zerohedge

Chinese Satellite Imaging Firm Helping Houthis Target US Warships

Washington is now accusing China of getting in bed with the Iran-backed Shia Houthis of Yemen, who have long waged a war against Red Sea shipping, including attacks on US warships and Israel.

The US State Department on Thursday issued allegations centered on Chinese firm, Chang Guang Satellite Technology, saying it is directly supporting attacks by Houthi fighters against American interests. This firm is well-known to be close to the CCP government, and is already under Western sanctions.

“We can confirm the reporting that Chang Guang Satellite Technology Company Limited (CGSTL) is directly supporting Iran-backed Houthi terrorist attacks on U.S. interests,” State Department spokesperson Tammy Bruce told a press briefing.

The statement was issued in the wake of a Financial Times report which said the firm is supplying the Houthis with satellite imagery used in targeting. 

“The United States has raised our concerns privately numerous times to the Chinese government on Chang Guang Satellite Technology Co Ltd’s role in supporting the Houthis in order to get Beijing to take action,” a US officials was quoted in the report as saying. But these warnings were reportedly “ignored”.

CGSTL has long been described as close to the Chinese government, and has been a central firm in the country’s military-civil fusion program, which requires private sector companies to provide assistance to the government when called upon. The Chinese Embassy in Washington has denied any awareness of these new allegations concerning support to the Houthis. Interestingly, public company documents present the firm’s purpose as providing “earthquake services”. 

And the state connections are clear…

According to background on the company via FT:

The Chinese company was established in 2014 as a joint venture between the provincial government in Jilin and a branch of the Chinese Academy of Sciences in Changchun, the province’s capital.

“Chang Guang is one of a handful of ‘ostensibly’ commercial Chinese satellite companies that are in fact deeply embedded in the military-civil fusion ecosystem, supplying global surveillance capabilities to both civilian and military customers,” said James Mulvenon, an expert on the Chinese military and intelligence services at Pamir Consulting.

It previously came under US sanctions during 2023 in connection with the Ukraine war, having been accused of giving high-resolution satellite imagery to Wagner Group, Russia’s most well-known and controversial mercenary firm.

The FT report indicates that CGSTL had Chang Guang 100 satellites in orbit as of last year, and there are ambitious plans achieve 300 circling the earth by the end of 2025, which would allow for snapshots of any location on the planet each ten minutes.

If it does have a role in Yemen, this will further damage already severely strained US-China relations mid the tariff war, given the Houthis have frequently directly targeted US warships, including the carrier USS Harry S. Truman with drone and missile attacks. The USS Carl Vison carrier is about to joint the Truman in patrolling regional waters, also as tensions heat up with Iran.

Tyler Durden
Thu, 04/17/2025 – 23:15…

Trump Admin Orders Halt To Offshore Wind Project Near New York

Authored by Jacob Burg via The Epoch Times,

Secretary of the Interior Doug Burgum said on April 16 that he had ordered a halt to the construction of a major wind project off the coast of New York “until further review.”

Burgum, posting to the social platform X on Wednesday, said he had consulted with Commerce Secretary Howard Lutnick to direct the Bureau of Ocean Energy Management to “halt all construction activities” on Equinor’s Empire Wind project. The Biden administration approved the project in 2023, with construction beginning last year.

The interior secretary accused the former administration of “rush[ing] through its approval without sufficient analysis.” He did not provide further details on potential faults identified.

“On day one, [President Donald Trump] called for comprehensive reviews of federal wind projects and wind leasing, and at Interior, we are doing our part to make sure these instructions are followed,” Burgum wrote in a follow-up post.

The Interior Department did not respond to a request for comment by publication time.

Equinor, a Norway-based company, was supported by President Joe Biden in his efforts to expand renewable energy projects.

The Bureau of Ocean Energy Management (BOEM), an arm of the Interior Department that permits offshore energy projects, gave the company a stop-work order, according to an Equinor spokesperson.

“We will engage directly with BOEM and the Department of Interior to understand the questions raised about the permits we have received from authorities,” Equinor said in a statement provided to media outlets. “We will not comment about the potential consequences until we know more.”

Equinor did not respond to a request for further comment by publication time.

Lutnick was involved in the decision because the Commerce Department houses the National Marine Fisheries Service, which is also involved in permitted offshore wind facilities.

Burgum’s decision follows Trump’s January order to review all offshore wind permitting and leasing on his first day back in office in January.

After declaring a national energy emergency, the Trump administration has hastened the speed of environmental reviews and has fast-tracked approvals for other energy projects.

Since Trump’s order, the offshore wind industry has worked to align itself with the president’s energy agenda.

At the time, the American Clean Power Association said in a statement that it “strongly supports President Trump’s effort to reform the permitting process to speed the development of all forms of domestic energy production.”

However, the group’s CEO, Jason Grumet, on Wednesday criticized Burgum’s decision to halt the Empire Wind project.

“Halting construction of fully permitted energy projects is the literal opposite of an energy abundance agenda,” Grumet wrote in a statement.

“With skyrocketing energy demand and increasing consumer prices, we need streamlined permitting for all domestic energy resources. Doubling back to reconsider permits after projects are under construction sends a chilling signal to all energy investment.”

He urged the Trump administration to “quickly address perceived inadequacies in the prior permit approvals so that this project can complete construction and bring much-needed power to the grid.”

Located 12 nautical miles south of Long Island, New York, the…

Russia Targets Major Surge In Natural Gas Exports By 2050

Authored by Charles Kennedy via ilPrice.com,

Russia plans to double its natural gas exports by 2030 and triple them by 2050.

The strategy focuses on expanding exports to “friendly countries” and developing Arctic energy resources.

Russia faces economic risks due to global market volatility and Western sanctions.

Russia expects its natural gas exports, including via pipeline and LNG, to jump twofold by 2030 and threefold to 2050 under its new long-term energy strategy approved by the government on Monday.

Russia sees its pipeline and LNG overseas deliveries surge from 146 billion cubic meters (bcm) in 2023 to 293 bcm in 2030, and further up to 438 bcm by 2050.

Crude oil and condensate production is targeted to increase from 531 million metric tons per year, or 10.66 million barrels per day (bpd), in 2023 to 540 million tons, or 10.8 million bpd, by 2050.

However, oil exports are expected to remain flat throughout 2050, at around 235 million tons per year, or about 4.7 million bpd.

The new strategy, whose update was ordered by Vladimir Putin, includes measures to accelerate the development of oil and gas processing, expand the regional gas infrastructure development program, and ensure sufficient petroleum product supply on the domestic market at affordable prices.

Under the strategy, Russia will also continue to redirect oil and gas exports “to new markets in friendly countries,” to which Moscow has been exporting since the invasion of Ukraine and the Western embargoes and sanctions imposed in 2022.

Russia also aims to boost oil transshipment capacity in its Arctic and Far Eastern ports and actively utilize the Northern Sea Route’s potential—these are key to delivering oil and LNG from its Arctic projects to markets in Asia.

While updating its long-term energy strategy, Russia faces lower oil and gas revenues in the short term.

For Russia, the oil market meltdown in recent days could pose risks to the economy, Russia’s Central Bank Governor Elvira Nabiullina said last week.

“If the escalation of the tariff wars continues, this usually leads to a decline in global trade and the global economy and, possibly, demand for our energy resources. Therefore, there are risks here,” Nabiullina was quoted as saying by Russia’s TASS news agency.

Tyler Durden
Thu, 04/17/2025 – 06:30…

Trump Confronts Economic And Geopolitical Reality

Authored by Edward Ring via American Greatness,

By the time this is published, everything may have changed, and that is to be expected. Throughout his career, well before and since becoming a politician, Trump has explicitly stated that he does not think it is always a good strategy to be predictable. And while markets love predictability, sometimes markets, and the systems propping them up, need disruption. This is such a moment.

Nobody should deny that the anxiety is genuine. An older friend of mine, well into his 70s, still working but ready to retire, is wondering how he and his wife will survive if their savings are wiped out. That’s true for all of us, but it begs the question: What if the painful restructuring we may be about to endure, and which may last for many years, is necessary to avoid an even worse fate?

Trump’s abrupt escalation of import tariffs goes well beyond violating the principles of comparative advantage, but we can start there. “Comparative advantage” is not all it’s cracked up to be. Repeated in business schools as if it were gospel since the 1980s, it goes something like this: “Wool is cheaper in Scotland, and wine is cheaper in France, so France should sell their wine to Scotland, and Scotland should sell their wool to France.” Everybody wins. Period. That’s the extent of it. That is the essence of free trade theory.

In the real world, though, policies that rely on “comparative advantage” doctrine as their moral justification have gotten pretty ugly. While overall economic growth may be maximized when every nation exports products that it produces most cost-effectively, the local impacts are not always benign. Nations that produce coffee at competitive global prices, for example, end up with valuable cropland converted from food production to coffee plantations. These coffee plantations are typically owned by multinational corporations that repatriate profits to low-tax nations elsewhere while buying off a small local elite that streamlines the regulatory environment. Meanwhile, the nation becomes dependent on imports for everything except coffee, and even the coffee ends up priced out of reach for the average citizen. Replace “coffee” with any specialty product, and all too often, the “gains of trade” translate on the ground into nations with seething, destitute populations dependent on accumulating debt and foreign aid.

These examples aren’t restricted to foreign nations, nor are they restricted to commodities. While American multinationals moved manufacturing overseas, in the process destroying millions of jobs and thousands of communities in America, it wasn’t just cheap wool, cheap wine, and dirt-cheap flat-screen TVs that were pouring into the country in exchange. We offshored our production of steel, our chip manufacturers, our pharmaceutical industry, and much more.

And even that devastation was tolerated for decades because its effects were mostly felt in what we now call rust belt states. Our service economy and tech sectors boomed, along with what was left of manufacturing, satiating a majority of the population that loved buying cheaper foreign imports. But…

Made In China Vs Made In America

While China’s status as the world’s largest manufacturing hub seems to be a law of nature these days – one only challenged by President Trump – that hasn’t always been the case. 

In fact, as Statista’s Felix Richter shows in the chart below, as recently as 2009, the U.S. trumped China in manufacturing output as measured by total value added in the sector.

 

You will find more infographics at Statista

China’s manufacturing output climbed from roughly $134 billion in 1980 to roughly $4.8 trillion in 2023. 

During that time, China’s share of global manufacturing output climbed from 5 percent to around 30 percent, while former manufacturing leader the United States saw its share drop from 21 to 17 percent. 

In 2001, the U.S. share of global manufacturing peaked at 28 percent, but China’s accession to the WTO in 2001, which opened the country up to the world economy, quickly changed the balance of power.

Tyler Durden
Wed, 04/16/2025 – 18:00…

Respect & Clarity: China Opens Door For Reengaging Trump In Trade Talks

Nasdaq 100 and S&P 500 e-mini futures trimmed overnight losses after China reportedly laid out a set of preconditions for resuming trade talks with President Trump and his administration, Bloomberg reported, citing a source familiar with Beijing’s internal deliberations. 

According to the source:

Demand for Respect: China wants a more respectful tone from the U.S., particularly reducing disparaging remarks from U.S. cabinet members. Beijing was especially angered by Vice President JD Vance’s recent “Chinese peasants” comment. Chinese Foreign Ministry spokesman called Vance’s remarks “ignorant and disrespectful.”

Unified U.S. Messaging: Chinese officials are confused by conflicting signals from Washington. While Trump’s tone on Chinese President Xi Jinping has been moderate, hawkish comments from other high-ranking White House officials have conflicted. Without a clear and consistent U.S. position, China sees little value in engagement.

Point Person: Beijing wants the Trump administration to designate a point person to oversee trade talks. 

News of the preconditions crossed the Bloomberg wires at 0427 ET. 

This sent the U.S. main equity index futures surging, trimming earlier losses from European and Asian sessions. 

As of 0630 ET, Nasdaq futures are still down 1.5%, while S&P 500 futures are down around 1%. 

Commenting on the Bloomberg report, Gary Ng, senior economist at Natixis, said these developments of potential trade talks between the U.S. and China might fuel more risk-on sentiment:

“The impact on the dollar will still be mixed for now, but there will be more inflows into equities, both in China and the US.”

Ng emphasized that this is not a U-turn in strategy, noting China had already signaled its openness to talks in a white paper published on April 9. However, he cautioned that a deal remains uncertain given the wide range of unresolved issues and the deepening economic and geopolitical rivalry between the two economic superpowers. 

Goldman analyst Rich Privorotsky commented on the latest trade developments and markets: 

China IP and retail sales strong overnight…largely ignored as markets lower on the back of U.S. restrictions on NVDA chip exports to China. This follow’s yday’s announcement of China halting the import of Boeing plans. Seems like the conflict between the two countries continues to escalate without a clear off ramp. “US President Donald Trump is willing to strike a trading deal with China, but the latter should reach out first” (RTRS)   The upshot “China has appointed a new top trade negotiator amid the tariff war with the U.S.” Bar feels low for some face saving exercise to bring both sides to the table (tricky part is who makes the first move). In a sense that could be a short term positive catalyst from here but even if tariffs are reduced they are likely to persist on China at some elevated level. The implications on U.S. consumers, global trade and growth remain impaired.

So technicals we’re largely supportive yday and we for the most part ignored those trade headlines including news that European/U.S.  trade negotiations had made little progress and EU trade delegation came back expecting no change to U.S. tariff policy. Hard to…

Peace Through Technological Strength: How Trump’s America Tames The Chinese Dragon

Authored by Shane Festa and Brent Sadler via The Daily Signal, a publication of The Heritage Foundation,

In the days around the U.S. presidential election, dozens of People’s Liberation Army warplanes cruised through Taiwanese airspace. Such behavior is a microcosm of China’s audacity and confidence to act with increasing impunity.

During President Joe Biden’s tenure, the Chinese military consistently probed Taiwan’s readiness and Washington’s leadership. Data from the Taiwanese Ministry of Defense indicates Chinese activity around Taiwan has spiked by over 30 percent compared to the same period last year, potentially a calculated jab to see how Trump 2.0 will respond to cross-strait antagonism.

As 2024 came to an end, the communist Chinese turned up the heat on Taiwan, flexing their muscles whenever opportunities arose. On Oct. 15, China’s Joint Sword 2024B exercise saw 111 aircraft cross the Taiwan Strait‘s median line—a record high. In December, coinciding with Chinese leader Lai Ching-te’s return from a visit to the U.S., naval activity surged again. Between Dec. 9 and Dec. 11, over 90 warships and dozens of aircraft were detected around the island nation.

In recent weeks, the People’s Liberation Army has returned to sending provocative signals. As typical, China’s military activities ebb and flow to send specific strategic messages or in reaction to perceived provocations, such as when the USS Ralph Johnson and USNS Bowditch transited the Taiwan Strait earlier this year.

That operation triggered an abnormally intense response for early February—30 Chinese aircraft were detected in Taiwan’s northern, southwestern, and eastern air defense identification zones in a single day. By comparison, the last transit of the Taiwan Strait by a U.S. Navy vessel, the USS Higgins on Oct. 21, 2024, saw China deploy only 14 aircraft in response.

Unlike the situation under the Biden administration, Beijing recognizes Trump 2.0’s focus on it hinders China’s absorbing Taiwan on a timeline of its choosing.

Moreover, shortly after Chinese Lunar New Year celebrations wrapped up, the Chinese military conducted unannounced live-fire drills on Feb. 27—unprecedented for that time of year when operational levels are typically lower and during less-than-ideal weather. The drills spanned from 40 nautical miles off Taiwan’s coast to the Tasman Sea between Australia and New Zealand, fomenting some consternation in Canberra and Wellington.

By mid-March, the 10-day average of median line crossings by Chinese aircraft showed a significant rise, almost doubling from six on March 17 to 11.8 by March 21—largely attributable to one day’s spike in activity on March 18.

Chinese Ministry of Foreign Affairs spokesperson Guo Jiakun explained the activity by citing a recent change to a State Department fact sheet that eliminated language opposing Taiwan‘s independence, stating, “This is yet another example of the United States’ stubborn adherence to the erroneous policy of using Taiwan to suppress China.” The surprise drills in February and March produced unexpected spikes in activity, indicating that even under President Donald Trump, China is still keen on testing boundaries.

To better ascertain China’s evolving military strategy and intent, the U.S. must leverage its forward-looking approach to intelligence, surveillance, and reconnaissance. In February, Adm. Samuel Paparo, commander of U.S. Indo-Pacific Command, warned that China’s heightened…

5 Companies Sue Trump Over Tariffs

Trump’s tariffs have injected a large measure of chaos into the markets – so much so that JPMorgan sees only four potential off-ramps to right the ship;

(i) Series of Trade Deals – the key being that one or more need to be completed across the G8 with a China deal being the most impactful

(ii) Another Trump Pivot – this could look like a delay/reduction for China to the 10%, perhaps with Trump’s commitment to fostering a business-friendly environment

(iii) A Legal Injunction – about 2 weeks ago a Charles Koch-backed legal group initiated a lawsuit against Trump challenging Presidential authority over tariffs (BBG)

(iv) Congress Passes a Veto-Proof Law – we have seen two initiative with Republicans crossing the aisle to join Democrats in attempting to halt the trade war but, as of now, the 2/3 necessary in both parts of Congress has not been attained.

While (i) is allegedly in the works, and (ii) could happen depending on which way the wind is blowing at Mar-a-Lago, we’ve now we’ve got (iii) in the works – as five companies have filed a lawsuit against the Trump administration over its decision to tariff nearly every country in the world – arguing that Trump has overstepped his authority.
President Donald Trump prepares to sign an executive order in the Oval Office at the White House on March 31, 2025. Leah Millis/Reuters

As Jack Phillips via The Epoch Times notes on April 2, Trump announced that he would impose 10 percent baseline tariffs on nearly every country and higher rates for nations with which the United States is at a significant trade deficit. A week later, the president paused the reciprocal tariffs for dozens of countries, but not for China, for which he raised the tariff rate to 145 percent.

The libertarian-aligned Liberty Justice Center filed a lawsuit on behalf of five companies in the U.S. Court of International Trade, alleging that a statute that Trump invoked “does not authorize the President to unilaterally issue across-the-board worldwide tariffs.”

“His claimed emergency is a figment of his own imagination: trade deficits, which have persisted for decades without causing economic harm, are not an emergency. Nor do these trade deficits constitute an ‘unusual and extraordinary threat,’” the group’s lawyers said.

The lawsuit was filed on behalf of alcohol company Vos Selections, sportfishing e-commerce business FishUSA, toy manufacturer MicroKits, pipe manufacturer Genova Pipe, and cycling apparel brand Terry Precision Cycling.

Liberty Justice Center’s senior counsel, Jeffrey Schwab, said in a statement that the president lacks the “power to impose taxes that have such vast global economic consequences.” The plaintiffs argue that only Congress, not the executive branch, can set tax rates.

Trump said in an April 2 executive order that the initial swath of tariffs is needed to bolster national security with regard to supply chains and because U.S. trading partners have engaged in “economic policies that suppress domestic wages and consumption, as indicated by large and persistent annual U.S. goods trade deficits.”

Trump’s announcements have caused fluctuations in the stock market…

Trade War Turbulence: China Halts Boeing Jet Deliveries For Airlines

Days after Juneyao Airlines postponed the delivery of a widebody jet from Boeing, Beijing has escalated its trade war response—quietly ordering all Chinese carriers to suspend further Boeing deliveries, according to Bloomberg, citing people familiar with the situation. The move marks a broadening of non-tariff retaliation amid a deepening tit-for-tar trade war between the U.S. and China. 

Here’s more color from the report:

China has ordered its airlines not to take any further deliveries of Boeing Co., according to people familiar with the matter.

. . . 

Beijing has also asked that Chinese carriers halt any purchases of aircraft-related equipment and parts from U.S. companies, the people said, asking not to be identified discussing matters that are private.

The order came after China unveiled retaliatory tariffs of 125% on American goods this past weekend, the people said.

. . .

The Chinese government is also considering ways to provide assistance to airlines that lease Boeing jets and are facing higher costs, the people said.

. . .

Delivery paperwork and payment on some of these jets may have been completed before the reciprocal tariffs announced by China on April 11 took effect on April 12, and those planes may be allowed to enter China on a case-by-case basis, some of the people said.

Last week, Beijing hiked its effective tariff rate on US goods to 125%, countering President Trump’s 145% tariff rate. 

Beijing also shifted to non-tariff retaliation, limiting Hollywood film imports, slowing rare earth export shipments, and weakening the yuan. 

The Bloomberg report sent Boeing shares down roughly 3.5% in New York trading. The stock is down 10% year-to-date (as of Monday’s close) and hovering near Covid-era lows, still showing no signs of a meaningful recovery.

Let’s not forget that China’s non-tariff countermeasures may also include:

Export Controls and Quotas

Currency Devaluation

Boycotts (State-Inspired)

Licensing & Certification Hurdles

Restricting Market Access

Pressure Big Tech With Cybersecurity & Data Laws

Limiting Cultural Imports

Selling U.S. Treasuries

The trade war might be far from over…

Tyler Durden
Tue, 04/15/2025 – 07:20…

Mizuho: “Pretty High” Confidence Data Will Show China Dumping US Treasuries

Now that even the shoeshine boy is speculating whether China is selling its US treasuries (to kill three birds with one stone: i) hammer the dollar, ii) push yields higher and iii) prop up the yuan, if only to give the impression that China is winning the trade war something we described here), Mizuho has a “pretty high” degree of confidence that data will eventually show if China has been selling US Treasuries, according to Jordan Rochester, EMEA head of FICC strategy at the bank.

“Annoyingly we don’t get the data quickly enough, the data’s always lagged,” Rochester said on Monday in an interview with Bloomberg TV when asked if the Chinese have been selling US debt.

“You’ve got the extreme tariffs on China and also future reciprocal tariffs that will be extreme on other Asian central banks and they’ve got to defend their currencies.”

“You’ve seen a much slower pace of selloff in the renminbi than you’d expect, given the size of the shock to their system, so there’s clearly some sort of smoothing going on in the FX market, and to do that a central bank has to sell the US Treasuries and others to fund that FX intervention”

Echoing what we said last week, Rochester notes that for now, “we can only speculate” on whether the Chinese are selling, “but we’ll find out in the data in due course,” adding that his degree of confidence that the data will in due course reveal China’s selling is “pretty high.”

Separately, Rochester said he was “surprised” the dollar was “on the back foot” on Monday morning, after Trump provided some exemptions on his proposed tariff activity over the weekend

“This is alarm bells, I think, for US Treasury Secretary Scott Bessent,” Rochester said; “He’s now seeing a watering down of tariffs but still dollar weakness and US rates selling off still — it’s a horrible toxic combination”, which however can easily be explained precisely by Rochester’s core thesis, namely that China has been aggressively selling US paper, and is opportunistically converting the US-denominated proceeds into yuan at just the right time to give the impression that, as so many others have been parroting, that the US dollar is losing its reserve status.

His full interview starts around the 37 minutes mark.

Tyler Durden
Mon, 04/14/2025 – 23:46…