The irreversible COVID-shock to US spending. EU bracing for trade war. The secret of the Sierra Madre.
The irreversible COVID-shock to US spending. EU bracing for trade war. The secret of the Sierra Madre.
Great links, images and reading from Chartbook newsletter by Adam Tooze.
Anju Dodiya, Untitled (with bulbs) 2008 Vadehraart
How Covid permanently altered US consumer spending: goods v. services
The EU is bracing for trade war with Trump
Brussels is developing a two-step trade strategy to deal with Donald Trump, offering the Republican a quick deal if he wins a second term as president, and targeted retaliation if he opts for punitive tariffs instead. EU officials see the carrot-and-stick approach as the best response to Trump’s pledge to impose a 10 per cent minimum tariff, which they estimate could reduce EU exports by around €150bn annually. Negotiators are planning to approach the Trump team, if he wins the election in November, before he takes office to discuss which US products the EU could buy in bigger quantities. Should talks over improving trade fail and Trump applies higher tariffs, the European Commission’s trade department is drawing up lists of imports it could hit with duties of 50 per cent or more. … Valdis Dombrovskis, EU trade commissioner, told the Financial Times he was hopeful the two sides could avoid a repeat of past “confrontation”. “We believe the US and EU are strategic allies and especially in the current geopolitical context, it’s important that we work together on trade,” he said. However, he added: “We defended our interests with tariffs and we stand ready to defend our interests again if necessary.” The Latvian called for a “co-operative approach” and said Brussels was open to “targeted deals” to reduce the €156bn trade deficit in goods. During Trump’s first term, Brussels initially cut a deal on lobsters, a staple of the state of Maine, which Trump hoped to win in the 2020 presidential race. It had already returned a rare Republican governor and representative in 2016. Exports were suffering because of a recent free trade deal between the EU and Canada, which reduced prices for Canadian shellfish. The EU dropped tariffs on imports of US live and frozen lobster products — as well as for all other countries without a trade deal, in accordance with global trade rules. In return, the US halved tariffs on a bundle of goods including crystal glassware and cigarette lighters. Further deals followed on beef and soyabeans to appease Trump’s voters in the Midwest. Nevertheless, the annual US trade deficit widened to €152bn in 2020 from €114bn in 2016 when Trump won the election. Since Russia’s full-scale invasion of Ukraine in 2022 the EU has been importing large amounts of liquefied natural gas to replace supplies from Moscow. The US deficit has held steady under President Joe Biden, hitting €156bn in 2023. However, EU officials caution that it is hard to grow US exports substantially, as they tend to be less valuable than EU ones. Commodities dominate, while leading EU exports are pharmaceuticals, cars and expensive food and drink, such as champagne.
Source: FT
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The North Sea, Europe’s Green Power Plant
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Anju Dodiya “Falling Glass” (2009)
The Sierra Madre, a grounded ship, acts as a Philippine military installation on the Second Thomas Shoal.
The Sierra Madre, a grounded ship, acts as a Philippine military installation on the Second Thomas Shoal. China had hoped the vessel would fall back into the sea.
Source: FT
Second Thomas Shoal is a submerged reef located in the Spratly Islands. The Philippines first took possession of the feature in 1999. The Philippine outpost on Second Thomas Shoal is the BRP Sierra Madre, a Philippine Navy transport ship intentionally grounded on the reef and maintained by a contingent of marines. The Sierra Madre can be seen below in the detail gallery.
Source: AMTI
The Measure of the Sierra Madre
On 9 May 1997, the Philippine Navy's dilapidated tank landing ship BRP Sierra Madre (LT-57) ran aground on a reef near the Second Thomas Shoal in the Spratly Islands. She was stranded, and it was certain the ship could not be removed under her own power. Six days later, two Chinese frigates reportedly steamed into the area and trained their guns on the stranded hulk. It was alleged that no assistance was offered by the Chinese ships. But supposing they had, their help would not have been desired or welcomed by the crew of the old tank landing ship. The Sierra Madre had been run aground intentionally to serve as an outpost to boost the Philippines' claim to sovereignty over the Spratly islands. It was one of a long-running series of actions on many sides over claims to the hotly contested South China Sea. Though her hull is today pockmarked with gaping holes, and she is for all intents and purposes no longer seaworthy, the Sierra Madre remains in commission and is thus an official extension of Philippine sovereign territory. The rusting and battered hulk still houses a contingent of Philippine Marines staking claim to the area. The old LST is named after the Sierra Madre Mountains in the northern part of the Philippines, which are home to some of the country's most remote and inaccessible communities. It is only fitting, then, that the ship should have become a remote and inaccessible outpost herself. While extensive media coverage has focused on the rusting World War II–era landing ship in her current role as an international flashpoint, much less time has been spent discussing just how the Sierra Madre came to be in the Philippines at all. In fact, the old LST had a long and decorated career spanning three navies and multiple continents over five decades. The Sierra Madre began her long career as USS LST-821. The tank landing ship was laid down by the Missouri Valley Bridge & Iron Works in Evansville, Indiana, on 19 September 1944, one of more than a thousand LSTs that would be built for service in World War II. A little less than a month later, she was launched for her cruise down the Mississippi River to New Orleans, where she was officially commissioned on 22 November, with Lieutenant C. J. Rudine in command. She sailed for the Pacific theater, spending most of her time ferrying supplies between Eniwetok, Okinawa, Ie Shima, Ulithi, Guam and other bases in preparation for the expected invasion of Japan. The ship saw little action in the war, though she did earn one battle star. With the dropping of the atomic bombs in August 1945 and Japan's subsequent surrender, LST-821 instead focused on supporting the occupation that country. She sailed for the United States on 11 December 1945 and was decommissioned and placed in reserve on 8 July 1946.
While she sat in reserve, LST-821 and all of the other LSTs not assigned to the Maritime Sea Transportation Service or the Shipping and Control Administration in Japan were renamed after U.S. counties and parishes. LST-821 became the USS Harnett County. Within a decade she would be called to again serve her country. After the Gulf of Tonkin incident and the escalation of the Vietnam War, it became clear that the LSTs would be very useful ships. All of the reserve LSTs were reactivated for service, and four—the Garrett County, Hunterdon County, Jennings County, and Harnett County—were refitted as floating bases for the Mekong Delta Mobile Afloat Force (later the Mobile Riverine Force) in Operation Game Warden. …
As Saigon began to fall, the My Tho, her decks, holds, and every other space crammed with an estimated 3,000 refugees, set out downriver to the sea one last time; she would never return to Vietnam. The vessel joined an armada of 31 other South Vietnamese Navy ships that rendezvoused with the USS Kirk (DE-1087) in a desperate bid to rescue what was left of the navy and the roughly 30,000 to 40,000 people its ships were carrying.
This "E-Plan," developed by Defense Department Attache Richard Armitage and Captain Kiem Do, Deputy Chief of Operations of the South Vietnamese Navy, was a matter of extreme urgency. Captain Paul Jacobs of the Kirk later recalled the gravity of the situation when he received his orders to rendezvous with the flotilla from Admiral Donald Whitmire, commander of Operation Frequent Wind. "We're going to have to send you back to rescue the Vietnamese navy," Captain Jacobs remembered being told. "'We forgot 'em. And if we don't get them or any part of them, they're all probably going to be killed.'" The flotilla met at Con Son Island off Vietnam's southern coast and headed for Subic Bay in the Philippines in a desperate bid for safety.
So desperate was the situation on board the My Tho that a helicopter from the LST took off from the ship and landed aboard the Kirk to seek urgently needed food and medical supplies. The helicopter crew had failed to notice their fuel tank had been riddled with bullet holes, and that they had only a mere five minutes of flying time as a result. But they had made it to the Kirk and returned with the lifesaving supplies. The My Tho and her precious human cargo made the journey across the South China Sea largely in one piece.
But there was a huge catch in the plan. The Philippine government by that time had recognized the North Vietnam's communist government as the lawful government for all of Vietnam, and it, of course, demanded the return of the ships. U.S. Ambassador to the Philippines William Sullivan, as recounted in Jan K. Herman's The Lucky Few: The Fall of Saigon and the Rescue Mission of the USS Kirk, made clever use of a provision of the Military Assistance Program that stated if the receiving nation no longer had use of the donated equipment, it would be returned to U.S. custody.
Brokering a gentleman's agreement with the Philippine government, the My Tho and the other South Vietnamese Navy vessels would be permitted to dock at Subic Bay and discharge the thousands of refugees on board them.They would first have to be re-flagged as U.S. Navy ships under U.S. custody, with the nod that those ships would later be transferred to the Philippine Navy.
Source: USNI
When might the Russians finally run out of old Soviet stockpiles of equipment?
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Anju Dodiya, Breathing lesson 2009
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