Trump Takes Aim at China: The CCP Takeover of Global Shipping: One On One with Ross Kennedy | Episode 8 - Going Rogue with Lara Logan

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Ross (00:00):
Lodgink is China's national
government-controlled software program that
tracks every single thing that is shipped
into and out of China's borders.

Lara (00:12):
So it's a massive intelligence collection
system, basically.

Ross (00:16):
Lodgink to me is probably the closest thing
that you can have to a super brain that
understands global economic affairs at such
a granular level that you can move the
littlest needle or dial or switch and be
able to cause genuine economic impact, good
or bad, in any other country in the world,

(00:38):
because China makes 20% of everything on
earth and they're shipping it and they're
collecting all that data.

Lara (01:01):
Welcome back to Going Rogue with Laura
Logan.
This is a fascinating subject, I got to say.
I had to do a lot of homework to be able to
know what I'm talking about and you can
decide if I got there.
My guest on this episode is a gentleman by
the name of Ross Kennedy, and Ross is a
20-year veteran, basically, of supply
chains, global logistics and supply chains,
and for the last decade he's been working

(01:21):
on the intersection of global supply chains
and national security, and we all found out
what that meant during COVID, right.
I mean, that's when this issue really came
home.
The reason I'm having this conversation
with Ross right now is that there is a
proposed course of action by the Trump
administration that is coming out of the US

(01:43):
Trade Representative Office, ustr, which
falls under the president's authority.
It's basically his lead advisors on global
trade.
This is not a trade agreement, this is not
a bill, this is not something that goes
through Congress.
This falls squarely under the president's
authority to act and react to pressing

(02:05):
issues that affect US trade.
With that, I am going to bring in Ross.
Hey, there, ross, it's good to talk to you,
hello.

Ross (02:16):
Good to talk to you as well.

Lara (02:18):
Thank you for making time on this.
Your knowledge, okay, this is typical of my
technological expertise.
This may happen a few times during this
interview.
Let's hope not.
I have ears that, like my DNA, reject
technology.
So, okay, you have been advising people in

(02:41):
positions of authority for a long time on
global supply chain issues.
This issue today, that is, a proposed
action by the USTR, really takes aim at
China and at addressing one of the most
pressing issues in global trade, which is

(03:03):
what is happening to the commercial
maritime trading business, what has
happened to US shipbuilders, what is
happening globally and how this affects
commerce and trade and national security.
So, right recently, there have been a
couple of hearings to tackle this issue.

(03:26):
Can you explain what is the proposed course
of action, I guess, and then we can talk
about why.
What is the landscape that led to this?

Ross (03:38):
Sure, so back on February 21st the Office
of US Trade Rep released a notice of
proposed action and in it they build the
case that China's dominance and their legal
and illicit control really over the global
maritime shipping sector.

(03:59):
So all the big ships that people were
looking at during COVID, that were sitting
in the harbors for the Port of Los Angeles
and Long Beach, All of those ships are
foreign, built.
China's accelerated ahead with their naval
program and they have, you know, as many
vessels on the water as the US Navy does
today.
And that's the first time in a long time
that, just in terms of raw tonnage, if not

(04:20):
in capability, that the United States has
had anybody with as much steel on the water
as we have.
But all of that has built up slowly over
time through means both legal and illegal,
but all through things which we should have
seen coming.
And so in April of last year the office of
USTR, under the Biden administration,
received a number of complaints, and it's

(04:41):
not the first time, but it is the first
time really that an office of the president
has decided to pick something up and run
with it on this issue over China's
dominance of the maritime and shipbuilding
sectors.
Those investigations can take quite a while
six months to a year, maybe even 18 months,
depending on how complex, and so, when the
Trump administration was sworn in on

(05:02):
January 20th of this year, the team that
came aboard saw this investigation realized
that it was very much of a piece with the
larger issue of trade and tariffs and
reciprocity and President Trump's ambition
and vision to recalibrate the United States
away from a country that's largely
dependent on the maritime sector of other
countries, from a country that's largely
dependent on the maritime sector of other

(05:24):
countries, largely dependent on
manufacturing and production bases of other
countries and get us back to being a more
self-sustainable country.

Lara (05:36):
Okay, so, if I can interrupt you there,
ross, so what you're really talking about,
right, is that, like many other industries,
for example the pharmaceutical industry,
many other industries, for example the
pharmaceutical industry the United States
has outsourced its manufacturing and
shipbuilding capability.
We primarily manufacture submarines and
surface vessels for the Navy, right, I mean,

(05:57):
you're talking about commercial ships.

Ross (06:01):
Absolutely.

Lara (06:01):
That are now made mostly in China.
That's correct, and so China now completely
and utterly dominates the global trade in
well, the global movement of goods right,
Both import and export of goods all over
the world.

Ross (06:23):
That's correct.

Lara (06:24):
So they not only build the ships, so they
control who gets ships and who doesn't get
ships and whose ships are run by them.
They also build the containers, correct.
They also build the containers and they
make most of the products that go in those
containers.

Ross (06:43):
That's right.

Lara (06:45):
And that is a massive national security
issue, correct?

Ross (06:50):
Enormous and cannot be understated at all.

Lara (06:54):
Because, I mean, I can see obviously why,
but I'd like to know your opinion.

Ross (06:58):
Sure, Well, the pharmaceuticals during
COVID was a really good analogy to really
where this is.
We dealt with this in my own family.
I know most families were touched by the
issue as well as this fear of these
critical medicines, right, whether it's
precursors that go into things like aspirin
and ibuprofen, or finished medicines as

(07:18):
well.
It hit home for a lot of people that if it
wasn't a generic that could be made in
India, that they were probably going to
have a significant shortage, and if it
wasn't the medicine itself, it would be the
syringes, it would be the sterile packaging,
it would be some form of the medical supply
chain that would fall apart if and when
China chose to allow it to.
But the challenge that most people realize,

(07:40):
maybe for the first time, is that China has
control and to a degree that they hold a
first mover advantage to be able to deny
the United States something critical that
we need.
The reason that the two things are really
analogous, besides kind of that big picture
you know view over they have we need is it

(08:00):
does not matter if a thing is made or not
made in a certain place if you also can't
transport it from where it was made to
where it needs to be consumed.
And that was the premise of where the
United States really started outsourcing.
It kind of became a thing in the mid to
late 80s at the big MBA schools like
Harvard and Yale and Stanford.

(08:22):
To outsource, it was better for the
short-term bottom line to have these poor
countries with their much lower prices in
labor, no environmental regulations, make
the dirty stuff, make the cheap stuff.
And then that incentivized the United
States to then say well, why, if it's
better for them to make toys and

(08:42):
electronics in Hong Kong or in Shanghai,
who cares where the ships are made?
Who cares where the containers are made,
who cares how it gets here?
Because the United States is so big and so
powerful that nobody's ever going to screw
with us, nobody's ever going to cut their
nose off to spite their face economically
by denying our market these things.
And that theory prevailed through the 90s

(09:02):
when Clinton promoted and got through the
addition of China to the World Trade
Organization.
That was consummated in 21.
And since then it has been an absolute
rocket ship for China, not only in
manufacturing.
But part of what gives them their
manufacturing dominance is the rise in
shipbuilding.
So it's not just controlling the making of

(09:24):
a thing, it's also not just controlling the
making of a thing, it's also controlling
the making and movement of a thing.
That really gives exponential power to
China.
And so, even as we're using tariffs and
various trade levers to address the
restrictions and the trade barriers that
China puts up worldwide through their
control of making of things, as we're
trying to fix that Now, we're moving

(09:46):
downstream of that and saying, okay, now we
also have to take a look at what does it
mean that they can build, that they build
50% of the ships in the world.
They build 37% of all the ships in the
world.
That includes all the military vessels.
So what does it mean, when they can do that,
when they can build faster, cheaper, when
all the money we're putting into building

(10:07):
ships there is going right back into their
military?
Because all of these shipyards are also
military shipyards.
They're producing aircraft carriers,
ballistic missiles, submarines, surface
combat vessels three docks down from the
next big container ship for Maersk or for
MSC or for whomever, from the next big
container ship for Maersk or for MSC or for
whomever.
And so when we look at that and we say we

(10:27):
are not only giving up our economic
sovereignty, our economic security and
stability, now we're giving up our national
security because we've given them control
and we're paying them to take control and
maintain control of these things at our
expense by putting money into their
shipyards, into their container building
economy and not only into the goods and

(10:49):
services that we acquire from them.
And so I think, that.

Lara (10:52):
So we're financing the building of China's
military.
Absolutely, this is just I mean, it's just
great.
There's just yet another thing that the
United States taxpayer is doing to slit its
own throat without being told the truth.

Ross (11:09):
And they've co-opted all of our allies into
it.

Lara (11:13):
And, by the way, at the same time that
China is building and controlling the
shipping and the containers and the flow of
goods, who's keeping all of that secure?
Who's paying for that?

Ross (11:26):
That would be us as well.

Lara (11:29):
Can you explain that?

Ross (11:31):
Yeah, we can use the example of the Houthi
crisis in the Red Sea.
Going back to, I think.
The first missile or drone was fired
sometime in November, only a month after
the Hamas attacks on Israel, and was that
October 7, 2023?
And it was just a month later that the
Houthis who, as far as anybody knew, had no

(11:54):
connection to Hamas Of course they do.
They're both funded and sponsored and
empowered by Iran.

Lara (11:59):
The Houthis out of Yemen, by the way, who
the Biden administration took off the
terrorist and Trump put it back on.

Ross (12:06):
That's exactly right.
And they began firing missiles or drones
both right kamikaze drones and missiles at
ships that were even loosely or
tangentially connected to Israel, and then
it just became a free-for-all when we
didn't do anything to stop it.
The majority of goods that flow through
that part of the world actually are
European.

(12:26):
It was one of the things that kind of came
out in the whole signal scandal.
Recently was a couple of our senior people
VP JD Vance as well making the point that
we're doing the Europeans a solid here by
the vast majority of military materiel in
that region that's trying to stop that
behavior by the Houthis is American, but

(12:46):
the majority of the trade that transits
through that is really benefiting Asia, the
Middle East and Europe, not necessarily the
United States, but we're still leaned upon
by the rest of the free world to be the
safe keepers of the global commons and
that's our Navy primarily in a situation
like this.

Lara (13:04):
So the US Navy and Coast Guard act as the
world's policemen on the water for commerce
and trade, for maritime commerce and trade.
Correct.

Ross (13:13):
Absolutely.

Lara (13:16):
And that costs a fortune.

Ross (13:18):
It costs an enormous amount.
Every Tomahawk missile that we fire is 1.2
million.
It was sort of a celebration when we saw an
F-16, recently, using a Hydra rocket, shoot
down one of the drones.
And why was it a celebration?

(13:39):
Well, number one it proved that a much
smaller air-to-air rocket could be utilized
from a fighter jet or from a helicopter to
engage these drones, to lock onto something
a little bit smaller.
But, number two, a hydro rocket's $57,000 a
piece, so it was a win.
It was a win that we weren't using Toboggan.
Yeah, or you know SM-3, sm-2 surface-to-air

(14:00):
missiles that are fired from the ships.
You know SM-3, sm-2 surface air missiles
that are fired from the ships, which also
cost, you know, a million bucks plus.
It was a win to say, okay, we're shooting
these things down not for a million dollars
a piece, but for $57,000 a piece, even
though the operational cost of flying an
F-16 is substantially more than that.

(14:21):
We still bent the cost curve down, just to
shoot down one thing that cost the Houthis
and Iran probably $20,000 to $30,000 to
build.
Now, all of a sudden, we're closer to
parity, and all of that is coming at the
expense of the American taxpayer.

Lara (14:36):
But you say we're closer to parity and I
understand why you say that.
But when you look at the reality of it, if
you're going to do maritime security
operations, the reality of it if you're
going to do maritime security operations,
you need a.
That means a carrier, ship right, which is
how much I mean.
That's millions and millions and millions
of dollars.
That means all the support vessels.

(14:56):
There's the supply vessels and you know the
plethora of support vessels that go around.
That I mean basically the budget of the US
Navy.
It means having your Navy and your Coast
Guard constantly patrolling international
waters.
So you're outside of the United States,
operating outside of the United States.
The annual budget according to the Navy,

(15:19):
their annual budget is $255.8 billion and
most of that is spent on securing the
world's shipping lanes for trade, for the
whole free world, but also including for
countries like China.

Ross (15:34):
Absolutely.

Lara (15:36):
And that is a massive that's what any
business owner would call a massive
operational security cost that China does
not have to factor into its business models
in any way, shape or form, because the
United States is bearing the brunt of that.

Ross (15:52):
In fact, Chinese vessels that started going
through there.
So commercial ocean vessels use a system
called AIS Automatic Identification System
and AIS is a piece of hardware that's on
the ship that broadcasts publicly the
position of the ship, the ship's name and a
few of its other characteristics.

(16:13):
It's eight to 10 data points that it
broadcasts, but it basically says hi, I'm
here, I'm the ship and this is who I am,
this is what kind of vessel I am and a
couple of other things.
But one of the things that is transmitted
over that is something called AIS messages
and these are short form texts that,
generally speaking, the vessels will use to

(16:34):
broadcast their operating condition and
what port they're coming from, what port
they're going to.
And you had all of these vessels that were
sailing from China that were changing their
AIS signature from vessel name or whatever
it might be to say all Chinese crew,
Chinese cargo.
And why were they doing that?

(16:55):
Because the Houthis were utilizing public
AIS data to target which ships at what time
they were going to be shooting at.
And these vessels were saying we are all
Russian, we are all Iranian, we are all
Chinese, but primarily Chinese, as a way to
keep themselves safe.
And I think, with one exception in the last

(17:16):
year and a half, since this began in the
Red Sea, that has exactly been the case.
That vessels with Chinese crew that have
identified themselves as such have not been
shot at, and that to me, to anybody, even
if they don't know anything about military
strategy or geoeconomics or any of that,
right that would seem to be an indication

(17:36):
of people saying we're a friend, don't hurt
us, sure.
And so that pattern of behavior began
starting in about January, february of last
year, and it has continued.
And all of that despite the first foreign
military base for China in the world being
the PLA Naval Base, people's Liberation

(17:57):
Army Navy, the PLAN Navy Base at Djibouti,
which is right there at the mouth of the
Red Sea, where all of this is happening, at
Djibouti, which is right there at the mouth
of the Red Sea where all of this is
happening.

Lara (18:07):
Wow, and that's, of course, one of the
critical supply lines there, right?

Ross (18:10):
Absolutely.

Lara (18:13):
Which runs.

Ross (18:19):
Yeah, it's.
The major trade lane between Asia and
Europe goes through the Red Sea and through
the Bab el-Mandeb, which is the southern
portion of the Red Sea, where Africa and
Yemen nearly touch Bab el-Mandeb, which is
the southern portion of the Red Sea, where
Africa and Yemen nearly touch that little
passage, and then the Suez Canal at the
northern part of the Red Sea between Egypt
and the Egypt Red Sea into the
Mediterranean.
That's how Europe buys all of its stuff and
gets it mostly from China.

(18:39):
It doesn't go over land, it doesn't take
the northern sea route through the Arctic.
Generally speaking, the vast majority of
that comes right through the Red Sea and a
lot of oil and natural gas that China
acquires from the Middle East and within
the Mediterranean region as well, moves
through that same zone.
So China's commerce is completely protected.
Even as the US has been keeping Arleigh

(19:01):
Burks, which cost millions of dollars a day
to operate, even as we've been keeping now
whole carrier strike groups in the region,
which God only knows how much money that
actually is.
But we are expending, before we ever put
that, $57,000 rocket in the air to shoot a
drone down.
That's downstream of $100 million or more
in spending just to put an F-16, f-18,

(19:25):
whatever it may be in the air to shoot that
particular thing down, and that's just the
Navy.

Lara (19:31):
That's not including any Army, air Force,
marine assets we might have in the region,
nsa intelligence assets, all that kind of
thing that go into protecting those areas,
that whole ecosystem of security and joint
battle, domain awareness and all the fancy
terms the Pentagon throws around.

Ross (19:48):
That all has a cost in manpower and money.

Lara (19:53):
So the reason we're having this
conversation is that there is a proposed
course of action that is currently being
under review.
It is a holdover from the Biden
administration that the Trump
administration has looked at and taken on,
so it's a bipartisan effort in that sense.

(20:14):
And what it proposes?
Can you explain what the proposal is?
What is that proposed action?

Ross (20:22):
So it covers several different provisions.
The ones that have gotten the most
attention, but in some ways the ones that
aren't most interesting to me are what's
called vessel service fees.
And so these service fees encompass three
categories of potential service fee that
could be charged to a vessel.
The first is a binary Is the vessel

(20:45):
operated by a Chinese-owned company.
So if it's container ships, that would be
Costco not the really cool store that sells
all the Kirkland brand stuff but COSCO, the
China Ocean Shipping Corporation, and OOCL,
orient Overseas Container Alliance, which
is a subsidiary and OOCL, orient Overseas

(21:08):
Container Alliance, which is a subsidiary
now of Costco.
They were acquired, I think, three years
ago by Costco, so that really on net
impacts them from a container side, which
is the vast majority of consumer goods auto
parts, electronics, apparel, all of that.
But it also encompasses tankers, liquid
natural gas carriers, dry bulk vessels,
things like that.

(21:28):
But generally most of the attention is paid
to Costco and OCL, because in the major
category of what we import and export,
that's the biggest is how does it impact
them?
So the second category has a step check
provision in it that then there are fees
assessed if that provision is met and that

(21:54):
provision is, is the vessel itself,
regardless of who's operating it, of
Chinese construction.
Was it built in China?
Was it built in China?
If it was built in China, then the penalty
for that comes down to who the vessel
operator is and what the composition of
their vessel's fleet is globally, by

(22:15):
percentage of Chinese origin.
So if it's anything larger than 0% up to
25%, it's a quarter of a million dollars or,
excuse me, half a million.
If it's 50 to 75% Chinese bill, or 25 to
50%, it's 750,000.
If it's over 50%, it's a million dollars.

(22:37):
And that's per port call.
And that's important because, particularly
for container ships, the vast majority of
container ships that come into the US Stop
at multiple ports.
They will stop at multiple ports.
It's called a vessel string.
So they'll have multiple ports, points of
origin in Asia, and then they will have
multiple destinations in the US, or

(22:59):
sometimes one in the US, one in Canada, two
in the US, one in Canada, whatever it may
be, particularly on the West Coast, but you
see it on the East Coast as well.
Those are smaller vessels because they go
through the Panama Canal, but it's the same
rules apply at the Gulf Coast, east Coast
and West Coast of the US.
The third provision involves the amount of

(23:20):
vessels that the vessel operator has under
construction, what are called new builds in
Chinese yards, and it's the same tier If
it's 1% to 25%, 25% to 50%, 50% plus.
That does benefit for people who know the
industry really well, like I do.
We can actually segment winners and losers

(23:42):
and neutral impact for the most part by who
the carriers are that are impacted by that
Sort of.
The major flag line of Korea is Hyundai
Merchant Marine.
They have very few vessels.
They're not Chinese.
They do not operate for the most part
Chinese-built vessels, certainly not in the

(24:04):
US trades, do not operate for the most part
Chinese-built vessels, certainly not in the
US trades.
And they don't have many, if any, vessels
under construction, at least publicly known
in Korea or, excuse me, in China, because
they build their ships in their own yards
in Korea.

Lara (24:16):
So this would not apply to them.

Ross (24:19):
Largely it would not, and if it does, they
would apply at the very, very, very most
minimal level of impact possible under the
rules.
And it's the same for Japan, who their
national carrier is ONE Line, Ocean Network,
express, one Line, and they have these big,
beautiful pink ships and pink containers.

(24:44):
They're really gorgeous.
Every day they sail is Breast Cancer
Awareness Month for them, but they are the
same.
Like the Koreans, they build their own
ships in their own yards, independent of
where the containers themselves may be
built.
There's no provision for that.
So those are really the big three that have
gotten a lot of impact, and I think the
biggest part of that is that everybody who

(25:05):
stands against those provisions are
manufacturer and trade associations that
are very, very dependent on imports from
China, and so Democrat strategists and
operatives, as well as industry
associations that have the shark-eyed
political hitmen that work for them, that

(25:26):
know how to manipulate public opinion and
opinion on the Hill, have all taken the
stance of this is going to be rocket fuel
for the same problem that tariffs is
starting, which is that it's going to
increase prices to consumers, and my
contention, and the contention of a lot of
people on the Trump team as well, is that

(25:49):
this isn't static.
These are incentives and disincentives to
engage in a certain behavior.
To say a thing is guaranteed to happen at
bare minimum is to say you have limited
imagination and no understanding of how the
world works.
But on the best case scenario, this can
actually help American consumers and

(26:10):
American national security, and we know
it's a national security thing.
It's not just that China is disadvantaging
the American economy and the American
maritime and shipbuilding sector, because
the next provision in there is that there
is a requirement that all of the operators
do not have their internal systems tied

(26:32):
into something called Logink, and Logink is
China's national government-controlled
software program that tracks every single
thing that is shipped into and out of
China's borders.

(26:54):
If you are tied in with Loginc, it does not
matter if the thing on your ship started in
Vietnam or wherever, but when you call the
Chinese port with that on there, you are
automatically submitting through an
e-manifest system.
Manifest is the list of what's all on a
ship and who owns it.
All of that data goes directly into China's
database for who's moving what in and out
of their country.

Lara (27:12):
So it's a massive intelligence collection
system, basically.

Ross (27:17):
I consider it I've run across a lot of
these kinds of things over the years that
countries will do to try to gain
informational advantage.
Lodging to me is probably the closest thing
that you can have to a super brain that
understands global economic affairs at such

(27:38):
a granular level that you can move the
littlest needle or dial or switch and be
able to cause genuine economic impact, good
or bad, in any other country in the world,
because China makes 20% of everything on
earth and they're shipping it and they're
collecting all that data.

Lara (27:54):
So this is what you meant when you said in
this proposed action the service fees that
are being charged to people who are on
Chinese ships or building new ships in
China or are going under a Chinese operator.
That's getting a lot of attention because
that's going to impact every Chinese

(28:15):
container ship or carrier that goes to a US
port and has to pay these fees, and it's
going to go to Walmart, to Target, to
Costco, to agricultural supplies, the
supermarket chains, for all that produce.
So you're getting a lot of pushback from
industry on that.

(28:36):
But what's much more significant, in a
sense, is this right, this requirement that
anyone, any of these operators that are
tied into China's massive collection system,
loginc, are then going to be subject to
what exactly?
What happens to them?

Ross (28:54):
There is no penalty for it.
It is a binding ruling that you will not
call US ports with your ships if your
systems are tied into lodging.

Lara (29:07):
Wow, that's a big deal, right, that's a
huge deal, I mean, for the industry
Enormous national security.

Ross (29:13):
Blow China for every carrier that complies
with that.

Lara (29:19):
Okay, but how many container ships come to
the US every day, roughly.
Probably 200 to 300 across all sizes.
That's every single day, right.

Ross (29:38):
That's every single day.
And of those, how many of them are tied
into Lodgink?
100%.
Except for the US flag vessels, which
aren't very many we have 179 vessels under

(29:58):
the US flag Pretty much every other ship
should reasonably be assumed with a high
degree of confidence that they're tied into
lodging.

Lara (30:11):
Okay, so this is what's.
This is what's called bearing the lead,
ross, we're talking about shipbuilding, and
you know, and when we should really be
talking about logic, right?
Because I mean that's this is incredible on
both sides of the equation.

(30:36):
One, it's incredible that China has access
to this much data and that system that it
is set up.
It's not simply I like Microsoft as my
operating system, or I'm a Windows guy
versus an Apple Mac person.
This is literally.
They have backed up Lugink by owning so
much of the industry that produces, not
just the goods that are being shipped, not

(30:58):
just the containers that they're shipped in,
but the very ships that they move on.
So they're in a position to dictate to all
of these people that you use their
operating system, which is piped straight
into the People's Liberation Army of China,
which is the military arm of the CCP.

Ross (31:17):
That's right.
And into the Ministry of State Security.
And I will take it even one step further.
How many people out there that may be
watching this, you know and if not them
themselves, certainly their relatives or
someone in their friend circle have seen
that a really cool thing gets made by
somebody somewhere and within days there is

(31:40):
a half price knockoff of it being sold on
Amazon or Shime whatever it may be.
Take that issue there in the case it's
because the factory, who's making the thing,
whatever it may be, is making somebody's
big idea, just sets up another company to
sell it and they're just knocking it off

(32:02):
and not respecting intellectual property
rights.
But now take that to every single thing
that might move on a ship, even if it's not
made in a Chinese factory.
Maybe it's made somewhere else, but because
the particulars of that cargo move through
Chinese ports and the carriers have to
disclose it and send an API feed over

(32:24):
directly into the various intelligence
sectors of China that these things are on
the ship.
Now they can get super granular and target
specific industries for disruption and say,
wow, an awful lot of this kind of thing is
moving.

Lara (32:39):
Right.

Ross (32:40):
For sure it's being made here or it's being
made in Vietnam and we weren't aware of it
before.
And now we're going to go, not have it.
So it's that layer.
If you know how to mine the data the way
someone like me does, now picture 50,000
people working for the government of China
that know how to do this better than me and
have AI helping them, and and and right.

Lara (33:04):
It gives them control over almost every
supply chain that exists.

Ross (33:08):
Absolutely.
It's a level of economic intelligence
gathering that's never existed anywhere in
the world After the you know, in terms of
the ability to know what is moving, when,
where, why, to whom, how much it costs all
of it.
There hasn't been that level of control
over information like that by a single

(33:29):
entity or country until you go all the way
back 300 years in history and get to the
British East India Company.

Lara (33:38):
Huh, which is?
This is like a modern day British East
India Company.

Ross (33:44):
I had a conversation a decade ago with
someone at the Pentagon that was taking a
look at supply chain risk which, honestly,
they were pretty ahead of their time by
Pentagon standards a decade ago.
Looking at that, they should have been
looking at it 30 years ago.
But at any rate, we're having a
conversation and he goes pick a company in
China that scares you more than anyone.
Who is it?

(34:05):
And I said it's Costco.
And he looked me in the eye and he goes
like the warehouse store.
I said no.
I said Costco, you know C-O-S-C-O.
He said why?
I said because they are the closest thing
that has existed since the East India
Company to that model.
They build ships, they build containers,

(34:27):
they build chassis, they build trucks, they
build everything that moves everything in
the world and they have offices in every
major country in the world.

Lara (34:39):
Okay, but so I'm a South African, so I
understand very well what you mean by the
British and actually the Dutch East India
Company, because they were the ones under
the British Empire that controlled all the
trade routes, the trade in spices.
Spices were really as valuable then as data

(34:59):
is today.
But can you explain what you mean by that?
When you refer to the East India Company?

Ross (35:07):
So the Dutch VOC right, which is kind of
colloquially what people call the Dutch
East India Company or the Dutch India
Company and the EIC, the East India Company.
They were both private corporations that
were chartered by the crowns so the Dutch
king and the British king and they were

(35:28):
three things at once.
They were trading companies.
They were engaged in the buying and selling
around the world of different things spices
and agriculture products, leather stuff
like that.
They were also merchant shipping companies
because they built and maintained and
operated their own fleet of vessels and

(35:49):
they were a quasi-blackwater in that they
were also a privatized security and
military capability.
It was not the British military proper that

(36:11):
invaded India and more or less did turn it
into a colony for a couple of hundred years.
It was the East India Company of Britain.
It was their private military, it was their
governors and they were called governors
who moved in, set up shop and began
colonizing for Britain.

(36:33):
You know, the Indian Peninsula known into
Bangladesh and into Burma it's now Myanmar
and the Dutch VOC operated the same way.
That's why even today there are a number of
countries in South America or in the
Caribbean who maintain themselves as part
of the British Commonwealth or as part of

(36:55):
the Dutch overseas territories and that
type of thing.
And now we're what, 350, 400 years into the
future?

Lara (37:03):
What does that mean?
Maintain themselves as part of that
commonwealth?

Ross (37:08):
So most of them are nominally independent.
Guyana is an example.
They gained independence, I think it was in
1970.

Lara (37:15):
Yeah, last year was their 54th anniversary.

Ross (37:17):
So they gained independence in 1970, but
they're still part of the commonwealth.
The British military still has an
effectively contractual obligation to
defend them in the event of attack.
Some other situations are like Suriname,
which is the next country kind of the
southeast of Guyana in South America.

(37:39):
They maintain similar status and
connectivity to the Dutch government.
But then you look at the British Virgin
Islands, the British Indian Ocean
Territories.
Those are maintained as sort of
unincorporated territories of the crown.
In the same way Guam or, you know, wake
Island might be in the Pacific, where

(38:00):
they're kind of sort of independent, but
they're very, very much part of and
overseen by and represented by and
protected by the United States.
So they kind of exist in a
quasi-independent status.
So these companies were so big and so
powerful that a lot of the things they did
still reverberate into history today.

(38:23):
That is the level of power that I'm talking
about, just with Costco, who is the fourth
largest ocean carrier moving goods to and
from the United States from China.
Their own ships.

Lara (38:39):
And what's the trade?
What is it?
$560 billion a year in trade between the US
and China $588.2 billion last year.
And how much of that is import and how much
is export for the US?

Ross (38:57):
The trade deficit is $297 billion, so that
balance of trade would be what 390 billion
import 290 export.

Lara (39:14):
So the majority of that is in China's favor,
right, Because they're making the goods,
they're shipping the goods and all the rest
of it.
And we are suffering under this illusion in
the United States that somehow, if we don't
get these cheap goods from China, we are
going to fall apart.

Ross (39:33):
Yep, well, people never ask the question.
You and I were having a conversation around
cheap appliances, right?

Lara (39:40):
Yeah, don't get me started now, ross, don't
get me started.
I took my Hamilton Beach microwave and I
drove over it with my car.
My children couldn't believe it.
Back and forth, back and forth

(40:15):
no-transcript stuff.

Ross (40:21):
I'm an economist but I look at logistics
and supply chains instead of interest rates.
But when we use the example of cheap things,
one of the talking points that you often
hear you've heard it with the tariffs and
you're going to hear it about this as it
starts to get more media play is oh my gosh,
how am I going to buy the next thing?

(40:43):
And the answer was well, in the 1950s and
1960s, when you bought a Maytag appliance,
you bought an Electrolux appliance.
When you bought a Kirby vacuum, you weren't
buying it with the expectation that you had
to cheaply replace it three years or five
years from now.

Lara (41:01):
Oh please, three years to five years, give
me a break.
18 months if you're lucky.
18 months if you're lucky.
I'm on my third microwave in the last two
years that is full of rust.
Third microwave in two years.

Ross (41:16):
You've heard the term planned obsolescence
right yeah, as a business term.
China's entire economy is built on planned
obsolescence.
As a US yes.

Lara (41:27):
It is the opposite.
It is the opposite of what consumers
actually want.
I heard this argument with a car.
Oh well, people want to replace their cars
every three to five years, so what's the
point in building a car that's going to
last 20 years?
No, I mean, this is nonsense.
I don't know where you live, I don't know

(41:48):
what planet you're from, but I live in a
small town in Texas, and the vast majority
of people that I know do not drive new cars.

Ross (41:56):
They don't.
I live in a.
I live in a very normal middle-class suburb
and you know a small town outside of
Minneapolis, right?
And I look around, my truck is 10 years old.
I do pretty much all the maintenance and
repair on it that I can, which is about 80%

(42:17):
of the issues I might run into.
Most people aren't that way.
They still take it to auto shops.
But I look around at all the auto body
shops and car repair and car maintenance
places they're all full.
They're all full, they're all full.
And this is a pretty well-to-do county in
general where we live.
We're certainly not in the upper 10 or even
25% of the incomes here and I'd say a good

(42:43):
70% of the cars that I see are at least
five years old, if not older.
So yeah, you're right, I mean that talking
point of people don't.
I mean the majority of people don't want to
go pay $60,000 every five years to rotate
their vehicles.
The same way big giant farmers rotate.

Lara (43:01):
Most people can't afford it.
Most people this is the bottom line Most
people can't afford it.
And so now what's happened is that you got.
You know, you have these big department
stores, the Walmarts and the Targets of
this world, and you're trapped in this
cycle of well, I got to go there because
it's cheap and I don't have a lot of money,
but what you have is wearing out.

(43:21):
Whether it's shitty I don't know if I
should say this okay whether it's bad
clothes, bad quality fabrics, the shoes
that are made of plastic, that are terrible
for you, that don't last for a second.
I mean, we're better off without all of
this stuff.
But we were told we were not.
This reminds me of the tobacco industry

(43:43):
when I was growing up Peter Stuyvesant
commercials, people on yachts, they were
smoking cigarettes.
They were cool, they were living the
lifestyle right.
Nobody said, oh, this is going to give you
lung cancer.
They wanted to get people addicted.
They wanted to get them bought into the
whole idea of cigarettes and then later it
was forced out into the open.

(44:04):
Well, this is kind of where we are with
globalization.
We've been sold this bill of goods.
Everybody's going to be better off.
You're going to get cheaper goods.
The supply chains will be more efficient
and you're going to be able to afford
things that you couldn't afford before.
No one talked about the death of
manufacturing in the United States.
No one talked about what happened to all
those manufacturing towns, what happened to

(44:25):
all those manufacturing jobs.
I mean, for goodness sake, I was at 60
minutes and I was the chief foreign
correspondent, chief foreign affairs
correspondent, at CBS News.
Nobody there did stories about this.
Nobody cared.
Are you kidding me?
Did they care that some town in the Midwest,
you know, was absolutely impoverished

(44:46):
because there was no manufacturing anymore?
No, all they did was make arguments in
favor of globalization, and so you had
American companies selling out because they
were making more money.
You had American politicians selling out,
and we were lied to over and over and over
again.
So now we're confronting the cost.

(45:07):
To me, when I look at this, I look at this
proposed action, what I see is we're
confronting the fact that we allowed a
parasite to come into our bodies and this
parasite now is built into the fabric of
our body.
So now we realize we need surgery.

(45:28):
I got to get this parasite out, because
what is it doing?
It's slowly killing me, and anytime
somebody wants to, they activate that
parasite.
It can detonate and Take down the whole
body.
So it's either a slow death with the
potential and the ability right to make it
a quick death, that, when all the pieces

(45:49):
are in place, if they want to pull, they
can.
That's what you're looking at when you
control global supply chains.
So you can control food, you can control
medicine, you can control fuel, you can
control construction supplies, you can
control I mean control just about every
critical industry.
You can control weapons, right.

(46:10):
Ammunition, the gunpowder, chemicals,
fertilizer I mean right down to the sealant
that you use in construction, right, all of
these things that we have outsourced to
China.
And you can say, oh well, you can get a
generic from India, well, not if it's going
on a Chinese ship, right?

(46:31):
So so now?
So that's the ticking time bomb.
You can slowly starve these things out, as
we've seen with certain industries where
they're moving things in a certain
direction so there's manipulation of the
supply chains or, if you want to, you can
take a catastrophic action and you can just
detonate that whole body.
You can blow up that.
That parasite can do, you know, a suicide,

(46:53):
be turned into a suicide bomb and take down
the whole body.
So now what happens?
The Trump administration, in this case, any
US administration, has to look at.
Okay, we got to do surgery.
The problem is the surgery is going to cost
the host right.
There's no removing something that is that

(47:13):
deeply embedded into the human body.
It's now built into the fabric of how your
body moves and functions, so extricating
that is going to be painful, and this is
what, to me, this proposed action is going
to be painful.
They're going to say that the service fees
that you want to charge are going to be

(47:34):
passed onto the consumer.
The price of goods is going to rise,
inflation is going to go through the roof
and you're going to have the Democrat or
the political opposition talking points the
Republican opposition talking points, by
the way because there's going to be a
buttload, if that's an official term.
There's going to be a whole plethora.

Ross (47:54):
I think that's a unit of measure in some
countries.

Lara (47:55):
yes, yes, it's definitely a unit of measure
in this country.
So you're going to have a plethora of
politicians on both sides of the aisle, but
also a major force from the Democrat side
of the aisle that is going to say this is
going to hurt Trump.
Instead of fixing inflation, he's made it
worse.
Instead of fixing the economy, he's made it

(48:21):
worse.
And so, oh, you've got to just live with
this cancer, this parasite that's eating
away the inside of your body.
You've got to just live with it, because,
guess what?
You can get cheap goods that aren't going
to last.
You can have everything that you need.
You can have all the things that you
wouldn't otherwise be able to afford.
What American family is better off today

(48:41):
because of this than they were?
Wait, let me see in the 1950s, when we were
doing all of this ourselves in the 1950s
when we were doing all of this ourselves.

Ross (48:52):
Well, and the things that are like when we
saw the tariff messaging, the whole food
price thing wasn't landing oh, it's going
to make your food more expensive.
Well, people know the reason the price of
eggs went up right was because avian flu
and because Biden's USDA mandated that
entire chicken farms wipe out their
population.
Historically and I know this because I was

(49:12):
director of global supply chain for two
years for an animal feed company
Historically the practice is not wipe out
the whole farm, it's you control the
population of a single building and, most-,
right, you isolate yeah, you, just you
isolate it to where the avian flu outbreak
has gone and you only euthanize for lack of

(49:35):
a better term that particular building.
It's the same with African swine fever and
pork you just take care of the building and
then you have to burn the bodies to kill
the virus, and that's been the longstanding
practice.
Anytime you've had that, the Biden
administration came along and said you know
what?
The whole farm.

Lara (49:54):
Kill everything, kill it all.
Gotta be sure.
Oh, and, by the way, don't talk about it,
because we don't want most of the country
to know.

Ross (50:00):
It's the Ellen Ripley approach in Aliens.
Right, I say we take off and nuke the whole
thing from orbit.
It's the only way to be sure.
Right, Like that was the approach.
For whatever reason they went and you had
egg prices run up.
But then you see Democrats out there
messaging that the reason your food prices
are high is because of tariffs that hadn't
even gone into force yet.

Lara (50:20):
Yeah, well, that's what they're going to
say about this.

Ross (50:22):
They're going to say it's like a tariff.
And because most people don't know how to
do logistics, supply chain and trade math,
I can do that math for them pretty quickly.

(50:47):
The worst case scenario for an importer
that has cargo on a Costco vessel of the
smallest size that comes to the US, which
means you have the least amount of freight
payers to spread that cost across.
So the bigger the ship, the more containers,
the more you're able to spread that cost
out.
Right, because it's a fixed cost, it's not
per container.
So the bigger the ship, the less the impact
is felt on an individual per container per

(51:08):
importer level.
Impact is felt on an individual per
container per importer level.
If you have a container on the worst case
scenario ship, you're looking at about $600
a port call.
The average number of port calls per vessel
is 1.5, round up to two that's $1,200 a
container.
Right.

Lara (51:24):
Yeah.

Ross (51:24):
The average value of a whole container of
imports into the US, of the kind of thing
that people are freaking out about their
electronics, their clothing, their,
whatever.
The average value is anywhere from $40,000
to $60,000.
Call it $50,000.
So a $1,200 service fee Increase yeah,

(51:46):
service increase right, Because it's on
container level is 2.4% of a $50,000 total
commercial value, and that's a static
analysis.
That's not assuming that you have half your
cargo on Costco and you have half your
supply chain with O&E or Hyundai,

(52:07):
Merchantchant, Marine, who has very limited,
if no exposure to the problem.
And guess what?
The big importers, the biggest ones Walmart,
Amazon, Target, Home Depot, Lowe's, Best
Buy.
What most people associate is like oh my
God, prices are going to go up.
These companies ship hundreds of thousands

(52:30):
of containers a year across every carrier,
so they have exposure across the entire
plethora of range of outcomes of vessels
and operators that are going to be impacted
by this.
That then means that the real true net cost
is much lower than 2.4%.
If Apple has a container on a vessel, in

(52:51):
the worst case scenario one container gets
it with a $1,200 fee, but the container is
full of iPhones and iPads.
That's $2 million of cargo value in a
single container.
Because of the amount of stuff you can get
in a 40-foot container.
Right, right, because it's small yeah get

(53:13):
in a 40 foot container, right, 73, because
it's small, yeah, or cubic, yeah, 73.
What cubic feet of internal space in a 40
foot container?
That is?
That is just an enormous amount of stuff
that you can pack in there and that cost
per unit spreads down to the pennies, yeah.
So the the counter messaging that the
democrats and that the industry and and the
industry are engaging in is a lot of it is
fear-mongering, playing on the fact that

(53:34):
most people just don't know these facts.
They don't understand that in the grand
scheme of all of these things, it's on that
going to be a lot less pain than they're
being promised for this.

Lara (53:50):
Okay so, but then I could counter that and
say to you okay, well, if it's not going to
cause them that much pain, then it's not
going to work.

Ross (53:59):
Well, the point is not to cause the
American consumers pain.
The point is to inflict, through myriad
ways, enough disruption to China and to
their economic sector at a low enough cost
to the US public, but still get the
messaging out that you begin to break

(54:22):
friction on these issues that really people
first became aware of during COVID, when
things were running out on store shelves
and what you could find was a lot more
expensive.
You know, you had no toilet paper, so
you're finding leaves off of a nice tree,
whatever it may be, that people kind of
remember.
I don't know, I hunt and I camp a lot, so
whatever, that's not the worst thing in the
world for me.
But you know we are a civilized society and

(54:45):
I'm an uncivilized man, but you know.
So the premise is that people generally
only get broken out of stasis or sort of
their comatose consumer behaviors when
there is something that kind of moves them
mentally and emotionally off the X.
And you know, stimulus demands a response,

(55:13):
stimulus to get some attention on the issue,
but the net impact that will be felt
materially.
The combination of all these factors is
very short-lived and if there is a cohesive
approach to this of how do we make this
work for us?
Now we're talking about something, because
let's take the trade math that I used on,
what's the real, true net impact per

(55:34):
container to an importer?
Let's flip it the other way.
The United States has $588 billion as of
last year in bilateral trade per year with
China.
Let's say $400 million of that is imports.
That's $400 million that's being
transferred from the US to Chinese
companies.

(55:54):
Now we're tariffing all that $400 million
at at least a minimum 20%, so that's $80
billion.
So if nothing else changes, the US is
actually getting $80 billion more in
revenue to itself.
That can go into tax cuts.
That can go into job training and expansion
programs.
That can go into better medical services.

(56:17):
That can go up into shoring up our budget
deficit, which is enormous and terrifying.
It can go into refinancializing other
programs.
It could pay for more rockets to shoot down
Houthi drones.

Lara (56:28):
Point is you could take back your roads
from the Chinese companies that now run the
tolls on them.

Ross (56:34):
Absolutely Right.
Next time I drive through northern Illinois,
I don't have to pay China for the toll,
right?
Or if you're in France, you got to pay
Russia, which is the great irony of their
hatred for Russia.

Lara (56:43):
Or across Texas.
You're still paying China.

Ross (56:46):
Yeah, that's exactly right.
It's ridiculous.
But when we turn that math around, what
most people don't know is that the reason
everything is so cheap that comes out of
China is not because it actually costs them
less.
Their cost per labor is only about half
that of the US at this point.
China's more or less a modern economy right,
particularly in their manufacturing and

(57:06):
industrial sector.
If we're paying our workers 15 bucks an
hour in a factory to drive a forklift,
they're getting paid the equivalent of
about 750.
So that spread doesn't explain how China
can be two, three, 400% lower on a lot of
things that should cost a lot more to
manufacture.
And the answer is is that China subsidizes
everything.

(57:28):
It's a system of vertical subsidization up
and down, from raw material to energy, to
water, to labor, to finished good.
Why then does us hitting them with tariffs
and service fees on vessels and all these
other things matter?
Because it's a forcing function that will
drain more resources and money from the

(57:50):
Chinese government to have to shore up
their manufacturing base.
It is a major strategic weakness for them.
That was a major competitive advantage and
that's like a level of economic judo that
the US hasn't really ever engaged in.
But it's something that you know.
I don't know if you've ever done martial
arts or wrestling or jiu-jitsu, anything
like that I have to instruct like, yeah, so

(58:14):
a day.
One principle that my jujitsu instructor
taught me is if he's got his hands on you
to control you, you also have control of
him, because he's he's, he's anchored to
your body to try to manipulate you.
So use that, use that point of contact as a
way to change him and that is what we're
doing with China.

Lara (58:33):
But the other way that you could look at
that, right, is that it's a little.
It's more than death by a thousand cuts,
but it's part of a strategy that has
multiple layers and multiple fronts.
So you're not proposing this action in
isolation.
That's your point.
This is happening along with the tariffs.

(58:53):
If this goes ahead, it's happening along
with the tariffs.
And then you still have many other things
at your disposal, like, for example,
250,000 Chinese students that are currently
on student visas in the United States visas
in the United States.
So I mean, for those people who argue,
because China has a lot of people on its

(59:14):
payroll inside Congress, outside of
Congress, in the intelligence agencies, in
the lobbyists right in DC, I mean, this
country is awash with CCP money and these
people are pushing against this and tariffs
and everything else really hard.
They have their people throughout the media,
too, to maintain consistent messaging.

(59:35):
But what do they really not want?
They don't want you to send back their
250,000 students because, first of all,
this is the basis of their espionage
operations inside the US, right, and not
only that, but the universities don't want
it because they've built these five-star
resorts for their own benefit that are not

(59:58):
sustained by their economic model.
They're sustained by the fact that they're
getting all this money from foreign
students and foreign grants and so on and
so on, and they've become indoctrination
centers.
So it's kind of a win-win for the US if you
get rid of the student visas and the
foreign money, because we don't want that
polluting American minds and American

(01:00:19):
education anyway.
And Trump, he hasn't even begun to play
some of these cards.
This will truly be the golden age of
America.
That's what we have to do.
Here's a message from our partner, dr Kirk
Elliott.
Something big is happening in the markets,
so big I have to bring your attention to it.

(01:00:41):
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Trump and Treasury Secretary Scott Besant
signed an executive order to create a
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sheet.
Meanwhile, the Bank of England is running
out of gold, so desperate they're paying
16% a month just to borrow it.

(01:01:03):
And where is all that gold going?
Right here to the US, with a drastic
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(01:01:25):
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(01:01:47):
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Ross (01:02:15):
You're married to a soldier, and so you and
he would both be familiar with a term like
this.
This is not a frontal assault on the enemy
that's totally doomed to fail.
This is a shaping operation.
This is something that you do when it is
one of many parallel right but interlocking
maneuvers that you take to prepare the

(01:02:38):
battle space for something much more.
So this is if you want to protect your
soldiers, you know, in six months or three
months or whatever, whatever that you're
going to have to do a ground invasion In
World War II, right?
What did we do?
We sent tons and tons and tons of
battleships and saboteurs and everybody

(01:02:59):
else and we just pounded the coastline of
France where all the Nazi pillboxes and all
their forces were.
We sent saboteurs behind enemy lines to try
to disrupt their supply chains out of
Germany.
We took all those steps ahead of time to
make the actual war a little bit easier and
to shape it more towards our advantage and

(01:03:21):
to de-risk it like China's already done by
infiltrating over 200,000 uniformed members
of the People's Liberation Army, by sending
in their hackers by buying up land near.

Lara (01:03:37):
US military installations, by buying up US
farmland, by using legal marijuana grow
operations to run illicit drugs, by
becoming the main money launderer for the
US cartels, by flooding the US with
fentanyl and the precursors and everything
that they supply to wage drug warfare.
I mean shaping operations like that as
China prepares to take us down.

Ross (01:03:59):
That's exactly right, and China's goal is
not necessarily a military invasion of the
US.
It's an apocryphal story, but you know
Admiral Yamamoto in Imperial Japan in World
War II, allegedly and I've seen it
attributed to the emperor.
You know someone in their political
leadership, yamamoto.

(01:04:22):
So it's apocryphal, but it's true.
You can't invade the mainland of the United
States.
There'd be a rifle behind every blade of
grass.
Right?
Because at the end of the day, we're a
country of rednecks like dudes like me.
That like it's rare for me to dress like
this, I'm usually in like camo or
underarmor or something, but always with a
gun, right, Like that's the US culture and
that's the perception even today.
And so, in order, like, the preference for

(01:04:44):
them is to collapse us from within.
But, just like in jujitsu, they've got
their hands on us.
If we conceptualize it differently, we have
our hands on them, and here's how United
States universities are a tremendous
vulnerability to the US.
You're just talking about that.
Hundreds of thousands of their students.
So, looking at it from a targeting
perspective, what can we define about that

(01:05:05):
large population of Chinese students?
Well, one of the reasons the universities
actively encourage it, despite known for
many years security threats to their
campuses and to the US national security,
particularly the guys working in science
and math and AI and physical sciences.
What do we know about them?
We know they pay in cash.

(01:05:27):
They don't need financial aid, so they're
stroking checks to Harvard or Yale or
Stanford or MIT every year for $100,000.
And it's cash.
And so that financial aid can be used for
other students.
Where does that money go?
Right, it cycles back into paying for all
of the students that are on financial aid,
which means they don't have to drain their

(01:05:48):
endowments at these schools, and that's
what the endowments are for.
Right is to expand the education mission of
the university.
So these endowments in the aggregate across
all American universities are somewhere
between $800 and $900 billion in value.
How do the endowments continue growing in
value?
They invest them and they invest them into

(01:06:10):
real estate investment trusts to acquire
large parcels of land.
That pays them a premium back, you know, or
pays them a fee every year.
They're buying stocks and bonds and
securities.
They're buying portfolio, you know
investments, shares as LPs into VCs,
whatever it may be, but they're following
an investment strategy and somehow $7 to
$10 billion of that dollars is in China and

(01:06:34):
in Hong Kong right now.
$7 to $10 billion of university endowment
money are funding the operations of Chinese
companies through their markets.
What if we just disincentivize that
behavior?
Get your money out.
Take every penny that you have stashed away
in offshore tax havens and we're not going

(01:06:54):
to pretend that the universities don't do
that too just like American companies and
rich people, right?
So take all that money and bring it back to
the US and you get a tax holiday.
You don't have to pay the 20% to bring it
back into the US and repatriate that, so
long as it goes into some direct productive
use for the American economy.
Take a look at the value of the pension

(01:07:14):
funds.
Public employee pension funds in the US is
over $5 trillion.
$78 to $90 billion at any given time is
invested in the same way in the Chinese
markets and in Chinese companies.
So in the aggregate we're talking almost
$100 billion that's tied up in the pockets

(01:07:36):
of our enemies.
That could be easily brought back to the US
and put to productive use today.

Lara (01:07:45):
And then, on top of that, the US bears the
brunt of the operational security costs,
you know, keeping the shipping lanes open,
keeping for the whole world right, and then,
on top of that, the whole tariff situation
is imbalanced, you know.
And so there's one after another, after
another.

(01:08:05):
You know, the US has certain environmental
standards and labor standards and all the
rest.
China doesn't worry about any of that.
I mean, you have a completely uneven
playing field, and the US taxpayer has been
deceived and conned into thinking that they
have to go along with this so they can buy
some cheap crap from Walmart.

Ross (01:08:26):
Well, by now.
Most people are familiar with the labor
issue in Xinjiang right, xinjiang province,
right Theurs.
Uh, yes, we were forced labor prevention
act, which was something that I've I've
worked on consistently since implementation,
provided expert testimony to homeland
security on how to implement that better.
So that law was signed by president biden.
It started, it was built.

(01:08:47):
You know, it's kind of the reverse of this
situation.
The work was all done by some really
amazing people, a couple of whom I know
personally and know well in the first Trump
admin.
But because of the political pressure
around China during COVID, you know Biden
was all but forced to sign the thing, even
if he didn't want to, and so but it went
active in January of 22.

(01:09:08):
So we're now just now, three years into
Uyghur Forced Labor Prevention Act.
Customs and Border Protection put 60 cases
a month on companies.
There are over 2,000 cases that they've put
on from detecting that the goods in that
shipment that come into the US were made

(01:09:28):
using forced labor in the Xinjiang province
of China, not forced labor in all the other
provinces and all the prison labor right,
but that's over 2,000 cases that CBP and
the Department of Justice, the Forced Labor
Enforcement Task Force which is the dumbest
acronym and interagency task force name
ever, but that does include people from

(01:09:49):
Commerce, bureau of Industry and Security.
That includes the FBI, homeland Security.
It's a whole bunch of people that are
involved in this, but they come together
and they say, okay, yeah, so it's 2,000
cases that have been adjudicated under this
law.
Customs only examines a little over 3% a

(01:10:09):
year of all the containers that come into
the US, and that number is something like
29 million.
Last year, containers came into the US.
3% of those are being examined, where
someone's physically cracking the container
open and looking in there to see what it is
right.
And so what does that tell me?

(01:10:31):
Well, that tells me a 50% whatever of the
things we consume in the US are made in
China.
At this point, right, only 3% of that's
being detected.
How much forced labor are we actually
missing?
How much are they making things in the
Xinjiang province, shipping them to the
Shenzhen and those parts and things that
they're making using forced labor ending up
as components inside of a bigger thing?

(01:10:52):
They get shipped to the US.
That's a lot harder to catch and detect,
right, and we know that there's forced
labor issues at Foxconn, who makes all the
stuff for Apple.
Take all of that together and then you
realize that every single ship that comes
out of Chinese shipyards has forced labor
in it.

(01:11:16):
So applicants that they bring in, they have
Uyghurs that they move throughout the
country, they take them out of Xinjiang
province and put them to work, and these
things.
Why are Chinese ships so cheap?
It's not just subsidies, it's because it's
cheap.
For the same reason, so many other things
there are because they're using forced
labor and they're abusing humans and
they're abusing the environment and
everything else, and so even the ships
themselves that are carrying the things
that may or may not be dangerous to an

(01:11:37):
American citizen, even the ships themselves
that carry them, have that type of evil
treatment of humans associated with the
construction of them.
And that is what we are trading Every time
we accept a Chinese ship to call— yes,
we're trading in forced labor.
We're trading in forced labor.
We're knowingly aiding and abetting and

(01:11:58):
supporting that type of activity, even as
we're supposed to be the land of freedom
and liberty.
We're supposed to be the country that
treats everybody as equal under God.
What messaging does that send if we're not
at least making our best effort to right
these wrongs, right these things that we
have participated in to benefit as well as

(01:12:20):
a country, if we don't try to do that?
It's one of the reasons I love like in my
soul, I love what we are trying to do as a
country with so many of the steps that
President Trump and his team are taking is
that they at least recognize the problem.
They're at least willing to put a name and
a label on it and say this is wrong, not
only what they're doing, but what we've

(01:12:41):
been doing by participating in this, and
we're going to take steps to try to make
that right and build a better America and,
for our allies and friends, help build a
better world for them too.

Lara (01:12:54):
And people in this country need to
recognize that there's going to be a little
bit of pain.
This is surgical, right?
This is this, this really.
These, these corrupt systems and practices
have been truly embedded into the fabric of
our society, our economy, our education
system and so on and so on.
It's just like bringing in, you know, 15,
18, 20 million whatever the number is
illegal people who've come here illegally,

(01:13:17):
you know, and using, infiltrating them with
foreign paramilitary organizations and all
the rest of it.
All of this now is embedded throughout our
society, and separating that and figuring
that out is another painful process that
inevitably, is going to cost us in lots of

(01:13:38):
ways.
So I want to ask you something.
So you went through the various service
fees that are a component of this proposed
action, and then we talked about lodging,
this intelligence collection system.
So your sort of supply chain math can apply
to the containers, right, and to those for

(01:14:01):
that level of shipping.
But when you talk about, close to 100% of
the ships coming here are using lodging and
you're not going to be able to dock at a US
port if you're using that system, that will
have a much bigger impact.

Ross (01:14:18):
No, Absolutely it will, it will because
you're denying the adversary, the thing
they most want and need, which is
information as a way to reinforce their own
panopticon and targeting strategy.
Against how do we disrupt and collapse the
United States?
That all depends on big, big, big, vast
amounts of data that can be thin sliced

(01:14:40):
Every time you buy something from Timo or
Shine it's going back into that detail,
your credit card number, your email address,
your home address, every time you buy a
Chinese car that's just loaded down with
sensors, the same way Teslas are.
It maps your pattern of life when you have
that level of detail of someone's life
everybody's paranoid about like, oh, the

(01:15:00):
FBI knows that my phone's in my pocket and
they're listening.
Yeah, china knows way more than our own
government does about you.
Whenever you buy from these apps and, by
the same token, just at a larger scale,
whenever you buy from China at all and it's
shipped on one of these ships, they know
that.
And when you can get that level of granular
or that level of big picture with

(01:15:21):
persistent real-time or near-time data on
an adversary, there is not a thing you
cannot do to them if you were so inclined.

Lara (01:15:29):
Well, and what people don't realize is a
lot of the time they think it's just about
an ad, you know okay.
So what if they're spying on me and now
they're sending me an ad?
Because I was talking about buying a
motorbike and now I'm getting ads for
motorbikes?
Or I was talking about how I want a beach
vacation and now they're sending me an ad.

Ross (01:15:45):
Spotify always seems to know the song for
the mood you're in, because it hears you
talking right.

Lara (01:15:49):
Right, and so people think that that's
innocuous.
But what they don't understand because we
haven't really identified it yet is the
degree to which that can be used to
manipulate and modify human behavior.
So you could have everybody believing a
certain thing, right, you could have
everybody believing oh, this is a tariff,

(01:16:12):
this is not a service fee.
This has got nothing to do with
intelligence collection.
This is just about, you know, xenophobia.
This is Trump, just like he did in COVID
when he talked about China.
This is him now going after China and it's
going to cost the American people, and so
on.
This is, this is kind of like.

(01:16:33):
You know, I never forget seeing all these
stories about all these police departments
across America that were getting free
drones from China.
And you're looking at this and you're
thinking are you nuts?
First of all, didn't your mother tell you
there's nothing in free?
Nothing in life is free, right, there's
always a price, Even when they say, oh, the

(01:16:54):
first one is free, no, nothing is free.

Ross (01:16:57):
If someone's giving you something for free,
the product is not the product is you.
You're the product.

Lara (01:17:05):
Yeah, it's like being in a game of poker
and you're wondering who's the mark?

Ross (01:17:08):
You're the mark, so we can look around the
table and see who the sucker is.
You're the sucker.

Lara (01:17:13):
That's right.
Okay, so if you're, if China is giving you
drones, it's because their drones are
mapping you, that's right.
And they're collecting information.

Ross (01:17:21):
The United States has been the sucker at
the poker table for forever.

Lara (01:17:27):
Over and over and over again.

Ross (01:17:28):
In fact, better poker players than the
United States.

Lara (01:17:31):
The Chinese play better poker than we do.
The Iranians play better poker than we do.
The North Koreans I hate to say it the
North Koreans play better poker than we do.
I mean, the list goes on and on right.
So it's staggering to me that people still
do not understand the value of information,

(01:17:55):
and what a human terrain map is really
built for has nothing to do with whether
they get you to buy a new motorbike or
don't buy a new motorbike, and everything
to do with behavior modification and
manipulation.
And just because we don't yet know what the
ultimate purpose of that is, what the

(01:18:16):
outcome of that is like.
Okay, with cigarettes, we know you're going
to get lung cancer.
What's the worst can happen to you You're
going to die of lung cancer.
We don't know yet what the outcome is of
behavior modification and manipulation.
We know that it can be used a Google search
engine can be used to decide an election.

(01:18:36):
We know that, but we've never really seen.
Oh okay, so it got.
This guy came to power and he did all of
this, and it's terrible.
They've tried to create that narrative
around Trump, but it falls apart constantly
because it's false.
Trump, but it falls apart constantly
because it's false.
It's literally not true.
No part of it is true.
So it's got and they keep telling more lies.
You know, to try and uphold that lie and

(01:18:57):
they all fall apart because none of it is
grounded in reality.

Ross (01:19:03):
You know, a good example, like the value of
data that can be used in a really
destructive way is and I'm definitely not
going to say where, but there is a place in
the United States, one where the
convergence of logistics infrastructure is
such that if this one tiny little place

(01:19:23):
were to be disrupted, flow of goods in the
United States would be constrained by about
70%, and it would be easily done Now.

Lara (01:19:38):
That's a ridiculous vulnerability.

Ross (01:19:40):
That's a ridiculous vulnerability, but it's
built up over all these years because of
these compromises that we've made over and
it's tied to the convergence of truck, rail,
ocean container, ocean vessels in that
whole way we move things in and out of the
country has given us this one vulnerability
that we have.

(01:20:01):
And I just fell out of my head when I
figured this thing out and I gave it to the
right people and I'm like guys, are you
tracking this?
And they're like we had no idea they do.
People.
And I'm like guys, are you tracking this?
And they're like we had no idea they do now,
and when was that?

Lara (01:20:14):
Four years ago.
And let me guess.
Let me guess what's been done to fix it.

Ross (01:20:22):
Last time I saw it.
I don't know Nothing.
Visual.

Lara (01:20:27):
I guess I just love this and then you're
talking about shipping and trucking and all
of that, but that is without even you said
something absolutely critical.
These vulnerabilities have been allowed to
build over time, and it's the same thing.

(01:20:48):
When you look at space and you look at
Space Force.
What have they discovered?
That our entire satellite infrastructure.
Many of these satellites are extremely
vulnerable and old and no longer
communicate with each other.
And what have we done?
The last administration ordered us.
This was an actual order, according to

(01:21:09):
people within space command.
They were told we do not want overmatch in
space, and overmatch has been the basis of
US defense for our lifetimes, right as long
as anybody can remember.

Ross (01:21:21):
When we go onto the battlefield.
Who do you think is funding all these
campaigns to attack Elon?

Lara (01:21:27):
Right 50% of the satellites in space are
Starlink.
Yeah, yeah.
And they don't want that, right.
And so what do they want now?
They don't want us to have overmatch,
either on the battlefield, or in space, or
in commerce, or on the oceans, right.
They want us to have parity.

Ross (01:21:47):
So when you had Chinese, you know vessels
in space we have 50% and everybody else has
the other 50%.
That seems fair and balanced.

Lara (01:21:58):
As an American, that would make sense,
right, you would think that every American
would want that.
But instead what you have is American
leaders and institutions that have stopped
seeking overmatch and have started to seek
parity, because now you're giving every one
of your adversaries the ability to come at
you and to counter you.

(01:22:19):
And people say to me well, why would the US
do that?
And my answer to them is always the same
Don't ask me.
Ask the people who did it.
Ask the people who left behind $80 billion
of advanced military equipment in the hands
of terrorists in Afghanistan when they
didn't have to.
There's no reason.

Ross (01:22:35):
We're seeing that equipment now show up to
be used against us in the Middle East.

Lara (01:22:39):
Right.
So you don't do that.
If you don't, if your major concern is
making sure that you want to keep America
safe, you don't do that.
I can look at that logically and say, well,
these people, that's not their goal, that's
not their priority.
Then people say, oh well, I don't believe
that.
Why would any American president or

(01:23:01):
administration, why would they not want to
keep America safe?
My answer is always you need to ask them
that I didn't do it.
I only know what they actually did.
I know that they went as far as looking
across the border at very specific assets,
high-level assets that made it across the
border, and they took that technology.

(01:23:24):
They broke the law by transporting that
across international borders and put it
back in the hands of the terrorists.

Ross (01:23:32):
That's right.

Lara (01:23:34):
So you didn't just leave stuff behind, you
went out of your way, when stuff was out of
their hands, to give it back to them and
put it in their hands, and that's the tip
of the iceberg of what they did in
Afghanistan.
So what we have seen, what's building here
and what you're talking about, is layer
upon layer upon layer of weakening
America's national security.

(01:23:54):
And because we don't, there's no, you know,
tanks rolling down the streets or some
foreign Navy showing up at outposts, you
know, and planes in the sky, we think we're
safe and we're fine, but it's an illusion
of safety, right?

Ross (01:24:10):
Well it is and you know it gets at
something that you know when your producer
and I were doing, you know, video and mic
testing and all of that you know prior to
this.
You know we were talking about something
related to J6 and kind of like, how can
people really kind of defend this type of
thing and defend?
You know, and you had a previous guest that
was that dealt with some really horrible,

(01:24:33):
horrific things in her younger life and you
wonder how that was Elanka Deaton who was
sex trafficked in the music industry.
Yeah, and you wonder, how do people get to
a place where they can justify and excuse
that kind of thing right, whether it's evil

(01:24:54):
or whether it's legitimately adversarial,
malignant, hostile intent against their
fellow citizens?
And you know, I was telling him that I was
reminded of something.
My best friend is a minister and is
genuinely one of the most insightful and
intelligent individuals I've ever met.
And he said to me you know we were talking
about, you know, this concept of like.
Why does evil exist in the world?
And all of that?
And he said, you know, he said evil itself
is actually pretty rare, like as far as

(01:25:16):
people who are genuinely truly evil, you
know, inhabited by the spirit of Satan, the
whole thing, he said.
Evil largely happens in the world because
people start out knowing that a thing is
wrong or bad and then it becomes normal.
And then, once something is normal, it must
be defended and it must be excused and

(01:25:39):
protected.
And that's how we've gotten to this place
where something that would seem so common
sense 10 years ago, 20 years ago, 30 years
ago, of like.
Why are we letting a communist country
completely have us, you know, lead us
around by the nose?
It's because over time it became normal and
now it has become profitable to the extent

(01:26:00):
that you have almost every major trade
association, national Retailer Association,
american Energy, ag, transportation Council
and like 80 other of these in the aggregate
billions of dollars that get paid into
these big lobbying groups to defend the
interests of their stakeholders.
And they're all sitting on the Hill on
Monday and today, one of whom was a guy who

(01:26:22):
fired me 10 years ago.
Actually, I should be grateful to that.
But these guys, they're all sitting there
and they're writing these papers and
they're paying lots of money to economists
to write things that's just total dreck,
but they're, you know, they're backing into
the conclusion.
They already had to justify it.
And all of them are sitting there saying
this is so bad, this is so negative for
America.

(01:26:42):
We shouldn't do this thing.
And it's because, over the years, and do
this thing, and it's because over the years,
they've become conditioned to believe and
then to defend their interests, which are
tidally locked to that of our adversaries.
It's zero sum for them.
America has to lose for them to continue to
gain.
And that is the root of probably 95% of the

(01:27:06):
genuine opposition that there is, like the
originating evil, so to speak, or the
motivating impulse to stop President Trump
and to stop this administration and team
from doing these things that make sense,
that are manageable, sent you prior to this.

(01:27:31):
I put four recommendations in that document
of how do we take a thing that's being
presented to the public as necessary spun
within the public and back at the Hill as
oh, this is so negative and bad for the
American economy.
How do we actually turn this into something
net positive?
That's because my animating impulse in life
is to defend and protect the interests of
this country and of my fellow citizens, and
that's something that I share with the

(01:27:53):
people in the Trump admin that are trying
to do these things is how do we do this in
a way that to the minimum extent possible
or not at all cause harm, but give us the
most optionality and the most ways to be
able to trigger positive, pro-growth,
pro-security solutions for this country?
And so everybody's saying, well, we
shouldn't do this, it's going to harm the

(01:28:14):
American economy.
My answer is why?
And everything I've seen spit back is BS.
It falls apart under the barest analysis.
The average person doesn't do bare analysis.
They just kind of believe what they see on
TikTok or Facebook or X or you know, fox
News, cnn, whatever.

Lara (01:28:37):
Well, here's one thing that I would say to
you is you know, this is primarily aimed at
China right, and the national security
vulnerability that we have with China,
whose actions on multiple fronts indicate
that they are not a friend, in spite of the
reciprocal nature of trade and all the rest

(01:28:57):
of it.
So one of the quickest ways to get this
issue into the forefront would be just to
release the data on how many people in the
United States government and across
industry are on the payroll of the CCP, Yep

(01:29:23):
of Congress, Democrat and Republican, how
many people on the National Security
Council, in the executive branch, anywhere,
anywhere in government, in the intelligence
agencies, in the think tanks, in these
defense companies, in the universities.
Let's see the list, because don't tell me

(01:29:43):
it doesn't exist.
Don't tell me that US intelligence doesn't
track this it doesn't exist.
Don't tell me that US intelligence doesn't
track this.
Get the donor list for ActBlue.
That's a good place to start, although I
will say that a lot of those morons on the
street who think, oh no, I'm donating to
this cause or that cause and can't see the
wood for the trees, they have no idea part
of that's going to China.

(01:30:05):
But just let's see it.
Let's see all of these people in the
lobbyists, in the Walmarts, in the Targets,
in the Amazons.
Let's see how many of these people are on
the payroll of the CCP.
Let's see how many journalists or media
organizations have taken this kind of money.
Because if you're taking money from China

(01:30:31):
money, because if you're taking money from
China, you are not credible you don't get a
vote on this, you don't get a voice on this.
You got to sit this one out because you are
compromised.
And then let's have this conversation,
because what's really frustrating about
this is that most of the country doesn't
even know this is happening.

Ross (01:30:48):
No, they don't about this is that most of
the country doesn't even know this is
happening.
No, they don't.

Lara (01:30:51):
How much coverage are the hearings getting?
How much coverage does this proposed action
getting?
I mean next to nothing.

Ross (01:31:05):
That's why, in probably no world would the
Trump administration or any other
administration put me on the microphone and
just say freewheel it for an hour talking
about these issues.
And because it's in politic at some level
right Now, I do love the team that's
currently there.
I mean it's.
You know, this is a different type of
administration.
They will counterpunch or they will punch
first if they think that it's the right
thing to do, and we haven't really seen

(01:31:25):
that out of our political leadership in a
long, long long time.

Lara (01:31:34):
No, we haven't.
But let me, can I ask you about this?
This uh, lodging thing that I'm still stuck
on is if you, if most of the ships coming
to the U?
S are using the lodging system and this
proposed action says, if you're using
lodging, you're you're not welcome here,
you can't come here.
Is there an argument that this would
collapse the supply chain and that it's too
catastrophic?

(01:31:55):
I mean, how does it actually work?
Do you give them time to use a different
system?

Ross (01:32:11):
And how do you police that?
Well, that's the kind of thing that the
reason the process works is an announcement
of a proposed action and then 30, 45 days
right to receive public comments back, and
then you hold a public hearing and then
that proposed action and all the comments
and additional data that flows in that
maybe they didn't have their hands.
That's one of the reasons you do that is
it's a bit of a honeypot to be able to get
more data in that you maybe didn't have
prior to or you didn't have time to collect,

(01:32:33):
and people offering it up because you've
given them a negative incentive or a
positive incentive, depending on their view,
to participate in the process, right, and
so they're going to push their own data
back.
You take all that, you churn through that
again for another 15 days, 30 days, 60 days,
whatever it may be, to get through it, and
then you do a final action.
And so the question you're asking about

(01:32:53):
Logink is something that, going back to
2019, was the first time I was ever like
eyes on any of that data and be like what
do you think of this?
What do you think of that?
And so I've known for five, almost six
years that Logink was already by then a bit
of a pervasive threat, now has continued to

(01:33:14):
grow as a threat.
You can't just rip that out all at once.
So what you do is you do a phased in
compliance right when you say okay by X
date, 180 days into the future, a year into
the future you have to provide an American
company does a cyber audit of all of your

(01:33:34):
systems to verify that there's no
connectivity right.
And that could be a trust wave which the
government uses a lot.
That could be any number of companies.
You could have Palantir do it if you really
wanted to make people cry, but somebody you
know, somebody who's an expert in cyber
forensics, being able to audit those data
flows and say, okay, it's not that you

(01:33:56):
can't have communication with the Chinese
government in some way, it's that you can't
have a persistent pipeline from the brain
of your operations feeding all that that
data.
You've got to firewall those and you've got
to compartmentalize them completely and you
are no longer to be sending Americans'
confidential, proprietary commercial data

(01:34:17):
to the government of China.
Well that makes sense to me.

Lara (01:34:22):
Even though I'm a kind of
rip-the-band-aid-off person, I understand.
That's why I'm not in government.

Ross (01:34:27):
I am.
When it's my own body, I try to accept.
It may be different for other people.
I'll rip the bandaid off too Correct.

Lara (01:34:34):
Yes, I kind of pry it off my kids really
slow if they're crying.
Yeah, no, my parents were.
They didn't care.
If you cried, it's okay.
That's what we're weak, right.
Although I, that's what we're weak right.
Although I've done that, I I rip it off my
kids too.
I told my son once I'm going to jump out of
a helicopter.
You want to come with me, you know, up in

(01:34:54):
the air.
And he's like, oh, you know, no.
I said, why not?
He said, mom, because I know you, you'll
push me out of the helicopter.
I was like I would not.
You know, maybe you know you'll be attached
to someone else, that's right.
Okay, so did we cover all of the?

(01:35:16):
Are there any other provisions in this?

Ross (01:35:19):
Yeah, the last provisions don't?
They deal with export and what can be
carried out of the US.
So there's a seven-year phased-in approach.
To you know, in year one it's like 1% of US
exports have to be on US flag vessels and
then I think that increases to something
like 15%, maybe by year seven.

(01:35:41):
But it is a phased-in approach and what
that's designed to do is elicit a response.
What that's designed to do is elicit a
response that one is more of a direct
response to reigniting American
shipbuilding and production.
The challenge is that a lot of the things
that we produce today in the US are not
carried on the same kind of vessels as the

(01:36:03):
things that we import.
We're importing a lot of things that can be
containerized, palletized, or you know what
they call floor loaded, where they just
pack as many boxes as possible into a
container.
You can't do that at scale the scale at
which we export with coal.
You can't do it with grain, although I
began my career 20 years ago literally
exporting grain in containers right back

(01:36:25):
overseas.
But the primary way in which we export a
lot of these things is by bulk vessel.
You know just vessels that have big giant
holds in them.
You can't without using specialized systems
called like ISO tanks or flexi tanks, that
are like bladders inside of a container.
You can't export crude oil or refined fuel
or base oil.

(01:36:47):
We produce so much of these kinds of things.
We produce a ton of natural gas, right?
We would love for Europe to be buying a lot
more of our natural gas than they do from
Russia, right?
So the fact that they still buy $10 billion
a year of Russian natural gas seems to
escape them when they're calling us
monsters for wanting peace in the region.

(01:37:07):
But they're still putting billions into
Putin's pocket a year.
But the hypocrisy of that notwithstanding,
we don't have any Jones Act, which is the
higher level of compliance of US flag.
We don't have any bulk carriers under the
Jones Act.
We have four under the US flag, but because
they're not Jones Act, we can't extract our

(01:37:35):
own mineral ore in Alaska and ship it to
the Pacific.
Northwest at scale Because we don't have
any ships that are legally allowed to do
that.
That's, you know, me and others that have
worked on this issue a long time.
You know go, you know, come in from ship
breaking and busting buildings down and all
that other stuff in the American South,
whereas most of our steel mills they're in

(01:37:56):
the Northeast right, they're in the Rust
Belt.
The most efficient way to get that is to be
able to move it on barge or to move it on
large ship and then truck it away from the
ports on the East Coast or off of the
interior river system, from the Mississippi,
ohio, illinois rivers, things like that.
We can't do that because we don't have dry
bulk vessels that can do US port to US port.

Lara (01:38:18):
So where does?
All of that scrap iron go, and why don't we
have them?

Ross (01:38:23):
Oh, that's a whole nother episode.

Lara (01:38:27):
Okay, but the goal of this yeah, I'm not
scared of the cartels of China.

Ross (01:38:31):
But if I trash the Jones Act too much, I'll
have people outside my door tomorrow.

Lara (01:38:37):
You know I'm ready whenever you are Ross.

Ross (01:38:41):
We can do another episode on that
Everything's fair game for me, you know.

Lara (01:38:48):
I mean, I'm on everybody's kill list, so I
just don't worry about it anymore.

Ross (01:38:53):
I kind of feel the same way.
It's like someone's going to get me right.
Good luck when you get here and we'll see
how it goes.
So we produce these enormous amounts of
scrap metal right.
We can't ship it to ourselves.
We don't have the ships to do it that are
compliant to the law as it is now.
So where does the majority of our scrap

(01:39:13):
metal go?

Lara (01:39:14):
Where.

Ross (01:39:15):
China.

Lara (01:39:16):
Come on, I'm tired of this.

Ross (01:39:19):
They're taking that scrap metal and they're
smelting it down, putting it back into
their steel supply chains and they're
building ships with it.

Lara (01:39:30):
It's ridiculous.
It's ridiculous what we've allowed to
happen and tell me this Okay, so the
ultimate goal of this proposed action is
you know it's multifaceted First and
foremost, take catastrophic action to shut
down this intelligence pipeline to China.

(01:39:50):
That is really-.

Ross (01:39:52):
My view, that's the number one value.

Lara (01:39:54):
Right.
And then it's the realignment of multiple
issues with the US economy right, so
there's the death of manufacturing.
There's the fact that we are not making
component parts, let alone ships.
Right, it's about bringing that capacity
back to the United States.

(01:40:16):
It's about our trade partners right, using,
operating under Chinese owned vessels,
anything that gives China this stranglehold
of control over the maritime industry.
This doesn't address the fact that we're
paying to secure everybody's shipping lanes
and trade routes.

Ross (01:40:35):
Right, there's a way to do that through
this Section 301 action as well.
Which is how?
So it seems like a trick shot, you know, to
a lay person, but it's really not.
So why are we protecting the Red Sea when

(01:40:55):
we are?
Of anybody that has any warships or
military assets or intelligence assets that
are trying to stop this, we are the lowest
beneficiary of that.
Well, the direct reason is is we do have
military bases that generally are supplied
through that route.
That's why American ships are going through
there and why we're escorting and
protecting them.

(01:41:16):
First is because they're going to Al Udeid
Air Base and Qatar and they're going to all
the various little outposts we have that we
have to get through the Red Sea to get to.
But that's a very small percentage of
traffic that moves through there.
As for anything related to United States,
economic interests, europe, though, most of

(01:41:36):
the imports to Europe that come from Asia
and the Middle East run through the Red Sea.
So why aren't we seeing more British
warships, german warships, french and Dutch
warships?
Why was the UK the only one to join into
Prosperity Guardian with us and then the
French put some warships out there to
protect their own CMA-CGM vessels?
It's because we didn't have a cohesive

(01:41:58):
alignment with them in a geopolitically
beneficial way.
And here's how we get to that.
Cma-cgm is the third largest carrier and
importer of goods into the United States.
The first is MSC, which is a Italian owned
but Geneva Switzerland based shipping
company.
They control about 20% of all the container

(01:42:19):
traffic in the world.
Then you have Maersk, which is a Danish
company and the largest of the US flag
services that services the US military is
the US flag subsidiary of Marist Marist
Line Limited.
Then you have CMA CGM, which owns APL which,
by the way, up until like 1995, was a US
flag carrier got acquired by a

(01:42:39):
Singapore-based company.
Cma acquired that master company a few
years ago, so we now have APL.
A few years ago, so we now have APL.
Three days after USTR first announced its
proposed action, on February 21st, the CEO,
rudolf Sade, of CMA was standing in
President Trump's office, the Oval Office,

(01:43:00):
and one of the things that he announced is
that we're going to invest billions of
dollars into maritime infrastructure and
shipping in the US.
The other thing he announced is they're
taking 20 CMA ships and they're putting
them under the US flag and they're
reflagging them and renaming them as APL
ships.
So that's 20 more ships that are going to
be named after US presidents, because they

(01:43:21):
have the Woodrow Wilson and the Harry
Truman and the Teddy Roosevelt and all of
that that they named their ships because
that's historically what APL has done 20
ships.
They're going to go from six or seven at
any time to 26 or 27, as quickly as they
can cycle these non-Chinese built ships
into the US fleet.
Why?
Because CMA read the room and they saw

(01:43:42):
where this is going and nobody else has yet,
which is that the number one way to avoid
all these penalties and the number one way
to show that you're cooperating with the US
and that your stuff is worth us protecting
in other parts of the world is to play ball
on this issue.
Put some of your ships under our flag so

(01:44:02):
that they have the ability to contract for
support for the United States government,
the United States military, so that we can,
in certain cases, be able to leverage those
ships in ways that benefit the US economy.
And now we're reaching something closer to
parity and equity.
For the amount of tax dollars and manpower
that we invest into protecting people's

(01:44:23):
things in the world, now you invest back
into us, not just financially, but you are
reciprocating at a level of geopolitical
and global support that we have given you.
So Hyundai Merchant Marine O&E line doesn't
really make sense as much for them to be
able to participate in something like

(01:44:43):
Prosperity Guardian and protecting commerce
in the Red Sea.
You know what it does make sense and
something that's already happening is joint
patrols of Korean and Japanese and US
military naval assets in and around Chinese
waters.
They know what time it is too just like CMA

(01:45:05):
has figured out.

Lara (01:45:07):
Well, this is very interesting.
And just on a personal note, how did you
get so passionate about this and so
knowledgeable about this subject?
I mean, you're not a veteran, you never
served in the military, you've been a
civilian advisor.

Ross (01:45:27):
A lot of that comes from my dad and my
granddad.
Grandpa was a 25-year guy in the Air Force,
you know he retired as a first sergeant or
a first shirt.
He did a lot of overseas work, you know,
during that time and including in Vietnam,
and a lot of stuff against the Soviet Union.
Dad did six years, eight years, something
like that as well, and he was a frontline
guy.
He was a nuclear ordnance guy.
Well, and he was a frontline guy.

(01:45:48):
He was a nuclear ordinance guy.
So he was forward deployed most of his
career but nuclear missiles and bombs on on
on planes right dealing with the soviet
union.
So I kind of grew up broadly with this like
communism is bad, us is good mentality were
you a military brat I was, Dad was out a
year before I was born, but that ethos is

(01:46:11):
what I was raised with, which is that you
find some way to serve.
Even if you don't serve in uniform, you
still have an obligation to God, family and
country and your community downstream of
country to give something back, Because you
do live in this amazing once in history,
you know, experiment in human
self-governance, and so I was raised with

(01:46:33):
that and I always had kind of a natural
inclination.
I always enjoyed reading Tom Clancy and
Robert Ludlum and you know John Le Carre,
mainly because I'm a boy right, and that
was back when boys were still allowed to
read stuff like that.

Lara (01:46:47):
And there were only two genders.

Ross (01:46:48):
Yeah, and my kids do.
They like the Hunger Games and the Jason
Bourne stuff too.
So it was a little bit of almost
indoctrination just being raised with it.
But my family always encouraged free
thinking in me and it got to a place where
I realized that in a little bit of an ego
way, but mostly ideological.

(01:47:11):
Place where I realized that in a little bit
of an ego way, but mostly ideological, if
I'm reading this data and I've always
assumed I'm the dumbest person in any room
I'm in, and if I'm the smartest person in
any room that needs to change right, I'm in
the wrong room, but I've always believed
myself to be the dumbest person in the room.
I've always been the last person to put my
hand up and say, yeah, we've got to do
something about this.
And somewhere along the way working

(01:47:33):
overseas, working in the US, getting eyes
on policy, getting eyes on data that isn't
confidential or classified but just isn't
kind of widely available Somewhere along
the way, I started realizing I'm reading
this data the same as everybody else and
I'm drawing totally different conclusions.
And I realized that it was because I began

(01:47:53):
my career doing trade with China.
I was involved in the transactions, I was
setting the freight spreads, and I learned
at the beginning of my career that you know,
something I say a lot now a mutual friend
of ours has heard it a lot from me and he
likes it too is that logistics is a map of
human intent.

(01:48:13):
Somewhere along the way, I learned that the
competitive advantage that I developed of
being able to read commercial documents and
shipment data to gain insight, to help my
employers and to help my companies was no
different than being able to read certain
kinds of data, and I thought, okay, this is
a way I can serve.
This is in some capacity, and nowhere near

(01:48:35):
the same capacity as someone that's worn
the flag on their shoulder, but it is a way
I can be supportive.
I can be one of a million, you know, kind
of contributing to help them pull their
weight.
And the more rooms I got invited into and
saying yes to things I had no business
saying yes to.
But I just figured it out and over time I

(01:48:57):
kind of realized that, okay, maybe I am the
only person looking at this or working on
it from this angle.
And then I finally found the courage to
start knocking on doors and being like, hey,
I've got this, I've got this data.
Do you want to see it?
And they were like, oh my gosh, yeah, we've
been looking at this problem.
And then it was Air Force asking me to you

(01:49:17):
know, come help them with targeting
doctrine on how do we figure out which ship
is a bad guy, because they all look
civilian right, like how do we get eyes on
that?
Well, I already knew how to do that.
You know and tell you which one's a
military vessel in disguise versus which
one is an actual fishing vessel.
So it's a mix of ideology and kind of

(01:49:37):
realizing that on some of these issues I
was first, or one of very few to have
skated to where that puck is going.

Lara (01:49:47):
So time has caught up with me.

Ross (01:49:49):
I'm the same person, I was a decade ago and
looking at things the same way.
But it's just time and events have kind of
caught up.

Lara (01:49:56):
And now we're in a much worse situation
than we were 10 years ago.

Ross (01:49:59):
We're exactly where I thought we would be
10 years ago.

Lara (01:50:03):
So this is going to get a lot of pushback.
It's going to be interesting.
Hopefully it'll get some attention.
We definitely want to check back in with
you and I still want to talk about all
those children and people that are being
trafficked inside those containers and what
the maritime industry.

Ross (01:50:20):
Fortunately, I know a lot more about that
issue than I wish I did, but yeah, that's a
conversation worth having.
That's a conversation definitely worth
having and it's definitely Far more than
this to me Far more than everything we've
just discussed that issue of how our own

(01:50:41):
good nature and our own resources and our
own supply chains and our own movement of
goods have been knowingly trafficking drugs,
people, weapons, people the worst right.
It's a horrifying, terrifying issue that
I've seen far too much of, and if I had one
mission the rest of my life, besides like

(01:51:02):
making America truly great again and giving
my kids a better country than I found it,
it would be.
How do we stop?
How do we stop that traffic in human flesh
and the destruction of lives?
It's in my bones, it hates me.

Lara (01:51:20):
Yes, so there's two things to that right,
and just to end with this right and this
just to end with this.
One part of that is we never see what these
Chinese run ships are doing out there to
the ocean.

Ross (01:51:38):
We never see.
Put a satellite directly on them?

Lara (01:51:40):
right.
So US intelligence can see it and the US
Navy sees it, but we, you know, even cruise
ships don't see it, because they make sure
that they avoid those things, but they'll
flush human feces and waste, you know, into
the same waters where they are fishing,

(01:52:01):
where they're doing whatever.
There's no environmental standards, there's
no hygiene standards, there's none of the
things that are supposed to be so important.
None of the standards that US vessels
adhere to are adhered to by the Chinese,
and the one entity on earth that has video
evidence of all of this is the United
States Navy, correct?

Ross (01:52:23):
Correct, they just released some of the
footage yesterday.

Lara (01:52:26):
So what did they release yesterday?

Ross (01:52:28):
What did they release?

Lara (01:52:38):
There was footage of a large cruise ship
that was emptying its gray water and septic
tanks directly into the ocean.
Okay, no-transcript fisheries destruction,

(01:53:21):
absolute destruction, decimation of global
fisheries, forced labor I mean you name it.
Okay, it's, it's enough.
It's time for all of that to stop, and the
US government is sitting, the US Navy is
sitting on video evidence and photographic
evidence that really will help people
understand these issues.
So that's something that I want to explore

(01:53:42):
more on the one side.
On the other side of this, the thing that
is without conscience is that human beings
and children are moved inside of these
containers, that children are trafficked
right for terrible, terrible reasons to
endure and survive a terrible journey, only

(01:54:04):
to be raped and tortured and ultimately, a
lot of the time, killed murdered.

Ross (01:54:10):
Far and away the number one vector of
trafficking of humans in the world is the
commercial ocean cargo industry.
Far and away.

Lara (01:54:17):
So that is an even greater reason to
support this initiative is that if they're
US-owned ships or they're under a US flag
and under US control, then we have the
ability to say to the United States what
are you doing about this issue?

Ross (01:54:38):
The vast majority of ships that come into
the United States.
They will berth right.
They notify 24 to 48 hours out and there's
a team at the Coast Guard that adjudicates
that and says, yep, come on in, We've got
all the data we need.
They're admitted to US territorial waters.
At that point They'll berth, They'll stow
and destow their cargo and they'll leave

(01:55:00):
the jurisdiction of the United States
without an American ever stepping foot on
the ship other than maybe a pilot.

Lara (01:55:07):
Yeah, so that just leaves it wide open.
They can do whatever they want.

Ross (01:55:11):
The pilots are the only ones that typically
that'll be on a ship.
As an American, yeah, and the pilots don't
have authority to they get on the ship,
they go straight to the bridge they pilot
the ship and they exit the ship and they go
to the next boat Right, and that's all
they're allowed to do.
That's all they're allowed to do so.

Lara (01:55:30):
This is something that that we need to
start taking ownership of, because it's not
good enough to say, oh well, this happens,
we know that, you know, people are being
children are being sent here.
In fact, right now, what I'm hearing from
multiple different intelligence sources is
that, as this administration, as the Trump
administration, is arresting and deporting

(01:55:53):
members of foreign paramilitary
organizations whether you call them cartels
or terrorist groups, whatever you want to
call them they're not a lot of the time
they're not finding the children in these
trafficking rings, because they're being
shipped out.
They're being put in containers and sent
back to China or to other places where

(01:56:14):
they're being sold and trafficked and raped.
So, either way, we have a massive issue
that, if the United States can take control
over maritime trade and shipping, that we
then at least have the opportunity to start
holding people responsible for the trade in

(01:56:35):
children and human beings.

Ross (01:56:37):
Every American ship that could call Cuba,
trinidad, a number of other Caribbean right
or, you know, latin Caribbean islands or
countries.
For every one of those, that's one less
ship that will be deterred from bringing in

(01:56:58):
humans that are going to get trafficked.
And the Caribbean is one of the largest
organ harvesting and trafficking locations
in the world, right here in our own
backyard, and they all move by water.

Lara (01:57:13):
The organs.

Ross (01:57:15):
The organs, well, humans, you know, we
talked about Sicario earlier right, and
they make a.
The movie yeah, yeah, they make a comment
in the second one about how humans are the
most valuable cargo, not the drugs, not the
weapons.
Humans have utility while we're alive.

(01:57:38):
We also have many, many parts and
components that have a lot of value when
we're dead.

(01:58:07):
And so when, just like dairy cows, when
they get to the way that humans are worked
nearly to death while they're still alive,
95% of their life is spent in parts of the
world open water where there is no
jurisdiction other than the United States
Navy that's capable of touching them or

(01:58:27):
stopping them.
And when they've reached the end of their
functional life, they are carved up into
parts and pieces.
And does that happen to everyone?
No, but is it?
If you tackle that one issue in that one
domain, do you make the biggest impact
against that type of evil?
Yes, do you make the biggest impact against

(01:58:48):
that type of evil?
Yes, and so every incentive and
disincentive we have to allowing people to
call our territorial waters to bring us
cargo, to carry our cargo away, to transact
business within the US sphere of influence,
every disincentive that we can put up to
that is pulling one more brick out of that
massive wall that prevents us from being

(01:59:11):
able to truly stop that kind of thing.

Lara (01:59:14):
And on that premise— how do you know
they're doing that?

Ross (01:59:20):
It's—when you get into these countries and
you ask the right questions of the right
kind of people, you would be amazed how
free locals are with sharing that type of
information.
to an American who looks like me, I'm a
nobody, right, but I look like I'm some

(01:59:44):
Hollywood version of an out-of-shape
retired Navy SEAL that might be doing
something else right.
And so simply because I'm an American who's
there to spend money or represent the
interests of a client or do a fact-finding
analysis for the state of Ohio or whatever,
simply because of that, if you just ask the
right questions, the locals will say things

(02:00:07):
and point you in the directions of things,
because they will hope that in some way
maybe you're the guy that can get that
issue back into some official capacity and
get attention on it.
I have sat and had meals with Philippine
families, with Vietnamese families, with
Thai families, with people in the Caribbean,
and you wouldn't believe how many of them

(02:00:29):
have stories about a cousin who took a job
as a seafarer on some fishing vessel and
they get noticed.
They never hear from that relative because
they spend 95% of their time at sea and not
every ship has Starlink on it, and so
they'll go years and they'll never hear
from this relative and then they'll get a

(02:00:49):
death notice from the manning or crewing
company that their cousin or their brother
or their mom or their dad or their child
signed their name to to try to make a
little more money for the family because
they're desperately poor.
And all it says was all it says is it
doesn't even say regret to inform you.
It says is it doesn't even say regret to
inform you or we're sorry to let you know

(02:01:10):
that it just says this hereby notifies you
that so-and-so was lost at sea.
And maybe they were, but I know specific
incidents in numerous parts of the world
where they were not lost at sea, uh, where

(02:01:31):
they were not lost at sea.
So it's a.
It's a situation just when you, when you,
when you're willing to hear the things that
people want to tell their story and you
know this above all, you know this above
all, when bad things are going on, if
you're just willing to listen and ask the
right questions and not judge them for
being in the position they're in, and you
don't even have to promise to help.

(02:01:57):
Sometimes they just need to tell somebody
that they think will understand or maybe be
able to help.
It is both horrifying and enlightening at
what information is really out there.
So I've always done my best to turn that
over to the right people and, to the US's
credit, whenever that kind of information
is received credibly, they do try with the
resources that are available to them, you

(02:02:19):
know, from their official government
capacities or whatever it may be.
They really have yet to see anybody in an
embassy or anybody in any of the law
enforcement or military agencies throw
their hands up and go.
Eh, not our problem.
Every one of them is like I'll see what I
can do, and there is material follow-up to
the best of their ability.
I can't say the same of that for most other

(02:02:41):
governments in the world, including some of
the ones that pretend to be more
enlightened than us and better than us.

Lara (02:02:48):
Well, I want it all, Ross.
I want to know the whole truth and I want
to see it, and I want to be able to share
it.

Ross (02:02:55):
The country put $150 billion into helping
them fight Russian aggression, was and
remains one of the largest human
trafficking hubs in the world.

Lara (02:03:02):
I am aware that would be Ukraine.

Ross (02:03:05):
That would be Ukraine.

Lara (02:03:08):
Yes, so that's another episode that I look
forward to doing with you.
Sure, it's a very dark point for us to
close this on, because we've been.
I could keep talking to you for hours.
It's fascinating, but I definitely we're
going to stay on top of this proposed
action and see what happens with that.

(02:03:30):
I want to talk more to you about the trade
in the maritime trade in human beings and
the role that shipping plays in trafficking
of children and men and women, and I would
very much like to trace that nexus of
trafficking back to the Ukraine, because it

(02:03:51):
is one of the most active, most violent
routes that exists and it's being protected
by people some of whom know nothing, but
some of whom know all about it.

Ross (02:04:02):
That's right.

Lara (02:04:05):
Thank you for talking to us and
enlightening us, and we'll stay in touch,
okay.

Ross (02:04:11):
Thank you so much.
Laura.

Lara (02:04:14):
Take care.

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Trump Takes Aim at China: The CCP Takeover of Global Shipping: One On One with Ross Kennedy | Episode 8

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.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}Trump Takes Aim at China: The CCP Takeover of Global Shipping: One On One with Ross Kennedy | Episode 8