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A new report from the think tank founded by former Google CEO Eric Schmidt quantifies the grim realities of the U.S. defense industrial base’s dependence on China for critical rare earth minerals. It also details which weapons systems might face the most impact if that delicate supply relationship breaks down.

The white paper, exclusively obtained from the Special Competitive Studies Project, uses AI intelligence from the supply chain tech firm Exiger to assess how many unique components, identified by National Item Identification Number, or NIIN, contain critical minerals, such as antimony, gallium, germanium and tungsten.

From an assessment of almost nine million parts and 3,000 U.S. military weapon systems, the company identified more than 28,000 unique components  across 1,400 weapons systems containing just these four rare earths. The isolation of these parts is relevant in particular because of a near-term crisis: the expiration of a suspension on Chinese export controls set to take effect in November. Disruption to weapons fielding plans, as well as operational readiness and sustainment activities, according to the white paper, is very much a possibility. Yet according to Kit Conklin, chief strategy and global affairs officer at Exiger, the crisis is already here. 

In an interview with TWZ, he pointed to Japan, which is facing the prospect of a manufacturing halt after China choked off supply of some rare earths to the tune of more than 80% earlier this year.

“There’s no question that right now it’s a crisis for a lot of companies that are trying to get licenses approved by China and just not getting the licenses,” Conklin said. “So there’s real risk to current production, and when I think about us and scaling, whether it’s the drone industrial base or trying to scale our interceptor capacity to 1,000, 2,000, 3,000 interceptors a year, I mean, these are real choke points that we have that are impacting our ability to deliver these to the warfighter right now.”

Among the weapons systems most at risk for supply chain and manufacturing disruption, according to the data, is the vital Virginia-class submarine, which requires more than 300 critical NIINs containing the four elements, including 190 parts requiring germanium.

Germanium, used in optics, night vision systems, EO/IR equipment and more, is a byproduct of zinc ore. In January, the Pentagon announced an $18 million investment in the country’s only germanium production facility in St. George, Utah to expand refining capacity “sevenfold” to more than 20 metric tons annually by an unspecified deadline.

China controls some 68% of the world’s refined germanium. It has a far greater chokehold on gallium, used in semiconductors and solar cells, and especially advanced radars, controlling up to 99% of production. Each Virginia-class sub requires 50 unique parts containing gallium.

China controls about half the production of antimony, used to harden ammunition and to manufacture optics and electronics; and up to 80% of the supply of tungsten, used in manufacturing tools, warheads and heat-resistant components.

While it doesn’t break down components by weight, the report notes that the rare earth requirements for the Virginia-class sub are also considerable by mass: each sub required 9,200 pounds of the elements, while an F-35 Joint Strike Fighter jet requires 900 pounds.

The Virginia-class submarine is America’s only in-production fast-attack nuclear-powered sub that has been in service since 2004. Twenty three of these critical vessels are in service today, or roughly half of the total planned program, with the remaining boats yet to be built. It’s notable in the context of the paper because it has multiple points of exposure to supply chain disruption. Another of these exposure points: its 1,700 mission or safety-critical parts requiring casting, forging or extrusion. As the report lays out, supply chain bottlenecks around limited metal casting, forging and extruding capacity are delaying production timelines and putting manufacturing at risk.

China, again, produces about half of the world’s casting output and “is often the sole option for large castings,” the paper found. The analysis shows that more than half, or nearly 8,000, unique supply items containing steel castings have delivery lead times of more than 36 weeks. More than 9,400 items containing extruded aluminum, about 47% of these parts, have lead times that long.

“Virginia-class submarines, already threatened by U.S. reliance on China for critical minerals, are reportedly also three years behind schedule, potentially due in part to the lack of domestic large-scale casting capacity,” the report finds. An analysis of Navy construction timelines published earlier this year does indeed find that 10 of the 12 Virginia subs now under construction face delays of 36-44 months.

Alarmingly, a recent war game simulation found that the U.S. could not replace ships, planes and missiles lost to combat specifically due to casting and forging shortfalls, the report notes. That’s despite a $2 billion Pentagon initiative launched in 2024 aimed at revitalizing this industry.

Beyond submarines, the report shows that aircraft, including some of the nation’s workhorse fighter jets, face outsized production and sustainment risk due to rare-earth elements and casting/forging dependencies.

The B-2 Spirit bomber – the nation’s only nuclear-armed stealth bomber until fielding begins on the B-21 Raider sometime next year – requires 782 parts containing the four rare-earth elements isolated in the report.

The F/A-18 Hornet family of fighters flown by the Navy and Marine Corps, including the Navy’s Growler electronic warfare variant, tops the list for dependency on steel castings, with 3,800 individual parts requiring the process. Following is the KC-135 Stratotanker, with 2,570 parts. All 10 of the systems requiring the most metal castings for production are aircraft, the analysis shows. The legacy Hornet and the KC-135 have been out of production for decades, while the Navy’s Super Hornet will see its production line go cold in 2027. Any ongoing demand for castings for these systems would thus be in spares and repair parts. 

Military aircraft also represent the highest-need category among weapons systems requiring cadmium plating, a process used to make aerospace components corrosion-resistant.  The domestic supplier base has shrunk due to EPA safety limitations established in 2008. All of the top 10 weapons systems requiring the most cadmium-plated parts are aircraft, with the KC-135 topping the list with 2,780 unique components. The C-130 Hercules transport, B-52 Stratofortress bomber and Galaxy C-5 transport all have more than 2,000 parts.

The B-52, which is undergoing a service life extension to take it into the 2050s – past its century mark – may run into modernization delays not only over cadmium-plated and steel-casted components, but also due to overly rigid military specifications, which increase lead time and delays. The white paper cites the bomber’s rib airfoil and fuel vent valve components, which both have lead times of more than 400 days due in part to production being burdened with dozens of mil-spec compliance requirements, which the authors say have not kept pace with today’s commercial practices.

“The requirement for a part to meet so many mil-specs, if not reasonably necessary, may limit the number of possible suppliers of that part, potentially increasing its lead time and bottlenecking production,” they write. “For the B-52, this could inhibit current modernization efforts intended to keep the airplane operational through the 2050s.”

A final risk the paper addresses is workforce shortages and dangers from limited suppliers creating single points of failure. Across defense, the number of small suppliers has decreased by 43% in the last decade, it notes. It cites, as a case study, the February 2025 fire that forced the closure of SPS Technologies in Jenkintown, Penn. – a fastener maker that produced components for more than 1,000 weapons systems and was deemed critical for 90, including the Nimitz-class carrier, the F/A-18 fighter and the M1 Abrams tank. For systems including the Tomahawk Land Attack Missile and the MH-60 Black Hawk helicopter, the facility was a single-source supplier.

With operations offline until at least 2028, the supply chain has been “actively disrupted” due to the outage of just one facility, according to the paper.

“This case underscores the risk of single sourcing in the defense industrial base and the need to qualify alternate sources to avoid such significant chokepoints,” the authors write.

The paper hails work that has already begun to invest in domestic critical minerals production and shore up the defense industrial base. But it does hint that these efforts may be too late to avoid a crash if China shuts off or severely reduces exports. The paper notes that, on average, it takes the U.S. 29 years to open a new mine. The U.S. has one established domestic mine: The Mountain Pass Rare Earth Mine and Processing Facility, just outside of Las Vegas. Initially established in 1952 and reopened in 2018 after a long hiatus, it now produces more than 50,000 tons of rare earth oxides annually. Last year, for the first time in seven decades, a new domestic rare-earth mine opened in Wyoming, stating plans to start producing ores extracted from coal, including gallium and germanium, by 2029. Production is projected to total 456 tons of rare earths per year. The project had been in development for more than a decade before opening. 

Conklin said a July executive order aimed at developing domestic production of rare earths while collecting data on what elements systems required created opportunities for smart policy creation – perhaps in the next National Defense Authorization Act – around holistically attacking the problem. 

“I would love for us to figure out a way to get out of thinking about these supply chain risks system by system. We tend to have disparate requirements to look at the nuclear triad or subs or interceptors,” he said. “I think with the executive order that came out earlier this year, there’s a real opportunity for Congress to legislate on some of these issues beyond just figuring out what the risk [is] for antimony in the sub industrial base, and thinking about it a little bit more holistically.”

One potential solution he proposed: an agency within the executive branch (led, perhaps, by a critical minerals czar) who can coordinate production needs and resourcing and develop the most efficient pathways to secure needed materials.

While no U.S. defense manufacturer has yet publicly cited manufacturing disruptions due to rare earth availability, signs are increasing that the federal government is taking supply concerns seriously. In addition to Project Vault, a $12 billion White House initiative announced in February that would create a strategic stockpile of rare earths akin to existing stockpiles of critical medical supplies and petroleum, the U.S. Army has begun extending long-term leases on military land to companies seeking to build critical mineral processing facilities.

Conklin said he doesn’t anticipate major changes in rare earth exports between now and the end of the year, describing the U.S.-China supply relationship as “in a bit of a détente.” That said, with new policies pending, we could be only days away from new revelations about the extent of the impact of these materials on the defense manufacturing enterprise.

Contact the editor: Tyler@twz.com

While votes are still being counted in California, a handful of important races in the midterm elections have already been called or are pointing firmly in one direction.

Despite its status as a reliably Democratic stronghold, the Western state has played a dynamic role in Tuesday’s United States elections, acting as a testing ground for questions as varied as partisan redistricting and tax measures targeting billionaires.

Let’s take a quick look at some of tonight’s results:

Democrats ahead in key races

While vote-counting was still under way, Democratic candidates have pulled decisively ahead in several contests seen as must-wins for the party’s effort to take control of the US House of Representatives.

To boost the party’s chances, voters a year ago approved a partisan redistricting measure promoted by Governor Gavin Newsom to net Democrats five additional seats in the US House.

One such race took place in the state’s 22nd Congressional District, located in the agriculture-rich Central Valley.

Progressive educator Randy Villegas celebrated the results of the race on Tuesday night as the Democrat held a commanding lead of about 30 percentage points over Republican incumbent David Valadao.

Democratic candidate Marni von Wilpert is also ahead in the 48th district, located in Southern California near San Diego, where she is leading Republican Jim Desmond by about 20 points.

While those advantages are considerable, The Associated Press news agency has not yet officially called those races.

Progressive Aisha Wahab is also firmly ahead in her race against Melissa Hernandez, a fellow Democrat, in the 14th district.

Wahab overcame substantial spending by pro-Israel groups to defeat the establishment-aligned Hernandez in a special election in September. She is now on track to win a full term in that seat.

With her previous victory, Wahab became the first person of Afghan ancestry elected to Congress.

In the San Francisco Bay Area, moderate Democrat Scott Wiener is leading progressive rival Connie Chan in a race for the seat of retiring Representative Nancy Pelosi, the powerful former Democratic House speaker. Wiener has a lead of about 10 points with 50 percent of the vote tallied thus far.

Republicans face another bruising defeat in gubernatorial race

While Republicans across the country have laboured to turn California into a symbol of liberal dysfunction, voters in the state remain unconvinced that conservatives offer a better alternative.

The gubernatorial race was called for the Democratic candidate, former state Attorney General Xavier Becerra, immediately after the polls closed.

Becerra’s Republican rival, British political commentator Steve Hilton, had argued that years of unbroken Democratic domination had resulted in sky-high prices and public disorder.

But his bid to underscore cost-of-living issues by holding campaign events where he offered discounted petrol fell flat at a time when many voters blame President Donald Trump’s war on Iran for eye-watering prices at the pump.

Becerra’s victory comes more than five years after Republicans tried to dislodge Newsom through a recall election that failed by a margin of more than 20 points.

In the past, Republicans could console themselves that if they remained in electoral purgatory in the most populous US state, their Democratic rivals were likewise locked out of power in conservative strongholds such as Texas.

Tuesday’s losses will sting a bit more after a series of shock wins by Democrats in states that can usually be counted on to deliver easy wins for Republicans, including Texas.

Uncertainty over some ballot measures

While some results have come in quickly, tight contests over some of the state’s ballot measures, or policy questions put directly before voters, have yet to be called.

Proposition 40, which would institute a one-time tax on the net worth of billionaires in the state to help fund programmes such as healthcare and education, is trailing with about 44 percent of the counted votes in favour and 56 percent against.

The measure won support from progressive figures, such as Senator Bernie Sanders and Representative Ro Khanna, but prompted a deluge of spending from wealthy donors and companies to oppose it.

The Associated Press has announced that Proposition 39, which would have instituted voter ID laws sought by conservatives, has been rejected by voters.

Polls suggest the governing party could fall below 40 percent as voters weigh failing services.

South Africans are voting in local elections widely seen as a verdict on the African National Congress (ANC), the party that led the country out of white minority rule in 1994 but has steadily lost support over the past decade.

Polls opened at 7am (05:00 GMT) on Wednesday and close at 9pm (19:00 GMT). A record 29.2 million people are registered to vote at 23,696 voting stations, according to the Electoral Commission of South Africa (IEC). More than 1.4 million special votes were cast on Monday and Tuesday.

Voters are electing councils for the country’s eight metropolitan municipalities, 44 district councils and 205 local councils. Those councils then choose mayors.

The ANC fell below 50 percent in municipal polls for the first time in 2021. In the 2024 national election, it lost its parliamentary majority and was forced into a coalition government with the Democratic Alliance (DA) and other parties. Polls suggest the ANC’s support could drop below 40 percent this time.

“Municipal failures have contributed to declining public trust and confidence in democratic governance,” President Cyril Ramaphosa said in his weekly newsletter, “From the Desk of the President”.

Ramaphosa is due to vote at Hyde Park High School in Johannesburg, the presidency said.

Johannesburg is the biggest prize in this election. The country’s financial capital has had five mayors in four years.

The DA has fielded its 75-year-old former leader, Helen Zille, for the city’s top job. Her campaign stunts included snorkelling in a mud-filled trench that was flooded by a burst municipal water pipe.

A News24 poll put Zille at 36 percent, meaning she would need coalition partners, particularly the ANC, to govern. Zille told the Associated Press news agency that the ANC was “in free fall”.

This is the first local vote for former President Jacob Zuma’s uMkhonto weSizwe (MK) party, which is mounting a strong challenge in the coastal city of Durban.

“We are going to start by taking back our country here,” Zuma told supporters in the city on Sunday, the AFP news agency reported. Durban has become a centre of anti-migrant sentiment, a prominent theme in the campaign.

Turnout may be a concern. Only 46 percent of registered voters took part in the 2021 municipal elections.

Coalition government is already widespread: 74 of the country’s 257 municipalities were run by coalitions or minority administrations as of February, according to the Mapungubwe Institute for Strategic Reflection.

Security has also been tightened. Police said 21 election-related cases have been recorded since Sunday. KwaZulu-Natal has 165 voting stations classed as high risk, the most of any province.

Final results are expected on Sunday. They are expected to shape the race to succeed Ramaphosa as ANC leader at the party’s conference in December 2027.

Longtime Republican Senator Susan Collins had held the seat for nearly three decades, but was swept away in the blue wave.

Democrat Troy Jackson, a former Maine Senate president and labour organiser who entered the race in July, has won the Senate race in Maine, flipping a seat held by the Republicans for 30 years.

Longtime Republican Senator Susan Collins conceded the race to Jackson early on Wednesday, ending nearly three decades as Senator for Maine.

Maine’s race was one of the most closely watched in the country. Republican groups spent heavily on the race, donating $76m compared with $40m by Democrats. Jackson’s campaign raised $26.9m, slightly more than the $25.2m for Collins through mid-October.

Located in the far northeastern United States bordering Canada, Maine’s economy has been affected by Trump’s tariff wars with its northern neighbour and key trading partner.

Collins, who has served as senator since 1997, has framed herself as sharing voters’ moderate politics and serving the state’s 1.4 million residents as chair of the Senate’s powerful Appropriations Committee.

Polls released shortly before the election suggested Jackson edging out Collins in a tight race shaped by negative campaigning.

Collins distanced herself from Trump during the campaign but drew criticism for voting in favour of Trump’s legislation and judicial nominees after the Supreme Court ended abortion rights.

Jackson, who campaigned on strengthening the economy and government accountability, framed Collins as a Trump ally and accused her of corruption, which she has denied.

Collins focused on her independence – she was one of the few Republicans who voted to remove Trump from office after the January 6, 2021 attack on the Capitol – and attacked Jackson for his federal inexperience and his voting record in the state legislature.

Fans of Spanish football club CD Tenerife gathered outside the Estadio Heliodoro Rodriguez Lopez in Santa Cruz de Tenerife as tributes poured in for forward Jesus de Miguel, who died after an on-field collision.

De Miguel died on Tuesday from injuries sustained in a clash with FC Andorra goalkeeper Jesus Owono during a Spanish second-division match, leaving Spanish and European football in mourning.

Spanish police have opened an investigation into possible involuntary manslaughter.

Santa Cruz de Tenerife chief prosecutor Jose Luis Sanchez-Jauregui told the Spanish news agency EFE that criminal charges were unlikely because the collision happened in the course of play.

Tributes were held before Champions League fixtures on Tuesday, with Barcelona, Atletico Madrid and Villarreal opting not to play the competition’s anthem before kickoff in honour of De Miguel, 30, who went into cardiac arrest after being struck in the chest.

Moments of silence were observed in those stadiums and others across Europe, including at Old Trafford, where Manchester United were playing Roma. Images of De Miguel were shown on giant screens inside the grounds.

Arsenal manager Mikel Arteta and midfielder Mikel Merino also began their news conferences on the eve of Wednesday’s match against Slavia Prague by paying tribute to De Miguel.

By the end of the year, the U.S. will stop providing Israel with billions of dollars in annual assistance, President Donald Trump proclaimed Tuesday morning. The announcement was delivered as both Washington and Jerusalem are mulling plans for a new wave of attacks on Iran and amid increasing American voter antipathy toward the Israel in the wake of the Gaza war and America’s involvement in the war with Iran.

While Israeli Prime Minister Benjamin “Bibi” Netanyahu has openly discussed weaning his country off direct U.S. assistance in favor of more cooperation on weapons development, the Trump announcement still caught many there by surprise. It also raises a lot of questions about Congressional authorization and the impact on future sales of advanced arms from U.S. manufacturers, many of which are planned, that still have to be answered.

“As far as paying Israel, Bibi Netanyahu and I have made a deal that – we give Israel $4 billion a year – and we made a deal months ago that we’re stopping,” Trump told Fox & Friends Tuesday morning during his message to American voters going to the polls for the midterm election. “And they’re fine with it because you know they have become a very successful country. They don’t need it, and we won’t be paying anymore to Israel, so it’s just a wasted thing because we’ve already agreed that by the end of this year we won’t be paying Israel.”

“Now we’ll help Israel if they need it,” the American leader added. “You know they’ve been a great ally, and we’ve been the greatest of all allies to many many countries.”

Trump did not elaborate on what specific expenditures he was referring to, and we’ve reached out to the White House for more details. However, the president was almost certainly talking about the ongoing decade-long Memorandum of Understanding (MoU) with Israel.

The MoU calls for providing $3.8 billion in annual aid and it is drawing to a close. Set to run through 2028, the vast majority of that funding is for Foreign Military Financing (FMF) to purchase weaponry mostly from American manufacturers.

“In 2016, the U.S. and Israeli governments signed their third 10-year Memorandum of Understanding (MOU) on military aid, covering [Fiscal Year] 2019 to [Fiscal Year] 2028,” according to a 2025 Congressional Research Service (CRS) report. “Under the terms of the MOU, the United States pledged to provide—subject to congressional appropriation—$38 billion in military aid ($33 billion in Foreign Military Financing (FMF) grants plus $5 billion in missile defense appropriations) to Israel.”

The MoU is merely a promise and not legally binding. Congress has to approve any funding requests.

A New Deal

Washington and Jerusalem began negotiating a new MoU in June, according to the Israeli Defense Ministry (MoD).

“The new framework, reflecting the strategic vision of Israel’s Prime Minister and Minister of Defense, is designed to strengthen the IDF’s qualitative military edge through expanded joint investment in research, development, and co-production, deepen the U.S.-Israel partnership demonstrated during Operation Roaring Lion, and gradually transition from aid to a completely reciprocal partnership,” MoD explained.

Netanyahu has been warning Israel for months that it would have to face reduced assistance from the U.S.

“If you think we will continue receiving what I secured twice — tens of billions of dollars in American aid for the defense budget — you’d better prepare yourselves and get used to the idea that this will not continue,” he told Israeli media last month, according to Bloomberg News. “That is because America has changed, not because Israel has changed. It will end. It is only a matter of time.”

Netanyahu added that Israel has two more years with Trump, but must prepare for a less favorable Washington after he leaves power.

In January, the Israeli leader said he wanted to reduce Israel’s reliance on American aid. He told The Economist that he was not seeking the full renewal of the MoU, which has to be renegotiated by 2028. 

“I want to taper off the military aid within the next 10 years,” Netanyahu told the publication. Asked if he meant “to taper it off to zero,” Netanyahu said “yes.”

“We want to be as independent as possible,” the Israeli leader proffered. Referring to his meeting with the the American president in Florida in late December, Netanyahu added: “In my visit to President Trump, I said we very deeply appreciate the military aid that America has given us over the years, but here too we’ve come of age, and we’ve developed incredible capacities.”

For Israel, the MoU “now matters less for the money it provides than for what it signifies: a gauge of the depth and durability of U.S. support,” the Crisis Group think tank argued in August. “To be sure, FMF has enabled Israel to build up its military power without fully bearing the cost, and phasing out this assistance would impose real burdens. Israel would have to pay for critical U.S. weapons from its own budget.”

However, with its annual GDP now exceeding $700 billion and defense spending above $40 billion, “Israel has found increasing difficulty in arguing that it requires an additional $3.3 billion each year for military purchases,” Crisis Group posited. “Netanyahu has asked the finance ministry to allocate billions of dollars in additional funding for the defense budget over the next decade, a large portion of which would be earmarked to procure U.S. fighter jets, on the assumption that Israel will no longer receive the funds necessary for these purchases from Washington.”

Since the attack by Hamas, U.S. money from the MoU has made up a smaller percentage of the Israeli MoD’s overall budget as the country has increased its own defense spending. Those funds have also been bolstered by several large tranches of U.S. supplemental aid to procure bombs and other weapons.

“For most of the last 15 years, the $3.3 billion Israel receives annually in FMF made up roughly 20% of Israel’s defense budget, which was itself 5-6% of Israel’s GDP in the same period,” the Israel Policy Forum (IPF) explained in May. “Both Israeli defense spending and the share coming from U.S. aid slowly declined amid major economic growth throughout the 2010s, and then spiked in 2023 following the October 7 Hamas attack on Israel and ensuing wars.” 

IPF stated that after the Hamas incursion, “Israel sharply increased defense spending (both within the regular budget framework and in extraordinary expenditures) to 8-9% of GDP, and the U.S. gave Israel several large supplemental security assistance packages between late 2023 and early 2026 in addition to the MOU-directed security aid.”

“The net result, taking into account both much higher Israeli spending and large amounts of American aid, is that in 2024 U.S. assistance briefly accounted for more than one third of Israel’s defense budget,” IPF noted. “In 2025 this figure dropped to close to 10%, with Israel spending an estimated NIS 168 billion ($52 billion) on defense in that year.”

Until recently, “Israel had been given a partial exemption” on the requirement that FMF funds be allocated for American products,” the Crisis Group noted. This allowed Israel to “invest a portion of the money in its own defense industry, Crisis Group explained. “This carveout, in turn, has made Israeli firms more competitive in the arms export market.”

Heavy Reliance On American Hardware

Israel, which has received more than $175 billion in U.S. aid since its creation in 1948, relies heavily on American weaponry. The Israeli Air Force (IAF) tactical aviation fleet consists of U.S.-built F-15s, F-16s, F-35s and AH-64 Apache attack helicopters, among other U.S. types. Israel also made deals for a number of other platforms including KC-46A aerial refueling tankers and CH-53K heavy-lift helicopters and it uses large amounts of American precision munitions. Meanwhile, Israeli missile defense systems like Iron Dome and Arrow 3 have been developed with significant assistance from the U.S.

A top Israeli MoD official told The Times of Israel (ToI) last month that his country wants to flip the switch to add value to the American defense industry by using its experience developing weapons as it fights seemingly constant wars. The continual threats from regional actors and terror groups allow Israel to serve as a testing ground for U.S. defense technologies, Aviram Hasson, director of the Defense Ministry’s mission to the US and Canada, explained.

“Hasson pointed to engineering breakthroughs and intellectual property emerging through development of Israel’s active-defense systems, saying every US government request for technology arising from the long-range anti-ballistic missile Arrow 3 program has been fulfilled,” the publication noted.

“It is clear on both sides of the ocean that this cooperation is a strategic need of both powers, not only of Israel,” Hasson told ToI.

U.S. Has Paid Far More Than $4B A Year For Israel’s Defense

Beyond direct financial aid, the U.S. has expended a great deal of resources defending Israel over the past several years. This has included defending against multiple Iranian missile barrages on Israel on top of participating directly in two wars. In addition, there were the constant drone and missile battles in the Red Sea with the Houthis, who began attacking shipping there in response to Israel’s war in Gaza. Part of the U.S. operation against the Houthis was also providing a layer of protection against long-range missile and drone launches at Israel by the rebel group.

During the course of all these events, the U.S. deployed a very large number of its available warships, aircraft, and air defenses, as well as thousands of personnel, to the Middle East at great expense, both in dollars and the toll on troops and equipment.

Just this year alone, 23 U.S. troops have died and nearly 900 have been injured since the launch of Epic Fury in February. Dozens of aircraft have been destroyed and U.S. bases in the region have been partially destroyed and will take billions to repair.

The U.S. has also fired off a large amount of its own munitions defending Israel from attacks by Iran and its proxies. This has contributed heavily to shortfalls in America’s own stockpiles.

All told, the U.S. has spent nearly $50 billion just on the most current conflict with Iran, far exceeding the $4 billion Israel gets per year in annual direct aid. Then there is the opportunity cost of the massive wear and tear on the force and the U.S. military’s overall capacity to fight in the near and medium term due to all these engagements.

All that being said, it can be argued that the U.S. had major interests in participating in these conflicts beyond just the defense of Israel. It is rarely just that simple. The Iran nuclear program, for instance, has impacts much farther than the Middle East and Israel. Still, the U.S. has poured unprecedented resources into Israel’s defense and these investments far eclipse the $4B being discussed today.

Surprise In Israel

Many Israeli government officials were caught completely off guard by the Trump announcement, according to Politico.

“Officials in the Finance Ministry say they were surprised by U.S. President Donald Trump’s announcement that military aid to Israel would cease by the end of the year, ” the publication reported.

“No formal document was submitted from the Prime Minister’s Office regarding the end of aid,” Politico added. “The ministry was aware of the intention to end it, but was surprised by the intention to do so immediately.”

Officials in the Defense Ministry and the military were also reportedly surprised by the announcement, according to the Post.

“We did not expect this announcement, certainly not today,” a senior defense official told Israeli media.

“There is ongoing dialogue with the Americans, and we can say that we were surprised. We will study the implications of the decision, which has yet to reach professional officials,” the official is quoted as saying.

As for Netanyahu, he has yet to weigh in on Trump’s statement. However, one of his main rivals in the closely fought Israeli parliamentary election that could unseat him has commented.

“The fact that Israel’s defense establishment is learning of a shift in our strategic relationship through the media, at the same time as the Israeli public, shows just how dangerous Benjamin Netanyahu’s conduct is,” Gadi Eisenkot said in a statement. “He can no longer be trusted and must be replaced.”

In his comments to Fox & Friends, Trump conceded that the midterm election played a role in his decision.

The annual assistance to Israel is a “bad talking point” for Democrats, including Michigan Democratic Senate nominee Abdul El-Sayed, the president proclaimed.

“The left uses the $4 billion payment … as a signal of unfairness. And we can’t allow that to happen,” Trump stated. “I don’t like that. … It’s almost too easy to target

There are many unknowns surrounding Trump’s statement about diminishing U.S. support for Israel.

The MoU, if that is what he is talking about, still has two years left, and almost $8 billion worth of anticipated funding, the vast majority earmarked for procurement of U.S. arms. 

As we noted at the top of this piece, the MoU itself isn’t legally binding but the aid is authorized by law and appropriated by Congress each year. Ending it early would mean Congress either not appropriating the money or changing the law.

Will Congress agree to cut the deal off by December? What about the U.S. defense industry? It is unclear at the moment how, or if, this move would affect American defense contractors selling arms to Israel. These companies depend in large measure on predictability and taking this agreement off the table two years early could be problematic.

It is not exactly clear at this point which U.S. arms makers will be hit the hardest by Trump’s announcement. There are billions of dollars in contracts for the future procurement of aircraft, munitions and other equipment to companies like Boeing for F-15Is and KC-46As, Lockheed Martin for F-35Is and AM General for Joint Light Tactical Vehicles. While Israel has bumped up its defense budget, it is not really known at this point how it will cover these costs without that lost U.S. aid.

Contact the author: howard@twz.com

Kim Yo Jong refuses dialogue with US after denying responsibility for theft of more than $6bn in crypto assets from Binance.

North Korea has fired several missiles into the Sea of Japan, according to South Korea’s military, hours after Pyongyang denied allegations that it was behind the theft ⁠of more than $6bn in crypto assets from Binance.

South Korea’s Joint Chiefs of Staff said on Wednesday that it had detected the launch of several missiles from the Sondok area on North Korea’s eastern coast towards the Sea of Japan.

It said authorities in South Korea and the United States were analysing the details of the launches.

The tests marked Pyongyang’s fourth such weapons launch in a month. They came a day after North Korea denied involvement in the Binance hack, dismissing an FBI announcement that North Korean hackers were responsible as “a trite provocation”.

Binance, the world’s biggest cryptocurrency exchange, said on Friday that hackers stole more than $6bn in what appears to be the largest cryptocurrency heist on record.

The FBI later said North Korean hackers had orchestrated the theft, attributing it to a hacking group known as TraderTraitor, which was also behind a $1.5bn hack of the Bybit exchange last year.

Early on Wednesday, Kim Yo Jong, the sister of North Korean leader Kim Jong Un, said Pyongyang viewed the FBI announcement as “an extension of Washington’s invariable hostile policy toward” North Korea.

She ruled out dialogue with Washington until the US abandoned that policy.

“It is our clear stand that we have no need to sit face to face with such unreliable and hostile persons,” she said. “The choice for peace includes dialogue, of course, but this is not surely equated with national interests for us.”

US President Donald Trump said in August that he plans to meet Kim Jong Un later this year, seeking to revive the bond he claims to have forged with the North Korean leader during his first term.

Trump said it was important to “get along” with Kim, adding that Pyongyang had 57 “very powerful” nuclear weapons.

Previous rounds of talks between Kim and Trump in 2019 abruptly ended amid disagreements over Pyongyang’s nuclear programme. In October, the US, South Korea and Japan again reiterated their call for the “complete denuclearisation” of the Korean Peninsula.

The call came as North Korea has accelerated its weapons testing this year, in what analysts say is likely a bid to increase its leverage in any future diplomacy with the US.

Its recent tests have included a submarine-launched ballistic missile, hypersonic missiles, attack drones, and cluster bombs designed to be carried by ballistic missiles.

On Tuesday, Pyongyang said it had tested a new cluster warhead for strategic cruise missiles the previous day, claiming it could destroy an area of 5 to 6 hectares (12 to 15 acres) with “high-density power”.

The latest launches followed a North Korean state media report that Kim had visited a naval shipyard building a destroyer and stressed the importance of a powerful navy.

James Talarico has won the United States Senate race in Texas, the first time a Democrat has won state office since 1994.

Tuesday’s victory marks a seismic shift in Texas, which has become a standard-bearer for staunch conservative policies for the Republican Party.

The win comes after a primary intervention by US President Donald Trump, which saw him endorse scandal-ridden Texas Attorney General Ken Paxton over Republican Senate candidate John Cornyn.

But Paxton failed to generate enthusiasm, even among his own party. That came despite record-breaking spending, topping over half a billion dollars.

The largest share came from billionaire donor Elon Musk, who spent at least $212 million supporting Paxton.

Musk’s SpaceX company is based in Texas. He has spent heavily across the country, with Democrats expected to investigate his role as head of the federal cost-cutting panel, DOGE, after taking control of Congress.

“It’s historic,” said Taylor Bell, a 27-year-old law student, who attended an election watch party in Houston.

“Hopefully we see money coming back to the people of Texas, and not more of the same we’ve seen — well, my whole life at this point.”

Congressman Christian Menefee, who represents Houston, told those gathered that “tonight Texas has restored the hope of a nation”.

“Tonight, I believe firmly that we can accomplish anything in this country if we just stand together and we fight back against hate and bigotry,” he said.

“The younger generation and all the people who want a better future came out and made their voices heard,” said 29-year-old Yvonne Nunga, who works in IT. “This party, this fight right now, is not about left or right. It’s about top versus bottom, and I’m so glad that we have candidates that are making this a pivotal point in their messaging.”

“The current politics of the current administration is not working for the people. It’s not for the people, by the people, it’s for the billionaires bought by the billionaires,” she said.

No ‘puppet governor’ for Trump

Tuesday also saw the surprise victory of Gubernatorial Democratic challenger Gina Hinojosa, whose challenge had been considered a long shot even into the final days of the race.

Hinojosa has become the first Latino governor in the history of Texas, despite Latinos making up 40 percent of the state’s population.

Alejandra Peimbert, a regional communications director for Hinojosa’s campaign, said the victory should be seen as a rebuke to the hardline immigration policies enacted under 10 years of outgoing governor Greg Abbott.

Abbott has cooperated closely with the Trump campaign in its mass deportation campaign, spearheading policies that saw local law enforcement officials conduct immigration enforcement.

“I think the Latino community and our vote has been underestimated by politicians constantly,” Peimbart told Al Jazeera, adding that the economy is so bad, and the horrendous things that ICE has done to our community, tearing apart families…I think my community finally had enough.”

“President Trump will no longer have a puppet in a governor,” she said.

Abbott’s tenure has been defined by a conservative lurch in the state, with hardline approaches not only to immigration, but to social welfare programmes, abortion rights, education and religious freedom.

Abbott’s supporters have touted rapid economic growth in recent years, spurred by tax cuts and rollbacks on regulation.

The state has long been a Republican standard bearer in the US

Critics have said the metrics of economic success have the most positive impact on corporations and the wealthy, while middle and lower class Texans see little benefit.

Texas’s poverty rate sits above the national average, with little in the way of social safety nets.

“It’s one of the biggest things Texas can ever experience because these are two strong candidates that took their time, they took their dedication, and focused with every community in Texas, and so they deserve this position,” said 21-year-old Dylan Sutter.

“Everything is blue. It’s like the ballot itself was painted blue by the time we were done with it.”

In July, 2004, the IMF and
World Bank commemorated the 60th anniversary of their founding at Bretton Woods, NH to
provide a financial framework of assistance for the postwar world after the
expected defeat of Germany
and Japan.
With breathtaking hypocrisy, an October, 2004 Development Committee Communique
stated: “As we celebrate the 60th anniversary of the Bretton Woods
Institutions….we recommit ourselves to supporting efforts by developing
countries to pursue sustainable growth, sound macroeconomic policies, debt
sustainability, open trade, job creation, poverty reduction and good
governance.” Phew.

In fact, for 63 hellish years,
both these institutions achieved mirror opposite results on everything the
above comment states. From inception, their mission was to integrate developing
nations into the Global North-dominated world economy and use debt repayment as
the way to transfer wealth from poor countries to powerful bankers in rich
ones.

The scheme is called debt
slavery because new loans are needed to service old ones, indebtedness rises,
and borrowing terms stipulate harsh one-way “structural adjustment”
provisions that include:

• privatizations of state
  enterprises;
• government deregulation;
• deep cuts in social
  spending;
• wage freezes or cuts;
• unrestricted free market
  access for foreign corporations;
• corporate-friendly tax
  cuts;
• crackdowns on trade
  unionists; and
• savage repression for
  non-believers under a system incompatible with social democracy.

Everywhere the scheme is the
same: huge public wealth transfers to elitist private hands, exploding public
debt, an ever-widening disparity between the super-rich and desperate poor, and
an aggressive nationalism to justify huge spending on security for aggressive
surveillance, mass incarceration plus repression and torture for social
control.

An Alternative to Debt Slavery – The Bank of the South

Last December, Hugo Chavez
announced his idea for a Banco del Sur, or Bank of the South, as part of his
crusade against the institutions of international capital he calls “tools
of Washington.”
The bank will be officially launched at a presidential November 3 summit in Caracas, where it is to be headquartered, with seven
founding member-states – Venezuela,
Argentina, Brazil, Uruguay,
Paraguay, Bolivia and Ecuador.

On October 12, Colombia’s
President Alvaro Uribe announced his nation agreed to become the eighth member
but said “The decision is not a rejection to the World Bank or
Inter-American Development Bank, but a sign of solidarity and fraternity
towards the South American community.” At this time, only four South
American states aren’t included – Chile,
Peru, Guyana and Surinam,
but Chile seems likely to
come aboard following Colombia’s
lead, and the others may decide to join them.

Finance ministers from the
founding countries met in Rio de
Janeiro, Brazil
October 8 to finalize the Bank’s Founding Document. Many key operating issues
have yet to be resolved, but unofficial information was that each nation will
commit 10% of its international reserves and have equal oversight over the new
institution. In a concluding news conference, Brazilian finance minister Guido
Mantega stated: the participating countries “have been able to overcome
all obstacles that were in the way of an understanding around the formation of
the Bank of the South. We can now say that the (bank) is close to becoming a
reality” even though Brazil
(Latin America’s largest economy) hasn’t yet
formalized its entry.

Venezuelan finance minister
Rodrigo Cabezas explained the bank will help develop the region by offering
South Americans more credits. It’s being “created to build a new
architecture that assumes an improved relationship of the bank and its capacity
to offer credits for its people.” It also aims to increase liquidity and
revive socioeconomic development and infrastructure investments in
participating countries and keep them outside the restrictive control of the
IMF and World Bank that are fast losing influence and being phased out of the
region.

In 2005, 80% of IMF’s $81
billion loan portfolio was to Latin America.
Today, it’s 1% with nearly all its $17 billion in outstanding loans to Turkey and Pakistan. The World Bank is also
being rejected. Venezuela
had already paid off its IMF and World Bank debt ahead of schedule when Hugo
Chavez symbolically announced on April 30: “We will no longer have to go
to Washington
nor to the IMF nor to the World Bank, not to anyone.” Ecuador’s Rafael
Correa is following suit. He cleared his country’s IMF debt, suspended World
Bank loans, accused the WB of trying to extort money from him when he was
economy and finance minister in 2005, and last April declared the Bank’s
country representative persona non grata in an extraordinary diplomatic slap in
the face.

The Banco del Sur will replace
these repressive institutions with $7 billion in startup capital when it begins
operating in 2008. It will be under “a new financial architecture”
for regional investment with the finance ministers of each member nation
sitting on the bank’s administrative council with equal authority over its
operations as things now stand. Venezuelan Finance Minister Rodrigo Cabezas
stressed the bank’s Latin roots, saying: “The idea is to rely on a
development agency for us, led by us” to finance public and private
development and regional integration projects. He added: “There will not
be credit subjected to economic policies. There will not be credit that
produces a calamity for our people and as a result, it will not be a tool of
domination” like the international lending agencies.

Hugo Chavez’s vision is to
liberate the region’s countries from IMF, World Bank, and Inter-American
Development Bank (IBD) control that condemn millions to poverty through their
lending practices. Helped by windfall oil profits, his government is already doing
it with an unprecedented commitment to provide financial aid and below-market
priced oil to regional and other countries. So far this year, it’s on the order
of around $9 billion, and, unlike the Washington-controlled kind, it comes at
low cost and with good will, a cooperative spirit and few if any strings.

Nobel laureate economist Joseph
Stiglitz recognizes Chavez’s efforts and stated his support for the Banco del
Sur on an October 10 visit to Caracas.
He said “One of the advantages of having a Bank of the South is that it
would reflect the perspectives of those in the South (while in contrast IMF and
World Bank conditions) hinder (regional) development effectiveness.”

Stiglitz met with Hugo Chavez
on his visit and praised his redistributive social policies. He also criticized
Washington Consensus neoliberal practices that exploit the region’s people,
“undermin(e)….Andean cooperation, and it is part of the American
strategy of divide and conquer, a strategy trying to get as much of the
benefits for American companies” at the expense of the region and its
people.

Venezuela’s acting ambassador to
the Permanent Mission to the UN, Aura Mahuampi Rodriguez de Ortiz, warned the
world body about Latin American debt during her participation in the General Debate
on Macroeconomic Policies in October. She stressed: “The persistence of
the foreign debt of the developing countries affects negatively on its process
of development. It is not worthy to direct resources for the development of
poor countries if such resources end up directed to the payment of the foreign
debt” instead of going to economic development internally. She also spoke
of the new Bank of the South, how it will help strengthen regional integration
and also fairly distribute investments and finance projects to reduce poverty
and social exclusion.

A less publicized Bank of ALBA
(Bolivarian Alternative for the Americas) will also begin operating by year end
under “a new regional financial architecture under principles that create
a new form of channeling financial resources” to its four country alliance
– Venezuela, Cuba, Bolivia and Nicaragua.

Chavez first proposed ALBA as
an alternative to the Free Trade Area of the Americas (FTAA) in 2001 with Venezuela, Cuba,
and Bolivia
its original members in December, 2004. Nicaragua then joined the alliance
in January, 2007 under its newly elected president, Daniel Ortega, who signed
on as his first act in office. ALBA’s goal is ambitious. It is the
comprehensive integration of the region and development of the “social
state” for all its people. It is boldly based on member states’
complementarity, not competition; solidarity, not domination; cooperation, not
exploitation; and respect for each participating nation’s sovereign right to be
free from the grip of other countries and corporate giants.

In April, the 5th ALBA summit
was held in Caracas
to discuss ways to improve the alliance. Initiatives covered included a
Permanent (coordinating) Secretariat and a plan to create 12 public companies
to be co-managed by ALBA member states. Its goal is to strengthen key economic
sectors in areas of energy, agriculture, telecommunications, infrastructure,
industrial supplies and cement production. ALBA country foreign ministers then
agreed in June to create a development Bank of ALBA to help finance these
ventures with low-cost credit. It will complement the Banco del Sur and also be
headquartered in Caracas.

Uncertain Future Prospects

Socially responsible regional
banks, like those discussed above, will challenge the dominant institutions of
finance capital if they fulfill their promise. But therein lies the problem.
These new institutions aren’t panaceas and they may end up letting capital
interests exploit them for their own advantage. In addition, financial autonomy
alone won’t free the region from Washington’s
grip without greater change. What’s needed are sweeping nationalizations of
basic industries, an end to one-way WTO-style trade deals, socially
redistributing national resources, developing local economies, achieving land
and housing reform, plus a sweeping commitment to social equity and a resolve
to end a 25 year neoliberal nightmare. From 1960 to 1980, the region’s per
capita income growth was 82%. From 1980 to 2000, however, it was 9%, and from
2000 to 2005 only 4%. For the region, it meant sweeping poverty, inequality and
the most extreme disparity between the super-rich and desperate poor in the
world. 

Change is needed, and Venezuela under
Hugo Chavez has done most in the region to achieve it. Finance Minister Rodrigo
Cabezas just presented his government’s 2008 budget to the National Assembly
that allocates 46% of it to social spending. It devotes special attention to
health and education but also to subsidized and free food, land reform,
housing, micro credit, job training, cooperatives and more as Chavez continues
to use his nation’s resources to address the needs of his people. Since he took
office, social spending per person is up more than threefold and in 2006 was
20.9% of GDP.

Chavez now has an ally in Ecuador under
Rafael Correa, whose early efforts are promising. Hopefully, they’ll continue
under a new constitution to be drafted in the next six months and then put to a
national referendum next year. Other Bank of the South founding countries like Brazil, Argentina,
and Bolivia,
however, claim to be center-left but, in fact, embrace 1990s neoliberalism, and
financial autonomy won’t change that. The Bank of the South will only work if
it fulfills a mandate to prioritize local needs and development, not corporate
ones. That’s a tall order, and achieving it won’t be easy with its dominant
member, Brazil under Lula,
closely tied to Washington
and in its grip.

Nonetheless, small signs of
change are emerging, the Bank of the South may be one of them, and a new
generation of leftist leaders may in the end break Washington’s weakening (but still strong)
hold on the region. That’s the hope, and every step forward means more power to
the people and another possible world.

Stephen Lendman lives in Chicago
and can be reached at [email protected].

Also visit his blog
site at sjlendman.blogspot.com and listen to The Steve Lendman News and
Information Hour on TheMicroEffect.com Mondays at noon US central time.

DEVELOPING STORYDEVELOPING STORY,

Bottoms, who formerly advised ex-President Joe Biden, beat Republican Rick Jackson.

Democrat Keisha Lance Bottoms has made history as the first Black woman elected governor in the United States.

The former Atlanta mayor emerged victorious over her billionaire opponent, Republican Rick Jackson, who spent more than $200m of his personal fortune in an attempt to succeed popular outgoing Republican Governor Brian Kemp.

Bottoms, an adviser to former US President Joe Biden, was propelled to victory in part by the state’s significant Black voting bloc, which turned out in large numbers during early voting.

During the campaign, she faced Republican attempts to characterise her time as mayor as a crime-ridden decline for the state’s largest city.

“It’s a longstanding playbook to paint Atlanta as this big bad place,” Bottoms told the Associated Press news agency.

Bottoms’s win marks the third consecutive time that Georgia Democrats have nominated a Black woman for governor. Stacey Abrams lost in 2018 and 2022 to Kemp, who is leaving office in January after eight years due to term limits.

Breakfast cereal giant Kellogg’s has stopped using rice grains in Rice Krispies and Coco Pops in the UK due to “changing weather conditions” that have disrupted supplies.

Corn flour and rice flour are being used instead, a Kellogg’s spokesperson said on Tuesday, adding that the updated recipes have been “carefully assessed” and the firm has taken customer feedback into consideration.

Those ingredients are replacing rice grains as crops have been hit by dry weather in key producing countries in Asia, reducing harvests and driving up prices.

The new recipes mean cereal packaging will now include a ‘contains wheat gluten’ warning.

Rice Krispies products in the US and Canada will continue to be made with real rice with no changes to their recipes expected, a spokesperson for Kellogg’s North American business told the BBC.

The recipe change in the UK will help “maintain consistent quality at a time when changing weather conditions are affecting the quality and availability of some of the rice and grains used in our cereals,” a Kellogg’s spokesperson told the BBC.

“We appreciate that even small changes to a much-loved product can feel noticeable and that’s why we have approached this with a lot of care and consideration.”

The company also said that Rice Krispies and Coco Pops will continue to meet UK food standards on levels of fat, salt and sugar in food.

The cereals also contain no artificial colours, flavours or sweeteners and the nutritional benefits in each bowl, such as fibre, Vitamin D and iron are staying the same, the spokesperson added.

Iran says a ‘maximum deterrence’ plan is ready against any new US attack, warning of an immediate response.

Polls to start closing in waves across the country, with the earliest closures at 23:00 GMT in Indiana and Kentucky.

With control of the US Congress on the line, results from Tuesday’s races will have marked implications for the country.

After a full day of voting, the first polls have begun closing in the consequential US midterm elections.

Control of the US Congress is on the line, with all 435 House of Representatives seats and 35 of the Senate’s 100 seats up for grabs.

Democrats, who have campaigned on promises to combat the country’s rising cost of living and end the US-Israel war on Iran, are eyeing a return to power in the US House. The party is also optimistic it could recapture control of the US Senate from Republicans when all ballots are counted.

The first clues to how the midterms may affect each party will appear in the US state of Kentucky’s highly competitive sixth congressional district, where polls closed at 6pm ET (23:00 GMT).

In the conservative district, which includes the state’s second-largest city, Lexington, Democrats have invested heavily in the campaign of US Navy veteran Zach Dembo, who is running against a Trump-backed physician and former state lawmaker, Ralph Alvarado.

If Republicans hold the seat, it could signal how the party may perform in other races across the country.

Results from all of the day’s races will continue to come in throughout Tuesday evening. But some may not be known until Wednesday, or later, as more states finish voting and officials start releasing their vote counts.

Follow all the returns on Al Jazeera’s live results page.