Could America’s hardline policies towards Iran be a dilemma for Arab countries?

US Secretary of State Mike Pompeo has announced new economic sanctions and a more hardline American policy towards Iran. How are Middle Eastern nations likely to react?

    
Iran protests

On Monday, US Secretary of State Mike Pompeo gave a speech in which he said that the US will “crush” Iran by the means of economic sanctions and military pressure. The Trump administration’s new policy on Iran comes just weeks after the US withdrew from the Iran nuclear deal. Pompeo said that the US is now intent on restraining Iran’s influence in the Middle East and ensuring that Tehran is never able to develop nuclear weapons. But many political analysts and pundits in Washington say the new policy amounts to one of regime change.

Some Arab countries will likely welcome this new tougher US policy. Saudi Arabia, Iran’s arch-rival in the region, has openly called the Iranian regime a member of the “axis of evil” in the past. Saudi Arabia, along with Qatar, Bahrain, Kuwait and Oman, is a member of the Gulf Cooperation Council (GCC), which may also back Washington’s policy to isolate Iran. Earlier this month, GCC Secretary General Abdullatif al-Zayani said that Iran should have to meet certain requirements such as “the completion of the nuclear file in terms of inspection, not providing terrorists with ballistic missiles, respecting UN Security Council resolutions and non-interference in neighboring countries.”

Dr. Mohamad Ezz al-Arab, a political expert at the Al-Ahram Center for Strategic Studies in Cairo added that elites in Gulf nations such as Saudi Arabia, the United Arab Emirates and Bahrain view Iranian influence to be “very dangerous” for their security due to Iran’s support for militias such as Hezbollah in Lebanon and Syria or the Houthis in Yemen. Speaking to DW, he also noted that the US role in the region is to bolster Israel’s security and support governments of countries such as Saudi Arabia that align with US interests.

Saudi Arabian Foreign Minister Adel al-Jubeir and US Secretary of State Mike Pompeo (Reuters/F. Al Nasser)Saudi Arabian Foreign Minister Adel al-Jubeir meets with US Secretary of State Mike Pompeo

The US as new regional police?

But Iranian political analyst and former diplomat Said Hadi Afaqhi told DW that countries which support the new US policy on Iran could face negative repercussions. “The American desire to change the balance of the region runs contrary to the interests of Russia and Arab countries,” he said. Greater US intervention in the case of Iran could mean that the US is becoming more of watchdog in the Middle East. If Arab countries refuse to act in a way that the US wants and step out of line with American policy, they too could face economic sanctions or isolation from the American administration. He warned that Arab countries should refrain from “applauding” Trumps hardline policy towards the Islamic Republic.

Saudi Arabian vs. Iranian competing influence in the Middle East Saudi Arabia and Iran are in a power struggle and use proxies to push their interests in the Middle East.

 

Afaqhi also argued that Iran does not intervene in the conflicts of Arab countries without the permission of the governments in those countries. “It is not for America to determine what Iran should or should not do. Iran has entered Syria and Iraq at the invitation of the government officials there,” he said. He also said that Iran’s dispute with Saudi Arabia and other Gulf States is a matter for those countries to decide – not the US. “In regards to the nuclear agreement, Iran was able to reach an understanding with the US, EU and other great powers, so why is Iran seen as not being able to deal with its neighbors?” he argued.

What future for Iran?

One Middle Eastern country that is sure to take Iran’s side in the face of this new hardline policy from the US is Syria, as the Iranian government financially backs the Assad regime in Damascus. And Holly Dagres, an Iran analyst and curator of The Iranist newsletter, says past experience shows that Iran’s influence in the region is unlikely to dwindle, despite the renewed sanctions and American pressure. “We have have to remember that when the Syrian uprising started and Iran intervened on the behalf of Bashar Assad’s government, the country was under the worst sanctions in its history, which were implemented by the Obama administration, ” she told DW.

Watch video03:53

US foreign policy planner: Iran must behave ‘like a normal nation’

If anything, Dagres believes that the Iranians will continue to expand their influence in the region. “After decades of international isolation, Iran has managed to circumvent sanctions in numerous ways, whether by working the middleman, the black market, or trading with countries that the American sanctions enforcement agency OFAC cannot reach. If Iran wants something to be done, it will find a way,” Dagres concluded.

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COURTESY: DW

Pompeo unveils US Iran plan: Economic strife, break with EU

The secretary of state has outlined a hard-line Iran strategy that is likely to deepen the chasm between the EU and US. Analysts and former US officials say the plan is incoherent and dangerous.

    
Mike Pompeo US Außenminister (picture-alliance/AP Photo/J. S. Applewhite)

The Trump administration threatened Iran with “unprecedented financial pressure” on Monday, issuing a laundry list of harsh requirements demanding Tehran change its foreign and domestic policies.

In a speech touted to outline the administration’s strategy toward Iran, Secretary of State Mike Pompeo promised “the strongest sanctions in history” should Tehran not buckle to US demands.

Pompeo’s speech comes nearly two weeks after President Donald Trump pulled out of the Iran nuclear deal and reimposed sanctions lifted under the Joint Comprehensive Plan of Action (JCPOA), the 2015 accord that Iran signed with Russia, China, the United States, Britain, France and Germany.

Read more: What is the Iran nuclear deal?

“The sting of sanctions will only grow more painful if the regime does not change course from the unacceptable and unproductive path it has chosen for itself and the people of Iran,” Pompeo said at the conservative Heritage Foundation think tank in Washington, DC.

Pompeo said the United States would not try to renegotiate the JCPOA. Instead, any new deal would require Iran to meet 12 demands, including halting its ballistic missile program and ending interventions in Syria and Yemen, as well as wide-ranging concessions on its civilian nuclear program. Pompeo added that the United States and its partners in the Middle East would “crush” Iranian operatives and regional allies such as the Lebanese Shiite group Hezbollah.

Iran shoots back

Several hours later, Iran President  Hassan Rouhani decried Pompeo’s threats, saying Washington had no right to make decisions for his country.

“All world countries want independence in their decisions, and the Americans may advance their agenda in some places through pressure, but logic does not accept them making decisions for the world,” Rouhani was quoted by state broadcaster Press TV as saying. “Who are you to decide for Iran and the world?”

Iran’s top diplomat, Javad Zarif, described Pompeo’s plan as “regression to old habits.” In a Twitter post, he chided the Trump administration  for being “imprisoned by
delusions, failed policies and dictated to by corrupt special interest.”

Javad Zarif

@JZarif

US diplomacy sham is merely a regression to old habits: imprisoned by delusions & failed policies—dictated by corrupt Special Interest—it repeats the same wrong choices and will thus reap the same ill rewards. Iran, meanwhile, is working with partners for post-US JCPOA solutions.

Not a strategy

Analysts and former US officials said the Trump administration revealed that it had little desire for a diplomatic solution, but looked rather to be pursuing a policy of economic pressure designed to topple the Iranian regime.

“This isn’t a strategy. It is an unprioritized and internally incoherent wish list,” said Jarrett Blanc, who was coordinator for implementation of the agreement at the State Department under the Obama administration. “It is a fantasy of regime change without the resources or leverage. It is, obviously, also an insult to our European allies.”

Read more: Iran’s military power

Washington’s hard-line policy of economic warfare is likely to further strain relations with allies already angry at Trump for withdrawing from the nuclear deal despite their lobbying and Iran’s compliance.

EU leaders are now scrambling to ensure that Iran receives the economic benefits it was promised in order to remain in the deal. Among other things, they are considering implementing a blocking statutethat would protect EU firms that do business with Iran and another measure to have EU governments make direct money transfers to Iran’s central bank.

Pompeo made it clear that the United States expects the support of regional and global allies, including the European Union. Though he said he believed that the EU would follow the United States because they shared “values,” he also doubled down on threats to target European entities doing business with Iran.

However, EU Foreign Policy Chief  Federica Mogherini accused Pompeo failing to show how pulling out of the nuclear accord would make the region safer or “how it puts us in a better position to influence Iran’s conduct in areas outside the scope of the JCPOA.”

Mogherini went on to stress that the EU would remain committed to the deal as long as Iran abided by its nuclear-related commitments, “as it is doing so far.”

Read more:  European allies struggle to curb impact of US sanctions 

Watch video01:50

EU unites against Trump over US sanctions on Iran

‘Fissure,’ ‘trans-Atlantic rift’

Ali Vaez, the director of the Iran Project at the International Crisis Group, said the Trump administration had made it clear that EU leaders had wasted their time trying to convince the president to remain a party to the deal, and that there was now a “fissure in the middle of the Atlantic.”

“Its message to Europe is now clear: ‘Join me in changing not Iran’s behavior, but its regime,'” Vaez said. “Pompeo’s speech further proved that there is no middle ground to be explored with the Trump administration. Europe should take its fate in its own hands.”

The US strategy appears to be to apply economic pressure that will create domestic political instability in Iran that will challenge the regime directly. However, unilateral US sanctions are unlikely to be as effective as the international measures that had brought Iran to the table to negotiate the JCPOA.

Those international sanctions were punishing, but they were only effective because of their international scope. For China, Russia and the European Union, going back to those sanctions is a nonstarter so long as Iran complies with the nuclear accord.

 

Watch video00:27

German chancellor expresses EU support for Iran nuclear deal at meeting with Putin.

Read more: No clear benefit from Trump’s reimposing sanctions on Iran

“The idea of reapplying sanctions, which will hammer the Iranian people under the guise of helping them, is not only deeply incoherent, it also directly undermines the chosen policy approach of America’s European allies,” said Esfandyar Batmanghelidj, the founder of the Europe-Iran Forum, a business network.

“Europe is continuing to bet on dialogue and engagement, including economic engagement, and is getting results, so far keeping the Iranians in the agreement after Trump violated and abrogated the deal,” he said. “The trans-Atlantic rift is only getting deeper.”

Meanwhile, analysts said the US’s violation of the JCPOA had only reinforced perceptions in Iran that the United States cannot be trusted. The Trump administration’s calls for Iranians to rise up against the country’s leaders and veiled threats of regime change will also harden the Iranian leadership’s resolve.

“Even if the US could inflict maximum pressure on Tehran, such onerous measures are unlikely to persuade an Iranian leadership seemingly convinced that the only thing more dangerous than this threat would be to surrender to it,” Vaez said. “The Trump administration might believe that it has devised a new Iran strategy, but, in the eyes of the Iranian leadership, this is par for the course.”

Every evening at 1830 UTC, DW’s editors send out a selection of news features. You can sign up to receive it directly here.

Watch video04:13

What is it like doing business in Iran?

COURTESY: DW

North Korea does not want to be like East Germany

Pyongyang’s threat that it is ready to call of the planned meeting between North Korea’s leader and the US President is a reality check for the Trump administration — especially for Mike Pompeo and John Bolton.

    

Graffiti - First Germany, now Korea as well (picture alliance/akg-images/G. Schaefer)Graffiti from 1989 – First Germany, now Korea

Should Washington take North Korea’s threat seriously?

Washington and Pyongyang’s bluffs, posturing and brinkmanship in the run-up to the highly expected summit between President Trump and North Korean leader Kim Jong Un should be expected. Similarly, North Korea’s history of sudden diplomatic maneuvers, for instance when it canceled a secretly planned meeting between US Vice President Mike Pence and Pyongyang officials during this year’s Winter Olympics at the last minute, is also well established.

That means that Washington, for now, need not panic about the upcoming summit, but it also should not regard Pyongyang’s threat to walk away from the meeting as mere bluff. North Korea had called off a planned meeting with South Korea in protest over joint US-South Korean military exercises, which Pyongyang considered an aggressive gesture.

Read more: Why the Iran nuclear deal’s collapse is a disaster for North Korea

“I expected them to object and perhaps if the United States does not satisfy their demands, this summit meeting can be aborted”, Han Park, a former unofficial US-North Korean negotiator who secured the release of two detained American journalists in 2009, and facilitated the 1994 Pyongyang visit of former US President Jimmy Carter told DW.

“It’s not a complete surprise that North Korea would respond to these exercises by demonstrating to Trump that these negotiations are going to be a complex process and the United States should not take North Korea’s participation for granted”, concurred Kelsey Davenport, the director for nonproliferation policy at the Arms Control Association.

She suggested that Washington, during ongoing negotiations, consider de-emphasizing elements of the joint exercise that North Korea views as most provocative. According to a South Korean media report, US nuclear-capable strategic bombers, which had originally been scheduled to participate, will now not take part in the exercises.

North Korea’s threat to cancel the meeting can also be understood as a response to President Trump who has repeatedly described himself as savvy negotiator. Just recently he lashed out against former top US diplomat John Kerry for refusing to walk away from negotiations during the Iran nuclear agreement talks. Kerry’s unwillingness to walk away from the talks, according to Trump, ultimately led to an agreement which the president has labeled the “worst deal” in history – one which he just recently pulled the US out of.

Read more: South Korea’s self-appointed ‘patriots’ protest against rapprochement with North

With its threat to scrap the leadership summit, Kim, in a way, has now one-upped Trump, by stating that he might not just away from a bad deal, but that is ready to not even show up for a meeting that does not meet his conditions. Having said that, both Trump and Kim have an avid interest in making the historic meeting become a reality, if only to play to their respective domestic audiences.

Nordkorea Missile Tests (Getty Images/AFP/E. Jones)North Korea said it is ready for denuclearization

What should the Trump administration glean from Pyongyang’s comments?   

“We have to have a realistic assessment of North Korea in terms of their desires and plans”, said Han Park, the former unofficial US-North Korean negotiator who visited North Korea more than 50 times. A coherent plan or a long-term strategy to deal with Pyongyang beyond the Trump’s administration mantra of denuclearization remains absent, added Park:

“Sure, Trump would like denuclearization, but North Korea is not going to give up its nuclear aspirations and to have military defense capability against the United States. They are not going to give up that capability without assurance of peace. And we have not discussed what we can give North Korea for peace and denuclearization.”

If the Trump administration is serious about negotiations about denuclearization, it must address Pyongyang’s security concerns, said Davenport. “It views the US military presence in the region as a threat and Washington is going to need to reduce that threat if it wants North Korea to take meaningful steps to halt and reverse its nuclear weapons program.”

In preparation for the summit, the US, especially the president himself, need to understand that there is a price to pay for steps toward North Korean nuclear disarmament, the experts said. The US also needs to be aware that such an effort will take time and cannot be achieved in one high profile setting, between Trump and Kim.

“At best it is the start of something, at worst it is one demonstrative, symbolic gesture, especially on the part of Trump”, said Park.

Instead of focusing too much on this one event, Washington, said Davenport, should concentrate on “denuclearization as a long-term goal that recognizes that in the interim steps that reduce the threat posed by North Korea’s nuclear weapons and that reduce North Korea’s capacity to expand its arsenal can still be meaningful and benefit US national security.

UN USA Botschafter John Bolten tritt zurück George Bush (AP)John Bolton played a controversial role during the George W. Bush administration

Why was John Bolton singled out by North Korea?

In a statement, former North Korean nuclear negotiator Kim Kye Gwan attacked President Trump’s new National Security Advisor John Bolton, stating that: “We do not hide our feeling of repugnance toward him”. Kim took issue with Bolton — a hardliner who has a history of advocating for US preventative military action in countries like Iraq, Iran and North Korea — suggesting recently Libya’s nuclear disarmament as a model for North Korea.

That comparison, understandably, did not go down well in Pyongyang, because less than ten year’s after Libya ended its nuclear activities, the country’s leader was toppled and killed after an outside military intervention that included the US.

What Kim’s missive did not mention explicitly but what is probably an even better explanation for North Korea’s hostility towards Bolton is his past role in nixing a nuclear deal that a previous US administration had reached with Pyongyang — just as he did recently with the Iran deal.

“North Korea has legitimate reason to distrust John Bolton”, said Davenport. “John Bolton was instrumental in killing the negotiated agreement between the United States and North Korea when Bush succeeded Clinton as president.”

Like the later Iran nuclear accord, the so-called Agreed Framework, signed in 1994 by Bill Clinton was extremely controversial and never ratified by Congress. President Bush’s description of North Korea as being part of the so-called axis of evil marked the de-facto end of the agreement.

Former US-North Korea negotiator Park, who knows Bolton personally, thinks Trump’s National Security Advisor holds an anachronistic view on global affairs. “He is basically a militarist. He thinks things will be taken care of through military means. But that time is gone. We cannot use military means against North Korea.”

But Park also offered some advice for Secretary of State Mike Pompeo, who recently said that if Pyongyang took “bold action to quickly denuclearize, the United States is prepared to work with North Korea to achieve prosperity on the par with our South Korean friends.”

“When Pompeo suggests that North Korea can be assisted by the US to become like South Korea – that’s not what they want. They don’t want to be a small South Korea. They want the money, but not through capitalist, private ownership means whatsoever. They don’t want to be like East Germany.”

 

COURTESY: DW

Will Syria’s Assad get the message? Ask Russia and Iran, say former US officials

Former top US officials are uncertain whether the Syria strikes will achieve their intended goal, to deter the Assad regime from using chemical weapons. But the attacks sent some key additional messages.

Rubble at the destroyed Scientific Research Centre (Reuters/O. Sanadiki)

The Trump administration made clear that attacks against Syria’s chemical weapons program had one purpose: to deter Syrian President Bashar al-Assad from using such weapons again in future as he had done, the United States and others said, recently in the city of Douma.

Friday night’s strike came one year after the US hit the Assad regime in similar fashion after Damascus had allegedly carried out a deadly chemical attack in the town of Khan Sheikhoun. This time, however, the US was not acting alone, and it, along with France and the UK, conducted significantly more strikes than a year ago.

Read moreAirstrikes in Syria: What you need to know

The fresh US-led action, described as a one-off attack, capped a tumultuous lead-up that started, as has become routine in Washington, with a presidential tweet. In it, Trump promised swift and tough US military action, denounced Assad and taunted Russia and Iran. The tweet triggered international alarm about an imminent attack in one of the world’s most volatile regions, and left US officials scrambling for answers.

Donald J. Trump

@realDonaldTrump

Russia vows to shoot down any and all missiles fired at Syria. Get ready Russia, because they will be coming, nice and new and “smart!” You shouldn’t be partners with a Gas Killing Animal who kills his people and enjoys it!

When the attack came — days after Trump’s initial timeline — it was in concert with two allies and clearly limited in scope to a narrow set of targets. To many observers, the military action looked more like a restrained response than a broader one initially forecast by Trump. That’s led to several questions:

Will Assad still get the message and stop using chemical weapons?

“I am underwhelmed,” said Ryan Crocker, a former US ambassador to Syria, who also served as Washington’s envoy in Iraq, Afghanistan and Pakistan. “We basically did the same thing we did a year ago on a slightly larger scale. But it is not going to do any lasting damage to Assad’s ability to use chemical weapons in the future or anything else.”

Watch video00:30

Stoltenberg: All NATO allies back Syria airstrikes

“Will this deter him — that’s a question that remains open,” said Philip Breedlove, the former NATO and US military commander in Europe. “Remember that this criminal, this monster leader of Syria, enjoys the support and the enabling capabilities and the exterior political support of Russia and Iran.”

Read more: US-led strikes on Syria: A move with unpredictable consequences

While it’s difficult to predict Assad’s response, to change his calculus would probably require action that threatened the very foundation of his regime, said Mona Yacoubian, a Syria scholar at the United States Institute of Peace. “In that sense, these strikes were probably too limited to do that.”

All three experts highlighted the influence of Russia and Iran on the Assad regime.

Putin besucht russische Luftwaffenbasis in Syrien (picture-alliance/dpa/M.Klimentyev)It’s Putin who will have the most influence on Syria’s use of chemical weapons, not US strikes

“Remember that Mr. Assad by himself is not capable of all these things that are going on around him,” said Breedlove. “He is enabled, empowered and encouraged by Russia and Iran.”

“If they say don’t do this again, he probably won’t do it again,” agreed Crocker, referring to Moscow and Tehran’s sway over Assad’s use of chemical weapons.

“I would look at Iran particularly,” the former US diplomat said, adding, “I can’t believe the Iranians are just fine with this. They suffered a great deal from chemical attacks in the Iran-Iraq war. They know what it’s like.”

Russia, said Yacoubian, despite some bellicose rhetoric, also could have no interest in escalating a conflict with the US over Syria and might be inclined to clamp down on Assad’s use of chemical weapons for its own reasons.

A British jet about to take off for a mission in Syria (picture-alliance/AP Photo/L. Matthews)The US was right to seek allies for the strikes, but having just two may not have been a strong signal

While Crocker supported Washington’s decision to not strike Syria alone this time, he said the lack of participation of any other nations aside from Britain and France sent a bad signal to Arab countries in light of next year’s 100th anniversary of the Versailles Treaty, which ended World War I. “No one in the West will tweet to this, everybody in the Middle East will because the British and the French, of course, were the ones who divided up the Ottoman Middle Eastern territories.”

The former US diplomat also expressed his astonishment about the timing of Berlin’s announcement not to participate in a military strike against Syria.

“I found it more than a little sad and disturbing that Germany chose International Holocaust Remembrance Day to make a public statement that under no circumstances whatsoever would Germany participate in a strike on a chemical weapons facility,” said Crocker.

What do the strikes tell us about the Trump administration?

Washington, US-Präsident Donald Trump spricht während einer Kabinettssitzung im Weißen Haus (Reuters/K.Lamarque )Mattis is one of very few Cabinet members who have not felt the ire of the president

Asked whether the US response could be read as a sign that the Pentagon, which under Defense Secretary James Mattis had advocated for a careful and coordinated response, had prevailed over the White House’s initial call for swift action, the experts rejected such an interpretation as going too far.

Still, the nature and the execution of the attack prove that Mattis plays an important role right now, said Crocker. “Pretty clearly he is able to calm the president down,” he said. “Not many people can do that.”

Read more: What foreign powers want from the Syrian war

Former NATO Commander Breedlove, who declined to engage in politics, praised Mattis and General Joseph Dunford, the chairman of the joint chiefs of staff.

“What you have seen here is that these two incredible military leaders have given their boss, the commander-in-chief, their advice, and the commander-in-chief made the decision based on that advice. Frankly, I think they got it right.”

USA John Bolton (Imago/Zumapress)Many wonder what Bolton’s role will be in shaping US foreign policy

Experts have wondered whether Trump will continue to heed the counsel of his military leaders, particularly with the ascent of the hardline John Bolton as national security adviser.

Similarly interesting will be whether Trump’s newly formed team of Pentagon chief Mattis, Bolton and Mike Pompeo, who appears likely to be confirmed as the new secretary of state, will address what Crocker, the former Syria ambassador, calls the administration’s underlying problem.

“There still is no Syria strategy in Washington.”

Each evening at 1830 UTC, DW’s editors send out a selection of the day’s hard news and quality feature journalism. You can sign up to receive it directly here.

COURTESY: DW

Trump causes global outcry with new duties on metals imports

US President Donald Trump’s planned tariffs on steel and aluminum have met with massive outrage, and have sparked concerns that the measure will distort trade, cost jobs and ultimately lead to a tit-for-tat trade war.

Steel coils piled up in Duisburg plant (picture-alliance / dpa)

After weeks of speculation, Donald Trump on Thursday followed through on his campaign pledge to protect American industries from “unfair” global trade practices as he announced stiff new tariffs of 25 percent on steel imports and 10 percent on aluminum.

The trade measure, due to come into force next week, was greeted with fury by key US trading allies such as Canada, the EU, Australia and Mexico.

European Commission chief Jean-Claude Juncker led the criticism, saying the EU “will react firmly” to defend its interests. “We will not sit idly while our industry is hit with unfair measures that put thousands of European jobs at risk,” he added.

“If the Americans impose tariffs on steel and aluminum, then we must treat US products the same way,” Juncker argued. “I’m not saying we have to shoot back, but we must take action,” he told German TV stations Friday.

The EU’s top trade official, Cecilia Malmstrom, said the bloc would consider imposing its own “safeguard” tariffs on imports of steel and aluminium in response to US President Donald Trump’s decision. In an interview with the Financial Times,  she said officials in Brussels would wait to see the formal announcement of US tariffs next week before taking any action.

Read more: EU mulls retaliation if US slaps import tariffs on steel

Canadian Trade Minister Francois-Philippe Champagne responded even more bluntly. “Any tariffs or quotas that would be imposed on our Canadian steel and aluminum industry would be unacceptable [and] would have an impact on both sides of the border,” he told parliament on Thursday.

Australia’s Trade Minister Steve Ciobo said his biggest concern was now “retaliatory measures” by other major economies. “That’s in no-one’s interests,” he told reporters.

Read more: Germany’s DIHK warns new US tariffs could trigger trade war

Trump has long threatened to impose tariffs on steel and aluminum, accusing other countries of dumping and deploying “unfair” trade practices. He’s been particularly critical of China, whose steel producers are being accused of fueling a global steel glut by dumping their subsidized steel on markets worldwide.

Watch video01:06

Trump imposes stiff duties on metals imports

Muted Chinese response

The timing of Trump’s announcement was especially provocative for Beijing because its top economic envoy Liu He was in Washington and holding meetings at the White House on Thursday.

Read more: US, China still at odds over steel overcapacity

China, which accounts for only 2 percent of US steel imports, has previously warned it was ready with countermeasures should the Trump administration deploy tariffs. On Friday, Beijing called on the US administration to “abide by multilateral rules and to make contributions to the trade and economic world order.”

“If other countries follow in the steps of the US, it will harm global trade,” said Hua Chunying, the Chinese foreign ministry spokesperson.

The vice secretary-general of the China Iron and Steel Association simply shrugged off Trump’s decision. “The impact on China is not big,” said Li Xinchuang. “Nothing can be done about Trump. We are already numb to him.”

But for South Korea — the third-largest steel exporter to the United States after Canada and Brazil — the trade measure is more threatening.

“For us, the worst case scenario was a 54 percent tariff,” a South Korean trade ministry official who declined to be named told the news agency Reuters. “Still if the option for a global tariff of at least 24 percent is taken, that will still affect our steel exports to the US,” he added.

Asian steelmakers fear the US tariffs could result in their domestic markets becoming flooded with steel products that have nowhere else to go. “We are concerned about how other exporters react, what will happen with steel that cannot be sold to the US,” Vikrom Wacharakrup, Chairman of Iron and Steel Industry Group, Federation of Thai Industries, told Reuters.

Watch video00:36

Steel industry hit by overcapacity and tariffs

Real economy effects

The move to protect American metals producers threatens to raise prices for consumers and businesses that buy goods made with the raw materials. Mickey Levy, analyst with Berenberg Bank said in a note to investors that the tariffs would add uncertainty to business plans in certain industries, for example in the automibile sector,

“Assuming the supplies of US-sourced steel and aluminum are fairly inelastic in the short run, and incorporating disruptions and costs of transitions, business operating costs would rise and business production processes would be less efficient,” he noted, adding that the measures’ impact on the economy would be a decline in American consumers’ purchasing power.

And Tom Porcelli from RBC pointed out that Trump’s jobs argument wasn’t plausible because there were far more US jobs in businesses that pay money to buy steel than there are in businesses that produce it. “There are 415k people employed in primary metal manufacturing and metal ore mining businesses. Yet the folks in downstream manufacturing (ie the consumers of steel) employ 16x (!) as many people,” he said in a note, adding that it was rather obvious that “the winners/losers ratio seems extremely skewed.”

Therefore, the heads of the National Tooling and Machining Association and the Precision Metalforming Association were among many steel users that warned of the damage that could be done by the import duties. They said in a joint statement: “President Trump campaigned on the promise to protect manufacturing jobs but his plan to impose tariffs will cost manufacturing jobs across the country.”

And Dennis Slater, president of the Association of Equipment Managers, added: “Tariffs or quotas on steel and aluminium imports will burden US manufacturers with higher costs while our competitors in China, India and Mexico will get a free pass to use the cheapest input materials they can find.”

Economists at Barclays Bank estimated the levies could reduce US growth by as much as 0.2 percentage point this year and inflation by 0.1 point.

Watch video01:29

Let the tariffs begin!

uhe/aos (Reuters AFP, dpa)

COURTESY: DW

Trump Says He’s Open to U.S. Citizenship for DACA Illegal Aliens

President Trump told mainstream media reporters on Wednesday that he was open to breaking his immigration commitment by giving a pathway to U.S. citizenship to nearly 800,000 illegal aliens shielded from deportation by the President Obama-created Deferred Action for Childhood Arrivals (DACA) program.

In statements outside the White House, Trump told the Associated Press (AP) that he would be open to giving U.S. citizenship to DACA illegal aliens, saying “It’s going to happen.”

The AP reported:

President Donald Trump says he’s open to a pathway to citizenship for hundreds of thousands of young people who were brought to the country as children and are now here illegally.

Trump told reporters, “We’re going to morph into it. It’s going to happen, at some point in the future, over a period of 10 to 12 years.” [Emphasis added]

Trump was talking about the young immigrants who had been protected from deportation and given the right to work legally in the country under the Obama-era Deferred Action for Childhood Arrivals program.

According to Bloomberg News, an anonymous administration official is already walking back Trump’s comment about citizenship for DACA illegal aliens, saying the remark does not indicate an upcoming policy proposal by the White House.

Trump on DACA recipients: “Tell em not be concerned, OK? Tell em not to worry about it. We’re going to solve the problem… They should not be concerned.”

Trump on citizenship for DACA recipients: “We’re going to morph into it. It’s going to happen, at some point in the future, over a period of 10 to 12 years.”

Trump also said he would be demanding at least $30 billion to build a border wall along the U.S.-Mexico border, as well as an end to the process known as “chain migration,” where newly naturalized citizens can bring an unlimited number of foreign relatives to the U.S., and an end to the Diversity Visa Lottery program, which imports 50,000 random foreign nationals every year from countries with known terrorism issues.

On immigration bill, Pres Trump said he wants $30-billion – including $25-billion to build a border wall. In exchange, would agree to a path to citizenship for DACA “Dreamers,” during a 10-12-year period if no criminal record.

Pres Trump also said he wants family reunification/chain migration limited to husbands/wives and children. Says parents are tricky. Wants visa lotteries to undergo significant changes – or ended.

“If you don’t have a wall, you don’t have DACA,” said Pres Trump, again insisting the wall is essential to an immigration deal. He wants $25-billion in funding, but believes it won’t cost that much. “We’re talking about probably 800 miles of wall,” says the pres.

In another break of commitment, Trump said he was open to potentially extending the DACA program beyond its March 5 deadline of when Attorney General Jeff Sessions said it would officially end.

If no immigration deal by March 5th DACA deadline, he might extend the deadline. “Yeah I might do that,” but he’s not guaranteeing because he wants to give Congress incentive to act.

While the White House’s official position on a DACA deal has been that they would be open to giving legal status only to DACA-enrolled illegal aliens in exchange for the end to chain migration, elimination of the Visa Lottery, and full funding for a border wall, the administration has never been supportive of citizenship for illegal aliens.

Granting a pathway to U.S. citizenship to DACA illegal aliens would break Trump’s long-held campaign promise that no amnesty for illegal aliens would be granted until illegal immigration to the U.S. was fully ended.

In Trump’s historic 2016 immigration speech, he specifically said “There will be no amnesty.”

“For those here illegally today who are seeking legal status, they will have one route and one route only. To return home and apply for re-entry like everybody else under the rules of the new legal immigration system that I have outlined today.”

“It’s our right as a sovereign nation to choose immigrants that we think are the likeliest to thrive and flourish and love us.”

“Anyone who tells you the core issue is the needs of those living here illegally has simply spent too much time in Washington.”

Trump’s comments come just after a new Harvard-Harris poll revealed that his pro-American immigration agenda of reducing legal immigration levels to raise the wages of Americans is wildly popular with American voters, as Breitbart News reported.

For example, 85 percent of black Americans said they supported a merit-based immigration system, rather than the current flow of chain migration. Another 72 percent of Democrat, former voters for Hillary Clinton agreed that the legal immigration system should be based on skills, not family ties.

Currently, the U.S. admits more than 1.5 million legal and illegal immigrants every year, with more than 70 percent coming to the country through the process of chain migration. Mass immigration to the U.S. has had a detrimental impact on America’s working and middle class, which have seen stagnant wages for decades and continued outsourcing of blue-collar and some white-collar jobs.

The poll found that more than 80 percent of Americans support curbing legal immigration levels, a plan that Trump has endorsed to raise the wages of working and middle-class Americans and stem the current never-ending flow of cheaper, foreign competition that burdens the country’s blue-collar workers the most.

Since DACA’s inception, more than 2,100 illegal aliens on the program have been kicked off because they were found to be either gang members of convicted criminals.

John Binder is a reporter for Breitbart News. Follow him on Twitter at @JxhnBinder.

Trump and Xi hail ‘$250 billion’ trade deals

All looked rosy on Thursday as the US and Chinese Presidents trumpeted trade deals countries supposedly worth over $250 billion between their countries. But is the striking figure quite what it seems?

China Donald Trump & Xi Jinping (Reuters/D. Sagolj)

US President Donald Trump and Chinese President Xi Jinping celebrated trade deals between their countries supposedly worth over $250 billion (€223 billion) on Thursday, during day two of Trump’s visit to the country.

Several major deals were announced. Aircraft manufacturing giant Boeing agreed to sell 300 planes worth $37 billion to the state-controlled China National Aviation Holding while US telecommunications company Qualcomm agreed deals worth $12 billion with three Chinese phone makers.

The biggest and arguably most significant deal of all sees an $83.7 billion investment by the China Energy Investment Corp, to take place over a 20-year period, in chemical manufacturing projects and shale gas developments in West Virginia, a state that recorded a huge Trump vote in last year’s US Presidential election.

Several other smaller agreements, many involving energy companies, were also announced.

However, while Trump will likely return to the United States hailing the agreements as further evidence of his self-proclaimed reputation as a master deal-maker, there are more than a few caveats attached to the “$250 billion” figure, primarily the fact that many of the agreements are nonbinding memorandums of understanding rather than legal contracts. In other words, they can very easily be reneged on.

Watch video01:45

Xi Jinping hosts President Trump in Beijing

Also, many of the biggest deals are centeredon US companies that already do major business in China — such as Boeing and Qualcomm — so to what extent the deals are actually new, or in any meaningful sense connected to Trump’s dealmaking skills, is unclear.

Trump, who has long railed against China for the country’s trade policies, was in a far more conciliatory mood when speaking alongside Xi in Beijing. He blamed his US predecessors for an “out of kilter” trading relationship with China and repeatedly praised the Chinese leader as “a very special man”.

The art of the deals?

US Commerce Secretary Wilbur Ross — who earlier this week was named in the Paradise Papers for investments he made in a company linked to Vladimir Putin’s son-in-law — boasted on Wednesday of “$250 billion” worth of deals between China and the US but the full details were only revealed on Thursday.

With a raft of high-ranking US CEOs accompanying Trump on his trip, several deals were expected and Ross announced agreements on Wednesday worth $9 billion, featuring around 20 US companies including General Electric, DowDuPont and Bell Helicopter, many of which already have extensive Chinese partnerships.

The Qualcomm deal saw $12 billion worth of nonbinding agreements signed with phone makers Xiaomi, OPPO and Vivo, a continuation of the San Diego-based firm’s longstanding investment in China, where it already does most of its business.

The deal between Boeing and China National Aviation Holding certainly sounds major although among those to proclaim skepticism at the significance of the deal was former Mexican ambassador to China Jorge Guajardo, who, amid a series of comments on Trump’s trip, wrote on Twitter: “Interesting to see how many of those are past agreements/purchase orders repackaged. Beijing is a master of selling the same agreement 10 times.”

Interesting to see how many of those are past agreements/purchase orders repackaged. Beijing is a master of selling the same agreement 10 times. https://twitter.com/bpolitics/status/928254975368663040 

The West Virginia investment is the first major overseas investment by the newly formed China Energy group and will be very well received by those US voters whose faith in Trump was based on his supposed ability to bring about such deals.

China’s Commerce Minister Zhong Shan said the deals were “truly a miracle” but there was much more caution from market analysts.

“I suspect they might be primarily MOUs (memorandum of understandings) instead of actual contracts and the actual contract amount may be substantially less,” Alex Wolf, an economist at Aberdeen Standard Investments, told Reuters.

Tremendous for both of us”

Other criticism focused on the fact that the deals would not grapple with more structural concerns regarding the bilateral trading relationship with China, such as the various restrictions the Chinese government places on the operations of several US firms operating in the country, ranging from the blocking of internet giants such as Facebook and Google to the protectionist measures used against car makers.

Read more: EU firms want better access to Chinese market

Nonetheless, the generally positive tones were welcomed by US and Chinese commentators. Xi heralded the dawn of a more transparent and open Chinese economic age in relation to how it deals with foreign firms while Trump, although regularly referring to the “shockingly high” trade deficit between the countries, was also effusive.

“We will make it fair and it will be tremendous for both of us,” Trump said, drawing a wide smile from Xi when he insisted that it was previous US Presidents, rather than China, who were to blame for the deficit.

Yet while the rhetoric was soaring and will no doubt continue to be, many of Thursday’s deal announcements have a way to go to prove they are worth the paper they are written on, if they are on paper at all.

Watch video01:46

Trump on Asia visit lauds China as problem-solver

aos/mm (Reuters, dpa)

Courtesy: DW