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The US-China trade deal fell apart - here's why

TrumpXi
© MarketWatch
US President Trump • China President Xi
Readers who have been paying close attention to every leak related to the ongoing US-China trade talks might remember this FT story from six weeks ago about Beijing's penchant for returning trade-deal draft proposals to Washington riddled with red-line strikeouts.

We only bring it up now because, according to a play-by-play published by Reuters Wednesday morning, it appears President Trump finally lost his patience with Beijing when they returned a draft trade deal with strikeouts eliminating virtually all of the major concessions made during the past few weeks.

Though reports about Beijing's unwillingness to compromise had begun appearing with more regularity during the preceding week, according to Reuters, it appears Beijing was deliberately trying to provoke President Trump. And if this was indeed China's goal, it appears it succeeded.

Comment: See also: US more than doubles tariffs on $200 billion worth of Chinese goods


Briefcase

Venezuela Supreme Court: Turncoat lawmakers to be prosecuted following failed coup

VenezSC
© The Rahnuma Daily
Venezuelan Supreme Court
Venezuela will prosecute six lawmakers who backed opposition leader Juan Guaido's failed coup last week, the Supreme Court has ruled, hinting that more prosecutions were in the works for "high treason" and "conspiracy."

The Venezuelan Supreme Court has announced the prosecution of six lawmakers on charges including treason against the fatherland, conspiracy, insurrection, civil rebellion, usurpation of functions, and public instigation, the body said in a statement issued on Tuesday. The document named Henry Ramos Allsup, a former National Assembly speaker, Luis Florida, Marianela Magallanes, Simon Calzadilla, Americo de Grazia, and Richard Blanco.

The Constituent Assembly subsequently stripped all six of their parliamentary immunity, plus Edgar Zambrano, who joined Guaido at the military base where he kicked off the botched uprising with a call for the military to abandon President Nicolas Maduro's government last Tuesday. Assembly speaker Diosdado Cabello added that three more lawmakers complicit in the coup had been identified and would also be prosecuted. The Assembly has promised to suspend the immunity of any other lawmakers found to be involved in the short-lived attempt to overthrow Maduro, which triggered two days of rioting and resulted in five deaths.

Comment: See also:


Arrow Down

Lavrov to CNN: 'You're called fake news', now you ask 'fake question' on Venezuela

Lavrov
© Reuters/Amr Abdallah Dalsh
Russian FM Sergey Lavrov
Russian Foreign Minister Sergey Lavrov joked that CNN was "fake news" and described the network quizzing him about Moscow's hypothetical response to a possible US intervention in Venezuela as a "fake question."

Lavrov had a brief press conference following his meeting with US Secretary of State Mike Pompeo, on the sidelines of the Arctic Council in Rovaniemi, Finland on Monday. One of the few questions came from CNN, asking what "leverage or opportunities" Russia had to stop a US military intervention in Venezuela.

"Some call your company CNN 'fake news,' and now you are asking a fake question," Lavrov replied.


Joking aside, the Russian top diplomat continued, Russia is categorically against any military intervention anywhere without UN Security Council authorization.

"From my contacts with American, European and Latin American counterparts, I do not see supporters of a reckless military solution. I hope that this understanding, which everyone has, will be turned into a practical policy, that there will be no military solution, because it would be catastrophic," Lavrov said.

Asked if American diplomats shared this understanding, Lavrov replied, "Yes."

Nuke

Due to lack of EU pushback on US, Iran to cut some 'voluntary commitments' made under nuclear deal

Iran Flag nuclear deal
© Reuters/Leonhard Foeger
An Iranian flag flutters in front of the International Atomic Energy Agency (IAEA) headquarters in Vienna, Austria, January 15, 2016
Iranian Foreign Minister Javad Zarif has said that Iran will continue to abide by the 2015 nuclear deal - but will no longer implement some optional commitments, due to the lack of EU pushback against the US.

Zarif, who arrived in Russia on Tuesday, sought to debunk speculation that Iran is considering abandoning part of its binding commitments under the internationally acclaimed accord, struck back in 2015.

"Iran's future actions will be fully within the [nuclear deal], from which the Islamic Republic will not withdraw," Zarif told reporters in Moscow.

He chastised the US for being hell-bent on tearing up the deal, and the EU for being too weak to resist American pressure and preserve the accord.

Comment: Iran's President Hassan Rouhani further added that the Iranian move was reciprocal action to US complete withdrawal from it under President Donald Trump.
Rouhani announced that Tehran will be gradually suspending its commitments under the deal, giving other parties subsequent periods of 60 days to negotiate a reversal of those actions. He blamed European signatories of failing to compensate to Iran the damage done by US unilateral sanctions after Washington broke its part of the bargain.

Iranian Foreign Minister Javad Zarif earlier told reporters Tehran would be backing out of some "voluntary commitments" under the 2015 agreement as a response to the EU's inability to stand up to the pressure of Washington's attempts to isolate Iran.
Iran has decided to resume activities it had ceased under the terms of the JCPOA:
As of now, Tehran will no longer sell off excessive enriched uranium and heavy water, the Iranian president said. Under JCPOA terms, it is required to dispose of those materials if production exceeds certain thresholds.

Other signatories will have 60 days to negotiate with Iran and address its concerns, particularly in oil industry and banking sector, which Washington targets with its sanctions. If an agreement is reached, the suspension will be reversed.

Otherwise Iran will no longer be bound by an obligation not to enrich uranium over a certain level and may restore the shut heavy water nuclear reactor in Arak, which was supposed to be repurposed with the help of other signatories under the nuclear deal.

After those measures are implemented, 60 more days will be given for negotiations, Rouhani warned. And then Iran may take additional unspecified measures, he said.

Rouhani defended the JCPOA as a deal that was beneficial to Iran and detrimental to the enemies of Iran. He said only "radicals in the US," Israel and Saudi-led Arab nations were interested in destroying it.
Yet Iran is still holding the door open for a renewed agreement:
Iran's Foreign Minister Mohammad Javad Zarif has said Tehran's decision to row back on its commitments under the nuclear pact is reversible, and the deal can be saved if European states meet their obligations.

Zarif is currently in Moscow, where he told Russian Foreign Minister Sergey Lavrov that Iran's move doesn't violate the original terms of the 2015 agreement. He added that there's now a 60-day period for diplomatic activity over its decision.

Iran can guarantee the continued survival of the deal if European nations fulfill their obligations under the agreement, Zarif said.


Iran says the move is a response to the US' withdrawal from the agreement one year ago, and the external pressure that has been placed on Tehran as a result. Zarif said only Russia and China have supported Iran and helped it to keep the nuclear deal going.

Zarif blamed the other signatories - Britain, Germany and France - for failing to shield it from US sanctions. France said that the three European states are doing all they can to keep the accord alive, while China has stated that all sides have a responsibility to ensure the agreement is fully implemented.

"Yes, they made some nice statements," Zarif said of comments from European leaders. "But in practice nothing happened."
But unless there is substantive progress, there are rumors Iran may also withdraw from an even older treaty:
Press TV reported on Wednesday, citing sources close to Iranian president Hassan Rouhani that Tehran might withdraw from the 1970 Treaty on the Non-Proliferation of Nuclear Weapons if the UN Security Council puts the issue of the Iranian nuclear deal on the agenda.

Commenting on the partial suspension of Iranian commitments under the JCPOA, Russian Foreign Minister Sergei Lavrov noted earlier in the day it would be premature to hold a UNSC meeting on the matter.



Attention

DHS Sec McAleenan: Over 1% of Guatemala and Honduras entered the US since September 2018

Acting DHS Sec. McAleenan
© Homeland Security
DHS Sec. Kevin K. McAleenan
In a shocking demonstration of the latest surge of illegal immigrants border officials are struggling with, over 1% of the populations of Guatemala and Honduras have entered the United States since September, according to the Homeland Security Department chief.

Worse, 3% of the population of one Guatemalan county has crossed into the U.S., acting Homeland Security Secretary Kevin K. McAleenan told the 49th Washington Conference of the Americas tonight.

"The current migration flows, especially of vulnerable families and children, from Central America through Mexico, to remote areas all along the U.S. border, represent both a security and humanitarian crisis. The situation is not sustainable," said the longtime border and immigration official.

Overall, he predicted the April numbers of illegal immigrants will be even worse than the jaw-dropping March figures which shocked the White House into shaking up its immigration team. "In March, we had over 103,000 irregular arrivals of undocumented migrants - 90% crossing the U.S. border unlawfully and unsafely in the hands of human smugglers. We will see similar numbers in April," said McAleenan.

Russian Flag

Russia expels two Swedish diplomats after Stockholm denies visas for Russian envoys

Sweden Ministry for Foreign Affairs

Sweden's Ministry for Foreign Affairs
Sweden's Foreign Ministry says two of its diplomats have been expelled from Russia following a move by Stockholm to deny visas to two of Moscow's envoys.

The expulsion, announced on May 8, was another blow to relations following an earlier diplomatic dispute over alleged Russian spying in the Nordic nation.

"Two Swedish diplomats have been asked to leave Russia," Swedish Foreign Ministry spokesman Rasmus Eljanskog said. "We regret the Russian Foreign Ministry's decision."

Stock Down

Ukraine admits economy tanked due to anti-Russian policy

Ukraine default economy
The massive decline in Russia-Ukraine trade has incurred major losses for the Ukrainian economy, according to Ukraine's Federation of Employers which claims the financial damage is 13 times as much as losses suffered by Moscow.

Anti-Russian rhetoric adopted by Kiev in recent years resulted in a drastic reduction of trade turnover between the neighboring states, and stripped Ukraine of 10 percent of its gross domestic product (GDP), according to Sergey Salivon, the head of the economic policy department at the business association.

"Ukraine's cross-border trade with Russia shrunk more than three times over five years through 2018," the official said in interview with CapitalTV. "At the same time, our exports dropped more than four times as imports from Russia fell by less than three times."

Bad Guys

US more than doubles tariffs on $200 billion worth of Chinese goods

freight global trade
© Getty Images
Washington has carried out the US president's latest threat, increasing import duties on $200 billion worth of Chinese goods from 10 percent to 25 percent, according to the Federal Register.

The hike will come into effect on May 10, with US trade representatives expected to establish a process for individuals seeking exclusions from additional tariffs for certain products.

Earlier Wednesday, US President Donald Trump said he would be happy to keep tariffs in place on Chinese imports. The president stressed that Beijing is mistaken if it hopes to negotiate trade later with a Democratic presidential administration.


Fire

New documentary shows EU diplomats' real feelings about Brexit negotiations: 'Oh, f*** off!'

brexit protestor
© Reuters / Susana Vera
EU officials leading Brexit negotiations have been caught on camera using several choice words to describe the utter chaos to which they have apparently been subjected to by British Prime Minister Theresa May's Brexit delegates.

The fly-on-the-wall BBC documentary, Brexit: Behind Closed Doors will be shown in two parts and focuses on the Brexit misadventures of the EU Parliament's chief negotiator Guy Verhofstadt and his team. Despite the polite, diplomatic language used in public, tensions were apparently extremely fraught behind the scenes, with the EU team branding British negotiations "insane" and "pathetic."

During one scene, EU negotiator Michel Barnier pleaded for someone "stable, available and reliable" from the British side with whom he could conduct the talks.

"We can't ask too much of Britain, don't overdo it," Verhofstadt wryly replies.

Comment: In other words, we're leaving, but not really.


Russian Flag

Russia ramps up airstrikes in preparation for "final showdown" in terrorist-occupied Idlib

russian jet syria
© The Drive
Russian Air Force Su-30s have continued to be active over Syria
Though Syria has largely been out of the headlines for over the past half-year, there's multiple indicators to suggest we could soon be headed for a major escalation over Idlib.

The last time a large Syrian-Russian joint force mustered to retake the al-Qaeda held province in the country's northwest, the United States threatened major military response (in Sept. 2018), also citing that even should so much as an accusation of chemical weapons usage surface, US strikes would ensue.

Over the past weeks both Syrian and Russian jets have conducted airstrikes over parts of Idlib in retaliation for stepped up HTS operations (Hayat Tahrir al-Sham/Syrian AQ/formerly Nusra) against government areas in a pattern of escalation that looks to continue. And now Russia's Khmeimim airbase is facing more severe attacks via HTS rockets, mortars, and terror drones.

Comment: SouthFront reports on the methodical chipping away of Idlib terrorist positions by the Russian and Syrian air forces:
The Russian Aerospace Forces and the Syrian Arab Army (SAA) artillery have eliminated the terrorists responsible for the recent rocket attack on the Hmeimim airbase, the Ministry of Defense of Russia announced on May 8.

According to an official statement by the defense ministry, the attack was carried out by terrorist groups known as the Ard al-Bab Brigade and the al-Jabal Brigade. The two groups launched the rockets from the demilitarized zone around Idlib.
"The artillery recon units had promptly revealed 2 positions of the militants from which the attack was conducted. The firing points were eliminated by the Russian Aerospace Forces' aircraft and the Syrian Government Troops' artillery,
The Russian MoD added that the air defense systems in the Hmeimim airbase were able to intercept 12 rockets. Other rockets reportedly landed in civilian areas away from the airbase, causing material damage only.

The rocket attack was likely a response to the SAA's ongoing ground operation in northern Hama. In the last three days, the army captured four areas, including the strategic town of Kafr Nabudah.
plus actions in Latakia, where the Russian forces are based:
In the early hours of May 8, terrorists hiding along the Syrian-Turkish border launched several rockets at the Russian Hmeimim airbase in the western Syrian governorate of Lattakia.

Local sources said that the rockets missed their target and landed in civilian areas away from the airbase. No civilians were reportedly injured or killed.

In what appears to be a response to the rocket attack, warplanes of the Russian Aerospace Forces carried out a series of airstrikes on terrorists' positions in the town of Kabani in the northern Lattakia countryside.

Kabani is an infamous stronghold for several terrorist groups, including the al-Qaeda-affiliated Turkistan Islamic Party (TIP), Ajnad al-Kavkaz (AK) and Horas al-Din.

A large, well-equipped force of the SAA's 4th Division and the National Defense Forces (NDF) is currently stationed near Kabani. This force could launch a ground attack on the strategic town, if the attacks on Hmeimim went on. Such an attack will likely be a limited operation, similar to the ongoing one in northern Hama.