The President's Daily Brief - September 19th, 2022. China Operating in Mexico to Avoid Tariffs. Is Ukraine Getting Too Much Help?

Episode Date: September 19, 2022

It’s September 19th. You’re listening to the President’s Daily Brief. Your morning intel starts now. ------ China is using an industrial park in Mexico to cheat their way into the American marketplace. And probably to set up a den of spies. I’ll explain what we know. As always, I’m keeping an eye out for developing stories. Put these two on your radar. First, a Wheat War update. We’ve got some cranky farmers in Europe, claiming Ukraine’s wheat and corn are flooding their market — not poor countries abroad. Second, you’ve probably seen the headlines about Martha’s Vineyard and the immigration debate. We’ve got a fresh poll out that shows whether the American people support what the Republicans are doing. And finally, the last thing before I let you go. Some advice for my East Coast listeners: you might want to fill up your gas tank. I’ll explain why. ------ 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 September 19th. 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, China is using an industrial park in Mexico to cheat their way into the American marketplace and probably set up a den of spies. I'll explain what we know. As always, I'm keeping an eye out for developing stories. Put these two on your radar. First, a wheat war update. We've got some pretty cranky farmers in your Europe, claiming that Ukraine's wheat and corn are actually flooding their market, not poor countries abroad. Second, you've probably seen the headlines about Martha's Vineyard and the immigration

debate. Well, we've got a fresh poll out that shows whether the American people support what the Republicans are doing. And finally, the last thing before I let you go, some advice for my East Coast listeners. You might want to fill up your gas tank. I'll explain why. But first, let's get started with today's main brief. About two and a half hours south of Laredo, Texas is the city of Monterey, Mexico.

It is a gorgeous place surrounded by some beautiful mountains, rich architecture, and as it turns out, a bunch of communist investors from China, trying to sneak their products into America without you knowing. And here's the incredible part. It's all perfectly legal. To properly understand this story, we have to understand something called the United States-Mexico-Canada Agreement, or the USMCA.

It's a trade deal signed back in 2018, and it replaced something called NAFTA, or the North American Free Trade Agreement. Now, the USMCA is supposed to encourage trade between ourselves and our North American neighbors. To do that, it reduced or eliminated tariffs between us. So here's how the Commerce Department describes the entire purpose of this agreement. Quote, the USMCA is mutually benefited.

for North American workers, farmers, ranchers, and businesses. And I want you to remember that. This trade deal is supposed to be beneficial for only North Americans. But that's not what's happening, at least not in an industrial park in Monterey, Mexico. It's being used to effectively cheat, and almost certainly as a center for Chinese spies too. So here's what we know. For decades, this industrial park was actually a ranch, and it belonged to a family in Mexico called the Santos. One of the sons of the owner decided that he wanted to raise something beyond horses and cattle. So in 2016, he launched a new business, an industrial park. And he set it up such that the goal was for Chinese companies to move their operations to Mexico, his old ranch, all to take

advantage of NAFTA and eventually the USMCA. And so this former ranch owner named Cesar Santos, He set up a business park with two Chinese investors, one named the Hawley Group and the other the Futong Group. So what do we know about these two Chinese investors? Well, we don't know a lot about the Holly Group. On their website, for instance, there's no list of board members or their executive team. But we know a little bit more about the Futong group, specifically the chairman of the board, a man named Wang Jiang Yi.

If you go to the Fultong Group's website, you will see that Mr. Wang Jiangyi is a member of the Chinese Communist Party. He served as a relatively senior Communist Party representative in various political meetings. In fact, on the company's website, they actually brag about his meeting with China's President Xi. Regardless, these three parties, Mr. Santos of Mexico, the Holly Group and the communist-backed Futong group, Well, they set up what's now called the Ho-Fusan Industrial Park, two and a half hour south of our border in Monterey, Mexico. And business is booming. There are 11 manufacturing plants and warehouses on over 2,000 acres.

Within the next two years, Hofusan officials expect to have 35 Chinese businesses in that park, with 15,000 people working there, about 10% of whom would be Chinese managers. That's all according to Bloomberg News. Plus, listen to this. Mexico is building two highways from Monterey directly to Laredo, Texas, with one of those highways specifically built to service this new industrial park. All right, so what kinds of businesses are we talking about at this park? Well, there is an electronics company, a furniture company, and an auto parts maker amongst many others. And all of which that sounds, well, mostly benign, but we've still got two issues.

The most obvious is economic cheating, and the second, that's my specialty, espionage. So let's talk about that first part, economic cheating. Imagine you are a Chinese furniture company. If you make a chair in China and you ship it to America right now, it's subject to a 25% tariff. That's because former President Donald Trump launched a trade war years ago with the Chinese, and those tariffs remain. But if you're at that same furniture company and you move to Mexico, you can ship that chair to America without penalty, not one single tariff, all because of the U.S. MCA, which, remember, is designed to

help North Americans, not the Chinese. But that actually leads us to the second problem, and that is espionage. Two years ago, the Chinese Communist Party published a very blunt set of guidelines that told its members to, quote, educate private business people, to weaponize their minds with China's socialism ideology, end quote. Then, a year ago, Beijing issued another decree targeting all Chinese citizens abroad, and the order read this, quote, we must strengthen guidance of thought and promote the love for the motherland, the Communist Party and socialism, in fact, amongst all overseas Chinese citizens and overseas students, end quote. Finally, we know from FBI reporting that Chinese companies

have no choice but to comply when Beijing tells them to do something. For instance, If the Communist Party or their intelligence service tells these companies to say host its spies, in other words, to give them cover to conduct operations in the United States or Mexico, well, these Chinese companies will comply. They can't say no, or they will be jailed, harassed, or even killed, or their families will. So that's pretty serious business, to have that kind of threat just two and a half hours south of our border. And so, folks, that's what we know this morning. we have got a new threat on our southern border.

And let's summarize the threat before we move on to analysis and opinion. We have Communist Party-led investors setting up an industrial park two and a half hours south of our border. They are inviting Chinese companies to set up shop, in part to avoid tariffs and take advantage of the U.S. MCA, which of course is a trade deal that's supposed to only be for North Americans. Plus, we know that these companies are mandated by Chinese law to help the Communist Party, and their intelligence service whenever and wherever they are asked. So we can reasonably assume this industrial park will be used as a cover provider for Chinese spies, spies that will operate not just in Mexico, but assuredly across the border into our country as well.

So if I were in the White House this morning advising you on next steps, this would be my counsel and my opinion. We know that China is America's greatest threat. that is the official assessment of the FBI, the CIA, and the military. And if we really believe that that is true, that they want to weaken us and destroy us, then it seems logical and reasonable that we should take that threat very seriously and treat it with, in fact, profound alarm, especially when it's sitting a couple hours south of Texas. But how do you do that in this case? Well, two ways, I think.

First, an American president who really understands this threat and cares about America winning, well, they would pick up the phone and tell Mexico's president, Mr. Lopez Obrador, that this industrial park in Monterey will be shut down within 48 hours, either by him or by us, by any and all means necessary. Now, that might make some people uncomfortable, and look, I appreciate why. But either we believe that China is an existential threat, or we don't. And if we do, we should probably behave in a similar way as we did after the September 11th attacks. We have to protect the nation.

And if people don't listen, including Mexico's president, we act. That's good leadership. That's tough leadership. And it's what we all deserve. Second, what the facts in this brief show is that the U.S. MCA is being abused. It was supposed to be a trade deal by of and for North Americans, not any other country. China or otherwise. So either we fix this loophole or we back out. But how do we fix this? And I mean folks like you and I who aren't in the White House this morning. Well, if you share my alarm on this,

I encourage you to contact your senator or representative. Go to Senate.gov or house.gov. Send them an email and tell them about this USMCA loophole and specifically the threat at the Hofuson Industrial Park in Monterey, Mexico. So that's Hophuson, spelled H-O-F-U-S-A-N. There's public reporting on this, and in fact a quick internet search will show you that. So send some of these reports to justify your demands for change, or you can even send them a link of this podcast. Because either we start fixing this stuff with great alarm, or we will pay a very heavy

price if a war with China ever comes. And that price won't just be in some... far off land. It'll be in places that we never imagined right here in the homeland, like in the fair city of Laredo, Texas, with the highway running directly between the 250,000 citizens of that town and a group of Chinese provocateurs that are happy to see all those folks suffer. Coming up, ladies and gentlemen, a closer look at what's on my radar. Two updates for you, one on the wheat wars and the other on immigration. We'll be right back. save the day like superheroes and sidekicks or auto and home insurance with usaa you can bundle your

auto and home and save up to 10% tap the banner to learn more and get a quote at usaa.com slash bundle restrictions apply welcome back to the pdb as always i'm watching a few other stories this morning put these two on your radar first an update on the wheat wars and this time we've got some angry european farmers who say that ukraine is getting an unfair advantage to refresh our memories here Ukraine has long exported lots of wheat and sunflower products abroad, mostly to Africa, the Middle East, and Asia. Historically, Ukraine didn't export many of their agricultural products to Europe, and that's mostly because there were differences in environmental regulations, and that led to tariffs by Europe against these Ukrainian goods. Well, then the war happened, and so Europe threw open the borders to help

with the original idea that Ukraine's agricultural goods would be quickly exported to the international market to Ukraine's former clients in Africa and such. But that's not necessarily happening, at least not according to the Wall Street Journal, who's reporting that some of Ukraine's wheat is being kept in Europe for Europeans. And that's a big problem for farmers and ranchers in places like Poland and Romania, Bulgaria, and even France. You see, the production costs in those countries are a lot high. than in Ukraine, all because of those environmental rules.

So let me give you a couple of examples of how this disadvantages Europe's farmers. European wheat sells for around $320 a metric ton. Ukraine is 270 a metric ton. That's a $50 difference. The same is true of corn. European corn goes for about $310 a metric ton. Ukraine's 250, so a $60 difference. This data, by the way, was from a $1,000

couple of weeks ago, so there might be some recent flex here. But regardless, it's causing European farmers to protest. They're often having to sell at a lower price, or they get out-competed by the cheaper Ukrainian stuff. And by protest, I mean farmers are actually getting out on the streets. It's actually getting that bad. For instance, in Bulgaria, we've seen farmers revolting in a number of cities, big protests. In Poland, government officials at the border there are trying a different tactic. slowing down the customs process in solidarity with their farmers. And I'll tell you what I mean. Normally Polish border officials process 80 trucks a day, more or less,

at one major crossing. But now they're only letting 12 to maybe 25 through in a day. Well, obviously, consequently, there are thousands of trucks waiting in line. For what it's worth, Europe's farmers have proposed a fix here. They want to export all of Ukraine's wheat and corn to Africa and the Middle East and so forth. In other words, don't keep it in Europe. But Europe's leaders in places like Belgium have rejected this idea. So bottom line, folks, some unintended consequences for the Europeans as they fight this war.

They're helping Ukraine's farmers. That's true, but they're hurting their own. Seems like a bad idea to anger your farmers. Nevertheless, more to come. Finally this morning, the immigration fight in this country took a controversial turn last week when Florida's governor Ron DeSantis flew 50 illegal. migrants to Martha's Vineyard in Massachusetts, which is a state that proudly calls itself a sanctuary for illegals, but was actually outraged by having to deal with it. So you probably read those headlines

late last week, you heard the arguments, and you came to your own conclusions. But regardless, a poll from the New York Times and Sienna College released on Friday found that 51% of people agree with the Republican Party when it comes to how to handle illegal migration. Meanwhile, 37% said that they actually agreed with Democrats and the rest were undecided. One important caveat to this poll. It came out as the Martha's Vineyard story was leading in the news. So it's unclear how these numbers might shift. I'll keep watching for them.

But still, we're seeing more and more polling that shows that America wants fewer migrants, both legal or illegal. That frustration is no doubt being driven in part by the record number of illegal migrants crossing our southern border, which will be more than two million this year. We'll have those final numbers in early October. And with that one more thing before I let you go, a heads up for my listeners on the East Coast. You might want to fill up that gas tank. We'll be right back.

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One more thing before I let you go this morning. For my listeners on the East Coast, I wanted to flag a potential spike in gas and diesel prices for you. And that's because of Hurricane Fiona, which might seem surprising because none of the trajectories show that that storm will actually hit the United States. at all. But there's a very unusual reason for why prices might still spike. Let me explain. Normally, a lot of the East Coast's oil and gas and diesel supply gets pumped from Texas via the colonial pipeline. But refineries on the East Coast are running very tight, and the pipeline is exceedingly full. So some oil companies like British Petroleum are taking the very

unusual route of shipping oil products to the Bahamas, refining it there and then sending gas and diesel onward to the East Coast. That includes cities like Savannah, Georgia, Jacksonville, Florida, and distribution centers in New Jersey and New York. This unusual routing from Texas to the Bahamas to the East Coast, well, that didn't happen at all last year, that's at least according to reports from Reuters. But it's been increasingly popular this year because of tight supplies and the colonial pipeline issue. So that means that a hurricane that hits the Bahamas creates an unusual risk for the entire East Coast this year. And Hurricane Fiona, unfortunately, will probably hit the Bahamas later this week. So if you are in those cities that I mentioned,

or frankly, anywhere along the East Coast, you might want to keep a close eye on this hurricane and maybe fill up your tank before prices jump higher. 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. Yamava Resort and Casino at San Manuel is California's number one entertainment destination for today's superstars. Catch the Jonas Brothers return to the Yamava Theater stage on April 30th, the powerful vocals of Demi Lovato on May 17th,

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