Mercedes is willing to begin military and weapons production. Historically speaking, this did not work out so well for Europe the last time; however, as with all things German, the expanded backstory is a little more complicated.

Due to a combination of terrible political decisions related to the German and EU energy sector, the German industrial economy is contracting rapidly. Germany is the heart of the EU economic engine.

At the same time as the German economy is contracting, the economic footprint of China in the EU is growing. The core issue centers around a declining auto sector but extends to all ancillary manufacturing outputs.

By following the WEF’s “Build Back Better” program, Europe as a whole has ended up making itself energy-dependent and vulnerable. The Gulf oil and gas crisis, the looming 25% Trump tariffs on EU cars, and the withdrawal of U.S. troops from German NATO bases only add to their growing economic troubles.

Around the same time as this economic convergence, Germany began ramping up its commitments, support, and spending for Ukraine in the conflict with Russia. Subsidy outflows rose just as GDP was falling, a clear example of an economic spiral that can easily spin out of control.

German Chancellor Freidrich Merz is trying to deal with the consequences of exceptionally short-sighted and damaging policy, but reversing the trend would require Germany to focus all policy operations inwardly away from Brussels and the demands of the collective European Union. This is now the core issue in German politics driving bold dividing lines between political power structures.

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There is an increased public discussion about the race to build datacenters in the USA that are part of the Artificial Intelligence (AI) race for superiority.  There are multiple facets within the discussion and some things to consider that might not be at the forefront, yet.

Overall, there is a global race to build the best AI system that is not dissimilar to the nuclear arms race.  Arguably the use of AI as a weapon is one possibility; while the second aspect surrounds strategic economic power.

The USA is poised very favorably in this AI race due to the advanced tech industry in America and recent national security moves made by President Trump in the tech sector surrounding strategic critical minerals and domestic chip production.  However, no one is quite sure where China is in their AI development and last year’s explosive revelation around China’s “Deepseek” model shocked the U.S. tech industry due to its advanced intelligence prowess.

With China and the USA both in this AI race, and the need for massive investment in datacenters to do the processing needed for an artificial intelligence brain of such significant capacity, there is a sense of urgency in the tech industry that is surfacing around the country.  Simultaneously, with datacenters becoming more controversial, suddenly the geopolitical intelligence operations enter the picture.

Currently, it is well accepted inside the tech industry that part of China’s strategy against the USA in this AI race is to slow down American system development.  As a consequence, it is beginning to surface that Beijing may be funding voices inside the USA to rally against the building of datacenters. Essentially, China funding voices, real or artificially boosted influence operations, to amplify domestic opposition to the datacenters.

Anytime the intelligence operations become part of a domestic issue that has national security implications, things get opaque, cloudy and muddy pretty quick.  Is datacenter opposition organic – actual citizens and communities pushing back against the development in their towns and/or cities or is the opposition to the datacenters a form of foreign influence operation?

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There was much fake news about the tech and finance leaders traveling with President Trump to China.  Moments ago, President Trump corrects the record:

TRUTH SOCIAL – “CNBC incorrectly reported that the Great Jensen Huang, of Nvidia, was not invited to the incredible gathering of the World’s Greatest Businessmen/women proudly going to China. In actuality, Jensen is currently on Air Force One and, unless I ask him to leave, which is highly unlikely, CNBC’s reporting is incorrect or, as they say in politics, FAKE NEWS!

It is an Honor to have Jensen, Elon, Tim Apple, Larry Fink, Stephen Schwarzmann, Kelly Ortberg (Boeing), Brian Sikes (Cargill), Jane Fraser (Citi), Larry Culp (GE Aerospace), David Solomon (Goldman Sachs), Sanjay Mehrotra (Micron), Cristiano Amon (Qualcomm), and many others journeying to the Great Country of China where I will be asking President Xi, a Leader of extraordinary distinction, to “open up” China so that these brilliant people can work their magic, and help bring the People’s Republic to an even higher level! In fact, I promise, that when we are together, which will be in a matter of hours, I will make that my very first request. I have never seen or heard of any idea that would be more beneficial to our incredible Countries!”

~ President DONALD J. TRUMP

“Tim Apple” always cracks me up. lol

As previously noted and discussed by USTR Jamieson Greer, since the original trip to Beijing was announced several months ago, it was very easy to identify this visit was not a customary ‘state visit’ in the formal sense of the term.  Instead, this trip was always planned as a trade, finance and economic business trip specifically to engage Chairman Xi with a financial and investment focus.

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This video presentation is very well worth reviewing. Thankfully the British-centric perspective is dropped and Promethean Action PAC focus more on the overall ‘globalist’ political machine driven in North America by Obama’s leftist political operation, the Center for American Progress (CAP).

Kokinda stays away from the ‘intelligence‘ aspect of the background (which is good – not her lane).  However, for accurate and affirming context on the geopolitical part of the Kokinda review, make sure you have read “Segment 4” (just updated) from the remarks of Russian President Vladimir Putin when he was asked about whether his upcoming trip to China was related any way go President Trump’s trip which takes place this week.  President Trump and President Putin have spent several hours on the phone together in the past seven days. Putin’s responses in SEGMENT 4 are quite revealing.

PROMETHEAN PAC – “As President Trump prepares to travel to China, this episode argues that Putin’s remarks about Russia’s “partners and friends” (China, India, and the U.S.) reveal a shifting global alignment that alarms the Obama–Soros network. It examines the Global Progress Action Summit in Toronto, where Barack Obama appeared and Center for American Progress leaders, including Neera Tanden and Patrick Gaspard, framed Trump’s presidency as an “interregnum” and promoted Mark Carney’s “Principled Pragmatism,” described as preserving globalist structures while rebranding to address public backlash. The script contrasts this with what it calls a “new strategic map” driven by Trump, Putin, and Xi, highlighted by Victory Day context, an announced Russia–China energy deal, and Trump’s proclamations. It concludes that Democrats seek midterm gains but face setbacks from redistricting rulings, prompting renewed efforts to win back working-class voters.”

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President Trump is traveling to Beijing, China this week on May 14th and 15th.  Treasury Secretary Scott Bessent left the U.S. earlier today for advance discussion with Chinese intermediaries.

National Economic Council Director Kevin Hassett appears on Fox News to discuss the current status of the economy and the strong internal investment that is now frontloading a manufacturing surge.  As noted by Hassett one of the reasons the first quarter GDP was lower than expected was the amount of capital equipment imported to start a resurgence of the U.S. manufacturing base.  WATCH:

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Secretary of Energy Chris Wright appears on CBS Face the Nation to discuss the current status of the conflict with Iran.  As supplemented by additional confirmation from President Trump, Secretary Wright notes the Iranian military apparatus has been defeated but the goal to end the Iranian nuclear ambition remains.  VIDEO and TRANSCRIPT Below:

[Transcript] – MARGARET BRENNAN: We’re now joined by U.S. Secretary of Energy, Chris Wright, good to have you here.

SEC. CHRIS WRIGHT: Great to be here. Happy Mother’s Day.

MARGARET BRENNAN: Oh, thank you for that. President Trump said that he expected a response from Iran. He said this yesterday. Has one been received and what is the U.S. going to do with it?

SEC. CHRIS WRIGHT: Not that I’m aware of, but I suspect we will get a response very soon. Things are tough for the leaders of Iran right now, and I think they’re- they get growing motivation to make it- make a deal, but we know where this is going to end. We don’t know the route to there, but at the end of the day, we’ll have free flow of traffic through the Straits of Hormuz, and we will have an end to the Iranian nuclear program. The end point we know. The route, we don’t.

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There is a certain irony in the timing all things considered.  President Trump has given the EU until July 4, 2026, to fulfill the trade agreement previously negotiated (ie. the Turnberry Agreement) or 25% tariffs on EU automobiles will be triggered.

(Via Truth Social) – “I had a great call with The President of the European Commission, Ursula von der Leyen. We discussed many topics, including that we are completely united that Iran can never have a Nuclear Weapon. We agreed that a regime that kills its own people cannot control a bomb that can kill millions. I’ve been waiting patiently for the EU to fulfill their side of the Historic Trade Deal we agreed in Turnberry, Scotland, the largest Trade Deal, ever! A promise was made that the EU would deliver their side of the Deal and, as per Agreement, cut their Tariffs to ZERO! I agreed to give her until our Country’s 250th Birthday or, unfortunately, their Tariffs would immediately jump to much higher levels. Thank you for your attention to this matter.”  ~ President DONALD J. TRUMP

U.S. Trade Representative Jamieson Greer recently spoke directly about what was creating this problem.  His interview and explanation in detail is below (MUST WATCH):

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Previously, Toyota Inc informed the Canadian trade delegation that if the USMCA (CUSMA) was dissolved, the most important auto manufacturing operation they have in the country would end.  Toyota was being respectful and brutally honest with the Canadians.

Last year, at almost the same time as Toyota made their position clear, Honda put a pause on the plan to build EVs in Ontario [2025 Notice] pending additional review.  Today, according to Nikkei, Honda has now completed that review and cancelled the plan.  Honda will not build EVs in Canada.

Asahi Kasei, the Japanese material supplier that makes battery separators, a core component used in lithium-ion batteries, will likely make a similar announcement soon.  The decision is in response to declining EV sales in combination with current U.S-Canada trade friction.  Without guaranteed access to the U.S. market, it makes no sense to invest in Canada.

Electrek – “Honda is shelving its massive C$15 billion ($11 billion) EV and battery manufacturing hub in Ontario, Canada, according to a new report from Nikkei. The move escalates what was initially framed as a temporary pause into what increasingly looks like an indefinite retreat.

[…] When Honda announced the Alliston, Ontario project in April 2024, it was billed as the company’s most ambitious EV commitment yet. The plan called for a new EV assembly plant capable of producing 240,000 vehicles per year, a 36 GWh battery factory, and cathode material processing facilities through joint ventures with POSCO Future M and Asahi Kasei. Production was targeted for 2028.

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How do you sum up the economic forecast for Europe? This story highlights one of the craziest stories in a long time. This is so blindingly suicidal, it cannot be stupidity. This is intentional.

BACKGROUND – You might remember last year due to climate/carbon emission regulations inside Europe EU automakers had to pay fines to the EU Commission if they did not meet electric vehicle targets. In order to avoid the penalties many EU automakers began purchasing ‘carbon credit’ offsets from Chinese EV automakers.

European car makers were paying China for carbon credits, and Chinese car companies began using the payments to lower prices. Europe was, essentially, paying China to undercut their own auto market. The result was European car makers, specifically those in Germany, losing market share to lower price EVs from China.  German industry began shrinking.

If that wasn’t crazy enough, what comes next is beyond laughable. As a result of lost sales and diminished volumes, Volkswagen had shut down auto plants. Now, Volkswagen is announcing that Chinese automakers, their China “partners,” will take over the underutilized facilities and start building Chinese cars in Germany.

GERMANY – Volkswagen Group is facing increased pressure from its board to further cut costs despite already announcing radical measures, such as axing around 50,000 jobs in Germany by 2030 and reducing production capacity by up to 3 million units per year to 9 million, which would make it very difficult to avoid plant closures or sales. Overall, Europe’s largest automaker aims to reduce costs by 20% by the end of 2028.

In an attempt to mitigate the effect of these measures, the automaker appears ready to do what not too long ago would have seemed unthinkable, namely selling China-developed cars in Europe and even sharing its underutilized plants in the region with its Chinese partners.

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White House National Economic Council Director, Kevin Hassett, appears on CBS news to dispatch the narrative engineering of Margaret Brennan.

I completely understand why the White House appears to have finally had enough of Ms. Brennan’s dramatic performances and has chosen not to send most representatives into this nonsense pantomime any longer.  She’s even more insufferable than Jake Tapper.  That said, Kevin Hassett is likely the only member of the administration kindhearted enough to deal with the snark and lack of substance.

What I don’t understand is why the White House just doesn’t tell her in brutally honest terms: Margaret, your dramatic performances are tiresome, and your intellectual vigor is running at a continual deficit. Regards.

True to form, Ms. Brennan wanted desperately to pontificate about the terrible state of the U.S. economy blaming the White House for the failure of Spirit Airlines, and demanding Kevin Hassett address the Iran conflict that is not in his portfolio.  Director Hassett stayed comfortably in his lane, smiled and took apart the fake news construct as professional as possible given the absurdity of Brennan’s presentation.

[Transcript] – MARGARET BRENNAN: We begin this morning with the director of the White House Economic Council. Kevin Hassett joins us from Los Angeles. Good early morning to you.

KEVIN HASSETT: Oh yeah, good morning.

MARGARET BRENNAN: Well Director, President Trump sent a letter to Congress on Friday saying a few things. One that the conflict with Iran, the ceasefire has been extended. He also said the hostilities have been terminated. He also said the threat posed by Iran remains significant, and the force posture will continue to be updated. Then overnight, we saw the President said Iran has not yet paid a big enough price for what they’ve done to humanity. What exactly is the message to the market?

KEVIN HASSETT: Right. Well, I think the market has been pretty consistent. The fact is that what the President is seeing is that the blockade is working. It’s putting an enormous amount of pressure on Iran, and Iran’s threats to put mines in the straits have even made it so that humanitarian aid that, of course, we would let through to Iran, that there are a lot of those ship captains that are wary of going to Iranian ports because they’re worried about where the Iranians have put the mines. And so, you know, I go down to the sit room many times a week and get briefed on what’s going on in Iran, and they’re an economy that’s really on the precipice of extreme calamity. They are having a hyperinflation. They’re starting to have hunger. The bottom line is that the pressure on the great American people, because of these people who are like really intent on American and Israeli destruction with their nuclear weapons, are still in power. One last thing, Margaret, I don’t know if you noticed, but the UN Human Rights folks came out this week condemning Iran because they’re killing people who are trying to stand up to this regime that’s potentially, you know, causing starvation and even famine.

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