Morning Wire - Russian Rebellion Fallout & Chinese Trade Imbalance | 6.27.23

Episode Date: June 27, 2023

Russian President Vladimir Putin’s control over the country remains in question following the Wagner Group rebellion, lawmakers seek to lower the threshold of Chinese duty-free goods that enter the U.S., and New York City’s Mayor busses migrants out of state after criticizing other political figures for doing the same. Get the facts first with Morning Wire.  Boll & Branch: "Save 15% off your order with promo code WIRE https://www.bollandbranch.com/?utm_source=podcast&utm_medium=Radio&utm_campaign=WIRE" Learn more about your ad choices. Visit podcastchoices.com/adchoices

Russian President Vladimir Putin's control over the country remains in question following the short-lived rebellion of Wagner Group mercenaries. We're going to continue to stand with Ukraine. So whatever occurred in Russia this past weekend did not change those facts. How are other countries reacting to the dramatic turn of events and what does it mean for the war in Ukraine? I'm Daily Wire, editor-in-chief John Bickley. Georgia Howe is on vacation. It's Tuesday, June 27th, and this is Morning Wire. Chinese apps Timo and Shian are the top retail shopping shopping.

sites in the U.S. ahead of Walmart and Amazon, but now Congress is trying to put an end to China's retail domination. They're putting people out of work in stores. They're putting people out of work in manufacturing. And after heavily criticizing governors who shipped migrants to sanctuary cities, New York City's mayor has taken a page out of the same book. How many migrants has he bust out of the city and where did he send them? Thanks for waking up with Morning Wire. Stay tuned. We have the news you need to know. While the dust settles following a short-lived rebrand, rebellion against Vladimir Putin and Russia, the fallout continues. Here are the latest on what the attempted mutiny means for the war in Ukraine

and what it means for the Russian strongman's grip on power as Daily Wire's senior editor, Cabot Phillips. Cabot, what's the latest out of Moscow? Yeah, on Monday, Russian President Vladimir Putin offered his first comments to the public since the mutiny fizzled out, essentially declaring victory, saying the country had consolidated around his government. He did, however, thank Wagner soldiers for avoiding bloodshed, saying they were misled by their leaders before reiterating that he would have crushed them with force if necessary.

He also promised to abide by the deal he struck, which offer legal immunity to those who took part in the uprising. One of the big questions now facing Putin is whether the rebellion results in shakeups at the Kremlin. Specifically, will he replace the countries in battle defense minister who was at the heart of the mutiny attempt? For his part, Wagner leader Yubgeny Progosin has tried to downplay the rebellion, posting a video on Monday calling it a protest, not a coup attempt and saying he never intended to overthrow Putin, which is obviously quite the about face from what we saw over the weekend when he was marching on Moscow. Yeah, it is.

This all centered on the Wagner Group. Tell us more about this controversial military company. Yeah, it's important to understand the Wagner Group might technically be a private company, but they're essentially a small military of their own. The group employs tens of thousands of some of the most battle-hardened soldiers on the planet, and their mercenaries have been deployed by Putin everywhere from Syria and Libya to Mali, fighting wherever Russian interests are at stake. Much of the unit is composed of convicts who have been released from prison in exchange for years of service,

and their tactics are notoriously brutal. For example, videos this year appear to show Wagner leaders killing deserters and those called retreating with a sledgehammer. Yeah, shocking stuff. How could this turmoil in Russia impact the war in Ukraine? Well, Ukrainian officials have been clear that they viewed the mutiny as a sign that they're winning the war. They're optimistic that the rebellion will also serve as a distraction in Moscow, and demoralize Russian troops, opening the door for military success on the front lines. Remember, to this point in the war, Wagner forces have seen more success than traditional Russian troops.

On that note, here's Secretary of State Anthony Blinken speaking to CBS. To the extent that it presents a real distraction for Putin and for Russian authorities, that they have to look at sort of mine their rear, even as they're trying to deal with the counteroffensive in Ukraine, I think that creates even greater openings for the Ukrainians to do well on the ground. But it is worth noting. To this point, we have not seen any real gains for the Ukrainians. Their long-awaited counteroffensive has been off to a rocky start with little to show for their renewed efforts. Right.

Now, what does Putin's struggle for power mean for the West? So there was initially some cautious optimism that a fractured Russia could present a window of opportunity in Ukraine, but there are just as many fears associated with the turmoil. First, Western allies have expressed concern over how the mutiny could impact Putin's strategy in Ukraine, His relative lack of success in taking the country has really dragged on his popularity, and there's now growing fear that he'll resort to even more brutal tactics and an attempt to assert dominance and show his people the war can be won

and that he's still in total control. A damaged Putin is a dangerous Putin, as he's likely to become even more unpredictable. The other big fear here is that Progogian or even some other leader launches another mutiny and plunges the country into civil war. Yeah. And what about American adversaries? how have they reacted to this development?

Yeah, one of the big questions this week has been how China in particular would react. Remember, President Xi Jinping has become one of Putin's closest allies. But despite that very close relationship, as the mutiny raged, there was radio silence from Chinese officials. It wasn't until Sunday evening, well after Putin prevailed that Beijing finally issued a statement in support of Putin, saying, quote, as Russia's friendly neighbor and comprehensive strategic partner, China supports Russia in maintaining national stability and achieving development and prosperity.

Reading between the lines, the fact that she only supported Putin after it was clear he'd remain in power, shows the alliance might not be as deep as one would imagine. This apparent crack in Putin's armor could alter the power dynamic between the two leaders. Keep an eye on that in the coming months. Yeah, cracks forming in multiple directions for Russia. Kappa, thanks for reporting. Anytime. Coming up, how two Chinese companies are dominating the import game.

Every day, hundreds of thousands of packages arrive from China directly at U.S. homes all duty-free. Some lawmakers say that's causing a trade imbalance and they want to lower the threshold of goods that qualify for free entry. Daily Wire Culture reporter Megan Basham is here now with more. So, Megan, to set the stage, what's the tax rule now on foreign imports? So in 2016, Congress changed the rules so that any packages that come into the country that are valued at less than $800 base no tariffs as long as they're going to individual buyers. And that's what they call the de minimis rule. Now, before 2016, the tax ceiling was much lower, only $200. Critics say that this has created a major trade imbalance with China, which especially

benefits from this rule because so many inexpensive goods are manufactured there. A hearing in the House last month that focused on economic competition with China delved into this issue, and former U.S. trade representative Robert Lightheiser testified as to why he believes that duty-free limit needs to be dramatically lowered. Nobody dreamt this would ever happen. Now we have packages coming in two million packages a day, almost all from China. We have no idea what's in them. We don't really know what the value is. There's no way to check any of it. There's a recent study that's come out saying that the value of this could be as much as $190 billion a year, largely additional trade deficit with China. Half a trillion, three percent of their entire. growth is really transferred to the United States. In my opinion, Congress should completely get rid of the de minimis rule and go back to what it was meant to be. That is to say, $50 or $100. But I fear that even that won't work because there are a billion-dollar companies that exist solely because of this

loophole. Now, Lighthizer went on to say that fast fashion companies like Sheehan and Timu would not exist without that loophole. In fact, a report released last week found that those two companies account for more than 30% of all de minimis shipments. So last year, it was like 600,000 a day. Well, so 30% from Sheehan and Timo. Yes. And if you're not familiar with those companies, I'll just tell you that as a mom of a teenage daughter, they are very popular in that age group because the clothes are so cheap. So they are now the top two shopping apps in the country, bigger than Amazon. And speaking of Amazon, American companies like Amazon also help these Chinese manufacturers exploit that loophole. They'll ship packages from China that would be over the $800

limit into Canada first, for example. And there, they'll divide them into smaller packages so that they qualify as duty-free before then shipping them into the U.S. All right. So that definitely seems questionable. Why is this such a problem? Well, the concern is that it's hurting U.S. workers in manufacturing and retail. American companies like Gap and H&M pay hundreds of millions of dollars in import duties. Meanwhile, you have these Chinese companies that are paying virtually nothing. So small Chinese imports have exploded. Before the new rule in 2016, about 200 million packages a year qualified for that de minimis rule.

By 2021, it was nearly 800 million. And China accounts for about 60% of that. So politically, that could make for some pretty interesting bedfellows, as this is a major issue for labor unions, who, of course, typically align with the left. And in the past, it was Democrats who actually tried and failed to change. this rule. So you could start to see some bipartisan support for it. And there have been some complaints raised by human rights groups, correct? Right. And they say that those low tariff thresholds allow companies like Shan and Timu to avoid complying with regulations that require companies not to use forced labor. Now, on the other

side of the coin, we're seeing pushback from business interests. Representatives at the U.S. Chamber of Commerce want to see that current law preserved because they say that it speeds up the pace of commerce, and it keeps costs slow for consumers. They also say it allows customs and border officials to focus on more important issues. It's always interesting to watch these issues where Republicans and Democrats seem to sort of swap sides. Yeah. Thanks, Megan. Any time. New York Mayor Eric Adams is taking heat as he sends migrant families out of his city to other parts of the country after criticizing Republican governors who did the same. After Politico reported the surprising in some argue hypocritical move last week, the mayor's

office is scrambling to respond. Here to discuss is Daily Wire contributor, David Marcus. Hey, Dave. So it seems that the roles have been reversed here. What exactly is going on? Basically, what was discovered was that Mayor Adams between April of 2022 and April of 2023 was sending 114 migrant families who had arrived in New York City to other cities across the country at a cost of $50,000. This, of course, came at a time when he was vociferously attacking Florida Governor Ron DeSantis. and Texas Governor Greg Abbott for sending migrants to New York. So it's difficult not to see the irony.

Even though obviously 114 families is a drop in the bucket compared to the almost 80,000 migrants who have made their way to Gotham. Regardless of the numbers, critics of Adams are saying that what was good for the goose is good for the gander. Has the mayor responded to this criticism and the claims of hypocrisy? City Hall has, and the spokeswoman there attempted to draw a distinction, not just based on the wrong number, but also, on Mayor Adams' allegation that at least some of the migrants either did not want to go from GOP states to New York City or didn't know that's where they were going. Charges that the governors refute.

And honestly, there isn't much evidence behind the mayor's claims, which have been echoed by other Democrats, such as California Governor Gavin Newsom, who has gone so far as to threaten Ron DeSantis with arrest for kidnapping after sending migrants to the Golden State. Right. We actually talked to DeSantis about that last week. Now, New York City is a sanctuary city, so isn't the idea that it would provide for migrants itself rather than shipping them to other cities? And what are the places where they're actually being sent? Well, yeah, and the answer to your second question adds some further irony, as the two top destinations for the migrants moved by Adams are, you guessed it, Florida and Texas. But frankly, New York and other sanctuary cities are in a real jam. They never expected to be

dealing with this many migrants this quickly. And it's draining resources like, you know, a deadbeat sibling. Adams is certainly aware of how this looks, but honestly, he's running out of good options. And there have been concerns from towns upstate that the mayor is sending them their way, too. Is this just the latest step for Adams? Yeah, and you're right. There's an ongoing battle in smaller towns and cities north of the Big Apple, where hotels are being used to handle the overflow. And of course, his honor has also floated the rather bizarre idea of migrants being housed in private homes. I think what this shows more than anything else is the magnitude of the problem. And really, that was the whole point of the Republican governors sending the migrants in the

first place. So the parts of the country untouched directly by the border crisis, aside from fentanyl and other drugs, that is, had some skin in the game. And it seems to be working. Yeah, even some legacy media outlets aren't able to ignore it at this point. Dave, thanks for joining us. Thanks for having me. Another story we're tracking this week. Republican presidential candidate and Florida Governor Ron DeSantis was in Eagle Pass, Texas on Monday, where he announced his plan to end mass illegal immigration and the flow of drugs across the border. Daily Wire reporter Tim Pierce has more.

The plan titled No Excuses would complete Trump's border wall, authorize states to enforce immigration law, and crack down on sanctuary jurisdictions. And in the move that's caused the biggest stir, the Florida governor said he would authorize the use of deadly force to deter Mexico's drug cartels. Of course you use deadly force. I mean, would you let somebody just break into your house and do your harm?

No, and I can tell you in Texas, they wouldn't do that. If you drop a couple of these cartel operatives, you're not going to have to worry about that anymore. That's all the time we've got this morning. Thanks for waking up with us. We'll be back this afternoon with more of the news you need to know.