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Make Alberta Great Again:                         In this Canadian province, separatists see Trump as an ally

Make Alberta Great Again: In this Canadian province, separatists see Trump as an ally

CNN4 hours ago

It's a Monday night in June and hundreds have braved the haze of Canadian wildfires to gather in a cavernous sports facility in the city of Red Deer, Alberta.
An Alberta team, the Edmonton Oilers, are taking on the Florida Panthers in a National Hockey League finals game tonight. The atmosphere is heavy with anticipation.
But these people aren't here for hockey. This is a rally for Alberta independence.
It might be hard to believe, given Canadian sports fans' recent booing of 'The Star Spangled Banner,' but not all Canadians took offense to US President Donald Trump's questioning of their country's sovereignty.
In oil-rich Alberta, where a movement for independence from Canada appears to be gathering steam, many see in Trump a powerful and important ally whose haranguing of their former Prime Minister Justin Trudeau was as welcome as his calls to 'drill baby, drill.'
Though some see US statehood as a step too far, many in the Red Deer crowd believe the US president – as a fellow pro-oil conservative – would recognize a breakaway Alberta should a vote on independence go their way.
'Donald Trump is not the savior of the world,' says Albert Talsma, a welding contractor from Bentley. 'But right now he's North America's best asset.'
With their 'Make Alberta Great Again' hats, 'Alberta Republic' T-shirts and posters declaring 'Albertans for Alberta!' it's not hard to see parallels to the US president's MAGA movement and the forces that inspired it.
Separatists here have long argued that Canada's federal system fails to represent their interests; that the federal government's efforts to stymie climate change are holding back Alberta's lucrative oil industry (the largest in Canada); that they pay more than they get back through federal taxation; that their conservative values are drowned out by the more liberal eastern provinces.
'Alberta hasn't been treated fairly since 1905, when we joined Confederation. They basically used the west as a colony, to take wealth from the west to support the east,' says Kate Graham, a singing grandmother from Calgary.
She opens the rally with a rendition of Janis Joplin's 'Mercedez Benz,' the lyrics modified to promote independence. Like Janis, she sings it a cappella, before spending much of the rest of the event at a booth by the door, selling merch emblazoned with the slogan 'I AM ALBERTAN.'
Similar disenchantment is voiced by a steady stream of Albertans, each venting against their mother country on a stage flanked by a large provincial flag strung across a soccer goal.
'They want to stifle our (oil) industry,' says Mitch Sylvestre, a businessman from Bonnyville and one of the rally's chief organizers, his hoarse voice echoing over the PA system.
'We have cancer. We have a problem,' says Sylvestre. 'We have it large.'
In a strange twist, the push to get Alberta out of Canada has gained momentum just as much of the country has united in patriotism in the face of Trump's tariffs and threats of annexation.
Soon after Prime Minister Mark Carney's Liberals rode a wave of anti-Trump sentiment to win the 2025 federal election in April, the Alberta Legislature passed a law making it easier to organize a referendum on independence.
Under the new law, petitions for a province-wide vote now require just 177,000 signatures – down from 600,000 previously – and those signatures can be gathered over a period of four months rather than three. The province is home to nearly 5 million people, according to Statistics Canada, representing more than a tenth of the population of the entire country.
One of the most vocal advocates for a referendum is Jeffrey Rath, a lawyer and co-founder of the Alberta Prosperity Project (APP), which organized the Red Deer rally.
Rath, well over six feet tall in a cowboy hat and boots, has a ranch just outside of Calgary. He raises race horses there and follows the sport closely, especially the Kentucky Derby – where this year, he notes with a grin, ''Sovereignty' beat 'Journalism.''
'If you wanna know what's special about Alberta, just look around, right?' Rath says with a sweep of his hand.
The view from the rise above Rath's horse pasture is superb: quaking aspen, white pine and green rolling hills.
'It's one of God's treasures on earth. And the people here are very distinct people that have a very distinct culture and that are interested in maintaining that culture.'
In Rath's eyes, Trump's attitude toward Canada is an opportunity. His group is counting on US government support in the event of success at the ballot box.
'Trump's election has given us a lot of hope,' Rath says. 'If anybody is going to have the guts to recognize an independent Alberta, (it) would be the Trump administration.'
Separatism is not new in Canada, but it's only had real political power in the predominantly Francophone province of Quebec, which has numerous pro-independence parties and voted in two referendums on independence in the past 50 years, rejecting it by a 60/40 margin in 1980 and by around one percentage point in 1995.
In Alberta, enthusiasm for separation has waxed and waned for decades, fueled initially by 'Western alienation' – resentment felt in western Canada against a federal system dominated by the more populous eastern provinces. More recently, the movement has attracted Albertans who were angered by federally mandated lockdowns during the Covid pandemic. Among them was Rath, who has in the past faced controversy for suggesting government officials should face murder and negligent homicide charges over what he claims are the ill-effects of the Covid vaccine.
A recent poll by the Angus Reid Institute found about a third of Albertans currently support independence, though that support does not break down equally throughout the population.
Some of the loudest critics of the idea come from Alberta's indigenous communities, whose treaties with the Canadian crown are older than the province itself. Under pressure from that community, the government added a provision to the referendum bill that guarantees their treaty rights whatever the result.
Another poll, by CNN's Canadian broadcast partner CBC, found that more than half of the governing United Conservative Party (UCP) would vote to separate from Canada if given the chance. It also found that, while the percentage of the population backing independence has remained static over the past few years, the share of people who 'strongly' back it has grown.
'We can't ignore the fact that a third or more of Albertans are fed up,' Alberta Premier Danielle Smith, the leader of the UCP, tells CNN.
While Smith's party proposed the referendum bill, she says she is against separation herself, preferring to 'get Alberta to exert its sovereignty within a united Canada.'
'We have had, from time to time, these kinds of initiatives flare up,' says Smith. 'And they're almost always in response to a federal government that's out of control. But they have all subsided when the federal government got back in its own lane.'
'I think that it's a notice to Ottawa that they've got to take this seriously,' Smith adds. 'The question is, what can we do to address it?'
One of the more explosive questions surrounding secession is whether an independent Alberta might join the United States.
In February, a billboard appeared along the highway between Calgary and Edmonton, with text urging onlookers to tell Premier Smith that Alberta ought to 'Join the USA!' superimposed over a picture of her shaking hands with Trump.
'I don't think Albertans are very keen to trade a bad relationship with Ottawa with a bad relationship with Washington,' Smith says when asked about the possibility.
In Red Deer, the crowd seems divided on the issue. Most who speak to CNN say they would rather see Alberta as a fully independent country.
But others, like construction worker Stephen Large of Czar, Alberta, feel it would be good to have the might of the US on their side – particularly if negotiations fail in the event of a 'yes' vote for independence.
'The minute something happens here toward independence, our federal government is going to be furious,' says Large, who wears a red 'Make Alberta Great Again' cap.
'They will pull out all the stops, military and police and whatever they can find to lock us down, lock us in.'
Large points to how former Prime Minister Trudeau briefly invoked the Emergencies Act when Canadian truckers blockaded downtown Ottawa to protest cross-border vaccine mandates in 2022.
The statute, which had never been used before, allowed Canadian law enforcement to take extraordinary measures to restore public order – including freezing the bank accounts of certain protesters and banning public assembly in parts of Ottawa. The law also allows the government to deploy troops within Canada to enforce the law, though Trudeau did not invoke that part of the provision in 2022.
'We're gonna need some support from somewhere, and the only place on Earth that is worthy of their support is the United States military,' Large says.
A woman sitting in front of Large overhears him and turns around, nodding in agreement.
'I'm with him,' she says, introducing herself as Evelyn Ranger of Red Deer. 'I'm not sure that Alberta or the western provinces, even together, can make it on their own. So, the States is still the better way to go, because you've got the military, you've got the trade and everything already set there.'
For his part, Rath refuses to consider whether the federal government might invoke the Emergencies Act or use other measures to put down his movement if it were to unilaterally declare Alberta independent in the event of a 'yes' vote.
'We'll cross that bridge when we come to it, but we don't see that happening,' Rath says.
Asked if he would be up for an interview at that point, he grins.
'Yeah,' Rath replies, before letting out a laugh. 'It might be from a jail cell.'

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Five Ways Iran May Respond
Five Ways Iran May Respond

Atlantic

time28 minutes ago

  • Atlantic

Five Ways Iran May Respond

'NOW IS THE TIME FOR PEACE!' Donald Trump posted on Truth Social right after the United States launched a bombing campaign against three sites crucial to the Iranian nuclear program. But Iran gets a vote on whether that time has indeed come, and its leaders are instead vowing 'everlasting consequences.' What happens next in this rapidly expanding war largely depends on what exactly Iran means by that. That's not easy to predict, because the next stage of the conflict now hinges on an Iran facing unprecedented circumstances. The Iranian regime is arguably more enfeebled and imperiled than it has been since the 1979 revolution ushered the Islamic Republic into existence. Even before Israel launched its sweeping military campaign against Iranian nuclear and military targets just over a week ago, it had dramatically degraded two of the three pillars of Iran's defenses: Tehran's regional network of proxy groups (such as Hamas in Gaza and Hezbollah in Lebanon) and its conventional military arsenal (assets like missiles, drones, and air defenses). Now Israel and the United States may have reduced the third pillar—the country's nuclear program and its position at the threshold of acquiring nuclear weapons—to smoldering ruins as well. Given these conditions, past behavior by the Iranian regime may not be a reliable indicator of its future actions. Iran's leaders, for example, have developed a reputation for biding their time for months or even years before retaliating against foes, but the speed and scale at which their nuclear program and the regime itself are coming under threat may force their hand. For Iran experts, the north-star assumption tends to be that the regime's overriding priority is ensuring its survival. Viewed through that prism, the Iranian government currently lives in the land of bad options. If Iran responds forcefully to the United States, it could enter an escalatory cycle with the world's leading military power and an archenemy already pummeling it, which in turn could endanger the regime. If Tehran responds in a limited manner or not at all, it could look weak in ways that could also endanger the regime from within (enraged hard-liners) or without (emboldened enemies). 'There are no good options, but Iran still has options,' Sanam Vakil, an expert on Iran and the broader region at the think tank Chatham House, told me. She ticked off the goals of any Iranian retaliation: 'Inflict pain. Transfer the costs of the war outside of Iran. Showcase resilience, survivability.' In my conversations with experts, five potential Iranian moves kept surfacing. 1. Close the Strait of Hormuz Iran could take a big step and use its military to disrupt shipping or even seek to shut down commerce in the Strait of Hormuz, a crowded international waterway near southern Iran through which roughly one-fifth of the world's oil supply passes. Indeed, in the hours after the U.S. strikes, the Iranian parliament reportedly granted its support for such a measure, though Iran's leadership hasn't yet followed through with action along these lines. Such a move would affect the global economy, driving down financial markets, driving up the price of oil, and inflicting steep costs on economies around the world. It would likely get the attention of the economic-minded American president. But in addition to the fact that the U.S. military might contest such a move, the dispersed pain of this measure could ultimately make it an unattractive option for Iran. The economic shock would boomerang back to Iran, in addition to harming Iran's patron, oil-importing China, as well as oil-exporting Gulf Arab states. In recent years, Iran has been improving its relations with Saudi Arabia and the United Arab Emirates—the Saudis even restored diplomatic ties with the Iranians in 2023. The Iranian regime will likely be wary of alienating partners at a time when it is so isolated and diminished. 2. Attack U.S. personnel or interests in the Middle East Iran could also choose, either directly or through what remains of its regional proxy groups, to attack U.S. forces, bases, or other interests in the region. That could include attacks on U.S. personnel or energy-related infrastructure based in Gulf countries allied with the United States, with the latter option serving as another way to induce economic shock. But Tehran's assessment here may be similar to its calculations regarding the Strait of Hormuz. If the Iranians hit targets in the Gulf, that could 'bite the hand that feeds' Iran, Vakil told me. 'They need the Gulf to play a de-escalation role and perhaps a broader regional stabilization role. I think they will try to protect their relationship with the Gulf at all costs.' Vakil deemed it more probable that Iran would strike U.S. targets in nearby countries that don't have close relations with Tehran, such as Iraq, Syria, and Bahrain, which hosts the headquarters of U.S. Naval Forces Central Command (NAVCENT). If Iran were to take this approach, much would depend on whether its strikes are relatively restrained—essentially designed to claim that it has avenged the U.S. attack without provoking a major response from Washington—or whether it decides to go bigger, perhaps galvanized by the devastation wrought by the U.S. attacks and the U.S. government's sharp public messaging. 'If the Iranians really strike all of the NAVCENT base in Bahrain,' Jonathan Panikoff, a former U.S. deputy national-intelligence officer for the Near East who is now my colleague at the Atlantic Council, told me, they may 'open up a world of hurt.' Such an attack might embarrass Trump and spur him to make good on his threat in his address to the nation on Saturday evening to respond to Iran with even greater force. The United States could, for example, hit Iranian oil and gas facilities or other energy sites, army and navy targets, or even political and military leaders. The war in Iran could quickly metastasize into a regional conflict. Consider, as one case study, what transpired after the United States killed the Iranian general Qassem Soleimani during the first Trump administration in 2020. Analysts predicted all sorts of potential Iranian retaliatory measures of various sizes and scales, but Iran ultimately opted for an intense but circumscribed missile attack on the Al-Asad Airbase in Iraq, resulting in no fatalities but more than 100 U.S. personnel with traumatic brain injuries. The Trump administration downplayed the attack and limited its response to imposing more economic sanctions on Iran, and the two countries even swapped messages via the Swiss embassy in Tehran to defuse tensions. 3. Attack U.S. personnel or interests beyond the Middle East An even more escalatory approach would be for Iran to directly attack U.S. targets beyond the region, Panikoff noted, referencing countries such as Turkey, Pakistan, and Central Asian nations. But he thinks such a move is 'very unlikely' because the Iranians would be taking a 'hugely retaliatory' step and inviting conflict with those countries. 'Having an actual missile attack—say, into Pakistan against the U.S. embassy—would be devastating and shocking,' Panikoff told me, adding that he could envision Iranian leaders doing this only if they believed that the end of their regime was near and they had 'nothing to lose.' Alternatively, the Iranians could revert to more rudimentary, older-school practices of theirs such as directly executing terrorist attacks or sponsoring proxy-group terrorist attacks against U.S., Israeli, or Jewish targets around the world. That 'would be a lower bar' for the Iranians, Panikoff said, and 'is something to be worried about.' 4. Dash toward a nuclear weapon The Iranian regime could draw the lesson from its escalating war with Israel and the United States that only possession of a nuclear weapon can save it. Even before Israel's military operation, Iran seemed to be tentatively moving in the direction of trading its position on the brink of nuclear-weapons power for actual nuclear weapons, which appears to have contributed to the timing of Israel's campaign. But although prior to the war Iran may have been capable of enriching uranium to 90 percent, or weapons-grade, within days or weeks, it was further away—perhaps months or more—from the capability of turning that weapons-grade uranium into a usable nuclear weapon. And now its nuclear program has been seriously degraded, though the extent of the damage isn't yet entirely clear: Iran may have retained its stockpile of enriched uranium. Any push for the bomb could also invite further economic sanctions and military operations against Iran. That makes a race for a nuclear bomb in the immediate aftermath of the U.S. strikes, with whatever resources it has left, unlikely, although Iran could take steps short of that such as seeking to develop and possibly use a crude nuclear device, scrambling to rebuild its nuclear program, or withdrawing from the Nuclear Non-Proliferation Treaty. Iran will emerge from this war with dead nuclear scientists and destroyed physical nuclear infrastructure, but what will persist in some form is the technical expertise that enabled it to enrich uranium to 60 percent, and that probably can be applied to further enriching the material to weapons-grade, because that isn't much of an additional leap. The longer-term threat of a nuclear Iran is unlikely to be wiped out as long as the current Iranian regime, or any like-minded or even harder-line one, remains in power. 5. 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The Iranian attack on U.S. forces in Iraq after Soleimani's killing five years ago may have been smaller than some anticipated, but it has still been described as 'the largest ballistic-missile attack against Americans ever.' Troops later recounted that one soldier in a shelter behind the base's blast walls was nearly blown up by the barrage. Frank McKenzie, then the commander of U.S. Central Command, has estimated that had he not ordered a partial evacuation of the airbase, an additional 100 to 150 Americans might have been wounded or killed. If that had happened, the Trump administration might have responded much more forcefully, which in turn could have sparked further escalation from Iran. The effort to achieve a calibrated response might have produced a full-blown war. All actors in this current war now contemplating their next moves should keep that lesson in mind.

Will Tech Tariffs Slow U.S. Growth?
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The tariff roller coaster rumbles on, and for American manufacturers, there's no getting off the ride anytime soon. Even with a drastic reduction in duties on China-made goods and a respite from global 'reciprocal' tariffs, the looming threat of taxes on foreign wares will continue to sow confusion. For some footwear, apparel and textile manufacturers based in the United States, tariff turmoil has been a boon to business, and for others, it's resulted in orbiting by brands and retailers that are voicing interest but aren't quite ready to pull the trigger on onshoring. The uncertainty of President Donald Trump's tariff strategy hasn't just paralyzed retail decision-makers, but the supply chain. Without clarity about the future of trade policy, manufacturers are left wondering about when to scale up—and how. More from Sourcing Journal Amazon and FedEx Continue to Up Their Game on AI-Enabled Logistics Robots AGI Denim's Apparel Park: A LEED Platinum Pioneer in Sustainable Denim Manufacturing Tariffs Stall Long Beach Imports, Marking Slowest May Since Pre-Covid Era Much of the U.S. manufacturing landscape, across sectors and applications, relies on advanced, automated technologies that take the place of cobbler's benches and traditional sewing machines. Some next-generation processes, like 3D printing, are on the verge of breaking through as production drivers in the U.S. But all of these activities, new and traditional, rely on machinery, much of which is sourced overseas and, under the current tariff regime, subject to potentially onerous duties. 'There's a combination of issues happening right now. I think uncertainty in the marketplace has stymied some orders from coming to fruition, because people are wondering how the 90-day pause will conclude,' said Kim Glas, president and CEO of the National Council of Textile Organizations (NCTO), regarding the opportunities coming to American producers. According to Glas, the rapid evolution of trade policy may be driving up interest in American manufacturing, but it's not providing any clarity for producers that are trying to understand their place in the puzzle. In the absence of a clear path forward, the textile sector is waiting until July 9—the date that the deferral of reciprocal duties concludes—to see 'what kind of market signals' will materialize. NCTO has long been supportive of holding 'trade predators' like China and Vietnam accountable for non-market activities. 'But we have also advocated, including in the first Trump administration, for a few exceptions that we think are critical,' Glas said. Access to state-of-the-art textile manufacturing equipment is necessary to help improve processes at the nation's plants, both in order to drive efficiency and cost-competitiveness. But those upsides come with a hefty price tag. 'It's very expensive,' Glas said. 'When you apply a 10-percent tariff, or another tariff differential, it can make a real difference about whether or not you can afford to reinvest in your operation,' she explained. 'When you do a big capital expenditure like that, you have to amortize those costs over a period of time.' But duty costs are paid upfront. And on a machine that costs tens, if not hundreds of thousands of dollars, even a 10-percent duty could be make-or-break for a small operation. There are significant limitations to such equipment production in the U.S., Glas explained, and the advanced machinery is essential to most modern operations. Devices used for extruding, drawing, texturing or cutting man-made textile materials aren't made stateside. Many of these technologies hail from Europe, and of course, China. Glas stressed the tightness of margins in a price-competitive industry like textiles, where companies are likely to spring for the lowest-cost option. The risk in not having access to advantageous technologies is that foreign operators will gain those capabilities, underscoring their own attractiveness. 'We have to think about this in a holistic way. If the design is to unleash more U.S. investment, we're all for that. We want to see our U.S. textile industry grow and we need the administration's help,' Glas said. 'But there is a recognition across the industry that a lot of the textile machinery is no longer made here, and will not be made here overnight. So we need to have a special dispensation for that.' The NCTO lead said exemptions for production machinery could be written into potential forthcoming trade agreements or tariff regimes, or an exclusion process could be established after tariffs are reinstated (as was the case with Trump 1.0's Section 301 duties on China). Either way, she hopes decisions surrounding solution for American manufacturers are 'expeditious.' 'The tariffs are definitely making the machinery more expensive,' Mitch Cahn, owner of Newark, N.J.-based apparel and gear manufacturer Unionwear, told Sourcing Journal. The producer, which specializes in items like baseball caps and tote bags, imported machinery earlier this year from Canada, before Trump's tariff announcements. 'We didn't make the investment because we expected tariffs, we actually made the investment to ramp up for the U.S.A.'s 250th birthday' in 2026, he said. Cahn anticipates a surge of business surrounding the occasion, along with events like the World Cup and the Olympics. According to the business owner, doubling down on automated machinery (this time, on an apparatus that sews canvas totes) was a matter of necessity. 'We were having a lot of difficulty hiring more sewers; the pool was dry,' he said. 'We had to invest in machinery to make up the gap between what we were doing and what we want to be able to do next year.' The tote bag machinery, when it's operating at full speed, will do the work of 44 people with a single operator. 'We're still ramping up; the goal is to have it probably operating 18 to 20 hours a day by the end of the year,' he said. 'We didn't do it to speed up or save money. We just did it because there was really no way for us to grow linearly—not even exponentially,' he explained. 'There's no way for us to keep adding sewers to our operation, so we need it.' These planned investments in technology aren't a bid to replace human headcount with machines—in fact, Unionwear is holding on tight to the sewers that it employs. One prevailing issue inhibiting the growth of American manufacturing is the lack of a pipeline for skilled, affordable labor. The group has plans to automate other production processes, and is in talks with American manufacturers for those projects. Since the reciprocal duties on more than 60 countries were announced, Unionwear has seen a 'considerable' increase in interest and sales, Cahn said. 'If the tariffs are here to stay, the return is actually going to be much greater than it would have been without the tariffs,' he said of the investment in new technology. 'And the reason for that—and it's something we didn't expect—is the possibility that with automation, we actually can be competitive with import prices that have tariffs on them.' Cahn said that even if the Canadian-made machinery was tariffed at the 25-percent rate that Trump originally threatened, the company still would have made the buy. 'It really opens up a much bigger market for us,' he added. Kuba Graczyk, founder of Los Angeles-based 3D-printed footwear startup Koobz, agreed that investments in automation are key to expansion as a U.S. producer. The group, which prints mono-material, single-piece shoes, currently operates 60 3D printers and is building out a factory in Ventura, Calif. that Graczyk said will house 4,000 printers at the end of the next two years. This will give the startup the ability to churn out 'a couple million pairs of shoes a year,' he estimates. Since April 2—Trump's so-called 'Liberation Day'—business has picked up, he added. 'Customers who were actively working with us decided to substantially accelerate, customers who were just, like, looking at this as something interesting decided to launch projects with us to see where it could go instead of being hesitant,' Graczyk said. 'And those folks who ghosted me suddenly decided, 'Hey, let's get on that again.'' 'Of course, it tapered down' over the course of the ensuing weeks, which saw reductions in duties on China-made goods, deferrals on all reciprocal duties and a trade deal with the United Kingdom, among other trade developments. 'But out of all of this interest, we were able to create an amazing pipeline which is wired long-term, because one of our gauging questions was, 'If the tariffs get back to [what they were previously] would you still work with us?'' Koobz has decided only to take on business with partners that have a long-term plan for onshoring and budget allocated to the effort. But scaling up from 60 to 4,000 3D printers—which Graczyk said ring in at about $600 apiece—will require significant capital expenditure. While the price tag on the devices is modest, a tariff will add to it, and the group is looking to scale aggressively in a short period of time. Koobz looked into 3D printer options made outside of China, and found that the models made stateside as well as in Europe cost more and came equipped with fewer, less-advanced features. 'There are other sources than China. In Europe, there's still a handful companies that can manufacture equipment of that sophistication, at that scale—maybe not as good, maybe a little bit different architecture,' Graczyk said. But beyond price and performance, the factory owner is also looking to develop a smart and resilient supply chain, starting with machinery. One way to foster this could be to diversify sourcing for machines, but there would be differences between the units and the way they operate, as well as possible differences in quality and output. 'We are fortunate enough that we haven't pulled the trigger on any anybody yet, but we are at risk of slowing down because we would rather take more time to de-risk this as much as possible; to slow our progress instead of building while still thinking about where to source,' he said. 'We know we have to build a system which is very flexible.' Koobz is having discussions with 3D printer manufacturers about the potential of nearshoring printer production to free-trade-agreement countries like Mexico, and some are already considering doing so. 'Short-term, I'm not super worried about securing our next year's growth, because the printers that we're using for the current stage of products are already in the U.S., in distributor warehouses,' he said. 'We've already purchased some of them, so there's some frontloading of this equipment. But thinking forward, we need to add multiple colors, multiple materials—those machines are a little bit more sophisticated, and inventory of those doesn't exist.' The already-bought machines and those available onshore will float the company through to the last quarter of 2026, he believes. After that, Koobz will 'have to start solving the puzzle' of where to source the technology that powers its operations. 'Who are we going with for the next stage of building? Are we keeping the same equipment, the same manufacturer, buying higher-tier machines from them—or are we switching to something else because of the tariffs?' To Graczyk, there are bigger concerns than the added financial burden caused by the import taxes. It's the breakdown in the U.S.-China trade relationship—and the inkling that it could get worse, not better—that gives him pause about eating the cost of potential duties and sticking with Chinese suppliers. 'We already figured out how to work it out with the previous tariffs, the 145 percent, because [the printers] generate so much margin and profits that we can absorb [the tariff cost],' he said. But he worries about a 'complete decoupling' of the world's two biggest economies. 'We believe our business model supports the investment in this equipment, even with those outrageous tariffs, but the biggest threat is to business continuity; whether our business needs can be met long-term with companies based in China,' he added. But machines manufactured outside of China, too, will be subject to trade barriers—even those made in nations the U.S. considers allies. Desma, which crafts direct-injection molding machines used by the footwear industry in Germany, has also felt the impacts of tariff talk. While goods from the country face only a 10-percent duty rate (for now), the intense swings in the administration's tariff strategy are not doing anything to propel what was already a sustained and healthy trend toward onshoring, according to regional sales manager Marco Schafer. 'Many people consider options and discuss scenarios, but we have not experienced a rush into investing into manufacturing capabilities, and going at it full-steam,' he said. 'And I think people are right to be cautious, because you just saw what happened with China—you went from next to nothing to over 100 percent. Now they're back to 30 percent, and it's questionable if that has any effect whatsoever, or if the market will eventually just absorb those costs and not much will change.' Schafer said footwear firms have been eager to bring some portion of their manufacturing closer to home for at least three or four years, and those that understand the business case for doing so didn't need tariffs to push them over the finish line. 'It's not so much the Made in USA label; there are some hard economic figures' that underscore the appetite for reshoring. 'You are in the market you're selling in, so your logistics are shortened. The other thing is capital—if you order container loads of goods from Asia, your capital is tied up for quite a long time, whereas if you manufacture here and you have shorter lead times, your cash flow is actually improved.' But it's a decision every company has to make for itself, and much of it has to do with modeling costs versus output. 'A simplified view: you realistically have to make at least 500 pairs of the same or similar product in a day, in a one-shift operation, to even be able to consider an investment into automation,' he believes. Desma's 'bread and butter'—direct injection molding machines—allow footwear manufacturers to produce foam midsoles for performance shoes and sneakers. The largest, most advanced model can churn out 1,500 to 2,000 pairs per day. All told, it's a big investment, with machines costing hundreds of thousands of dollars. Ergo, the footwear manufacturers who are intent on scaling operations using these machines aren't doing so on a whim. 'All the major projects we're working on—whether those are already projects we have on order, or projects we hope to have on order soon—they all originated in 2024,' Schafer said. 'Those projects don't happen overnight; the machines and calculations are complex, so you have to really be sure that you believe in your product and in your forecast.' In short, tariffs are generating interest, but they're not turning the tides for makers of advanced machinery. Even if an American footwear firm decided today that the unstable trade environment necessitated a sea change in sourcing strategy, they couldn't fast-track that shift. 'We're dealing with six-to-seven-month lead times after we after we get an order, but to get the right configuration of the equipment, whether it's a machine or automation line, you're easily involved with engineering six to 12 months before a company is ready to place a [purchase order]. These are often two-year projects,' he said. 'People know that if they get into this field, it's a big commitment.' There are myriad other factors in the equation, from availability of raw materials (many of which are still sourced from Asia or Europe), to staffing (workers must be trained on robotics and electronics), and facilities, which must be equipped to support the machinery and its output. 'All that needs to be put into consideration,' Schafer added. 'And therefore, the whole tariff thing—yes, it triggered some discussions, but no active projects as of yet.' That could change with more clarity about the future of America's trade relationships. Of the volatility of the past two months, Schafer said, 'We hope that the worst is behind us, and that after the loud time comes the time of more quiet negotiations behind closed doors.' This article ran in SJ's Tech Report. To download the full report, click here. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

Senate Readies Tax Bill for Vote as Holdouts Threaten Delay
Senate Readies Tax Bill for Vote as Holdouts Threaten Delay

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time34 minutes ago

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Senate Readies Tax Bill for Vote as Holdouts Threaten Delay

(Bloomberg) -- President Donald Trump's tax-and-spending agenda is nearing a climactic vote in the Senate this week in the wake of air strikes on Iran, which risk embroiling the US in a prolonged Middle East conflict. Bezos Wedding Draws Protests, Soul-Searching Over Tourism in Venice One Architect's Quest to Save Mumbai's Heritage From Disappearing NYC Congestion Toll Cuts Manhattan Gridlock by 25%, RPA Reports Trump's $4.2 trillion tax-cut package, partially offset by social safety-net reductions, does not yet have the support it needs to pass the Senate. Fiscal hawks seeking to lower the bill's total price tag are at odds with Republicans worried about cuts to Medicaid health coverage for their constituents and phase-outs to green energy incentives that support jobs in their states. Finessing a deal to line up the votes will require focus — and a bit of arm-twisting — from Trump, who is juggling both a pivotal week for his domestic agenda alongside a highly uncertain situation in Iran following the US strikes. Trump on Sunday, as US officials and foreign leaders were still digesting what the attacks on Iranian nuclear sites will mean for Middle East stability, urged members of his party to swiftly pass the tax bill. 'Great unity in the Republican Party, perhaps unity like we have never seen before. Now let's get the Great, Big, Beautiful Bill done. Our Country is doing GREAT,' Trump said on social media. Senate Republicans plan to begin the multi-step process to vote on Trump's tax and spending cut bill mid-week, setting up final passage in the latter half of the week or over the weekend. That timeline would allow the House to vote on the latest version next week and meet Trump's goal of enacting his signature bill by July 4. Meeting that ambitious deadline will require senators to quickly negotiate resolutions to a series of thorny policy issues that have divided Republicans for weeks. Senate Majority Leader John Thune must balance demands by fiscal conservatives for deeper spending cuts with qualms from moderate Republicans concerned the bill goes too far in making people ineligible for Medicaid and cutting funding for rural hospitals. Renewable energy incentives continue to divide the party as well, with some conservatives pushing for a faster phase-out of tax breaks for wind, solar, nuclear, geothermal and hydrogen. Other senators are angling to keep the breaks in place for projects that have already begun. Senators will also find themselves in talks with some of their House counterparts over the state and local tax, or SALT, deduction. The Senate bill would keep the current $10,000 cap in place, while the House-passed version would raise it to $40,000. Several House members from high-tax states, including New York, New Jersey and California, have threatened to block the bill if it doesn't include a $40,000 SALT cap. The Senate has some negotiating room to increase the SALT cap. The bill, per Senate rules, can lose up to $1.5 trillion over a decade. But a new estimate from the non-partisan Joint Committee on Taxation, found the legislation only costs $441 billion over ten years — after deploying a budget gimmick that assumes the $3.8 trillion cost of extending Trump's first-term tax cuts cost nothing. Rules Battles Democrats are locked out of the deal-making, with Trump able to pass his agenda on Republican votes alone. But they have been able to use arcane Senate rules to successfully challenge and strike some provisions from the bill if the Senate parliamentarian declares the measures aren't sufficiently related to taxes, spending or the budget. The parliamentarian blocked a provision that would make it harder for judges to hold Trump administration officials in contempt for failing to abide by rulings. Democrats were able to eliminate measures that would curb some Supplemental Nutrition Assistance Program benefits. Provisions to strip funding from the Consumer Financial Protection Bureau and cut Federal Reserve employee salaries were also tossed out. Late Sunday Democrats announced Senate Parliamentarian Elizabeth MacDonough had thrown out provisions related to the federal workforce, including a plan scaling back civil service protections for federal workers and a measure that would allow the president to eliminate agencies without approval from Congress. She also ruled that a provision forcing the US Postal Service to sell off all its electric vehicles must be removed from the bill. The parliamentarian has permitted Republicans to use the bill to pressure states not to regulate artificial intelligence by denying them funding for broadband Internet projects. That's a watered-down version of a House proposal that would have blocked states from issuing AI regulations. That plan drew bipartisan criticism for overstepping states' authority. Democrats are also seeking to remove the Section 899 'revenge tax' on companies domiciled in countries with 'unfair' tax regimes. That provision has stoked fears on Wall Street of capital flight from the US. That parliamentarian ruling could be released as soon as Monday. The tax bill is the core of Trump's economic agenda combined into a 'big, beautiful bill.' The Senate version makes permanent individual and business tax breaks enacted in 2017, while adding new breaks for tipped and overtime workers, seniors and car-buyers. The bill would allow hundreds of billions of dollars in new spending for the military, border patrol and immigration enforcement. To partly pay for the revenue losses, the bill imposes new work and cost-sharing requirements for Medicaid and food stamps while cutting aid to students. The measure would also avert a US payment default as soon as August by raising the debt ceiling by $5 trillion. (Updates with additional parliamentarian decisions.) Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros The US Has More Copper Than China But No Way to Refine All of It Can 'MAMUWT' Be to Musk What 'TACO' Is to Trump? ©2025 Bloomberg L.P. Sign in to access your portfolio

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