through Vietnam or Mexico etc.), US consumers or importers pay the tariffs. Tariffs are a tax. The combined impact of rerouting trade, strengthening of the dollar, and the genuine buying of goods from countries other than China negated much of the damage of the tariffs. Tariff Policy The Congressional Research Service comments on U.S. Tariff Policy . Who Makes U.S. Tariff Policy? The Constitution grants Congress the power to lay and collect duties and to regulate commerce with foreign nations. Because tariffs are no longer a major element of domestic tax policy, they have instead become an instrument of U.S. foreign policy and trade promotion. As such, Congress often works with the President to set tariff policy by authorizing the President to negotiate trade agreements and to adjust tariffs in certain circumstances. What Has U.S. Tariff Policy Been? Over the past 70 years, tariffs have never accounted for much more than 2% of total federal revenue. In FY2024, for example, CBP collected $77 billion in tariffs, accounting for approximately 1.57% of total federal revenue . Instead, the United States has generally used its tariff policy to encourage global trade liberalization and pursue broader foreign policy goals. Since 1934, the United States has reduced or eliminated many tariffs as part of bilateral and multilateral trade agreements. By supporting the creation of the GATT and the WTO, the United States Congress sought to reduce tariff rates globally within a rules-based trading system. Roughly 70% of all products enter the United States duty free. Issues for Congress For more than 80 years, Congress has delegated extensive tariff-setting authority to the President, who was more insulated from domestic protectionist pressures than individual Members of Congress. This delegation led to an overall decline in global tariff rates. However, it has meant that the U.S. pursuit of a low-tariff, rules-based global trading system has been the product of executive discretion. While Congress has set negotiating goals, it has relied on Presidential leadership to achieve those goals. The Trump Administration was openly critical of low-tariff policies and made extensive use of authorities delegated to the President to increase tariffs on certain goods. As a result, duties paid on U.S. imports doubled from FY2015 to FY2020 from approximately $37 billion to $74 billion. The Biden Administration has maintained many of those policies with CBP collecting $77 billion in FY2024. Some Members have supported the increased use of tariffs; however, others have expressed concern about the economic impact of increasing tariffs. Some Members and committees have also expressed concerns about the President raising tariffs without congressional approval. Related Posts September 26, 2024: Trump Claims Tariffs Will Reduce the Trade Deficit. Let’s Fact Check. Trump proposes 60 percent tariffs on China. Would that reduce the trade deficit? Where? How? If Trump imposed 60 percent tariffs on China, I believe all trade with China would cease. The US would not collect a cent on those tariffs. That’s the good side actually because would be US consumers who paid the tax. November 22, 2024: Trump’s Proposed Tariffs Are a Tax on Consumers, Primarily the Poor For the poorest fifth of Americans, who will have incomes of less than $29,000 in 2026, the tariffs will impose a tax increase equal to 5.7 percent of their income that year. November 25, 2024: Trump Threatens 25 Percent Tariffs on Mexico and Canada on Day One Trump says he will unilaterally scrap his own allegedly “Best in History” USMCA trade deal and impose huge tariff hikes on our top two trading partners. Is this constitutional? Either this is a Bluff, or Trump is a fool. It could be both. But Trump would have to break his own “Best Deal in History” to do what he says. The deal renews in June of 2026. I believe Trump will wait until then to do anything drastic, if even then. There would be serious ramifications to break a trade deal that Trump himself negotiated. No one could possibly believe any deal he negotiated. How Much Revenue Can Trump Realistically Bring in From Tariffs? Given that Trump, AKA Tariff Man, is going to hike tariffs, the key question is How Much Revenue Can Trump Realistically Bring in From Tariffs? There are many moving parts to this question including Congress, retaliations, and consumer impacts. The Tax foundation provides an estimate. Mine is lower because Trump is not going to unilaterally break USMCA. Click on the above link for details. Subscribe to MishTalk Email Alerts. Subscribers get an email alert of each post as they happen. Read the ones you like and you can unsubscribe at any time. This post originated on MishTalk.Com Thanks for Tuning In! Mish Mike Shedlock Comments to this post are now closed. Funny how it all started just before the CCPandemic hoax. I am looking forward to what Trump will do on energy. Trump has vowed to declare a national energy emergency as soon as he takes office Monday, months after promising voters that he would cut their electric and gasoline prices in half in the first year of his administration . “To achieve this rapid reduction in energy costs, I will declare a national emergency to allow us to dramatically increase energy production, generation and supply,” Trump said in Potterville, Michigan last August. “Starting on day one, I will approve new drilling, new pipelines, new refineries, new power plants, new reactors and we will slash the red tape.” The president-elect reiterated as recently as Dec. 22 his intention to declare a national emergency on energy on the first day of his administration. He vowed to issue a series of executive orders to reverse Biden administration policies on natural gas exports, drilling and emissions standards. Trump plans to establish a National Energy Council led by North Dakota Gov. Doug Burgum, his pick to lead the Department of the Interior. Burgum said during a Senate hearing on his nomination this week that he expects the council to be established through an executive order. I encourage everyone to write down, if you can, the price you pay for gasoline, diesel, fuel oil, natural gas and electricity tomorrow. Repeat this every month this year to follow Trump’s progress. It should be an interesting exercise. I wonder if he will put tariffs on imported energy right away? That might raise prices in the short term. Given that sanctions against Russia in sping 2022 triggered global GDP decline and seizing up of world trade, you might want to look eastwards for the answers. Energy costs due to sanctions against Russia for America’s illegal proxy war in The Ukraine, have put pressure on developing countries all over the place, and European and EU countries too, contributing the the DXY spike and the strength of the USD against other currencies. The ending of hostilities with Russia and futile attempts to reboot global trade whilst China is imploding might have more leverage on oil prices. Prices decline as trade does, as demand does, as global deflation spreads. Axioms (contra Trump ‘thinking’) Wouldn’t the impact depend on demand elasticity for the specific good being tariffed? If Chinese-made product can be obtained elsewhere at a comparable price, then the Chinese producer will need to lower its price, right? If we are understating imports doesn’t that imply we are also overstating gdp? You are only talking about a few tenths of a percent, but its not nothing. “ This appears to be an amusing case of China cleverly avoiding US tariffs but not clever enough to hide it better.” You use the term “China” to make it sound as if everyone (government, manufacturers, workers, etc.) in China acts in concert just like an ant colony or beehive. It could be that manufacturers and other exporters are declaring the cargo correctly to the Chinese government and then route it through other countries to avoid any tariffs. This is exactly what US businesses would do if the situation was reversed. If hiding exports was official Chinese policy, I am certain that they are smart enough to just falsify the information. China cannot hurt the US very much on trade. Our exports are fungible, like food and commodities. Fungible exports cannot be banned or tariffed effectively. If China bought their food from another country, we would sell our food to the seller country. If they tried to squeeze us out, there would be oversupply and the selling country would be punished unless China overpaid (which is a tax) for its imports. The poorest do not work (perhaps old or dependent). The tariff costs can be easily mitigated for them. For the relevant working class, the wage increases will be much greater than the tariff tax. So the working class wins. The elite lose. The Chinese lose. And if you understand economics (e.g. Kalecki’s profit equation and why I would bring this up), you know that the elite are collaborating with the Chinese so they can get low tax rates and entitlements. Of course the elite are going to be against it. They just want to get rich off of China and let the working class deal with the consequences. Speaking of China… EcoHealth Alliance, the nonprofit that Dr. Anthony Fauci used to offshore risky gain-of-function research to China 6 months before the Obama administration banned it, has finally been cut off by the US Government – along with its former president, Peter Daszak, for a period of five years following scrutiny over its work in Wuhan, China ahead of the Covid-19 pandemic. Dr. Anthony Fauci ‘prompted’ the fabrication of a paper by a cadre of scientists aimed at disproving the Covid-19 lab-leak theory. According to US Right to Know , emails obtained in 2020 revealed that a statement in The Lancet authored by 27 prominent public health scientists condemning “conspiracy theories suggesting that COVID-19 does not have a natural origin” was organized by employees of EcoHealth Allianc e, a non-profit group that has received millions of dollars of U.S. taxpayer funding to genetically manipulate coronaviruses with scientists at the Wuhan Institute of Virology . After Sars-CoV-2 broke out down the street from the Wuhan Institute of Virology, Fauci engaged in a massive campaign to deny the possibility of a lab-leak from the lab he funded, and instead pin the blame on a yet-to-be discovered zoonotic intermediary species. https://usrtk.org/covid-19-origins/timeline-the-proximal-origin-of-sars-cov-2/ I can’t believe that I read Mish’s 10th article this year on Trump tariffs, and it’s only the 18th of January. Fortunately, we’re less than 48 hours away from finding out about Trump’s big border, deportations, tax cuts, tariffs, & crypto currency strategies. Did anyone buy $Trump crypto Friday night? I bought a bunch, to get around the gift tax. Well maybe the “poor” in the USA shouldn’t be buying cheap crap from China in the first place. By increasing the the price of cheap crap from China maybe people won’t buy it. If they don’t buy it no tax is paid and they experience zero inflation. If in fact China is sending the US some $60 billion in small parcels then the US needs to do what Australia did: tax them. I can’t remember what year it was, but several years ago we were able to buy things under a certain amount on platforms such as eBay from international sellers and pay zero tax on them. Lots of businesses in Australia started yelling about unfair competition and all that sort of stuff so they changed the system to force the big platforms to collect 10% GST on all purchases added on to the price automatically. And the GST included postage as well. Add in the huge increase in international postage costs, the GST, and fall in the Australian dollar and prices of some things have gone up by a huge amount. For example, I used to buy one item from a Japanese seller on eBay at around US$15.00. Small packet postage was around US$4 so my total cost was US$19 or around A$25 at that time. Fast forward to recent times. The price of the item is now around US$25, postage has increased to US$15 (thanks to those international postage reforms proposed by Obama and approved under Trump), and GST on the purchase is US$4 for a total of US$44. With fall in the exchange rate it works out to around $A70 or so. Guess what? I don’t buy it anymore. However if you travel overseas and return to Australia you can bring in $A900 per adult tax free. Some purchases for personal use such as clothes you bought overseas and used are not included in the amount. You can buy lots of stuff overseas much cheaper than in Australia and if brought back with you, you don’t have to pay exorbitant postage so it’s best to max out your shopping and allowance. You can probably pay for your ticket with the savings on price difference, GST, and postage savings. But twhat about cigarettes one of those staples of duty free shopping? Cigs – you are allowed one packet of cigarettes is all. Australia is the most expensive country in the world to buy those death sticks at around A$40 a pack. Yep, $A40 a pack. What about booze? 2.25 liters of booze. Again tax on booze here is high pushing up the price. You can buy a 700ml bottle of JW Black Label for around A$58 here. It is cheaper in Japan at any grocery store…..Here you can’t buy booze at a grocery store either. That’s the spirit… own nothing, be happy. Exactly as I planned it with my minions and demagogues and “our democracy ™ “ Many things about Australia suck not the least of which was their authoritarian long running covid lockdowns and forced vaccination. Their retirement system is great though. Yes, there are a few things better in Australia than some other countries, but there used to be a lot more. This place has changed a lot for the worse over the past 40 years or so. Retirement system is good and better than the US. Even better if you have some money, but not too much. No inheritance tax and no capital gains tax on your principal place of residence. IMO the government here in Victoria is going to try and implement an inheritance tax in the future. The state government is broke and in debt. Land tax in Victoria is outrageous and real estate tax on your PPR has gone way up for basically nothing in return, but still way cheaper than the US. Medical system is much cheaper than the US with prescription prices very reasonable. The public hospital system is basically free, but wait times for the ER and non life threatening surgery here in Victoria are too long. The ambulance service/waiting times are ridiculously long. Some people call a taxi to go to the ER even if they have a heart attack/stroke. Crime is generally low in many areas, but again has increased a lot over the years. The worst parts of Australia are the high cost of living and too much regulation of all aspects of life and business. The United States could not bear 60% tarrifs on Chineese goods, lest there be civil unrest. This isn’t 1929. The agrarian age is over, and so are any clever ways to enact US ecomic autonomy. I smell Y.U.G.E. debt under Trump. Would there be a tax on chinese ingredients(for lack of a better word) that make 90% of our antiobiotics? What about Chinese parts that go into our fighter jets? In 2023, the US imported 8.5 mbpd of petroleum products, including 6.5 mbpd of heavy crude oil that our refineries use. 8.5 mbpd x $80 x 30 day =$20 billion per month A 25% tariff results in $5 billion per month in revenue for the US government. Unfortunately it all comes from the US consumer in the form of higher prices for gasoline, diesel, fuel oil, jet fuel etc None of this comes from China. In fact we export oil and gas to China. Yeah but all those 200,000 gas stations are competing with each other. Prices go up slowly and come down even slower. Sometimes it isnt macroeconomics. Sometimes its damn Zeke down the street whose station is taking all my business. I gotta compete. Yes. There is a lot of competition in gasoline. Which is why profit margins are very low. The typical gas station net profit per gallon on gasoline ranges from 3-8 cents per gallon. That is why many stations have convenience stores to sell you items with high profit margins. So if a station buys their gas from the refiner at $3.00 and Trump then adds a 25% tariff on the oil the refiner buys, then the refiner must boost the price to the gas station to $3.75. Add 8 cents profit and the pump price is now $3.83. And all those gas stations can compete at the new level. Competing means either dropping your prices or offering some extra service which may or may not cost you more in the long run. I still think there will be a few desperate vendors who will be forced to drop prices no matter what the tariff is, at least for awhile. You have a strange idea of what competition means. If all gas stations see their cost of gasoline increase from $3 to $3.75, there is nothing they can do about it. No amount of competition is going to bring the price below their breakeven cost of $3.75. “ Which is why profit margins are very low. The typical gas station net profit per gallon on gasoline ranges from 3-8 cents per gallon.” Just wondering. In my area, Costco gas is ALWAYS $0.20 cheaper than the typical gas station. Does this mean Costco is losing $0.12-$0.17 per gallon? How can this be? I find it very hard to believe that the typical gas station’s margin is 1-2%. PapaD, come on! Nope. Costco does not sell gas at a loss. Costco is willing to make a 1-2% margin on gas, as each location sells over 1 million gallons per month. And gas is a draw that gets people into their stores. Other gas stations, with convenience stores will take 2-3% margins on 100,000 gallons per month. Smaller independents need 3-5% margins as they may only sell 60,000 gallons a month. Second, Costco can negotiate slightly lower prices when buying their gas due to their incredibly high volumes. In addition, you need to purchase a Costco membership to buy gas at Costco. And Costco makes a large part of their profits from membership sales. Most gas stations break even on the gas. They make their money selling stuff inside the station. This is why you see the rise of WaWa type gas stations that sell decent food along with a myriad of groceries Stopping for gas is just to lure you into the store. In other words it’s highly unlikely gas stations will drop prices on gas because they are already making zero or next to zero profit on the gas. Imported heavy crude is not priced at $80 a barrel so you entire post is incorrect. lol! WTI is currently $77.88, Brent is $80.79, and Murban is $83.65. And these numbers will change every day. $80 was just a rough estimate in order to estimate possible tariff revenue in the coming months. In addition, the 8.5 mbpd figure was an estimate as well, as this number typically fluctuates between 7 and 10 mbpd. If I had said I was hot and sweaty because it was 100F outside, would you tell me that it’s not hot outside at all, and I can’t possibly be hot and sweaty because it’s not 100F; it’s only 99F, so everything else I said must be wrong? Educate yourself and learn a little at the same time. The US imports a lot of crude from Canada and pays the market price for Canadian crude which is much lower than WTI. You can even look up the price and see how much the discount for Canadian crude is from WTI. Brent, Murban, and other oil prices are basically irrelevant in the USA oil market. Yes. The US imports more crude oil from Canada than any other country. And at a discount to boot. I am well aware of this because of my substantial holdings of Canadian oil and gas stocks. Even with a lower WCS price they are gushing some pretty generous free cash flow. And the price differential has been narrowing with the startup of the TMX pipeline. The US also imports oil from Venezuela, Mexico, Saudi and others at higher prices. I would be glad to redo the calculation for you based on your opinion. Just tell me what you think the “average” price for imported oil and petroleum products into the US will be in 2025, and what will be the average number of barrels per day of these products? I estimated an average of 8.5 mbpd at $80. What is your estimate? Perhaps you think the average price will be $70? Then the calculation would be: 8.5 mbpd x $70 x 30 =$17.85 billion per month instead of $20 billion A 25% tariff would then be $4.46 billion per month rather than 5 billion. Or better yet. How about you tell me how much the US will collect in tariffs on imported oil and petroleum products in 2025? How does China keep their slave labor busy in a trade war? The US can hunker down but what is to be done with idle hands that need to be fed. Back in the day they were pushed out to the border to build a massive wall. What would they do today? I have no idea but it’s a lot of people. What happens if they get ornery. As others have stated, the problem keeps Xi up at night. Xi is probably more worried about where he’s going to be able to run to. Trump is consistent: vulgar, grifting, cheap, tacky, lying, felonious, corrupt, abusive, vain, weak and ignorant. Everything you need to be a successful autocrat. Except you need to be a little smarter and a little less lazy. Colin Powell said much of the same about Hillary: https://www.cbsnews.com/media/5-emails-in-which-colin-powell-slammed-hillary-clinton/ He himself lied about weapons of mass destruction so pick your poison. I think that you meant Biden is …… Did you seen where Speaker Johnson said he knew Joe was gone, when he didn’t realize that he had signed some EO? But a refreshing change after the last administration. But it doesn’t make him a bad person. In other words we can expect continuity between administrations. Awesome! Like all other developing countries the USA can restore manufacturing behind a high tariff wall. Japan did it. China did it. South Korea did it. Europe still does it. While I do not know how much this may or may not influence the data, it has to be noted that an increasingly larger portion of Chinese exports to USA has pre-paid ocean freight. In other words, the shipper in China pays the ocean freight. Having spent my career in shipping, I can say that a large portion of Chinese exports to the USA is from a Chinese entity in China going to a Chinese consignee in the U.S. This is especially true for a type of cargo moving under a NVOCC bill of lading (non-vessel operating common carrier). I am not arguing with Mish’s analysis. I am just pointing out that the transportation costs maybe a variable impacting the data. The Chinese NVOCC trade between China (exports) and U.S. (imports) is massive! Weeeellll in a normal world, there would also be a competition component to all this. If a business cant sell a widget for $100 cause its competition is selling it for less, the business would have to consider dropping the price of the widget to get at least some revenue for its (fixed) expenses. The tariff may not be passed on at all. It would just be a lost opportunity for profit for the business. But since this isnt the real world and Covid slammed shut the doors of a lot of businesses, the competition factor may be a lot smaller. You will receive all messages from this feed and they will be delivered by email.