The President's Daily Brief - August 16th, 2022. Tensions Continue to Rise Over Taiwan. Election Chaos in Kenya.

Episode Date: August 16, 2022

It’s August 16th. You’re listening to the President’s Daily Brief. Your morning intel starts now. ------ First, Important developments out of Taiwan this morning, with a new surprise delegation of American politicians showing up. As you’d expect, Beijing is not happy. So this morning we’re going to talk about what happens if this brewing conflict turns to war. How would a war over Taiwan affect you? That’s coming up. As always, I’m keeping an eye out for developing stories. Put these two on your radar. First, a presidential election in Kenya just ended and it’s not going well. Election commissioners throwing chairs at each other, violence in the streets. I’ll explain what’s going on, and why you should care. Second, illegal migration numbers are in from our southern border. It’s a record, and not a good one. I’ll explain. And finally, one more thing before I let you go. A comment this morning from Drew from somewhere in America. He thinks that the PDB is too political lately, talking domestic issues instead of just global events. So I’ll respond to Drew’s concerns and see if you agree. ------ Please remember to subscribe if you enjoyed this episode of the President's Daily Brief. Email: [e-mail] Learn more about your ad choices. Visit megaphone.fm/adchoices

It's August 16th. You're listening to the President's Daily Brief. I'm your host and former CIA Officer Brian Dean Wright. Your morning intel starts now. First up, important developments out of Taiwan this morning with a new surprise delegation of American politicians showing up. And as you'd expect, Beijing is not happy. So this morning, we're going to talk about what happens if this brewing conflict turns to war. How would a war over Taiwan affect you? That's coming up. As always, I'm keeping an eye out for developing stories. Put these two on your radar. First, a presidential election in Kenya just ended, and it's not going well.

Election commissioners threw chairs at each other, violence in the streets. I'll explain what's going on and why you should care. Second, illegal migration numbers are in from our southern border. It's a record and not a good one. I'll explain. And finally, one more thing before I let you go. A comment this morning from Drew from somewhere in America. He thinks that the PDB is too political lately, talking about domestic issues instead of just

global events. So I will respond to Drew's concerns and see if you agree. But first, let's get started with today's main brief. Two weeks ago today, House Speaker Nancy Pelosi and other elected officials landed in Taiwan. Now, as you probably recall, it caused all kinds of drama. Beijing protested the visit and launched a series of unprecedented war games. And that's because China regards Taiwan as a part of its territory, while Taiwan believes that it is an independent nation. Well, two weeks later, I have another round of drama to report, this time caused by yet another delegation of U.S. congressmen.

Senator Ed Markey of Massachusetts arrived on Sunday for an unannounced two-day visit. He's leading his second group of politicians from Capitol Hill with a goal, he said, to demonstrate solidarity with Taiwan. And just like with Pelosi's visit, the Chinese communists are not happy. They've restarted the war drills, sending over 30 military jets and five naval vessels in just the past 48 hours. And they issued a variety of threats. They called the congressman's visit an ambush that violates China's sovereignty. Now, throughout these past couple of weeks, a number of you have written to me asking, what happens if the worst should come to pass, a war between the United States,

and China. This is a really big topic to unpack, so we're going to do it bit by bit over lots of briefs looking at all sorts of angles. And this morning, we're going to talk about why Taiwan is important to your pocketbook and to the global economy. In other words, if Taiwan were to be invaded, its factories bombed by China, what price would the American people pay financially? And how would it change your daily life? Today we're going to focus on one weird product in Taiwan, that's very tiny but has a very big impact on your life, and that is computer chips. Now, Taiwan is a lot like computer chips in some ways, relatively small, only 1% of the global GDP, but boy does it pack a punch.

Taiwan and its capital Taipei are home to the world's largest microchip maker called the Taiwan Semiconductor Manufacturing Company, or TSM. This company, and three others on the island, control about six. 60 to 70% of the entire world's microchip supply. And I want to emphasize, this tiny chip is built into most every electronic product that you can imagine. And without it, nothing works. They are the brains to a product's body.

So Apple most famously uses the chips from this Taiwanese company for its phones and its computers. But countless other American and European companies do the exact same. For cars, video game consoles, ATMs, hospital equipment, televisions, washing machines, yeah, you get the idea. If it's electronic and it's even modestly sophisticated, it's got a microchip in it, and it's probably sourced to Taiwan. So what would happen if that company, TSMC, were bombed into oblivion by the Chinese?

Well, according to a 2021 report by industry experts, the first year of war would cost global electronics providers half a trillion dollars in losses. But to give you a real better sense of what exactly that would look like, factories here and abroad would either stop making electronic devices or they would be severely limited in their production runs. Most especially because the United States military would grab whatever microchips were left for things like planes and ships and missiles for the war effort. And that in turn would cause a major spike in the cost of both new and used electronic goods.

In other words, massive inflationary pressures. Plus, if you work for a factory that builds or sells electronic equipment from Ford Motor Company to KitchenAid appliances, your job would absolutely be in jeopardy. We could also see all kinds of unexpected consequences, too. So, for example, when electronic devices would break or need service, there wouldn't be many options for repair. So off to the junkyard with cars and off to the dumps for, well, everything else. we would likely see a strange new challenge of finding enough land to park these junk cars or

landfills to bury all of our old gear. Or consider our agricultural industry. We plant wheat crops with computerized tractors and we harvest wheat with computerized combines. If we had a few years without microchips, farmers would be scrambling to cannibalize one set of machines to keep the other ones running. And if the war went on for a long time, some farmers would have to go back to very, very small. old machines sitting in barns in order to plant and harvest crops if they were so lucky to have them. So the bottom line is that life in America would look very different, very quickly, without these Taiwan computer chips. We would, in fact, slip back 100 years in time. Now, what's incredible

about this stark assessment is that it didn't used to be this way. The U.S. and our friends in Europe used to produce more than 75% of the world's semiconductor chips back in 1990. Now, we produce less than 25%. There are efforts underway to change this. Last month, in fact, Congress passed the Chips and Science Act of 2022. We are going to spend billions on the construction and expansion of semiconductor manufacturing facilities, billions more for research, also lots of money for tax incentives for the entire industry. critics of the bill said it was a terrible corporate giveaway.

But the point here is that policymakers all agreed that we had a problem, even if they disagreed on the solution. Still, there's a lot of good news to report on this front. There are chip plants under construction right now, a $12 billion effort in Arizona, plus expansion efforts by companies like Intel and Micron in places like Ohio and Idaho. Still, it'll take years before this situation changes,

and we have domestic capacity again, at any real level. So if a war between China and Taiwan breaks out, well, let's hope for our sake, it's not until at least 2030 or so. But let's move beyond computer chips, because while this is absolutely an important issue that could clearly affect your pocketbook, it's not the only issue related to Taiwan. Let's also consider the shipping of all those goods that you buy that are made in Asia. Because there's a body of water between China and Taiwan that's called the Taiwan Strait.

And that is very important to global shipping. In fact, it's one of the world's busiest routes for global trade. In the event of a war, that area of water would be a battleground for Chinese and allied navies fighting for victory, because China would have to clear that straight to send the millions of troops over necessary to defeat and occupy Taiwan. And that means that commercial ships from Southeast Asia wanting to bring you goods, well, they would have to sail much further all the way out into the Philippines. or the Pacific Ocean to stay safe. And that would mean a lot more money spent on longer

voyages, more fuel and more crew hours. And those costs would almost certainly be passed to you. Plus, let's not forget insurance rates for those ships. They would go up, way up. In fact, when Nancy Pelosi went to Taiwan a couple weeks ago, short-term interest rates on these commercial vessels jumped 11%. Now, just imagine what that number would be in the case of an actual war. So there's one bit of intel here that you should know that actually might calm your nerves about this potential war and the impact that it might have on your pocketbook. And that's because as much as we need Taiwan's microchips, China does too. The numbers get a little bit squishy here, but China makes around 10% of the world's semiconductors. They're building that capacity out and fast, but still they are far behind, both in terms of quantity the Taiwan can make and also the quality.

And that means if China were to bomb Taiwan to surrender, in other words, to bomb Taipei's factories with it, Beijing would still need new computer chips from somewhere other than their own supply. Now, that's not to say that they couldn't try. And maybe, you know, they pulled off, but it's a very high risk proposition, one that increases the chances of a major loss for Beijing. So odds are they will delay a war with Taiwan for now until they build out their own domestic supply of computer chips. chips. So there you have it, ladies and gentlemen, a big war possibly delayed over little computer chips. Now, if you like this brief, I've got some good news. I plan for this to be part one of many more to come, looking at lots of different angles of what a war with China might look like and how it could affect you. Coming up, ladies and gentlemen, a closer look at what's on my radar. One quick

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is a trademark of Hasbro. Hasbro is not a sponsor of this promotion. Welcome back to the PDB. As always, I'm watching a few other stories this morning. Put these two on your radar. First, there is a presidential race in Kenya that ended yesterday, but allegations of corruption and voting irregularities have erupted. Electoral commissioners through chairs at each other as the results were announced, and the country has erupted in protests. But before we get into that, let's talk about why you should care. While we have a relatively small amount of trade with the country, around a billion dollars a year or so, the bigger role that Kenya plays for the United States is in our battle against radical Islamic extremists.

Now, throughout Kenya and most especially neighboring Somalia, there has been a long problem with Islamic terror. In 1998, there was a horrific bombing of the U.S. embassies in Kenya and Tanzania, taking the lives of hundreds of people, injured thousands. Al-Qaeda was to blame. Now, years later, the al-Qaeda group Al-Shabaab killed the U.S. service member and two Pentagon contractors during a raid on a Kenyan airfield. The U.S. troops were stationed at as a part of our war on terror. Now, that collaboration between America and Kenya continues to this day, with our Special Operations Command,

focused on training members of the Kenyan Defense Force to continue our long anti-terror fight. So any domestic troubles in Kenya could jeopardize that collaboration. And we certainly have have troubles to talk about this morning. A man named William Ruto was declared the winner of the presidential race defeating his opponent, a man named Ralea Odinga, by less than two percentage points. But just before the results were announced, the National Electoral Commission descended into chaos. Four out of the seven top election officials said that they couldn't support the result, that they would not take ownership over it. And that led to fighting some actual chair throwing and overall chaos. Mr. Odinga's losing campaign is refusing to concede this morning. He plans on

appealing to the country's Supreme Court for a review of the results. It's not over till it's over, his running mate tweeted. Now, this uproar is actually raising memories of past Kenyan elections that ended in ethnic and partisan violence. More than a thousand people died following the disputed elections back in 2007. And in 2017, the election vote had to actually be repeated after Kenya's Supreme Court found so many significant irregularities. We may see that same thing again as the two candidates represent very different political factions and very different tribal loyalties. But for whoever wins, they've got their work cut out for them. Kenya's economy is in the toilet. The unemployment rate among Kenya's prime workers

is about 40%. They're also saddled with major debt, about $70 billion. Half of it owed to foreign creditors, including China. So I'll be keeping a very close eye on this because chaos leads to power vacuums. And that will absolutely be filled by Islamic extremists in the region if given the chance. Finally this morning, I've got a record number to report, but it is not a good one. The U.S. Customs and Border Protection announced yesterday that our July numbers are in for illegal migrants trying to cross into America. And so far, the Border Patrol agents have made about 1.82 million arrests at our southern border just in this fiscal year, and that ends actually in September. But already, we've beat last year's record, which was 1.66 million apprehensions. So with about two months

left in the agency's fiscal year, arrests are expected to break the two million mark for the first time in American history. The surge so far is mostly single men and some families from all across Latin America, either seeking asylum or employment. In fact, around 70,000. percent of illegal crossings are made by single adults in search of work, and one in four migrants have tried to enter the U.S. more than once over the past 12 months, all because they won't face prison for repeated entry. All of this should remind you of the assertion made a couple of weeks ago by Joe Biden's Homeland Security Secretary when he said that the southern border is secure. I'll let you decide if that's true. And with that one more thing

before I let you go. I got a comment from Drew from somewhere in America. He thinks that I am making the PDB too political lately, talking about domestic issues instead of just global events. So we're going to talk about that and see if you agree. We'll be right back. Welcome back to the PDB, ladies and gentlemen. I've got one more thing before I let you go this morning. I got a comment from Drew from somewhere in America. He thinks that I'm making the PDB too political, talking domestic issues instead of just global events. So here's what he had to say. Quote, my feedback about this podcast lately is that it is straying from the spirit of the actual

PDB. It's drifting into domestic politics, which I have not enjoyed. Political podcasts are a dime a dozen, and you are losing what makes you distinct. I've enjoyed your international focus, so please return to your roots about global threats. That's why I've enjoyed this podcast so much. Well, Drew, this is a really great comment and critique. So I appreciate you having the courage to ride in. So one of the great challenges I have every day is choosing what to brief you all on.

There's no science to it. It's art. So my goal is to get as close as I can to the actual PDB with a real focus on international events. But Drew, it's also true that the actual PDB covers domestic matters too, especially security issues. So let's take three examples of how I'm trying to thread the needle here, covering both domestic and international issues. First, renewable energy. There is a clearly domestic angle here. Joe Biden, in fact, is signing today the $370 billion bill that's called the Inflation Reduction Act, though it's really a climate change bill. But while this clearly has a domestic issue or domestic

angle, it's also true that it has a profound national security implication. Now, the solar panels that America will soon be installing largely come from Asia and mostly from China. And mostly from China, plus materials from places like the Congo. Meanwhile, the windmills, especially those offshore initiatives, all of them require foreign ships to install them and foreign crews to service them. Plus, America's entire switch to green energy to lower our emissions, while China is increasing their emissions. They're offsetting what we're doing. And I think that's important for people to know. Next, the southern border. Now, I would hope that we would all agree that this is not just a domestic issue. We have foreign nationals coming across our border from dozens of countries abroad,

some of them who have never been screened, and some of them are later confirmed to be on our terror watch lists. There's also this issue of what are they bringing with them when they come over? Well, in fact, drugs in some cases, especially drugs from cartel networks and their Chinese suppliers. And finally, the FBI's raid of Donald Trump's home last week. Drew, you are probably on your strongest ground here to challenge me, and I appreciate it, candidly. And I must tell you that I wrestled with this one a lot, whether or not it's appropriate for the PDB podcast to discuss this, and if I do, how should I do it? Two things tip me over the edge here towards coverage. First, the FBI and CIA are going to be deeply involved in this story. Indeed, Representative Adam Schiff

has ordered the intelligence community to do a review of what the FBI found and whether that seized material, damaged national security. And that means the Intel community is once again going to be dragged into a political fight, just like they were during the Trump-Russia scandal, or frankly hoax, as we now know it to be, a hoax that was fueled by a deeply political FBI and CIA director. So I want to educate audiences on truth from fiction as this next chapter of the same story unfolds. The second thing that tipped me over the edge for coverage was reflect. on what function the actual PDB serves for the president. In short, Drew, it's giving America's leadership the knowledge that it needs to make informed

choices. It alerts leaders about challenges, provides the facts and the data to describe them, offers some analysis and solutions, but ultimately defers to leaders on what to do. So the question, Drew, is, do you think that listeners of this podcast deserve the same thing, to be alerted to a serious domestic issue about, in this case, possible official corruption or abuse of power within the FBI or CIA. And I want you to think about that, as I remind you of this. Back in early 2017, then President Donald Trump tweeted out his anger against the FBI and CIA for what he alleged was a targeted attack against him and his family regarding Russia-related matters.

Now, in the hours after that tweet, a very important Democrat went on TV. His name is Senator Chuck Schumer of New York. He was the Senate Majority Leader, one of the most important Democrats in the country. And he was asked about Trump's tweet by MSNBC's Rachel Maddow. Here was the senator's response, and I want you to listen very carefully to this. Quote, let me tell you, if you take on the intelligence community, they have six ways from Sunday at getting back at you. For a practical, supposedly hard-nosed businessman, Donald Trump is being really dumb to do this, end quote. Now, I want to speak to all of you, not just Drew.

I want all of us to reflect on what Chuck Schumer said. One of the most senior Democrats in all of America made clear that he and presumably other Democrats and Republicans in D.C. all knew that the CIA and FBI will target sitting politicians. They will get back at you. Not because you broke the law, but because you made them angry. It's been five years since that remark. Five years since a political leader told us that really, the FBI and CIA run the politicians if they get out of line. Are we all tracking on how bad that is?

It's the stuff of third world dictatorships. And as a former CIA officer, I have seen this abroad in places like Pakistan and Egypt. it destroys healthy nations. So folks, here's where I'm at covering this particular domestic issue on the PDB. I am going to cover this issue of the FBI raiding the home of Donald Trump. Because I saw what happened when the intel community got weaponized back in 2016. We all did. Chuck Schumer did. And that hasn't changed.

That corruption, that abuse of power remains. The threat to our republic remains. So I will cover it, because you all deserve to have someone who knows this world of intelligence and secrecy who can talk to you about it with facts and logic and reason. And then you can decide for yourselves. Because that is what the actual PDB is all about. Highlighting a threat or a crisis to leaders like you all, giving you knowledge and some analysis, but then letting you decide how to handle it at the ballot box.

because issues around national security to include abuse of power within the FBI and the CIA, well, that's not just the providence of former CIA officers like me or fancy people in D.C. or on TV. This nation's security belongs to you, the people. It is you that should decide how to solve our nation's problems. You know, still, to Drew and everybody else, you should know this.

I'm going to cover these domestic issues when I have something unique to say that is informed, that is driven by facts and logic. And as always, I'm going to welcome dissent. I encourage people to write in now and always. And if I fall short and I lose you along the way, Drew or others, I will be absolutely disappointed. But I hope that on balance, you tune in every day and you find something. of value domestically and internationally that nobody else is giving you, even if we disagree. And that, ladies and gentlemen, concludes your morning brief. As always, we close out the show,

reminding each other of why we are here, talking about our country and our world. It's the creed of every good spy and every smart American. It's from John chapter 8, verse 32. And you shall know the truth. and the truth shall make you free. Good day.