PDB Afternoon Bulletin | July 3rd, 2025: China Fumes At US-Vietnam Trade Deal & Drone-Operated 'Narco Subs' Shake Up The War On Drugs
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It's Thursday, the 3rd of July. Welcome to the PDB Afternoon Bulletin. I'm Mike Baker, your eyes and ears on the world stage. All right, let's get briefed. First up, China lashes out at the U.S. over the Trump administration's trade deal with Vietnam and warns other nations against striking agreements that undermine Beijing's economic interests. We'll have those details later in the show. We'll look at how South America's cartels are

are using technology to move their gear. Columbia's Navy seized its first drone-operated Narcos sub, which was outfitted with a Starlink antenna enabling real-time satellite navigation. But first, today's afternoon spotlight.

While investors breathed a sigh of relief after President Trump struck a trade deal with Vietnam on Wednesday, there was one party that wasn't celebrating the news. Of course, that would be the Chinese Communist Party, the regime in China. On Thursday, officials with China's Commerce Ministry lashed out at the U.S. over Trump's new arrangement with Hanoi and sent a warning shot across the bow of other nations considering new trade frameworks with America.

The Chinese feel that the deal targets and harms, quote, the interests of third parties, by which they mean China, and are warning other countries that China will take steps to economically retaliate against those that strike deals that undermine their dominance as a global exporter. That's according to a report from the Financial Times. Well,

Well, that's really not very neighborly. As we covered on this morning's PDB, the deal places a 20% tariff on Vietnamese exports to America. That gives Hanoi a competitive edge over China, which is currently subject to tariffs of 40% to 50%. After the Chinese Communist Party, the CCP, reached a short-term agreement with the White House last month to avert a mutually destructive economic standoff.

But the deal with Vietnam also places, and this is important, a 40% tariff on any goods that originated in another country but were transferred to Vietnam for final shipment to the U.S. Now, that practice, known as transshipping, has been leveraged on a very large scale by the Chinese to circumvent U.S. trade barriers, and Trump's new deal undercuts that lucrative strategy, which is why Xi Jinping has his knickers in a twist, which

which is an old Chinese saying, I'm told. In a statement, the Commerce Ministry said they were conducting an assessment of the terms of the U.S.-Vietnam trade deal and added, "...we firmly oppose any party striking a deal at the expense of China's interests. China will take resolute countermeasures to safeguard its legitimate rights and interests."

Since the supply chain disruptions caused by the COVID-19 pandemic, Vietnam emerged as a hub for production, with many Chinese firms setting up manufacturing outposts around Hanoi and Ho Chi Minh City, according to a report from the Wall Street Journal.

But Vietnam's rise as a production base drew increased scrutiny from the U.S., as evidence mounted that China was using the country as a way to bypass U.S. levies, again, transshipping. For example, as Chinese exports to the U.S. decreased by 10% over the first five months of this year, their exports to Vietnam jumped by 28%.

and Vietnam's exports to the U.S., well, they rose by 26%. Coincidence? Perhaps not. Analysts said the data shows strong signs of transshipment by the Chinese, but the new agreement with Vietnam, well, that deals a significant blow to Beijing's ability to continue leveraging their southern neighbor as a transshipment hub, and financial analysts say that's exactly the point.

The provision targeting transshipping is certainly aimed squarely at the communist regime, showing China remains the central focus of Trump's trade policy despite the fragile economic truce between Washington and Beijing. The chief Asia economist at HSBC in Hong Kong told the Wall Street Journal, "There does appear to be a more strategic intent here by the U.S. to essentially restrict Chinese exports entering the U.S. market via the back door."

Analysts told the journal that it signals that other countries seeking favorable trade terms with Washington will be expected to take steps to limit China's presence in their economies. For example, the recent trade framework reached between the US and the UK requires London to strengthen their supply chain security. That's a provision that many analysts interpreted as targeting the Chinese regime.

An expert on international economic law at the City University of Hong Kong told the Financial Times, "...the new U.S.-Vietnam deal is not just about trade. It's clearly aimed at China. This fits a much wider trend. The U.S. is lining up bilateral deals with countries near China to tighten economic cooperation and at the same time make it harder for Beijing to stretch its supply chain influence."

But the Trump administration is walking a fine line as they work to curtail China's trading relationships with other nations. Financial analysts say that if similar conditions are included in subsequent trade deals with other Southeast Asian nations, Beijing will take it as a clear provocation.

They warned that it could undermine ongoing U.S.-China trade talks, which aim to establish, of course, a more comprehensive long-term deal following the trade truce reached back in early June. China could renege on their promise to walk back export restrictions on some rare earth minerals, which alone could reignite the trade war between Washington and Beijing.

But for now, it appears China is taking a wait-and-see approach. Still, the regime is clearly growing frustrated with the Trump administration's broader strategy to fundamentally reshape the global trading order. Up next, we'll look at the use of technology by South America's drug cartels to enhance their trafficking operations. I'll be right back.

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Welcome back to the Afternoon Bulletin. Colombia's Navy has seized its first drone-operated narco-sub, outfitted with Starlink technology and found adrift off the Caribbean coast in an ominous preview of the cocaine trade's new era. The semi-submersible vessel, capable of remote piloting across oceans, was found empty, leading some authorities and Western security sources to assume that it was a test run, but there was little doubt about who was behind it.

Speaking at a press conference yesterday, Colombian Navy Admiral Juan Rosso confirmed the vessel belonged to the Gulf Clan, that's Colombia's most powerful cartel, and could carry up to one and a half tons of cocaine. For years, manned narco subs have been a hallmark of Colombia's cocaine routes, cobbled together in jungle shipyards and launched toward Central America or Mexico. In recent years, they've reached as far as Europe and Oceania.

But this new craft, equipped with real-time satellite navigation and no crew on board, signals a new significant shift. Footage released by the Columbia Navy shows a low-profile vessel slicing through the water with a Starlink antenna bolted to its bow, technology that, according to Admiral Rosso, opens the door for "more sophisticated unmanned systems designed to be nearly invisible to radar."

Now, it's not the first time that traffickers have turned to Starlink. Back in November, Indian authorities seized more than $4 billion, that's with a B, in meth from a Starlink-powered narco vessel near its island territories. It was the first known instance of a fully remote controlled drug sub.

Colombian officials say these developments are no coincidence. The Gulf Clan, a designated foreign terrorist organization by the U.S. State Department, has long operated as a global cocaine syndicate, channeling profits into paramilitary operations and collaborating with Mexico's cartels. And according to analysts at Colombia's Institute for Development and Peace Studies, engineers linked to these criminal networks have been experimenting with unmanned subs since approximately 2017.

The consequences are already visible on the investigative side. A researcher at the U.S.-based think tank Insight Crime warned that removing crews from these vessels severs the trail, making it exponentially more difficult to extract intelligence, of course, from captured operators, since there are no captured operators. Despite stiff penalties, as Colombian law imposes up to 14 years in prison for used construction or transport of semi-submersibles, the trend isn't slowing.

Colombian officials intercepted a near-record number of narco subs in both the Atlantic and Pacific last year alone.

and the threat stretches far beyond the country's shores. Just last week, Mexico's navy seized 3.5 tons of cocaine from a submersible off its Pacific coast. In March, Portuguese forces captured nearly 6.5 tons from another vessel, and in January, a narco sub being towed into a Spanish port disintegrated in open water. Its cargo was lost, but its presence was unmistakable.

All of it feeds into a much larger trend. According to the UN Office on Drugs and Crime, global cocaine production, seizures, and consumption hit record highs in 2023, with Colombian output surging to meet demand. As traffickers now embrace next-gen tools like satellite-linked drones and unmanned subs, Colombian officials warn that the war on drugs is entering a new, tech-heavy, more elusive phase.

And that, my friends, is the PDB Afternoon Bulletin for Thursday, the 3rd of July. Look at that. It's just the day before the 4th of July.

See how I figured that out. If you have any questions or comments, please reach out to me at pdb at thefirsttv.com. And of course, as you likely already know, to listen to the show ad-free, you can do that. It's very simple. Just become a premium member of the President's Daily Brief by visiting pdbpremium.com. I'm Mike Baker, and I'll be back tomorrow, which of course is the 4th of July. Until then, stay informed, stay safe, and stay cool.

Thank you.

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