Good morning,

Today we have an interesting brief. We will cover some more economic updates, such as an EV ban in the EU and the ILA dockworkers. We will also discuss some updates in the Middle East and a statement from Taiwan’s naval commander.

Give yourself about 6 minutes.

Reporting Period: 3 - 6 October

Bottom Line Up Front:

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European Union Institutes Tariffs On Chinese Electric Vehicles

On 4 October, the European Commission voted to impose tariffs on battery electric vehicles (BEVs) from China, citing unfair state subsidies and “economic injury” in the EU. The voting revised duties that were originally imposed in July 2024. The EU said it is looking for other solutions to remain competitive with Chinese BEVs while the tariffs are in place, suggesting they could be lifted.

China called the measure “disappointing” and “protectionist,” which is exactly what EU tariff supporters are hoping for.

Why This Matters

While the resolution passed, not every EU member state supports the decision. France has been a major proponent of the tariffs and has suggested the EU need to take a protectionist economic approach, rather than a free-market stance.

Germany, a major exporter of automobiles to China, has been against the tariffs. Germany feels the controls harm their domestic industry and will lead to a larger trade war with China. Germany’s automakers are currently struggling and were against the measure (presumably fearing counter tariffs).

China’s BEV industry has received massive subsidies from the Chinese Communist Party to remain competitive and, ultimately, saturate the European EV market and cause European manufacturers to extoll high costs to compete.

Want To Read More?

• Coverage by CNBC

• Germany and France in disagreement by POLITICO

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ILA Dockworkers Go Back To Work With Partial Deal, Negotiations Continue

On 3 October, the International Longshoremen’s Association (ILA) union and the US Maritime Alliance released a joint statement outlining a tentative deal on wages and extension to contracts to 15 January 2025. Both parties are agreeing to continue negotiations.

The strike began when ILA rejected a USMX offer, stating the proposal “fell far short of what ILA rank-and-file members are demanding in wages and protections against automation.” 50,000 of 85,000 ILA members went on strike.

The current agreement has ILA member wages increasing 61.5% over 6 years.

Why This Matters

From the ILA perspective, workers are not being paid enough in a demanding profession that is, because of automation, losing employment guarantees. A union’s role is to create a collective bargaining force to protect against predatory employer practices and ensure fair wages for fair work.

From the USMX perspective, dockworkers are already well-paid in addition to benefits. Before the strikes, top-pay was $39/hr, with 3-year employees making $31.90/hr.

From a national security perspective, the issue remains an unsightly “wicked problem.” ILA’s last strike was in 1977. It is likely that as contract periods expire, strikes will persist with unsustainable demands. A long-term concern is that America’s supply chain and trade competitiveness could suffer if we do not invest in automation, while other companies and nations do.

Want To Read More?

• Coverage by CNBC

• Coverage by Supply Chain Dive

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Israel Planning Retaliatory Actions Against Iran, US Strikes Houthis

On 5 October, The Times of Israel reported that the IDF are preparing a “serious and significant” response to the recent Iranian missile attack. On 4 October, US Navy ships and aircraft struck more than a dozen Houthi targets in Yemen.

Background: On 1 October, Iran launched more than 200 ballistic missiles into Israel, many of which were shot down by the Israeli air defense systems and US Navy assets. The attack followed an IDF ground invasion of southern Lebanon after more than a week of airstrikes against Hezbollah targets.

Why This Matters

On 4 October, CNN reported that Israel has given no assurances to President Biden that targeting Iranian nuclear facilities is off the table. It is also uncertain whether or not Israel would target Iranian leadership, oil fields, or military facilities.

There are concerns that today’s date, the one-year anniversary of the 7 October attack, will be used as inspiration for further terrorism by Hezbollah, Hamas, and the Houthis.

The FDD identified possible Iranian military sites that could be targeted by Israel:

Want To Read More?

• Coverage by The Times of Israel

• Biden’s position by CNN

• Strikes on Houthis by CBS News

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Pentagon Shopping For Inexpensive, One-Way Drone Systems

This week the Pentagon’s Defense Innovation Unit (DIU) issued a project solicitation that requests a commercial solution for new UAS platforms. The criteria is very specific, and seems to be inspired by the effects of commercial drones being used in Ukraine and, to a lesser degree, the Middle East. The drones must be:

• Ground-launched

• One-way (implies the ability to guide to target before self-termination)

• 50-300 km+ range

• Rapid, expeditious launch

• Low-altitude flight capability

• Able to carry multiple payloads (minimum of 10kg)

• Beyond Line of Sight (BLOS) operable (and low-bandwidth)

The solicitation specifically mentions the drones should be capable of DDIL Operations - disrupted, disconnected, intermittent, and low-bandwidth.

Why This Matters

The solicitation indicates the US is looking to use new UAS technologies to improve warfighting capabilities in remote and austere environments, such as the Pacific islands. Commercial drones have emerged as a cost-effective and innovative solution in Ukraine due to lack of traditional weapons systems and munitions, and the relative tactical parity between Russian and Ukrainian troops.

Cheap, fast drones with large payloads could be used to rapidly strike strategically valuable assets, such as adversary ships, air defense systems, airfields, command centers, or defensive positions.

Want To Read More?

• Solicitation by DIU

• Coverage by DefenseScoop

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Taiwanese Admiral Warns Of Chinese ‘Anaconda’ Strategy

Taiwan’s most senior naval commander, Admiral Tang Hua, warned that China’s expansionist designs threaten not only Taiwan, but world peace. Admiral Hua said that China’s myriad “gray zone” tactics are designed to pressure Taiwan and strain the nation’s defenses.

Hua also warned of China’s “anaconda strategy” in which the PLA could subdue Taiwan through blockades and the sheer volume of personnel, ships, and munitions. Hua fear is that Taiwan’s defense are not capable of protecting the island nation on their own.

Why This Matters

Admiral Hua’s remarks come as President Biden announced new aid to Taiwan. Hua warned that the PLA’s aggressions (which include aerial and naval incursions into Taiwanese territory) have steadily grown. Hua also said China is capable of blockading Taiwan whenever they choose, with no certainty as to how the international community would respond.

Want To Read More?

• Coverage by Taipei Times

• Coverage by The Economist

(Thanks to our reader, Otto, for this tip)

End Brief

That concludes this edition of The Intel Brief. I hope you learned something.

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See you on Thursday. Please reach out with any comments, concerns, or feedback!

Have a nice week,

Nick