text: Good morning. Here’s your Early Warning for Wednesday, 03 August 2022.TODAY’S BRIEFING:READ TIME: 7 mins 9 secondsInside the BeltwayDomestic INTSUMGeostrategic INTSUMLow Intensity Conflict Activity Rollup & OutlookINSIDE THE BELTWAYWHITE HOUSE: Nothing Significant to Report (NSTR)CONGRESS: The House is not in session, and the Senate is scheduled to vote on a treaty to admit Finland and Sweden into NATO. A bipartisan effort in the Senate is also expected to push a new bill that would drastically increase the type and volume of foreign aid, including new arms deals, to Taiwan. The bill rewrites portions of the 1979 Taiwan Relations Act, expanding Taiwan’s access to U.S. weaponry purely defensive in nature to all weapons “conducive to deterring acts of aggression.” The bill will also name Taiwan as a major non-NATO ally, opening the island country up to access surplus weapons and increase joint military training exercises.DEMS TARGET FAMILY RESEARCH COUNCIL: In a letter written to the U.S. Treasury and the Internal Revenue Service (IRS), Democrats lobby for revoking the tax-exempt status of conservative group Family Research Council (FRC). According to the letter, “FRC claiming to be a church strains credulity” and “is one example of an alarming pattern in the last decade – right-wing advocacy groups self-identifying as ‘churches’”. The letter points out FRC’s political activism in support of overturning Roe v. Wade and banning certain trans-related surgeries. TRUMP REPUBLICANS PERFORM IN PRIMARIES: Primary elections in Arizona, Michigan, Missouri, and Washington show some success for Trump-affiliated Republicans. America First candidate Black Masters won his primary and will run against Democratic Senator Mark Kelly in November. Meanwhile, Rep. Peter Meijer (R-MI) lost his primary bid after backing former President Trump’s impeachment in 2020. Two other Republicans who voted to impeach Trump – Reps. Dan Newhouse (R-WA) and Jaime Herrera Beutler (R-WA) – are in close primary races which have not been called. – M.S.DOMESTIC INTSUMFOOD & AG: NSTRENERGY: NSTR ECONOMY: The inventory “bull whip” effect is impacting warehouses following increased orders during and after the height of the pandemic. Warehouses in the Inland Empire area of California, fed by the port of Los Angeles, have reached capacity, with a 0.6% vacancy rate. Imports rose by 26% in the first half of 2022. (AC: This is consistent with previous reporting that wholesale and retail inventories rose at parabolic levels coming out of the pandemic, resulting in an overstock of goods. We previously advised that high retail inventories and slowing consumer demand would result in heavy discounts later this year as retailers try to reduce inventory. New data confirms this trend. – M.S.)GEOSTRATEGIC INTSUMCHINA CONDUCTS SIX DAYS OF MILITARY EXERCISES SURROUNDING TAIWAN: China announced snap military exercises in six areas of the East China Sea surrounding Taiwan on Tuesday. Taiwan’s Ministry of National Defense posted on Twitter that the “PRC [People’s Republic of China] announcing air-naval live-fire drills around Taiwan is self-evidently apparent that they seek a cross-strait resolution by force instead of peaceful means.” The exercises include large Chinese naval and air forces, including J-20 stealth fighters and hypersonic missiles. Taiwan government officials said earlier today that the exercises violated United Nations rules, invaded Taiwan’s territorial space, and amounted to a blockade of its air and sea routes to and from the island nation. (AC: China has ramped up its military response to unprecedented levels in response to House Speaker Nancy Pelosi’s visit to Taiwan. These exercises could easily segue into a complete blockade of Taiwan, including a seizure of Japan’s Senkakus and Nansei islands.