SIMONE DEL ROSARIO: WHEN BEER DRINKERS SOURED ON BUD LIGHT FOLLOWING A CONTROVERSIAL PROMOTION WITH TRANSGENDER INFLUENCER DYLAN MULVANEY – IT WAS CLEAR BUD LIGHT’S CLOSEST RIVALS WOULD BENEFIT. AND THEY ARE. BUT BEFORE LONG, IT WAS A MEXICAN LAGER ON EVERYONE’S LIPS.

NEWS CLIPS: That is Modelo Especial. Modelo Especial. Modelo Especial. Modelo Especial is the new top-selling beer in America. Who? Modelo Especial.

SIMONE DEL ROSARIO: THE OVERNIGHT SENSATION IS NOT AN OVERNIGHT SUCCESS.

BART WATSON: Modelo has certainly been a rising star in the beer industry for a number of years.

SIMONE DEL ROSARIO: BREWERS ASSOCIATION CHIEF ECONOMIST BART WATSON SAYS MODELO’S BEEN ON BUD LIGHT’S TAIL FOR SOME TIME. BUT MOST IN THE INDUSTRY THOUGHT A TAKEOVER OF THE TOP SPOT WAS AT LEAST A FEW YEARS AWAY.

BART WATSON: I think the timing surprised everyone. The changes in the last six months have been pretty dramatic and not something we’ve really seen before in the beer industry, but the overall trend was clear that Mexican imports, particularly Modelo, have been on the rise for a while, and premium lights have been slowly declining as they’re displaced by higher price beers.

SIMONE DEL ROSARIO: OVER THE PAST 10 YEARS – AMERICANS ARE STEADILY DRINKING LESS BEER PER PERSON.
BUT AT THE SAME TIME, IMPORTED BEER IS ON THE RISE, WITH MEXICAN IMPORTS DOUBLING OVER THAT TIME…PULLING BUSINESS AWAY FROM PREMIUM LIGHTS LIKE BUD LIGHT.

ANSON FRERICKS: I don’t think that it’s any secret that Bud Light has been in decline for a number of years now.

SIMONE DEL ROSARIO: ANSON FRERICKS IS A FORMER ANHEUSER-BUSCH EXECUTIVE.

ANSON FRERICKS: But they were still the number one brand. And there’s no reason that they couldn’t be the number one brand and turn the company around. What it takes is having great people,  great marketing campaigns, talking about what the brand is, making sure you hold on to the loyal customers that you do have and make Bud Light approachable for a new generation as well.

SIMONE DEL ROSARIO: BUD LIGHT’S BIGGEST STUMBLE – WAS FAILING TO HOLD ONTO THAT LOYAL CUSTOMER BASE.

BART WATSON: It’s pretty clear there’s been a permanent share loss here.

SIMONE DEL ROSARIO: AND THAT TASTES LIKE OPPORTUNITY FOR MODELO. BUD LIGHT PARENT COMPANY ANHEUSER-BUSCH MOVED TO BUY GRUPO MODELO IN 2012. BUT THE DEPARTMENT OF JUSTICE TRIED BLOCKING THE SALE, SAYING IT GAVE ANHEUSER-BUSCH TOO MUCH CONTROL OF THE U-S BEER MARKET. TO QUASH THE ANTITRUST COMPLAINT, ANHEUSER AGREED TO SELL MODELO’S U-S BUSINESS TO CONSTELLATION BRANDS.

ANSON FRERICKS: So Constellation was handed this brand that really had a lot of momentum already. You had a lot of Hispanic consumers that were coming into the U.S. Those Hispanic consumers, they knew Modelo from being in Mexico. So they had a lot of underlying tailwinds.

SIMONE DEL ROSARIO: REMEMBER FRERICKS’ FORMULA. HOLD ONTO LOYAL CUSTOMERS. AND CONSTELLATION KEPT GOING.

ANSON FRERICKS: Started advertising that brand to people outside that traditional Hispanic consumer base. And a lot of just traditional, call it more Caucasian consumers, more African-American consumers, they started seeing the brand show up at their grocery stores, convenience stores, because it was distributed more broadly. A lot of the marketing campaigns they did were very good.

SIMONE DEL ROSARIO: BUT NO ONE COULD HAVE ANTICIPATED THE FREE ADVERTISING MODELO WOULD GET WEEK AFTER WEEK WITH BUD LIGHT’S TAILSPIN.

ANSON FRERICKS: People have talked about it being the largest brand now in the U.S. That’s something that traditionally would not be covered within the business realm. And now, all of a sudden, every single week, people are talking about Modelo, its growth.

SIMONE DEL ROSARIO: THE QUESTION NOW IS CAN CONSTELLATION BRANDS TURN A SUMMER OF SUCCESS INTO SUSTAINED BEER SUPREMACY? FOR STRAIGHT ARROW NEWS, I’M SIMONE DEL ROSARIO.

SIMONE DEL ROSARIO: BOYCOTTS RARELY WORK. THAT’S WHAT MULTIPLE EXPERTS SAID WHEN BEER DRINKERS TOOK THEIR SHOT AT AMERICA’S BEST SELLING BREW, BUD LIGHT. BUT EVER SINCE TRANSGENDER ACTRESS AND TIKTOK STAR DYLAN MULVANEY PROMOTED BUD LIGHT ON HER CHANNEL…WEEK AFTER WEEK BEER SALES PLUNGED COMPARED WITH THE YEAR BEFORE.

NEWS CLIPS: Bud shares had lost more than $5 billion in market cap. Bud light could lose its status as the nation’s top selling beer. Modelo Especial is the new top selling beer in America. Anheuser-Busch plans to lay off hundreds of corporate employees.

SIMONE DEL ROSARIO: THERE ARE TWO REASONS THE BUD LIGHT BOYCOTT HAD THE RECIPE FOR SUCCESS, ACCORDING TO FORMER ANHEUSER BUSCH EXECUTIVE ANSON FRERICKS. FIRST, CUSTOMERS HAVE OPTIONS.

ANSON FRERICKS: Everywhere you have Bud Light, you also have Coors Light, Miller Light, Yuengling. And for the vast majority of consumers, they can’t really tell the difference in those brands. It’s water, it’s barley, it’s hops. Really the only thing that distinguishes those brands is its actual brand itself and what they stand for. 

SIMONE DEL ROSARIO: AND SECOND, BOYCOTTERS ARE GETTING CONSTANT FEEDBACK THAT THEIR ACTIONS ARE HAVING AN IMPACT. IT’S NOT LIKE WHEN YOU BOYCOTT TARGET AND HAVE TO WAIT THREE MONTHS FOR QUARTERLY EARNINGS.

ANSON FRERICKS: In the beer industry, there’s data that’s reported every single week from large retail data, Nielsen, IRI, et cetera, where they’re reporting what the actual sales numbers are. So every week, there’s this new news cycle that kicks off showing is Bud Light down 25%, is it down 30%, is it down 27%, which almost feeds on itself. 

SIMONE DEL ROSARIO: FOR INSTANCE, FOR THE WEEK ENDING JULY 22ND, NEARLY THREE MONTHS INTO THE CONTROVERSY, BUD LIGHT SALES VOLUME IS STILL DOWN 29.3% COMPARED WITH THE YEAR BEFORE. WHILE COORS LIGHT, MILLER LIGHT AND YUENGLING ALL SAW DOUBLE DIGIT GAINS. YEAR TO DATE, BUD LIGHT IS STILL THE BEST SELLING BEER, BUT MODELO ESPECIAL IS CLOSING THE GAP. THE BOYCOTT PUT A MAJOR DENT IN THE PARENT COMPANY’S EARNINGS. ON THURSDAY ANHEUSER BUSCH INBEV SAID U-S REVENUE FELL BY MORE THAN 10% LAST QUARTER, WHILE U-S OPERATING PROFITS DROPPED BY NEARLY 30%. SO HOW DID THE COMPANY STILL BEAT FORECASTS?

ANSON FRERICKS: What people have to remember is that Anheuser-Busch InBev is a massive global organization where they have operations in Asia, in Africa, in Europe and South America. The North American business unit really only accounts for about a third of the profits of the company. Two thirds of it is outside the U.S. And those business units outside the U.S. are doing very well. That being said, the stock is still off 15% since this controversy happened. Whereas the broader markets are up 15%. So even though they might be okay from a profitability standpoint globally, this has not been a good company from a shareholder perspective as they’ve missed out on a lot of the market gains this year. And they’ve also missed out relative to many of their competitors. 

SIMONE DEL ROSARIO: WHICH MEANS SHAREHOLDERS, LIKE FORMER BUD LIGHT CUSTOMERS, AREN’T TOO HAPPY WITH THE BRAND.

BUD LIGHT AD: We grow the barley that makes your beer. I grow the rice. I grow the hops.

SIMONE DEL ROSARIO: A MONTH AGO AB-INBEV LAUNCHED A PR CAMPAIGN HIGHLIGHTING THE 65-THOUSAND AMERICANS WORKING BEHIND THE BUD LIGHT BRAND, BUT IT’S DONE LITTLE TO BRING NAYSAYERS AROUND. 

ANSON FRERICKS: To redeem themselves, Anheuser-Busch, they have to take clear accountability for why they got themselves into this mess in the first place. And the only way to do that is actually attack it head on, which is the one thing that they have not been doing.

SIMONE DEL ROSARIO: FRERICKS, NOW PRESIDENT OF THE ANTI-ESG INVESTMENT FUND STRIVE, INSISTS CONSUMERS WANT COLD BEER WITHOUT A SIDE OF CONTROVERSY. AND THAT’S WHAT’S KEEPING BUD LIGHT SALES SWIRLING DOWN THE DRAIN. FOR STRAIGHT ARROW NEWS, I’M SIMONE DEL ROSARIO.

SIMONE DEL ROSARIO:

ONE IS NOT LIKE THE OTHER. TACO BELL’S FACING A 5 MILLION DOLLAR CLASS ACTION LAWSUIT OVER MISREPRESENTING HOW MUCH FILLING IS IN MENU ITEMS LIKE THE CRUNCH WRAP SUPREME AND MEXICAN PIZZA. COMPANIES GET IN TROUBLE FOR THIS ALL THE TIME. WE’VE GOT 5 TIMES CUSTOMERS CRIED “FALSE ADVERTISING” IN THIS WEEK’S FIVE FOR FRIDAY.

OF COURSE COSMETICS COMPANIES WILL TELL YOU THEIR PRODUCTS MAKE YOU LOOK BETTER, BUT BE CAREFUL WHAT YOU PROMISE. CUSTOMERS DISHED OUT AS MUCH AS $132 PER BOTTLE FOR “VISIBLY YOUNGER SKIN IN 7 DAYS” AND BOOSTED GENES FROM L’OREAL’S GENEFIQUE AND YOUTH CODE PRODUCTS IN 2009. BUT WITHOUT SCIENTIFIC EVIDENCE TO BACK IT UP, THE FTC WENT AFTER ‘EM. BY 2014, L’OREAL WAS BARRED FROM MAKING CLAIMS ANY OF ITS PRODUCTS TARGET GENES TO MAKE SKIN LOOK OR ACT YOUNGER.

WOULDN’T IT BE GREAT IF YOU COULD IMPROVE COGNITIVE FUNCTION BY SIMPLY PLAYING A GAME ON YOUR PHONE? THE FOLKS AT LUMOSITY CLAIMED YOU COULD. IN FACT THEY SAID IT COULD PREVENT MEMORY LOSS, DEMENTIA, AND EVEN ALZHEIMERS. EVEN EXCEL IN SCHOOL. BUT IN 2016, THE FTC FOUND NO SCIENTIFIC PROOF TO BACK THE CLAIMS AND HIT ‘EM WITH A $2 MILLION FINE. IT WAS ALL PART OF THE AGENCY’S CRACKDOWN AT THE TIME ON APPS MAKING HEALTH CLAIMS.

THOSE CLAIMS WERE CALLED INTO QUESTION BACK IN 2014 TO THE TUNE OF $13 MILLION. OK, CUSTOMERS DIDN’T LITERALLY EXPECT WINGS. BUT PLAINTIFFS COMPLAINED THAT POUNDING THE CAFFEINATED BEVERAGE DIDN’T OFFER ANY ACTUAL PHYSICAL BOOST. THE AUSTRIAN COMPANY WAS FORCED TO GIVE CUSTOMERS 10 BUCKS CASH OR $15 WORTH OF PRODUCT. THEY SAID THEY DIDN’T DO ANYTHING WRONG BUT WERE AVOIDING A LEGAL CIRCUS.

YOU’VE PROBABLY HEARD OF AIRBORNE AS THE TABLET DEVELOPED BY A SCHOOL TEACHER TO PREVENT COLDS. THEN THEY BACKTRACKED A BIT TO SAY IT “BOOSTS YOUR IMMUNE SYSTEM.” NEITHER WAS PROVEN AND EVENTUALLY AIRBORNE GOT HIT WITH A CLASS ACTION SUIT, SETTLING FOR $23.3 MILLION IN 2008. THE COMPANY REFUSED WRONGDOING, BUT STILL HAD TO OFFER REFUNDS TO WRONGED CUSTOMERS. YOU DO THE MATH.

GUT HEALTH IS ALL THE RAGE THESE DAYS. BUT YOU PROBABLY REMEMBER COMMERCIALS LIKE THIS FROM 2010 WITH ACTRESS JAMIE LEE CURTIS PITCHING ACTIVIA AND DANACTIVE YOGURT AS SCIENTIFICALLY PROVEN TO REGULATE DIGESTION AND HELP YOUR IMMUNE SYSTEM. THOSE CLAIMS HELPED IT SELL AT A 30% PREMIUM OVER OTHER YOGURT BRANDS. BUT STOP ME IF YOU’VE HEARD THIS BEFORE, A JUDGE RULED THERE WAS NO PROOF AND DANON SHELLED OUT $45 MILLION TO THOSE AFFECTED.

AS FOR THE TACO BELL PLAINTIFFS, THEY’RE HOPING THEY’LL FARE BETTER THAN THE KNUCKLEHEADS THAT SUED SUBWAY OVER THE LENGTH OF THEIR FOOTLONGS. THAT’S FIVE FOR FRIDAY, I’M SIMONE DEL ROSARIO. IT’S JUST BUSINESS.

SIMONE DEL ROSARIO:

THE BIRD IS DEAD. TWITTER IS NOW “X” WITH ELON MUSK HOPING TO TURN HIS INVESTMENT INTO ONE BIG SUPER APP, LIKE WECHAT, A PLATFORM OWNED BY ONE OF CHINA’S BIGGEST COMPANIES, TENCENT. BUT WHAT DOES THAT LOOK LIKE? HERE ARE 5 THINGS TO KNOW ABOUT THE CHINESE EVERYTHING APP TWITTER IS (COUGH) TAKING INSPIRATION FROM IN THIS WEEK’S FIVE FOR FRIDAY.

PEER TO PEER MESSAGING IS A BIG PART OF WECHAT. AT ITS CORE IT’S SIMILAR TO META’S WHATSAPP. BUT IT’S SO MUCH MORE. WITH “MOMENTS” USERS CAN POST IMAGES, TEXT, AND VIDEOS AS WELL AS SHARE LINKS. KINDA LIKE FACEBOOK OR SNAPCHAT. JUST LIKE THOSE SITES, FRIENDS CAN INTERACT WITH YOUR POSTS TO GIVE YOU THAT ENDORPHIN RUSH YOU DESPERATELY DESIRE. THEN THERE’S WECHAT “CHANNELS” WHICH OPERATES A LOT LIKE INSTAGRAM WITH IMAGES AND TIKTOK STYLE VIDEOS. BUT THE VIDEOS CAN BE AN HOUR LONG. WHY?

WECHAT IS A HUGE PLAYER IN PAYMENTS AND ECOMMERCE. INITIALLY WECHAT PAY WAS SIMILAR TO VENMO WITH PEER TO PEER TRANSACTIONS. BUT IT GREW AS WECHAT DEVELOPED APPS WITHIN THE APP. NOW, USERS CAN BROWSE AND BUY THINGS THROUGH THESE MINIPROGRAMS. IT EVENTUALLY MOVED OUT OF THE APP AND CAN BE USED PRETTY MUCH ANYWHERE FOR POINT OF SALE, IT’S KIND OF LIKE APPLE PAY. OH, AND YOU CAN DO ALL OF YOUR BANKING NEEDS WITHIN WECHAT. THAT’S A LOT OF YOUR INFO IN ONE SINGLE APP. BUT YOU DO YOU.

OK. HERE’S WHERE THE EVERYTHING PORTION OF WECHAT COMES IN WITH PUBLIC ACCOUNTS. NEED TO BOOK A CAR? DINNER RESERVATIONS? FIND A JOB? IT’S GOT YA. IT’S LIKE UBER, OPEN TABLE AND LINKEDIN ROLLED INTO ONE. YOU CAN ALSO APPLY FOR A VISA OR APPLY FOR A DIVORCE WITH A SINGLE CLICK. I’M NOT SURE THERE IS ANY EQUIVALENT. BUT IT SOUNDS PRETTY CONVENIENT.

WECHAT IS JUST THE 5TH BIGGEST SOCIAL MEDIA PLATFORM GLOBALLY WITH 1.3 BILLION MONTHLY ACTIVE USERS. THAT’S LESS THAN HALF OF WHAT FACEBOOK BOASTS, BUT I’M SURE ELON MUSK WOULD LOVE THAT NUMBER. IT ISN’T NECESSARILY A PREFERENCE THING, THOUGH. MOST POPULAR WESTERN APPS ARE BANNED IN CHINA, GIVING EM FEW OPTIONS. SO UNLIKE WECHAT, MUSK’S X IS GONNA HAVE THE FREE MARKET TO CONTEND WITH.

SURE AN EVERYTHING APP IS CONVENIENT. BUT WHAT IF YOU GET BANNED. IT HAPPENS WITH WECHAT, WHERE YOU CAN GET BLOCKED FOR THE SIMPLE ACT OF EXPRESSING DISPLEASURE WITH YOUR GOVERNMENT. IT CAN CUT YOU OFF FROM FRIENDS AND FAMILY. OSTRACIZE YOU FROM WORK. EVEN STOP YOU FROM ORDERING YOUR FAVORITE FOOD. IT SEEMS MUCH MORE DETRIMENTAL THAN WHEN TILA TEQUILA GOT THE AXE ON TWITTER.

FUN FACT. MUSK AXING TWITTER FOR X, WIPED SOMEWHERE BETWEEN 4 AND 20 BILLION DOLLARS IN ESTABLISHED BRAND VALUE, ACCORDING TO ANALYSTS. I’M WAITING FOR THE METHOD TO THE MADNESS, MAYBE THIS IS IT. THAT’S FIVE FOR FRIDAY. I’M SIMONE DEL ROSARIO. AND IT’S JUST BUSINESS.

SHANNON LONGWORTH: THE WIDE-OPEN LANDSCAPES OF THE MIDWEST AND GREAT PLAINS HAVE PROVIDED A CLEAR PATH FOR HARNESSING THE NATION’S WIND ENERGY.

BUT A NEW LOCATION FOR THOSE [TOWERING TURBINES] IS ON THE HORIZON, AND IT’S SOMETHING OF A MAIDEN VOYAGE FOR RENEWABLE ENERGY IN THE U.S.

BY 2030, THE BIDEN ADMINISTRATION AIMS TO DEPLOY UP TO 30 GIGAWATTS OF OFFSHORE WIND ENERGY– ENOUGH TO POWER 10 MILLION HOMES. THAT’S ROUGHLY 7% OF THE COUNTRY.

WIND AT SEA IS GENERALLY STRONGER AND MORE CONSISTENT THAN THAT ON LAND, WHICH MEANS IT’S A MORE RELIABLE SOURCE OF RENEWABLE ENERGY.

THERE ARE ALREADY TWO OPERATING OFFSHORE WIND FARMS IN THE U.S.–ONE NEAR BLOCK ISLAND WITH FIVE TURBINES…

AND THE OTHER, A PILOT PROJECT NEAR VIRGINIA WITH JUST TWO TURBINES. DOMINION ENERGY PLANS TO EXPAND THERE, CONSTRUCTING 176 TURBINES BEGINNING IN 2024. IT’LL BE THE LARGEST OFFSHORE WIND FARM IN THE COUNTRY.

IT’S JUST THE BEGINNING. SITES DOWN THE EAST COAST ARE IN VARIOUS STAGES OF RESEARCH, EVALUATION, AND CONSTRUCTION TO HOST OTHER PROJECTS.

FOR EXAMPLE, A SPECIALIZED SHIP IS JUST OFF OF MARTHA’S VINEYARD THIS SUMMER, INSTALLING A SIXTY-TWO TURBINE PROJECT TO POWER MORE THAN 400,000 HOMES.

WHILE SOURCING POWER FROM OCEAN WINDS IS RELATIVELY NEW TO US, THE EU’S BEEN DOING IT FOR DECADES. DENMARK INSTALLED THE VERY FIRST OFFSHORE WIND FARM IN 1991.

THE UK HAS MORE THAN 40 WIND FARMS CURRENTLY OPERATIONAL.

ON OUR SIDE OF THE POND, THIS TECHNOLOGY IS FACING SOME APPREHENSION.

BUILDING TURBINES IN THE WATER IS VERY EXPENSIVE– NOT JUST TO INSTALL, BUT TO MAINTAIN.

ALSO, REMEMBER WE’RE ABOUT TO SURROUND A GREAT DEAL OF COASTAL LAND WITH GIANT SPINNING BLADES. HERE’S WHAT THEY LOOK LIKE IN THE MIDWEST– IS THIS GOING TO AFFECT TOURISM? THE FISHING INDUSTRY? REAL ESTATE VALUES? OR COULD IT INCREASE VALUE IN THOSE AREAS?

AND DON’T FORGET MARINE LIFE ITSELF. CONSERVATION GROUPS AND POLITICIANS ARE CONCERNED ABOUT THE TURBINES’ EFFECT ON OCEAN LIFE.

THE DEPARTMENT OF ENERGY ACKNOWLEDGES “WIND PLANTS CAN IMPACT LOCAL WILDLIFE.”

WE SAW THIS WHILE REPORTING ON WIND TURBINES’ THREAT TO THE GOLDEN EAGLE POPULATION IN WYOMING.

WHILE THERE’S NO EVIDENCE THAT EXISTING OFFSHORE PROJECTS HAVE SIGNIFICANTLY HARMED MARINE MAMMALS, WE’LL CONTINUE FOLLOWING THE RESEARCH AS CONSTRUCTION RAMPS UP ON THE EAST COAST.

FOR MORE THAN TWO DECADES, VLADIMIR PUTIN HASN’T JUST LED RUSSIA, HE’S PUSHED OUT ANY WHO WOULD OPPOSE HIM. MANY BELIEVE IT’S WHY HE INVADED UKRAINE, AND WHY HE NEVER GOES TOO LONG WITHOUT RATTLING THE SABER.

Dr. Tyler White: I think what Putin is doing is he’s trying to, with the limited resources he has, but with the nuclear weapons he has, make sure that Russia is always at the center of attention, because that gives him power. And he does it by scaring people. And he does it through nuclear blackmail.

DOCTOR TYLER WHITE LEADS THE NATIONAL SECURITY PROGRAM AT THE UNIVERSITY OF NEBRASKA. IN OUR LAST VIDEO, WE ASKED HIM ABOUT HOW AND WHY RUSSIA MIGHT USE NUCLEAR WEAPONS.

BUT THEN WE WANTED TO KNOW WHAT A WESTERN RESPONSE TO THOSE POTENTIAL ATTACKS WOULD LOOK LIKE. IF PUTIN GAVE THE ORDER TO DEPLOY A NUCLEAR WEAPON, WHAT WOULD HAPPEN NEXT?

White: In political science, we have this sort of term gambling for resurrection, right? What happens when all the chips are down, and you need a big move to try to change your situation? And so, you know if he’s looking at what could be a resounding defeat, does he use nuclear weapons as a way of trying to gamble for resurrection, right? To try to turn the tide in a really, really important way, particularly if he feels his own personal future is at stake, right? And I think, to him, that’s way more important than what happens to Russia.

WHITE SAYS ANY WESTERN RESPONSE TO RUSSIA USING NUKES WOULD BE A COORDINATED EFFORT THROUGH NATO, THE MILITARY ALLIANCE COMPRISED OF MORE THAN 30 EUROPEAN NATIONS AND THE U.S.

White: I don’t think we think about this enough, NATO is special. NATO is really special, and the way the United States can, you know, locks itself into NATO, to defend a whole bunch of other countries, that’s special. That’s special in history. And so, you know, it gives us a tremendous amount of power, though. Because people, you know, once you have them on board, and they agree with the decision, you know, as someone once said, ‘democracies fight angry’ and having a bunch of democracies on board, I think, makes a force that no other no other country can encounter.

THE COUNCIL ON FOREIGN RELATIONS, AN AMERICAN THINK TANK, SAYS THERE ARE THREE SCENARIOS THAT COULD LEAD TO RUSSIA RESORTING TO NUKES IN UKRAINE: AS A SIGNALING DEVICE, AS A BATTLEFIELD WEAPON, AND AS A WEAPON OF TERROR.

NATO’S RESPONSE TO RUSSIA USING NUKES DEPENDS ON THE SCENARIO.

IF RUSSIA DECIDES TO DETONATE A NUKE AS A SIGNALING DEVICE, IT COULD COME IN THE FORM OF A TEST AT A REMOTE LOCATION, WHERE CASUALTIES WOULD BE LOW AND THE NUCLEAR FALLOUT LIMITED.

White: So, he could find a target like Snake Island or something like that and detonate a nuclear weapon there. He’s not going to kill very many people. But he’s going to demonstrate, ‘Hey, I just broke the nuclear taboo and I’m willing to use these weapons. Your move,’ right?

DR. WHITE AND THE CFR AGREE RUSSIA DETONATING A NUKE TO REMIND THE WORLD IT STILL HAS NUCLEAR WEAPONS WOULD PROBABLY NOT GENERATE AN OVERWHELMING MILITARY RESPONSE FROM NATO, OTHER THAN THE STANDARD FINGER-WAGGING THAT TYPICALLY ACCOMPANIES NUCLEAR WEAPONS TESTING.

IT COULD, HOWEVER, DAMAGE RUSSIA’S RELATIONS WITH CHINA. PUTIN IS MORE DEPENDENT ON CHINA THAN EVER AS WESTERN SANCTIONS CRIPPLE RUSSIA’S ECONOMY AND FURTHER ISOLATE IT ON THE WORLD STAGE.

UNDER THE SECOND SCENARIO, PUTIN MAY DEPLOY TACTICAL NUCLEAR WEAPONS DURING A BATTLE INSIDE OF UKRAINE. WE’VE TALKED ABOUT THESE WEAPONS BEFORE-TACTICAL NUKES ARE POWERFUL ENOUGH TO DESTROY CITIES, BUT THEY’RE MORE PRECISE THAN BALLISTIC MISSILES, DESIGNED FOR USE ON BATTLEFIELDS WHERE MILITARIES WANT TO CREATE MAXIMUM EFFECT WITH MINIMAL MATERIAL.

THE CFR SAYS PUTIN MAY DECIDE TO DEPLOY TACTICAL NUKES AGAINST ENERGY INFRASTRUCTURE TARGETS TO WEAKEN UKRAINE’S WILL TO FIGHT.

White: He could also use them on the battlefield to destroy formations, right? He could try to wipe out a Ukrainian, you know, offensive or something like that. And that would deal a significant military blow to the Ukrainians, but also again, breaks the nuclear taboo.

RUSSIA USING TACTICAL NUKES WOULD FURTHER FRACTURE ITS RELATIONSHIP WITH CHINA, POTENTIALLY PUSHING THE “FRIENDSHIP WITHOUT LIMITS” TO THE BRINK OF COLLAPSE.

AS FAR AS HOW THE U.S. AND NATO WOULD RESPOND, THE PUBLIC POLICY IS PURPOSEFULLY AMBIGUOUS. PRESIDENT JOE BIDEN SAID ANY USE OF NUKES IN UKRAINE, ON ANY SCALE, WOULD BE UNACCEPTABLE AND WOULD ENTAIL SEVERE CONSEQUENCES. THE AMBIGUITY IN THE POLICY ALLOWS FOR A RANGE OF RESPONSES, AGAIN, DEPENDING ON HOW RUSSIA DETONATES ITS BOMBS.

IF RUSSIA USES TACTICAL NUKES IN UKRAINE, AT THE VERY LEAST WESTERN WEAPONS SHIPMENTS AND HUMANITARIAN AID WOULD SKYROCKET. WHATEVER ECONOMIC SANCTIONS HAVEN’T BEEN IMPOSED YET PROBABLY WOULD BE, AND RUSSIA WOULD CEMENT ITS STATUS AS A DIPLOMATIC PARIAH ON THE WORLD STAGE.

White: And so I think Putin is constantly calculating, you know, what is my exit strategy? What does it look like? What can I live with? What’s acceptable? But he’s not the only person who gets to make that decision, right? I mean, reality in this case has a vote as well. I think what we worry about is that he will come to the conclusion that this is his best option. But again, there are some significant issues for him to do that.

THE THIRD SCENARIO FOR RUSSIA, IS DEPLOYING NUKES AS WEAPONS OF TERROR. IT’S DEFINITELY THE SCARIEST SCENARIO, AND THANKFULLY, THE LEAST LIKELY. BUT RUSSIA TARGETS CIVILIANS WITH CONVENTIONAL WEAPONS ROUTINELY, SO IT’S NOT IMPOSSIBLE TO RULE OUT PUTIN GIVING THE ORDER TO LAUNCH A STRATEGIC NUCLEAR WEAPON AT CIVILIAN TARGETS LIKE A CITY.

SUCH A STRIKE COULD BE HUNDREDS OF TIMES MORE POWERFUL THAN A TACTICAL NUCLEAR WEAPON AND WOULD BE DESIGNED TO DESTROY UKRAINIAN RESOLVE. BUT EVEN A RUSSIAN NUCLEAR STRIKE IN UKRAINE MAY NOT ELICIT A NUCLEAR RESPONSE FROM NATO.

White: We have conventional capabilities that could, you know, target very specific capabilities inside of Russia, inside of Belarus, wherever the missile came from, as a way of saying, you know, ‘you can’t do that, but we’re not going to escalate using a nuclear weapon right now,’ right? So, that keeps the onus on the Russians. Now, they’re going to have to do it twice, right? Which means that whatever hole they’ve been digging is now deeper.

IF WE THINK OF NUCLEAR ESCALATION AS A LADDER, RUSSIA’S USE OF STRATEGIC NUCLEAR WEAPONS OUTSIDE OF ITS BORDERS IS THE TOP RUNG. IT’S THE SITUATION EVERYONE WANTS TO AVOID, AND THE ONE PUTIN AND HIS CRONIES LIKE TO THREATEN THE MOST. IT’S ALSO ABSOLUTELY THE LEAST LIKELY SCENARIO, MAINLY BECAUSE IT WOULD BE THE END OF RUSSIA.

WITH CONVENTIONAL WEAPONS ALONE, THE U.S. AND NATO COULD STRIKE KEY RUSSIAN TARGETS ANYWHERE ON THE GLOBE WITHIN ONE HOUR. RUSSIAN MILITARY BASES, INSTALLATIONS AND LEADERSHIP CENTERS WOULD BE FAIR GAME ALONG WITH WHATEVER AIR, LAND OR SEA ASSETS RUSSIA HAS DEPLOYED OUTSIDE OF ITS BORDERS.

ALSO, CHINA, THE ONLY RUSSIAN ALLY WITH ANY REAL MILITARY MIGHT, WOULD NO DOUBT CUT TIES, LEAVING VLADIMIR PUTIN ALONE. THE LEADER OF A FAILED STATE.

HOWEVER UNLIKELY THAT SCENARIO IS, UNFORTUNATELY, IT’S STILL NOT IMPOSSIBLE. ALSO, THERE’S NO GUARANTEE SOMEONE MORE MENACING THAN PUTIN DOESN’T RISE TO POWER.

White: When it comes to nuclear weapons, you want to do everything you can to try to mitigate that risk, right? And it’s a fine balance, because sometimes your notion of trying to mitigate risk of, you know, to you looks completely rational, and to them, it looks incredibly you know, provocative, right?

WHITE SAYS FIGURING OUT THE RIGHT RESPONSE TO NUCLEAR WEAPONS IS THE TRICKIEST PUZZLE THERE IS, BECAUSE YOU’RE COMMUNICATING WITH FORCE. YOU WANT YOUR MESSAGE TO BE RECEIVED AND FOLLOWED, BUT YOU CAN’T CONTROL YOUR ADVERSARY’S RESPONSE.

FOR MORE ABOUT RUSSIA AND ITS ARSENAL OF NUCLEAR WEAPONS, BE SURE TO CHECK OUT ALL OF OUR REPORTING AT SAN.COM, WHERE YOU’LL ALWAYS FIND THE UNBIASED, STRAIGHT FACTS.

FROM THE START OF THE INVASION IN UKRAINE, THE THREAT OF NUCLEAR WEAPONS HAS LOOMED LARGE ON THE BATTLEFIELD.

RUSSIAN PRESIDENT VLADIMIR PUTIN REGULARLY SAYS THE USE OF TACTICAL NUKES IS VERY MUCH ON THE TABLE. PRESIDENT BIDEN SAYS THOSE THREATS ARE VERY REAL, BUT WHAT DOES THAT MEAN?

LET’S START HERE:

NINE COUNTRIES AROUND THE WORLD HAVE NUCLEAR WEAPONS AT THEIR DISPOSAL, AND THE EXACT NUMBERS ARE A CLOSELY GUARDED SECRET.

WE DO KNOW THE UNITED STATES AND RUSSIA HAVE THE MOST, WITH RUSSIA BEATING OUT THE U.S. BY ABOUT 500 WARHEADS.

OF COURSE, JUST LIKE THE U.S., NOT EVERY NUCLEAR BOMB IN RUSSIA’S ARSENAL IS READY TO USE. MOST ARE IN STORAGE AND SOME ARE BEING DECOMMISSIONED. THE RUSSIANS HAVE ABOUT 1600 DEPLOYED WARHEADS OF VARIOUS SIZES, AGAIN, VERY SIMILAR TO THE U.S.

AND THOSE WARHEADS HAVE COME A LONG WAY IN THEIR POTENTIAL FOR DEVASTATION SINCE THE U.S. DROPPED BOMBS ON HIROSHIMA AND NAGASAKI.

IT’S IMPORTANT TO UNDERSTAND THE IMPACT OF NUCLEAR WEAPONS IS MEASURED IN TERMS OF KILOTONS OR MEGATONS. A ONE KILOTON BOMB HAS THE SAME DESTRUCTIVE POWER AS 1000 TONS OF TNT. 1000 KILOTONS IS ONE MEGATON.

THE BOMBS USED IN WORLD WAR II HAD A STRENGTH OF ABOUT 15 KILOTONS.
THE LARGEST NUCLEAR BOMB EVER DETONATED, TSAR BOMBA IN THE 1960S, HAD A 50 MEGATON YIELD.

TODAY, MOST U.S. NUKES HAVE AN EXPLOSIVE YIELD AROUND 300 KILOTONS WHILE RUSSIAN NUKES TYPICALLY RANGE FROM 50-100 KILOTONS ON THE LOW END AND 500-800 KILOTONS ON THE HIGH END. BUT THERE ARE LARGER WEAPONS IN BOTH COUNTRIES’ STOCKPILES.

Doctor Tyler White: Nuclear weapons are actually used every day, right? So, every single day, we have a nuclear deterrent that we use, and we use that to assure our allies that we will take care of them and defend them. And we assure our adversaries that if they do something, we will, we will, you know, respond in kind.

TYLER WHITE, THE DIRECTOR OF THE NATIONAL SECURITY PROGRAM AT THE UNIVERSITY OF NEBRASKA, SAYS NUKES CAN BE USED TO DETER OR COMPEL ADVERSARIES.

THAT BRINGS US TO CATEGORIES: STRATEGIC AND TACTICAL.

STRATEGIC WEAPONS ARE USUALLY WHAT WE THINK OF WHEN IT COMES TO NUCLEAR WARHEADS. THEY TEND TO BE LARGER AND ARE DELIVERED BY THINGS LIKE INTERCONTINENTAL BALLISTIC MISSILES, CRUISE MISSILES LAUNCHED FROM SUBMARINES, OR GUIDED BOMBS DROPPED FROM PLANES.

RUSSIA’S NEWEST STRATEGIC WEAPON IS THE POSEIDON TORPEDO. THE LENGTH OF A TENNIS COURT, IT’S MEANT TO BE DETONATED UNDERWATER, PRODUCING RADIOACTIVE TSUNAMIS.

A RUSSIAN PROPAGANDIST CLAIMED THE POSEIDON COULD WIPE OUT THE BRITISH ISLES WITH A 500-METER-TALL RADIOACTIVE WAVE, A CLAIM MOST IN THE WEST DISPUTE AS OUTLANDISH.

TACTICAL NUKES ARE HARDER TO DEFINE. THEY CAN HAVE YIELDS BETWEEN FIVE AND 50 KILOTONS, ENOUGH TO DESTROY CITIES, AND ARE DESIGNED TO BE USED ON THE BATTLEFIELD.

White: When you’re thinking about how these things could be used, you got to think about the strategy. And there might be a couple of different things that Putin could do. Thing number one is he could use it as a signaling device, right? So, he could find a target like Snake Island or something like that and detonate a nuclear weapon there. He’s not going to kill very many people. But he’s going to demonstrate, ‘Hey, I just broke the nuclear taboo and I’m willing to use these weapons. Your move,’ right? He could also use them on the battlefield to destroy formations, right? He could try to wipe out a Ukrainian, you know, offensive or something like that. And that would deal a significant military blow to the Ukrainians, but also again, breaks the nuclear taboo.

SO THAT’S HOW PUTIN MIGHT USE NUKES IN UKRAINE. AS FAR AS THE WHY, WELL, IF RUSSIAN TROOPS CONTINUE FACING SETBACKS ON THE BATTLEFIELD AND PUTIN IS BACKED INTO A CORNER, THE CONSENSUS IS HE MAY DECIDE TO LAUNCH A NUCLEAR STRIKE TO STAVE OFF DEFEAT AND SAVE HIMSELF FROM BEING THROWN OUT OF OFFICE.

White: I think Putin is Russia, Right? And Russia is Putin. And that’s the way he wants it to be. In political science, we have this sort of term ‘gambling for resurrection.’ What happens when all the chips are down, and you need a big move to try to change your situation?

And so, you know, if he’s looking at what could be a resounding defeat, does he use nuclear weapons as a way of trying to gamble for resurrection, right? To try to turn the tide in a really, really important way? Particularly if he feels his own personal future is at stake, right? And I think, to him, that’s way more important than what happens to Russia.

MOST EXPERTS AGREE THE ODDS OF PUTIN USING NUKES IN UKRAINE ARE LOW, BUT THEY AREN’T ZERO. IT’S WHY THE U.S AND OTHER WESTERN ALLIES HAVE BEEN SO CAUTIOUS IN ARMING UKRAINE, AND WHY THEY’LL CONTINUE TO BE.

SO, WHAT WOULD HAPPEN IF– GOD FORBID–PUTIN WERE TO AUTHORIZE A NUCLEAR STRIKE IN UKRAINE OR ELSEWHERE? WELL, IT’S LIKELY THE UNITED STATES, AS THE MILITARY LEADER OF NATO, ALREADY HAS SEVERAL RESPONSES READY TO GO. HOWEVER, THE RESPONSE WOULD BE DEPENDENT ON HOW AND WHERE RUSSIA ATTACKED. WE DIVE MORE INTO THOSE TOPICS IN PART TWO OF THIS SERIES. YOU CAN FIND THAT STORY AND MORE UNBIASED, STRAIGHT FACT REPORTING AT SAN DOT COM.

Brent Jabbour:

When Instagram launched its Twitter alternative, Threads, on July 5th, new users were met with a message about future plans to join something called the fediverse.

So, what is it?

The Fediverse is a collection of decentralized platforms where users can interact and communicate across a host of different sites.

To get a better understanding, let’s take a look at the way mainstream social media sites like Twitter, Facebook and even LinkedIn work today.

Evan Prodromou:
“In order to participate in LinkedIn, you have to have a LinkedIn account, you can only connect to other people on LinkedIn. And all of your content kind of stays on LinkedIn, everything you post everything you talk about, in and that is a very centralized system, because it’s really closed off from the rest of the world.”

Evan Prodromou is a entrepreneur and technologist who led a team that helped develop ActivityPub, the backbone of the fediverse. Some would call him the godfather of the fediverse.

Evan Prodromou:

“Father of the fediverse Godfather of the fediverse, it is a long tradition, we’ve had distributed systems for the internet for a long time. So I stand on the shoulders of giants.”

Ross Schulman:

“ A lot of people already understand this concept, but don’t know that they do, because it’s the exact same concept as email”

Brent Jabbour:

Ross Schulman is a senior fellow for Decentralization at the Electronic frontier foundation, a nonprofit that works to defend civil liberties in the digital world.

Ross Schulman:
‘So, you know, when you say, I’m gonna send an email to my cousin who works at a school somewhere, he’s got a.edu address, right? I’m on Gmail, for example, there are two different servers, one is whatever, columbia.edu or whatever, and one is gmail.com. And those two servers are each, their own separate entities. And they talk to each other using a common protocol. And they exchange these little text messages that we call email.”

Brent Jabbour:

In the case of the fediverse, users on microblogging platform Mastodon can like, follow, and share content from other federated platforms including video platform PeerTube and wordpress. This allows users to theoretically have a single account and feed in the fediverse.

To date, Mastadon has been the most successful fediverse platform, receiving a lot of attention after Elon Musk took over twitter and users looked for other options.

Evan Prodromou:

“there are a number of players in the technology space, who have had to depend on Twitter for for quite a while, right. And as Twitter becomes less of a dependable partner for them, and they don’t, and they no longer have the same kind of arrangements, relationships. So classically, say the API for Twitter, the terms have changed quite a bit.”

Ross Schulman:
“there were mass layoffs, but but one one casualty of that was the trust and safety teams at Twitter, who by no means were getting perfect, but at least we’re you know, invested in trying and then after they left there was just nothing.”

“I think largely it was the it was this sort of movement from Hey, it’s not perfect, but they’re trying to it doesn’t even seem like they’re trying anymore that drove a lot of people away.”

Brent Jabbour:

While Mastodon may seem akin to Reddit there is a big difference. Subreddits act somewhat independently, but are still hosted by Reddit and subject to its rules and changes in policy, something that has caused issues in recent months.

When it comes to Mastodon, servers, known as instances, are completely independent and just use the Mastodon code to operate.

Ross Schulman:
“So there’s the mastodon code base, which is the computer code that runs the server, which is open source, and anybody can host on any machine that they want to, as long as it’s internet connected, obviously. And then there’s Mastodon dot social, which is the entity that runs one of the mastodon instances out there, but doesn’t have any control over any of the other ones.”

Brent Jabbour:

Not everyone is happy about Threads plans to join the Fediverse. A group of instance moderators have signed the Anti-Meta Fedi Pact, saying they will block any meta owned instances.

Evan Prodromou:
“A great part of the fediverse is that we’ve built those controls in, so those people can have the Fedi Pact and just say, Hey, we’re not going to have anyone from threads who can follow us. And it is an exercise of that control. And honestly, I applaud it, I don’t share the same concerns. But I do like the fact that they can make that decision and stick with it.”

Brent Jabbour:

But, this decentralized nature does raise some concerns.

Ross Schulman:
I think one of the one of the downsides that jumps out, I think, most strikingly is, is that it makes moderation harder, doesn’t make it impossible, but but it makes it harder”

“What we tend to see is that those those servers that that effectively don’t have enough moderation to stop that kind of problem from happening very quickly gets sort of like blacklisted from the rest of the Federer’s.”

Evan Prodromou:
“It is really up to the individual service providers to set the rules for how their users are allowed to post and also what kind of stuff they’re willing to have come in so they do have kind of a border control? Where it’s like, hey, we don’t want to have sexual content on our site, which is which is traditional for like Instagram, right?”

Brent Jabbour:

While the fediverse may be about to go through a huge growth spurt, Ross and Evan see upside for those looking for this type of social media experience.

Ross Schulman:
“the promise of the fediverse, for me, is this dichotomy between being able to find a place or a virtual place where, you like, the atmosphere, and that can be for, you know, a million different reasons.”

Evan Prodromou:

“If you do some innovation, if you build some cool new product, new search engine, new way of sharing video, audio games, the sky is really the limit, you launch it, and you’ve got a audience of 10s of millions, or coming soon, hundreds of millions of people who can start using it on day one.”

At this time, It’s unclear when Threads will officially become part of the fediverse.

TANKS, JETS, LONG-RANGE MISSILES AND NOW CLUSTER MUNITIONS. THERE’S A GROWING LIST OF WEAPONS REQUESTED BY UKRAINE THAT THE UNITED STATES INITIALLY DENIED BUT THEN APPROVED SENDING ANYWAY.

DESPITE MUCH OF THE HIGH-TECH WEAPONRY AND ELECTRONIC WARFARE IN USE IN UKRAINE, THE FRONTLINES LOOK MORE LIKE SOMETHING FROM WORLD WAR ONE, JUST WITH BETTER GUNS. ARTILLERY IS STILL THE DECIDING FACTOR IN MOST BATTLEFIELD ENGAGEMENTS. RUSSIA HAS MORE AND UKRAINE IS RUNNING OUT OF AMMUNITION.

TO MAKE UP FOR THE DEFICIT, THE LATEST $800 MILLION WEAPONS PACKAGE FROM THE U.S. TO UKRAINE WILL INCLUDE CONTROVERSIAL CLUSTER MUNITION ARTILLERY SHELLS TO BE FIRED FROM 155 MM HOWITZER CANNONS.

OFFICIALLY KNOWN AS DUAL PURPOSE IMPROVED CONVENTIONAL MUNITIONS, THEY’RE DESIGNED TO INCREASE THE KILL ZONE OF A SINGLE PROJECTILE. THEY ARE PACKED WITH BOMBLETS THAT DISPERSE WHILE THE SHELL IS STILL IN THE AIR. ONE DPICM CAN TAKE OUT MULTIPLE ARMORED VEHICLES. AND WHEN IT COMES TO TRENCH WARFARE, THE ABILITY TO DISPERSE BOMBLETS FROM THE AIR ABOVE ENEMY POSITIONS IS WHY DPICMs CAME TO BE KNOWN AS STEEL RAIN DURING OPERATION DESERT STORM.

General Patrick Ryder: So clearly a capability that would be useful in any type of offensive operations. I would note that the Russians have already been employing cluster munitions on the battlefield, many with very which include a very high dud rate reportedly.

THE DUD RATE IS THE PERCENTAGE OF BOMBLETS THAT DON’T DETONATE. EVEN WHEN USED IN OPTIMAL CONDITIONS, NOT EVERY BOMBLET WILL EXPLODE. SOME LAND IN WATER, OR MUD OR OTHER SOFT AREA. SOMETIMES THE UNEXPLODED ORDINANCE IS FOUND YEARS LATER AND THEN EXPLODES.

BUT WHEN USED IN OPEN FIELDS OR AREAS WHERE PINPOINT ARTILLERY MIGHT NOT BE THE MOST EFFECTIVE, CLUSTER MUNITIONS ARE THE WEAPON OF CHOICE. THE U.S. USED CLUSTER MUNITIONS IN EVERY MAJOR WAR SINCE KOREA. EVEN THE SUPREME ALLIED COMMANDER OF NATO CALLED DPICMs VERY EFFECTIVE WEAPONS.

BE THAT AS IT MAY, MORE THAN 120 NATIONS HAVE BANS IN PLACE ON CLUSTER MUNITIONS. IN THE U.S., IT’S TYPICALLY AGAINST THE LAW TO SELL OR TRANSFER CLUSTER WEAPONS WITH A DUD RATE HIGHER THAN 1%. THE CLUSTER WEAPONS THE U.S. WANTS TO SEND UKRAINE HAS A DUD RATE BETWEEN 2-3%. SOME WATCHDOG GROUPS SAY IT’S HIGHER.

TO GET AROUND THE LAW, PRESIDENT JOE BIDEN WILL INVOKE PART OF THE FOREIGN ASSISTANCE ACT WHICH ALLOWS PRESIDENTS TO SEND AID AND WEAPONS TO FOREIGN COUNTRIES, DESPITE RESTRICTIONS, SO LONG AS THE TRANSFER IS OF VITAL INTEREST TO U.S. NATIONAL SECURITY.

FOR MORE UNBIASED, STRAIGHT FACT REPORTING ON THE WAR IN UKRAINE, BE SURE TO CHECK OUT SAN.COM.

SIMONE DEL ROSARIO:

TREASURY SECRETARY JANET YELLEN IS IN CHINA FOR THE FIRST TIME SINCE TAKING OVER THE POST. THE HIGH-STAKES VISIT COMES AT A PRETTY FROSTY TIME FOR THE WORLD’S TWO LARGEST ECONOMIES. WE’VE GOT FIVE WAYS TENSIONS BETWEEN THE U-S AND CHINA ARE AFFECTING BUSINESS IN THIS WEEK’S FIVE FOR FRIDAY.

WITH TALKS OF DECOUPLING FROM CHINA, CAPTAINS OF INDUSTRY ARE TRAVERSING THE PACIFIC TO SMOOTH THINGS OVER. IN SHANGHAI IN MAY, JP MORGAN CHASE’S JAMIE DIMON PROMOTED DE-RISKING OVER DECOUPLING, SAYING THE BANK WILL BE IN CHINA IN GOOD TIMES AND BAD. HEY, THAT’S FRIENDLIER THAN WHEN HE SAID CHASE WOULD OUTLAST THE CCP. ELON MUSK MADE THE TRIP AROUND THE SAME TIME, OPPOSING ANY KIND OF BREAKUP WHILE VISITING TESLA’S GIGAFACTORY IN SHANGHAI, WHERE THEY MADE MORE THAN HALF OF TESLAS SOLD IN 2022. NEW STARBUCKS CEO LAXMAN NARASIMHAN ALSO VISITED CHINA FOR HIS FIRST TIME OUTSIDE NORTH AMERICA IN HIS NEW ROLE, STRESSING THE COMPANY’S LONG-TERM COMMITMENT IN THE COUNTRY WHERE THEY OPEN A NEW STORE EVERY 9 HOURS.

AMERICA’S HAD CHINA’S TECH DOMINANCE IN ITS SIGHTS FOR SOME TIME. THE U-S BANNED NEW TELECOM EQUIPMENT FROM CHINA’S HUAWEI AND Z-T-E DUE TO NATIONAL SECURITY RISKS, AND EVEN OFFERED TO REIMBURSE COMPANIES THAT RIP AND REPLACE EXISTING CHINESE TECH FROM THEIR INFRASTRUCTURE. ON THE EXPORT SIDE, THE BIDEN ADMIN IS LOOKING TO BLOCK SALES TO CHINA OF HIGH-END CHIPS THAT POWER A-I FROM THE LIKES OF NVIDIA, A-M-D AND INTEL. AND THE $280 BILLION CHIPS ACT TAKES AIM AT CHINA BY PUSHING MANUFACTURES TO MOVE FACILITIES TO THE U-S.

THE BANS GO BOTH WAYS. CHINA RECENTLY BANNED AMERICA’S BIGGEST MEMORY MAKER MICRON FROM ITS INFRASTRUCTURE PROJECTS, ALSO CITING NATIONAL SECURITY RISKS, BUT ANALYSTS DON’T THINK IT WILL HIT TOO HARD. THE MOVE CAME ONE DAY AFTER G7 LEADERS CRITICIZED CHINA AND BROUGHT UP DE-RISKING. CHINA ALSO LAUNCHED ESPIONAGE INVESTIGATIONS INTO MULTIPLE AMERICAN CONSULTING FIRMS, INCLUDING CAPVISION, RAIDING ITS OFFICES IN SEVERAL CHINESE CITIES. AND FOR YEARS, CHINA’S BANNED MOST OF THE BIG TECH BOYS INCLUDING GOOGLE AND FACEBOOK.

AMERICAN POLITICIANS ARE PERPETUALLY PERTURBED ABOUT TIKTOK, FEARING CHINA HAS A BACKDOOR TO USER DATA. PARENT COMPANY BYTEDANCE EVEN SWITCHED TO ORACLE SERVERS TO ASSUAGE FEARS, BUT ITS CHINESE EMPLOYEES WERE APPARENTLY STILL ABLE TO SPY ON JOURNALISTS. NOW TIKTOK’S BANNED ON FEDERAL GOVERNMENT DEVICES, AND IN MANY STATES. THERE’S AN OUTRIGHT BAN IN MONTANA THAT GOES INTO EFFECT IN 2024 IF IT GETS THROUGH THE COURTS. GOOD LUCK GETTING CONTENT FROM THOSE DRYWALL CHICKS.

CHINA’S LONG BEEN A GLOBAL MANUFACTURING HUB. AND THE LAST THING A MAJOR COMPANY WANTS IS TO GET SWEPT UP IN SUPPLY CHAIN DISRUPTIONS, COVID LOCKDOWNS, OR GEOPOLITICAL TENSIONS. AFTER YEARS OF RED FLAGS, APPLE’S MOVING SOME OF ITS CHINA-BASED PRODUCTION TO SPOTS IN SOUTHEAST ASIA, MICROSOFT HAS SHIPPED ITS LATEST XBOX CONSOLE FROM VIETNAM, AND AMAZON IS NOW SHIPPING FIRE TV DEVICES FROM INDIA.

THIS FRAUGHT RELATIONSHIP IS FIT FOR REALITY TV. THAT’S FIVE FOR FRIDAY, I’M SIMONE DEL ROSARIO AND IT’S JUST BUSINESS.