Musk’s xAI Wins Federal Deal: Trump Agencies Get Grok For Just 42 Cents
Elon Musk’s artificial intelligence company, xAI, has struck a deal with the General Services Administration that lets federal agencies use its chatbot Grok for a total fee of 42 cents over 18 months, according to the New York Times.
The Times reported that agencies will also get help from xAI engineers to implement the tools.
“We look forward to continuing to work with President Trump and his team to rapidly deploy A.I. throughout the government for the benefit of the country,” Mr. Musk said.
Josh Gruenbaum, commissioner of the Federal Acquisition Service, said negotiations began in July without Musk’s direct involvement. “We are in a heated race for probably the most important technology ever invented,” he said, noting safeguards to ensure secure federal use.
Musk has long played on the number 420 in business deals. The fee also nods to “The Hitchhiker’s Guide to the Galaxy,” in which 42 is the answer to the meaning of life.
“Thanks to President Trump and his administration, xAI’s frontier AI is now unlocked for every federal agency empowering the U.S. Government to innovate faster and accomplish its mission more effectively than ever before,” Fox News reported Musk as saying. “xAI has the most powerful AI compute and most capable AI models in the world.”
“This technology could be as transformative as the internet, maybe more … It’s crucial that Western, American values are front and center. We need to work with allies to ensure those values shape the technology that ends up leading the world,” Gruenbaum added.
xAI cofounder Ross Nordeen added: “‘Grok for Government’ will deliver transformational AI capabilities at $0.42 per agency for 18 months, with a dedicated engineering team ensuring mission success. We will work hand in glove with the entire government to not only deploy AI, but to deeply understand the needs of our government to make America the world leader in advanced use of AI.”
The deal follows similar agreements with OpenAI and Anthropic, whose chatbots will cost agencies $1 each for a year. xAI was also among several firms awarded Pentagon contracts in July.
Musk has poured billions into xAI to catch up with rivals, though revenues remain unclear. The company has faced setbacks, including when Grok called itself “MechaHitler” and spread false claims about a genocide in South Africa.
After Mr. Trump’s inauguration, Musk briefly joined a federal cost-cutting initiative, embedding aides at the GSA before leaving the project in June to refocus on his companies.
The subject of civil war comes up a lot lately. How about an amicable separation instead?
People do this all the time in their personal relationships. You have two people who loved one another once and maybe still do but just can’t live together any longer. At least, not without some sort of accommodation that neither can agree to.
And so the parties agree to separate.
One party does not (usually) try to force the other party to remain in the relationship and rarely tries to kill the other party when a separation is asked for. Most people understand that while it hurts to say goodbye, it’s wrong to hurt the other party for saying it.
Why can’t this work on a political level?
The answer is simple. It is why there was what was not a civil war in this country, 1861-1865. There was a successful attempt to prevent a separation. The slavery thing is a non sequitur told to young people to avoid them asking impertinent questions – such as why the “union” was inviolable (as Lincoln said it was) when that clearly conflicts with the idea of government by consent (which Lincoln had the gall to say he was defending, by forcing the states of the Southern Confederacy to submit to a government they did not consent to).
The issue that was resolved – by force – was whether states (and so the people) had the right to separate themselves politically from a “union” they no longer wished to remain within. Lincoln’s government – and armies – forced the Southern states to return to the “union” and submit to its government. This is “consent”in the manner of a woman who is unable to fight off her rapist.
The Confederacy never sought to gain political control over the states north of the Mason-Dixon line. They sought to be independent of them.
It is a lie, accordingly, that what occurred during 1861-1865 was a “civil war.”
Why is this lie told to school kids? For all the obvious reasons. The main ones being to portray the South as the bad guy and to portray the North as the good guy. This squelches questions about forcing people into a “union” they’d rather not be part of. How many people would consider getting married if it were made clear to them they could never (no matter what) leave the marriage?
Circling back to our situation.
It is similar in at least one way to the situation in this country in 1861 in that – like the Southern states – about half the people living in this “union” would like to peacefully separate from it. For reasons of irreconcilable differences, which is the generally accepted criteria for the dissolution of personal unions when they are no longer mutually agreeable. It is interesting that the criteria almost everyone accepts for the dissolution of a marital union is considered unacceptable when it comes to political unions.
Wait. That is not actually correct. What happened in 1861 – and what may happen again – is that one side of the “union” refused to allow the dissolution. How bizarre! Everyone – almost everyone – would regard it (correctly) as criminal and even psychotic to force someone to remain in a marriage they wanted out of. The reasons why are beside the point. Marriage – any such commitment – ought to be done voluntarily and for love. Using force to maintain the relationship is the antithesis of loving someone because it is the relationship of owner and slave.
But it does explain why political separation is not permissible. One side refuses to let go of their ownership claims over the other side, though this honest if evil motive is never declared.
In the context of our time, the reason why is the same as it was in that other time. One side needs the other side – in the manner of a leech that needs the warm blood of another creature to maintain its existence.
Most of you reading this are probably willing – eager – to agree that you want nothing from the Left (that is, from people who are socialists/communists) than to be free of them. More to the point, you don’t want their freedom. Or their money, either. The Left cannot survive without yours. It is like a spouse that does not work but demands you do in order to meet their needs, which always wax. A spouse who carries a .45 and makes it clear that you’d better go to work – and come home after work. And then give her a massage before bedtime.
It is really important to understand this. We do not need them – but they need us. They have to have us, just the same as the Northern states (more finely, the mercantilist interests that controlled the North and so the “union”) had to have the resources possessed by the South. Lincoln – for all his serial lying- admitted this prior to the outbreak of the war to force the South back into the “union.” He stated he would agree to any accommodation with the South regarding slavery – so long as the South continued to pay federal taxes (tariffs) and remained in the union. In other words, it was not the relationship that really mattered.
It was the relationship of owner to owned that did.
This is why those of us who wish only keep what is ours and to be left alone – are not going to be left alone by the people who believe what’s ours is theirs and who are genetically incapable (so it seems) of leaving other people alone. We are in the position of a spouse married to someone who sees us as their property and who will never let us go without a fight.
It is a depressing and daunting thing to come to terms with.
Hegseth Abruptly Summons All Generals, Admirals From Across Globe For Quantico Meeting
There’s intense, ongoing rampant speculation in the aftermath of breaking news reports saying Secretary of War Pete Hegseth has called top US military leaders from across the globe to gather at a meeting next week at Marine Corps base Quantico – which lies some 30 minutes south of Washington D.C.
Washington Post cited over a dozen people familiar with the matter who described all senior officers with the rank of brigadier general or above have been summoned, including all Navy admirals, which will amount to some 800 top commanders being gathered. No explanation has been given by the Pentagon chief.
Despite President Trump this week having boasted that his administration has solved “seven conflicts” – it remains that the globe’s biggest wars are still raging: Ukraine and Gaza. At the moment, European officials have been warning Russia that NATO is ready and willing to shootdown its warplanes if they breach NATO airspace.
These are tense and very on edge times, and so “The unexpected confab has created confusion and alarm, as there has not been a defense secretary in recent history who has ordered such a large number of the military’s top officers to gather like this,” The Hill points out.
Chief Pentagon spokesman Sean Parnell has meanwhile confirmed, “The Secretary of War will be addressing his senior military leaders early next week.” Specifically the meeting is set for Tuesday, Sept. 30.
It’s become clear that all of these top commanders, even those stationed at far-flung bases overseas in Europe, the Middle East or across the Pacific, are expected to be there in person – again, making this highly unusual. Some outlets asked the Pentagon to clarify whether some will participate remotely but there was no response.
The Washington Post described Hegseth’s summons was sent worldwide, across the Middle East, Europe and Indo-Pacific, via secure government means of communication which is available to bases and embassies across countries and time zones.
Will a new force posture related to Russia and the Ukraine war be announced? Is this brink of WW3-related stuff?
BREAKING: Secretary of War Pete Hegseth calls a “rare, urgent meeting” of hundreds of generals and admirals. pic.twitter.com/v7nKMqUaaB
Will Hegseth roll out more on his prioritizing China within DoD intelligence in readiness?
Or will this meeting concern more drastic changes at top command ranks? After all, there has been a significant amount of firings, hirings, and reshufflings within the DoD. Just last month Hegseth fired Defense Intelligence Agency Director Lt. Gen. Jeffrey Kruse, Navy Reserve Chief Vice Adm. Nancy Lacore, and Naval Special Warfare Command head Rear Adm. Milton Sands.
There’s been plenty of other movement and ‘house-cleaning’ happening at the Pentagon and within the DoD of late.
This is either a meeting that could have been an email (amid Russian incursions on NATO territory, including Alaska) or something ominous. https://t.co/8Da1SAgKzZ
Possibly, this whole thing could just be somewhat mundane and ceremonial. The administration has shown a penchant for parades and public displays of military strength. Could this be another very costly waste of time and resources that the summoned generals end up complaining about behind closed doors? A loyalty test maybe? The speculation continues.
NATO Has Already ‘Declared Real War’ On Russia Through Ukraine, Lavrov Says
Update(1535ET): Russian Foreign Minister Sergey Lavrov addressed a meeting of G20 foreign ministers on the sidelines of the UN General Assembly meeting in New York on Thursday, and he really unleashed, going after NATO and the European Union for declaring a real war on Russia through Ukraine.
His remarks came on the heels of NATO warning Russia it is prepared to defend “every inch of allied territory” after Estonia said that Russian fighter jets had violated its airspace last week. He started by accusing the Western alliance of failing to adhere to the principles of the UN Charter, which he described as “a manifestation of neocolonial ambitions, [which] leads to increased global instability and breeds regional conflicts.”
“A clear example is the crisis in Ukraine, provoked by the collective West, through which NATO and the European Union want to declare, in fact, have already declared a real war on my country and are directly participating in it,” Lavrov said.
“The escalation in the Middle East is in the same row,” Lavrov continued. “The unprecedented humanitarian catastrophe in Gaza has already claimed the lives of 65,000 people, and some UN officials working in the Middle East say there are estimates that the death toll is 10 times higher. None of Israel’s neighbors can feel safe; we see this every day.” Watch below:
‘NATO and EU have basically declared WAR on my country’
‘Ukraine crisis provoked by collective West’
Lavrov at UNGA sets out to make some G20 FMs squirm in their seats with hard facts pic.twitter.com/ifQn30NzCL
Both NATO and EU officials have indicated that shooting Russian planes out of the sky is an option “on the table” if there are further breaches of European airspace, in a dire warning.
* * *
The below interview exchange between CNN’s warmonger in chief Christiane Amanpour and European Commission President Ursula von der Leyen is a perfect illustrator of why NATO countries in eastern Europe and the Baltics are now hyping recent Russian drones incursions into European airspace. There is a new dangerous drive to ‘confront’ Russia, potentially sparking WW3, at a moment Ukraine forces continue steadily losing ground along the front lines…
CNN’s Amanpour: Türkiye shot down a Russian jet 10 years ago, and did not suffer consequences necessarily.
Ursula von der Leyen: It is a principle of NATO and Article 5.
Amanpour: What is taking you so long? Is it time now to punch back in the nose?
Amanpour wants NATO and the EU to “punch back” against Russia and hit it “on the nose” – even though this chickenhawk armchair general herself will never fight this conflict.
Von der Leyen assured Amanpour that the option of shooting Russian aircraft out of the sky is “on the table” – following last week’s alleged drone and jet incursion incidents which took place in Poland, Romania, and Estonia. In each instance jets were scrambled from the NATO countries.
“My opinion is we have to defend every square centimeter of the territory,” von der Leyen told the CNN correspondent. “That means if there is an intrusion in the airspace, after warning, after being very clear, of course the option of shooting down a fighter jet that is intruding our airspace is on the table.”
President Trump could potentially veto such a drastic action if formal consultations were held, but it does present the highly dangerous scenario of a NATO member choosing to ‘shoot first, consult later’ if airspace is violated.
Russian Ambassador to France, Alexey Meshkov, has said in a fresh interview with the RTL news channel published Thursday that if NATO shoots down a Russian plane this “would be war”.
He warned: “You know, there are many NATO planes that violate Russian airspace, deliberately or not, but it happens quite often. They are not shot down afterward.” He didn’t follow with any specific example of this, however.
BIG: Russian Ambassador to France, Alexey Meshkov:
If NATO shoots down a Russian plane, it would be WAR.
Meshkov further in the remarks denied accusations that Russian warplanes have been deliberately entering NATO countries’ airspace. The biggest instance was Estonia’s allegation that three Russian MiG-31 jets violated Estonia for 12-minutes over the Gulf of Finland last Friday morning.
Currently, there’s been a lot of speculation over where President Trump stands in all of this. He has made comments which appeared to downplay the drone and jet incursion incidents, but he’s also this week at the UN encouraged Ukraine’s Zelensky to seek to take back all territory currently held by the Russians. He has previously repeatedly said that the world must avoid WW3 with Russia at all costs, and has sought to improve US-Russia bilateral relations of late.
Former FBI Official Says Left-Wing Terror Will Continue Unless ICE ‘Changes Tactics’
Former Senior Executive (SES) FBI agent Christopher O’Leary, whose two-decade career focused on counterterrorism probes for the bureau, appeared blame Immigration and Customs Enforcement (ICE) for inviting attacks against its officers – urging the agency to overhaul its enforcement strategies such as ‘wearing masks’ (a nod to California) – to curb violence from radical leftwing extremists.
During an appearance on MSNBC’s “Katy Tur Reports” Wednesday, O’Leary weighed in on the brazen shooting at an ICE facility in Texas, conceding that overheated rhetoric should be dialed back while shockingly pinning the blame on ICE’s own playbook.
Former FBI agent Christopher O’Leary is on MSNBC telling Trump to bend the knee and stop the deportations of people here illegally, or the attacks will not only continue, but they will escalate. pic.twitter.com/TlqR9PbnBx
“You also have to start looking at what policies you’ve implemented and what tactics you’re using, because, if you tone down the rhetoric, but you leave those other pieces in place, nothing’s going to change,” O’Leary, who now is a MSNBC analyst, told Tur.
“Terrorism is theater. It’s intended to influence an audience beyond its immediate victims,” O’Leary said. “It’s putting a message out, and terrorism falls into really three categories: It’s either religiously motivated, ideologically motivated, or, in this case, politically motivated.
“The politically motivated ones, it doesn’t happen in a vacuum. It happens because conditions have been set that people start acting out against,” he added.
The former FBI agent doubled down, seemingly painting ICE as the villain in a narrative straight out of the progressive grievance handbook: “Distrust in institutions – that’s been building for quite some time – attacks on institutions, the wealth gap, oppressive policies – at least this is what people perceive – and then the militarization of ICE and other federal law enforcement, the wearing of the masks, the aggressive tactics. So, the people who are starting to act out against this feel it’s their only recourse.”
Related: DHS told California to pound sand over a new law banning federal immigration agents and other law enforcement personnel from wearing face masks while on duty.
“Again, this is predictable. We see this happening throughout our history and in other places as well. So, we can tone down the rhetoric, and that’s the right message,” O’Leary added. “But you also have to start looking at what policies you’ve implemented and what tactics you’re using, because, if you tone down the rhetoric, but you leave those other pieces in place, nothing’s going to change.”
ICE is still reeling after 29-year-old gunman Joshua Jahn allegedly unleashed a hail of bullets on a Dallas ICE facility early Wednesday morning, killing one detainee and leaving two others in critical condition before cowardly taking his own life.
Officials confirmed the shooter scrawled “ANTI-ICE” on an unused bullet, a chilling manifesto of hatred against agents enforcing America’s immigration laws.
Miraculously, no ICE officers were harmed in the indiscriminate attack, which acting ICE Director Todd Lyons slammed as a direct assault on federal personnel risking their lives to protect the homeland.
“Seeing the photos today, some of the bullets were in an office that I used to have there,” Lyons said. “It’s just a horrible feeling. People always ask me what’s the thing that keeps me up at night. It’s the safety of the men and women of ICE. My heart goes out to that detainee’s family. We’re charged with their protection, their custody. Nothing like that should happen.”
In response to the shooting, President Donald Trump announced that he is readying an Executive Order to expand targeting of domestic terror groups.
“The continuing violence from Radical Left Terrorists, in the aftermath of Charlie Kirk’s assassination, must be stopped. ICE Officers, and other Brave Members of Law Enforcement, are under grave threat,” Trump wrote in a statement. “We have already declared ANTIFA a Terrorist Organization, and I will be signing an Executive Order this week to dismantle these Domestic Terrorism Networks.”
DoJ Reportedly Directs Prosecutors To Investigate Soros Foundation Amid Far-Left Chaos Nationwide
The news cycle for dark-money, billionaire-funded NGOs is about to get optically displeasing for the Democratic Party and its elitist donor class, who have bankrolled what we consider the “protest-industrial complex.”
For years, these leftist billionaire-backed nonprofits have waged an all-out war against President Trump and his MAGA base, funding and facilitating nonstop leftist “color revolution” operations, propping up extremist movements, indoctrinating kids with toxic woke ideology and turning them into revolutionaries, and amplifying a decade of dangerous rhetoric that smeared MAGA as “fascists” and “Nazis.” These leftist, or Marxists, also fueled nation-killing agendas like DEI and criminal and social-justice reforms, which have proven disastrous for the longevity of the country.
A new report from The New York Times shows the Trump administration is preparing to investigate dark-money-funded NGOs that operate in the shadows, with the ultimate goal of not only destroying President Trump and MAGA, but also driving capitalism to collapse and ensuring the nation as we know it today no longer exists in the next decade.
NYT said a senior Justice Department official directed at least six U.S. attorneys’ offices to prepare investigative plans targeting the Open Society Foundations (OSF), bankrolled by radical leftist billionaire Democratic donor George Soros – now his leftist son, Alex, runs operations.
NYT’s report comes after the Capital Research Center, a think tank that tracks foundations, charities, and other nonprofits, released a report last week detailing an explosive revelation: OSF “gave $80 million to pro-terror groups.”
Let’s take a step back to understand that cracks were already rapidly forming across the NGO world shortly after the Trump administration nuked the United States Agency for International Development. Then came domestic terrorist operations by far-left groups that burned Tesla showrooms and vehicles nationwide. At the time, we focused on the Gates Foundation that funded the Aarbella network that plowed millions into ‘No Kings’ protests (read report). These protests ultimately failed, but they were color revolution-style operations aimed at influencing public opinion polls and promoting regime change in Washington. This is the same bullshit strategy U.S. intelligence agencies use overseas.
💰 $114.8 Million Dark Money Infusion: The Arabella Advisors network has funneled at least $114.8 million to “No Kings” protest organizers and affiliates
according to most recent (’19-’23) financial disclosures analyzed by GAI. pic.twitter.com/qWHyuAa7Tg
Then came revelations late in the summer, via a NYT report, that the Gates Foundation had severed ties with the Arabella dark-money network. And for good reason: the foundation likely realized that money funneled into the Arabella network would only strengthen Trump’s push to launch investigations into the NGO world (deep state/parallel government). And that’s precisely what might have happened.
Late summer arrived when Trump, out of the blue, began blasting Soros on Truth Social: he “should be charged with RICO because they support violent protests.” Trump was likely referring to anti-ICE and Tesla takedown protests earlier in the year.
Shortly after, a series of leftist violence erupted – from the transgender shooter who stormed a church in Minneapolis, to the leftist with a transgender boyfriend suspected in the Kirk political assassination, to Wednesday’s ICE attack in Texas by a far-left radical, which merely activated the Trump administration into launching war against the radical left that has been fueling this chaos and the rise in far-left militancy for years, something even the The Atlantic admitted this week as major problem.
Civil terrorism expert Jason Curtis Anderson describes the rise in far militancy as “nihilistic accelerationism” suggesting that “Far-left extremism extends far beyond groups like Antifa. There is an entire revolutionary (marxist) ecosystem of interconnected entities: billion-dollar progressive NGOs, anarchist networks, political organizations such as the DSA, foreign influence operations like the Singham network, gaming platforms, Discord servers and reddit threads, the dark web, and even civil-rights organizations staffed with “movement lawyers” fully dedicated to waging war against the West until it collapses.”
Marxist-aligned groups operating across America to subvert the nation and collapse capitalism are already “planning war against fascists.”
Meanwhile, the Trump administration is moving full steam ahead to neutralize radical leftists and their NGOs that sow chaos – a crackdown that will extend well beyond Soros and likely include Roy Singham in China, as well as PFLP, Samidoun, and leftist American dynasty families and their nonprofits. Americans remember who funded the BLM riots that destroyed their businesses and cities. Accountability is coming.
Former President Barack Hussein Obama has chimed in on the Tylenol controversy, after President Donald Trump warned pregnant women not to take the drug (acetaminophen), citing research showing a link to autism in children.
In a Thursday post to X, Obama defended the drug – writing that ‘broad claims around certain drugs and autism’ have been ‘continuously disproven,‘ – and as such, ‘undermine public health, do harm to women who are pregnant,’ and ‘create anxiety for parents who do have children who are autistic…
We have people in power making broad claims around certain drugs and autism that have been continuously disproven. The degree to which those comments can undermine public health, do harm to women who are pregnant, create anxiety for parents who do have children who are autistic –… pic.twitter.com/rxCZ7OIzs8
Perhaps now is a good time to point out that donations from employees of Tylenol maker Kenvue have overwhelmingly donated to Democrats.
Needless to say, Obama must have missed all the receipts showing a mountain of research – as well as Tylenol’s own warnings – that pregnant women avoid the drug, or ‘talk to your doctor’ – and got scorched in the replies.
Wait, you’re now actually calling these warnings some kind of “violence”? Even though this Mount Sinai study, summarized via press release around a month ago, supports a link between acetaminophen and autism/ADHD?
Truly next level.https://t.co/Qvap9HSU4upic.twitter.com/xde9kvHLfI
Tylenol, meanwhile, has issued a hilarious statement in the wake of this PR disaster:
“Acetaminophen is the safest pain reliever option for pregnant women as needed throughout their entire pregnancy,” said a spokesperson. “Our products are safe and effective when used as directed on the product label. We recommend pregnant women do not take any over-the-counter medication, including acetaminophen, without talking to their doctor first.“
Trump’s Trade Deal With South Korea On The Rocks As Lutnick Seeks More Cash
A little over a month ago, we joked that Trump was throwing around such ridiculous trade deal numbers – investments in the hundreds of billions if not trillions from countries for whom said promises were multiples of their GDP…
… the while impressive sounding, the while house of trade cards would crumble the moment someone does anything more than cursory due diligence, or merely peeks behind the curtain to try to understand what was just signed.
It appears that South Korea just peeked.
According to the WSJ, Trump’s trade deal with South Korea – announced with so much fanfare – is on shaky ground, with Commerce Secretary Howard Lutnick taking a tough line in talks as some Seoul officials privately argue to allies that the White House is moving the goal posts.
As a reminder, in late July Trump said the U.S. had agreed to lower South Korea’s reciprocal tariffs, plus levies on autos, to 15% from a proposed 25%. In exchange, South Korea pledged $350 billion in U.S. investments, plus another $100 billion in American energy purchases.
Well, it appears that Trump is altering the deal (and pray he doesn’t alter it further). Lutnick, in recent conversations with South Korean officials, has discussed with Seoul the idea of increasing the $350 billion they had previously guaranteed to the U.S. in July and suggested the final tally could get closer to the $550 billion pledged by Japan.
Furthermore, the commerce secretary has also told South Korean officials in private that Trump is looking for more of the funding to be provided in cash rather than loans, a recurring joke by those who first pointed out that the deal is, in a word, ridiculous as the $350BN represents a fifth of the country’s entire gross domestic product.
According to the WSJ, the fate of the Trump administration’s trade pact with South Korea represents a key barometer for the U.S.’s broader tariff dealmaking with dozens of countries. Many of those deals, including the one with Seoul, have been verbal, not signed, agreements. That has left a gulf between the U.S. and some of its key trading partners over what it would take to cross the finish line.
A rather naive take came from a White House official who told the WSJ that while the U.S. is working to fine-tune its agreement with South Korea, the administration isn’t asking for anything that would represent a “dramatic departure” from what was already agreed upon. Full details of that framework haven’t been disclosed.
The good news is that so far at least the cracks in the deal haven’t spilled over diplomatically: Treasury Secretary Scott Bessent reaffirmed to President Lee Jae Myung on Wednesday the strong economic and security ties between the U.S. and South Korea on the sidelines of the United Nations General Assembly, according to a Treasury spokesperson. Lee expressed hope for a “commercially reasonable” agreement, a top Seoul official said.
South Korea is closely watched because its trade accord closely mirrors that of neighboring Japan, which, along with the U.K., represents one of the few deals officially signed by both countries. A close ally of Washington and home to America’s largest overseas U.S. military base, South Korea was pegged by the Trump administration to be among the first major trade-deal targets, alongside Australia, India, Japan and the U.K.
But at home, South Korean officials are facing tougher political pressure to not give too much ground, with the public still irked over the immigration raid this month at a Hyundai Motor complex in Georgia that resulted in the arrest of more than 300 South Koreans (whose visas were improper as we subsequently learned as the company had “cut corners” on US visas instead of hiring domestic US workers). All but one of the detained Koreans have since returned home.
Washington’s ability to close a deal with Seoul could offer Trump much-needed momentum to complete others. But inaction could relieve negotiating pressure on trading partners, who have bristled at the steep asking price and await clarity on the legal issues swirling around Trump’s proposed tariffs.
Trump said on social media at the time he would select the projects funded by South Korea, with his administration controlling how the money is distributed. He offered no further details on the deal’s structure. Officials in Seoul almost immediately disputed Trump’s assertion.
Lutnick had been pushing the South Koreans to sign a deal more aligned with Japan’s agreement, particularly around the enormous investment funds pledged to the U.S. in exchange for tariff relief, according to WSJ sources.
Japan has earmarked $550 billion for U.S. investment projects as part of a memorandum of understanding signed earlier this month. A committee led by Lutnick will make recommendations to Trump on which projects to pursue, and the U.S. stands to reap 90% of the profits from each investment after Japan has recouped its original outlay. By agreeing to those terms, Tokyo saw its lower 15% auto tariff take effect earlier this month, down from the prior 27.5%. That puts Japan among the countries that have seen a crucial reduction from Trump’s proposed auto tariffs.
Lutnick has made clear that, while South Korea is unlikely to come substantially closer to Japan’s $550 billion figure, in his view Seoul must agree to many of the same terms arranged with Japan. Lutnick doesn’t want to give the impression the administration is offering a dramatically different deal structure to South Korea. That reflects a concern that doing so could undermine the signed U.S. agreement with Japan (which is a document that isn’t legally binding).
Lutnick never demanded a total payment of $550 billion from South Korea, according to a spokesman from South Korea’s Ministry of Trade, Industry and Economy, which handles trade talks with the U.S. He declined to comment further.
Still, behind the scenes the panic is palpable and suddenly the entire deal looks on the verge of collapse. In recent days, South Korea, through its embassy in Washington, D.C., has been dialing allies in Washington and warning them the Trump administration is trying to acquire last-minute concessions after the two sides had already come to a verbal agreement, according to a person familiar with the calls.
The discussions between Lutnick and his South Korean counterparts have taken place as recently as this month in New York. In these recent talks with Washington, Seoul has sought to make clear it isn’t comparable to Tokyo. South Korea has stressed its economy, with a gross domestic product of roughly $1.8 trillion, is roughly two-fifths the size of Japan’s.
Tokyo also has a currency-swap deal with Washington, which it can tap for U.S. dollars in a crisis. South Korea lacks such a foreign-exchange arrangement and would potentially need to liquidate U.S. dollar reserves to fund the $350 billion. That sum would swallow up more than 80% of South Korea’s current dollar reserves, potentially leaving it vulnerable in a financial emergency.
South Korean officials, including Lee, have recently said accepting the U.S. offer could trigger a financial crisis for the country. In fact, according to a Reuters report, South Korea now demands a Fed currency swap be implemented so the US can bailout Korea… after it makes its mandatory payments to the Trump admin!
“Without a currency swap, if we were to withdraw $350 billion in the manner that the U.S. is demanding and to invest this all in cash in the U.S., South Korea would face a situation as it had in the 1997 financial crisis,” he said through a translator.
Lee, a liberal, took office in a June snap election after his conservative predecessor, Yoon Suk Yeol, was removed from office and jailed for briefly imposing martial law. Lee has sought to calm the country and its economy and said he plans to use his U.S. visit to tell the world that “democratic Korea is back”.
Lee met Trump for their first summit in August, saying he had built a strong personal tie with the U.S. leader, despite not agreeing on a joint statement or concrete announcement.
Commerce Secretary Howard Lutnick has said South Korea should follow Japan’s deal with the United States. He said Seoul either needs to accept the deal or pay the tariffs, using the Trump administration’s depiction of foreign governments paying the levies, which are instead paid by U.S. importers. Lee, asked if he would walk away from the deal, said: “I believe that between blood allies, we will be able to maintain the minimum amount of rationality.”
South Korea has proposed a foreign exchange swap line with the U.S. to reduce the shock of the investments on the local market for the won currency. Lee did not address how likely the U.S. was to agree or whether that would be enough for the deal to go forward.
He said South Korea is different from Japan, which struck a trade deal with the U.S. in July. Tokyo has more than double South Korea’s $410 billion foreign exchange reserves, an international currency in the yen and a swap line with the United States, Lee said.
And once the incentives are aligned for South Korea to “have a crisis” to evade its tariff obligations, it will do just that… which means that it will be up to the Fed to not only rescue Seoul, but to indirectly pay the US treasury.
Which may have been Trump’s plan all along.
“The devil is in the details,” Lutnick said. “The Koreans either accept that deal or pay the tariffs. Black and white.”
It increasingly appears they may just end up paying the tariffs.
The Department of Homeland Security (DHS) said on Sept. 22 that it will defy California’s new law banning federal immigration agents and other law enforcement personnel from wearing face masks while on duty.
“To be clear: We will NOT comply with Gavin Newsom’s unconstitutional mask ban,” DHS said in a social media post.
DHS assistant secretary Tricia McLaughlin accused California Gov. Gavin Newsom of “fanning the flames of division, hatred, and dehumanization of our law enforcement” by signing the ban.
Newsom signed the measure on Sept. 20, making California the first state to prohibit most officers from covering their faces during official duties. The move followed criticism of masked Immigration and Customs Enforcement (ICE) agents conducting operations, which Newsom described as resembling a “dystopian sci-fi movie.”
“Unmarked cars, people in masks, people quite literally disappearing,” Newsom said. “No due process, no rights, no right in a democracy where we have rights.”
Trump administration officials have defended the masks as essential for agent safety at a time when immigration enforcement has grown politically explosive, in some cases drawing violent anti-ICE protests.
“At a time that ICE law enforcement faces a 1,000 percent increase in assaults and their family members are being doxxed and targeted, the sitting Governor of California signs unconstitutional legislation that strips law enforcement of protections in a disgusting, diabolical fundraising and PR stunt,” McLaughlin said.
DHS said that ICE agents “clearly” identify themselves during operations, wearing vests marked with ICE/ERO or Homeland Security and using vehicles with obvious insignia. The masks, the agency said, protect officers from being targeted by “highly sophisticated gangs like Tren de Aragua and MS-13, criminal rings, murderers, and rapists.”
The new law bans facial coverings such as neck gaiters and ski masks for local and federal officers—including immigration agents—while on duty. Exceptions allow motorcycle helmets, SWAT masks, N-95 respirators, undercover disguises, and tactical gear. The restrictions do not apply to state police.
Newsom’s office said the law responds directly to federal agents’ use of masks during immigration operations, including those in Los Angeles and Southern California that sparked protests this summer. “No one should be afraid that unidentified masked men will disappear your family members in broad daylight,” the governor’s office said.
Before being signed into law, the mask ban was approved by the California Senate by a two-thirds majority, and the Assembly passed it by a simple majority.
Legal experts are divided on whether the law will stand. The Supreme Court ruled in Arizona v. United States that states cannot regulate federal immigration enforcement. While California’s measure does not mention immigration specifically, it applies broadly to all local and federal law enforcement activity.
UC Berkeley constitutional scholar Erwin Chemerinsky has defended the legislation, arguing federal employees must follow general state laws unless compliance would significantly interfere with their duties.
Acting U.S. Attorney for Southern California Bill Essayli said that the measure is unconstitutional and unenforceable against federal officers.
“The State of California has no jurisdiction over the federal government,” Essayli said in a post on X. “If Newsom wants to regulate our agents, he must go through Congress,” Essayli continued, adding that he directed federal agents to “continue to protect their identities” and that the California mask ban “has no effect on our operations.”
The dispute is expected to head to federal court, where precedent strongly favors the supremacy of federal law over state law.
Starbucks CEO Unveils 900 Job Cuts, Store Closures in Turnaround Push To Win Back Customers
A little more than one year ago, Brian Niccol was lured to Starbucks from Chipotle Mexican Grill with a $100 million pay package. Niccol took over as CEO and has been implementing a turnaround plan aimed at restoring Starbucks’s mojo and convincing the public that $6 for a Grande Caffè Latte is a good deal. On Thursday morning, the next chapter of that turnaround was revealed: a restructuring plan that includes cutting 900 employees and closing certain stores as part of the company’s “Back to Starbucks” strategy.
In an 8-K filing, Starbucks revealed that its Board has approved a restructuring plan under its “Back to Starbucks” strategy, which includes the closure of some coffeehouses that lack a clear path to meeting brand standards or achieving financial performance. Most of these closures are expected to be completed by the end of the year.
Starbucks is also restructuring its corporate structure to focus more directly on coffeehouses and customers. These total restructuring costs will amount to $1 billion, with 90% of the costs tied to North American operations.
Niccol provided additional details on the restructuring in his letter to shareholders.
Here’s a breakdown of that:
Coffeehouse Portfolio Review:
Locations unable to meet brand standards or financial goals will be closed.
Net effect: ~1% decline in company-operated stores in North America in FY2025, leaving ~18,300 U.S. and Canadian locations (operated + licensed).
FY2026: growth expected as new stores open. Over the next 12 months, 1,000+ stores will be “uplifted” with upgraded designs.
Impacted employees will be offered transfers where possible; severance will be provided otherwise.
Non-Retail Role Reductions:
Starbucks will cut ~900 non-retail jobs and close many open positions.
Affected staff will receive severance and benefit extensions.
Non-essential office staff are instructed to work from home during the transition.
Investment Priorities:
More barista hours and staffing in stores.
Elevated coffeehouse designs.
Ongoing innovation and customer service enhancements.
Outlook:
Early results from “uplifted” stores show higher traffic, longer visits, and improved partner engagement.
Leadership stressed the difficulty of these decisions but framed them as necessary for long-term growth and resilience.
“While we’re making good progress, there is much more to do to build a better, stronger and more resilient Starbucks. As we approach the beginning of our new fiscal year, I’m sharing two decisions we’ve made in support of our Back to Starbucks plan. Both are grounded in putting our resources closest to the customer so we can create great coffeehouses, offer world-class customer service and grow the business,” Niccol wrote in the letter.
Full Letter:
Later this week, Starbucks is expected to report its 4Q25 earnings. In July, the company posted its sixth consecutive quarterly sales decline at stores open for at least a year.
Total quarterly revenues have stalled over the last two years.
Shares are down nearly 8% year-to-date and have been trading sideways for the past five years.
Hmmm Starbucks…
UK Starbucks Employee screams at woman for misgendering him, then proceeds to violently assault a man filming the altercation. pic.twitter.com/6ahMsto49T
— Antifa Public Watch official (@UnmaskedAntifa) May 8, 2023
I’m convinced Starbucks recruits their employees from Antifa riots.
