Embraer Feels Sting of Geopolitics After Losing Deal to Airbus
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The politics of aircraft sales were on full display last month when President Donald Trump, touring the Middle East, helped bring home the biggest widebody order in Boeing Co. 's history.
At the first day of the Paris Air Show, the connection between deals and diplomacy came to the fore once more, after Airbus SE edged out rival Embraer SA from Brazil to win a commitment from Poland. The vanquished party later said the decision was tainted by politics.
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If you are a scientist, are interested in science or benefit in any way from science—which is basically everyone on Earth—you may want to pay close attention to the Executive Order that President Donald Trump just signed on Thursday. This order's entitled 'Improving Oversight Of Federal Grantmaking,' and guess who could have a lot more oversight as a result. The answer rhymes with Trump. It will give the President and whomever he appoints unprecedented control over who and what projects receive what type of scientific funding from the federal government. And that's a big deal in more ways than one. How The Grantmaking Process Has Historically Worked To understand how much this Executive Order would change things, it's important to know history and understand how the federal grantmaking process has been conducted for like oh decades over multiple different Presidential administrations. Until this year, the decisions as to which scientific projects and whom will get funded have rested largely within different federal scientific agencies like the National Institutes of Health, National Science Foundation and Centers for Disease Control and Prevention. With the exception of the leaders at the very tippy top of these agencies, these agencies have been comprised mainly of what's been called career tract federal employees, many of whom have had scientific backgrounds. The label 'career' means that their hiring and promotions have occurred independent as to who and which political party happen to be occupying the White House. This has made them different from the political appointees such as the head of NIH and CDC who have by definition been a lot more beholden to the President and his (it's been a 'his' so far since there hasn't been a her yet) administration. Having mainly career tract federal employees run the grantmaking process has helped keep one individual with political power say like the President from deciding what gets funded. Historically, career federal employees have had a fair amount of job security, which in turn has allowed them to make decisions more independent of what a given President wants and more towards what might be good for society in the long run. But for many that whole job security thing went kind of poof this year, with combined efforts by the Trump administration and Elon Musk's Department of Government Efficiency, otherwise known as DOGE, to drastically shrink the staffs of these agencies and in one prominent case 'aid' in getting rid of an entire agencies. These career federal employees have historically relied rather heavily on the general scientific community to help make key decisions about grants and grant funding. They have convened advisory boards of external scientific experts and held public workshops to discuss what the agency's priorities for scientific research should be and what notices of funding opportunities, otherwise known as NOFOs, should be issued. A NOFO may sound like a dirty word but keeping the scientific community intimately involved in the preparation of such NOFOs have helped keep the process of determining scientific priorities more transparent and cleaner. The agencies have also employed scientific peer-review processes to review grant applications and determine which merit funding. This has entailed forming grant review panels and committees of again external scientific experts, whose backgrounds and discussions are made public. Typically, the agencies have followed the guidance of this peer-review process in order to again prevent one individual with political power, whether that person works inside the agency or elsewhere in the government, like say the President, from unduly influencing what is funded and who gets the awards. While these systems and resulting processes have been far from perfect, they have been in place to keep decision-making about science and scientific priorities more in the hands of you know actual scientists versus politicians and others with political agendas. They're also designed to prevent the big 'C,' meaning corruption. If one particular individual gets even more control of the whole federal grantmaking process, that person could push grants towards particular friends, associates or firms. And here's another reason why such a change can be a big deal. Any individual who has control over the grantmaking process can use grants as leverage or bargaining chips to make big deals for himself or herself. The Trump Executive Order May Shift Control Of Science To His Political Appointees This new Executive Order could throw a big grenade to all the above-mentioned processes and systems and their checks and balances. The Order indicated that appointees of the President will now decide what funding opportunities are offered or grants are awarded, without 'routinely defer to the recommendations of others.' Could those 'others' be scientists, the scientific community and people who actually can understand and do the science? It also said that grants 'must, where applicable, demonstrably advance the President's policy priorities,' as opposed to simply advancing scientific or the country's priorities. So, does this mean that a given grant will or won't be awarded based mainly on what the President does or doesn't want? The Trump Executive Order May Greatly Weaken The Role Of Scientific Peer Review The Order does say that 'Nothing in this order shall be construed to discourage or prevent the use of peer review methods to evaluate proposals for discretionary awards or otherwise inform agency decision making." But it does add the kicker, 'Provided that peer review recommendations remain advisory and are not ministerially ratified, routinely deferred to, or otherwise treated as de facto binding by senior appointees or their designees.' This kicker seems to kind of kick down the role and authority of scientists and peer-review. Imagine telling the coach of a football team for example, 'Your recommendations for the team will remain advisory and not routinely deferred tor otherwise treated as de facto binding." Think anyone will listen to the coach? That wording in the Executive Order essentially says that the political appointees can choose to ignore or bypass any recommendations from others. The Trump Executive Order May Makes It Easier To Terminate Grants The Executive Order includes language about terminating grants as well. For example, it says, 'an award may be terminated by the agency 'if an award no longer effectuates the program goals or agency priorities' or, in the case of a partial termination by the recipient, if the agency 'determines that the remaining portion of the Federal award will not accomplish the purposes for which the Federal award was made.'' This is kind of important because terminating and withholding federal grants is something that the Trump administration has been doing kind of a lot of lately, as I've described before in Forbes. This hasn't worked out too kindly for many scientific researchers around the country, leading to a lot of job loss. The Trump administration and DOGE have reportedly been searching grants for supposedly controversial terms like 'women' to determine which should be on the chopping block. On top of that, the Trump administration has been demanding more control over what's being done at different universities like Harvard and withholding scientific funding as bargaining chips to force compliance, as I have covered in Forbes. That's prompted a number of guess what lawsuits against the Trump administration and the various government agencies. These lawsuits have slowed some of these actions by the Trump administration. U.S. District Judge William Young even used the 'ill' word when he ruled in a non-jury trial that the mass termination of over $1 billion in diversity-related grants by the NIH under Trump as being "void and illegal." He also used the 'd' word to describe what the federal government was doing in terminating these grants, arguing that such terminations discriminated against the groups that the scientific projects could benefit. Of course, lawsuits can move at the speed of fruitcake batter in a wind tunnel, especially with appeals. The question then is whether the language of this latest Executive Order will further faciltate what the Trump administration has been doing with federal grants. The Trump Executive Order Also References Indirect Costs Speaking of lawsuits, another thing that's now being litigated in the courts is the attempt of federal agencies under the Trump to reduce the funding rate for indirect costs down to 15% for all universities and other institutions. I described in Forbes this action back when it was first attempted in February and how it would greatly reduce the amount of funding that those institutions would be getting. Therefore, it's not surprising that lawsuits against the Trump administration ensued. In June, U.S. District Judge Indira Talwani did rule this indirect cost slashing attempt as 'invalid, arbitrary and capricious, and contrary to law' and blocked this from happening. While this newest Executive Order didn't specify what indirect cost funding rates would be, it did reference indirect costs by stating, 'All else being equal," federal scientific grant awards would be preferentially awarded to 'institutions with lower indirect cost rates.' Could this be a more 'indirect" way of getting indirect cost rates down? Might this put researchers who are at institutions with higher negotiated indirect costs rates at a direct disadvantage when applying for grants? The Rationale Provided For The Trump Executive Order So what justification has provided for all of these changes in the grantmaking process? Well, the Executive Order claimed that 'Federal grants have funded drag shows in Ecuador, trained doctoral candidates in critical race theory, and developed transgender-sexual-education programs.' It asserted, 'In 2024, one study claimed that more than one-quarter of new National Science Foundation (NSF) grants went to diversity, equity, and inclusion and other far-left initiatives,' without providing the details of and citation for this study. The Executive Order continued by saying, 'These NSF grants included those to educators that promoted Marxism, class warfare propaganda, and other anti-American ideologies in the classroom, masked as rigorous and thoughtful investigation.' The Executive Order made additional claims without providing supporting evidence such as calling a lab in Wuhan, China 'likely the source of the COVID-19 pandemic,' stating that 'The NSF gave millions to develop AI-powered social media censorship tools — a direct assault on free speech' and accusing taxpayer-funded grants of 'worsening the border crisis and compromising our safety.' Certainly, if you were to go through all NIH and NSF grants that have been funded over the years, you will find ones that have not been worthwhile. You will find ones that have not generated adequate scientific insight or useful contributions to society. You will even find some real doozies where many might say, 'Why the heck did they fund that?' But that could be expected when you review the history of anything. Few investors can say, 'Yes, everything I put my money into ended up being a brilliant idea.' No one can say, 'I've never ever made a mistake in my life,' especially if that person has ever worn a mullet. Therefore, a handful of examples—even if they were accurate characterizations of those projects—should not be enough to justify the claim that Federal grantmaking has been an 'offensive waste of tax dollars,' in the words used by the Executive Order. Instead, if you want to review and improve the federal scientific grantmaking process, how using you know actual science to do so. Show the overall statistics such as what percentage of all the grants have led to true scientific insights, breakthroughs and positive changes in the ways things have been done. A report from the nonprofit United for Medical Research has shown that every dollar of research funded by the NIH has yielded $2.56 in economic activity. You'd probably invest in Dogecoin if you could be guaranteed that level of return. Again the federal grantmaking process to date has been far from perfect and has had problems that probably do merit new processes and perhaps even new systems to be put in place. But any changes should be done with proper oversight and guidance by real scientists who are independent of political or business pressure and the public. It should be done in a scientific and transparent manner that uses accurate, appropriate, verified and valid data. (Imagine that, using science to determine what to do with science.) The question is how much will this new Executive Order from Trump end up supporting versus trumping transparency and science. .
