Fdd's overnight brief

Iran

The conflict with Iran has entered a damaging new phase—a crippling limbo between war and peace that leaves the Strait of Hormuz closed and the prospect of escalation looming. – Wall Street Journal

The U.S. stepped up its Economic Fury pressure campaign against Iran when it took control of the sanctioned vessel Tifani in the Indo-Pacific recently. The move marked an expansion of an effort to squeeze Iran economically, which involves Treasury Department sanctions and a military blockade of Iranian ports. – Wall Street Journal

Iranians crossing the country’s border with Turkey on Wednesday expressed widely differing views on the war, the cease-fire, and their government, but all voiced deep concern over an economic crisis they said was unfolding in the country. – New York Times

In the days before proposed talks aimed at ending the war between their countries, President Trump and Iranian leaders exchanged a barrage of threats and insults that played out like a high-stakes game of chicken. In the end — at least, from Iran’s perspective — Mr. Trump blinked first. – New York Times

President Donald Trump said on Wednesday that Iran had agreed not to execute eight women protesters in a sign of respect for him, while ​officials in Tehran denied the executions had been planned and accused ‌the U.S. president of spreading falsehoods. – Reuters

The U.S. breach ​of commitments and ‌its blockade of Iranian ​ports and ​threats are the main ⁠obstacles ​to “genuine negotiations”, Iranian ​President Masoud Pezeshkian said on Wednesday. “[The] ​world ​sees your endless hypocritical ‌rhetoric ⁠and contradiction between claims and actions,” ​he ​said, ⁠one day after ​U.S. President ​Donald ⁠Trump’s ceasefire extension. – Reuters

An Iranian opposition leader criticised European countries on Wednesday for doing too little to halt executions in Iran, after Tehran ​carried out another execution in what opponents say is a wartime crackdown ‌on dissent. – Reuters

Iran executed a man ​convicted of links ‌to both the exiled opposition group ​Mujahideen-e-Khalq and Israel’s ​intelligence service, the judiciary’s ⁠news outlet ​Mizan reported on Thursday. – Reuters

President Donald Trump wants ‌to see a “unified” response from Iran’s leadership to ​U.S. proposals to end ​hostilities, White House press ⁠secretary Karoline Leavitt ​said on Wednesday. – Reuters

The Islamic Revolutionary Guard Corps threatened to deliver  “crushing blows” to American assets in the Middle East as President Trump claimed the regime wants the Strait of Hormuz opened “immediately” due to its financial collapse. – New York Sun

Iran hanged a man on Wednesday convicted of links to Israel’s Mossad spy agency, the judiciary said, with two NGOs based outside the country saying he worked for the Iranian atomic energy organization. – Agence France-Presse

US Central Command (CENTCOM) denied media reports that claimed several commercial ships had evaded the blockade of the Strait of Hormuz, calling the reports “inaccurate” in a post on X/Twitter on Wednesday. – Jerusalem Post

Editorial: Trump himself has given Iran plenty of chances, revealing his preference for a deal over war. But Iran broke the terms of the latest ceasefire by firing at ships in the Strait of Hormuz. Efforts to negotiate, spearheaded by Vice President JD Vance, collapsed after 21 hours due to Iranian intransigence. Before the ceasefire, Trump warned Iran that he would take out bridges, power plants, and infrastructure that had military uses. If Iran continues its intransigence beyond the two-week ceasefire deadline, Trump should make good on his threat and start hitting Iranian infrastructure. […] The U.S. has all the leverage. The Trump administration should use it to devastating effect. – Washington Examiner

Michael Segal writes: If Iran is looking for an off-ramp that preserves its dignity as a great civilization with thousands of years of heritage, and wants to get in on the ground floor of an important new technology, it would accept the thorium proposal and agree to part with its soon-to-be-outdated uranium-235. If instead Iran is determined to get nuclear weapons, it will reject the thorium proposal, making it easier for the U.S. to gain support against Iran from allies and Western religious leaders. President Trump has a reputation for being willing to step away from the brink to make an innovative deal. The thorium proposal would be a win whether the Iranians accept it or not. – Wall Street Journal

Marc A. Thiessen writes: Those two weeks of major combat, combined with the blockade, will dramatically increase Trump’s leverage at the negotiating table. And if Iran is still not willing to meet Trump’s demands, he can declare victory without a deal — and give the Iranian people the green light to drive the weakened regime from power. In a Truth Social post Tuesday night, Trump said a deal with Iran might not be possible unless the U.S resumes bombing — “their leaders included!” He’s right. So, give the regime its 72 hours — then end the ceasefire, resume combat and eliminate the leaders who are standing in the way. – Washington Post

Marc Champion writes: He’s trying to persuade the IRGC and regime faithful that talking is more effective than inviting renewed punishment from the world’s most powerful military, but he does not and never will argue for the capitulation the US and Israel are demanding. Both sides in Iran’s internal debate want to keep power. Both want to end the international isolation that’s been a significant source of the country’s economic woes. In this case, diplomacy is — to adapt a well-worn cliche — just war by other means. Even if no agreement is reached — because an accord would give the IRGC the means to survive — the true art of Trump’s dealmaking will be to use his indefinite ceasefire to force the regime in Tehran to face its economy and people. – Bloomberg

Lebanon

Israeli strikes on ​southern Lebanon on Wednesday killed Lebanese journalist Amal Khalil and wounded a photographer accompanying her, according to a senior Lebanese ‌military official and Khalil’s employer, the Al-Akhbar newspaper. – Reuters

An Israeli invasion of southern Lebanon, bombings in Beirut, massive displacement and rising sectarian friction. The year is 2026, but for those who lived through Lebanon’s civil war five decades ago, it may as well be the 1970s. – Reuters

President Emmanuel ​Macron said on Wednesday that a second French soldier had ‌died following an attack on United Nations peacekeepers in Lebanon last week, which he said was carried out by Iran‑backed Hezbollah. – Reuters

Israel and Lebanon will discuss a Lebanese proposal to extend their 10-day ceasefire and a halt to Israeli demolition operations in villages and towns in southern Lebanon, President Joseph Aoun said Wednesday, according to a person familiar with the matter. – Jerusalem Post

Korean Peninsula

North Korea and Russia aim to open ‌a road bridge connecting the countries across the Tumen River as soon as possible, North Korean state media KCNA said on Thursday, as the neighbouring countries forge closer ties. – Reuters

South Korea’s government said on Thursday it would ensure no discrimination against U.S. tech companies, including e-commerce firm Coupang (CPNG.N), following a letter from U.S. lawmakers calling for an end to ‌unfair targeting of American businesses. – Reuters

South ‌Korean President Lee Jae Myung called ​for expanding ​cooperation with Vietnam beyond ⁠trade and ​investment to areas ​including energy security and infrastructure during summit talks ​in Hanoi ​with Vietnam’s leader To ‌Lam ⁠on Wednesday, according to South Korean media. – Reuters

South Asia

Pakistan had hoped for another windfall of global good will as it prepared to host a new round of peace talks between the U.S. and Iran this week, locking down its capital for the second time in a month in the hope that the warring sides could make a deal. But this time, after the principal players were no-shows, disappointment has set in and businesses are counting their losses. – Wall Street Journal

The U.S. military has intercepted at least three Iranian-flagged tankers in ‌Asian waters and is redirecting them away from their positions near India, Malaysia and Sri Lanka, shipping and security sources said on Wednesday. – Reuters

Germany expects to soon ​sign an final ‌agreement with India about a planned $8 billion ​submarine cooperation between ​the two countries, Defence ⁠Minister Boris Pistorius ​told reporters on Wednesday. – Reuters

Pakistan’s ⁠National Resources ​Limited said ​its Darigwan site in southwestern ​Balochistan was ​attacked by unidentified ‌gunmen, ⁠with security forces securing the area ​and ​conducting ⁠clearance operations, the ​company ​said ⁠in a statement on ⁠Wednesday. – Reuters

Nepal’s Minister of Home Affairs, ‌Sudan Gurung, resigned on Wednesday saying there had been questions over his investments and other matters, the second minister to go from the month-old government. – Reuters

Myanmar’s new president is considering “good things” for detained former leader Aung San Suu Kyi, Thailand’s ‌foreign minister said on Wednesday, as the country seeks to normalise ties with regional bloc ASEAN after five years on the sidelines. – Reuters

Mihir Sharma writes: Keeping reactors of this sort safe and operational for decades would be an achievement even greater than getting them off the ground. It will certainly require a vast expansion of supervisory and maintenance expertise as well as careful, independent regulation. But it’s worth doing, and worth doing well. This new reactor might be 14 years late, but in terms of symbolism it has been completed at exactly the right time. It achieves criticality just as we are grappling with the consequences of losing access to oil and gas from the Gulf. Nobody in India needs to be reminded of the importance of energy independence, even if it takes a century to get there. – Bloomberg

Europe

During his state visit to the United States next week, King Charles III will not meet with victims of Jeffrey Epstein, according to a letter from lawyers representing King Charles and Queen Camilla in response to a request from Representative Ro Khanna, Democrat of California. – New York Times

Lufthansa Group, the German airline, said it would cut 20,000 flights over the next six months to save jet fuel as the pressure builds on companies to address surging prices and declining supplies of energy caused by the war in Iran. – New York Times

The U.S. ​State ‌Department said on ​Wednesday ​it approved ⁠the ​potential sale ​of Hellfire missiles ​to ​the Netherlands for $200 ‌million. – Reuters

Hungary’s new government will open up the historical archives of its communist-era secret police, according to the man who will run the office of Peter Magyar, winner ​of this month’s parliamentary election, who is expected to become prime minister ​on May 9. – Reuters

A Spanish prosecutor has asked a judge to close a corruption investigation into the business dealings of Prime Minister Pedro Sanchez’s ​wife, in a case brought by far‑right groups seeking a ‌jail sentence of as much as 24 years. – Reuters

Unions at Czech Television and Czech Radio warned they were preparing to strike on Wednesday over what they see as a threat to ​their independence from planned government reforms of the state broadcasters’ funding, ‌including scrapping a licence fee. – Reuters

Norway will take ​over planning for the Fen rare earth deposit – Europe’s largest – to ‌speed up development after a resource upgrade nearly doubled its estimated size, the government said on Wednesday. – Reuters

When the European Union imposed deep trade sanctions against Russia four years ago, Estonian timber producer Puidukoda had to quickly figure out how to replace over half of its supply of spruce and pine. – Bloomberg

NATO Secretary General Mark Rutte urged allies to jointly ramp up defense-industry production to increase the alliance’s deterrence, adding that it will be a key subject at the July summit in Ankara. – Bloomberg

Bulgaria’s acting chief prosecutor resigned two days after former president, Rumen Radev, scored the most decisive election win this century and pledged to root out graft. – Bloomberg

Romania’s government is on track to lose its parliamentary majority after the biggest party in the four-member coalition signaled it’ll go into opposition, risking political instability and imperiling a drive to narrow the European Union’s widest budget deficit. – Bloomberg

British military divers are preparing to conduct mine-clearing operations in case they are needed in the Strait of Hormuz, according to the Ministry of Defence. – Politico

Editorial: Finally, as long as natural gas remains so important to its economy, the EU must ensure that it has plenty in storage by next winter — and ideally establish a strategic gas reserve to cushion short-term shocks, along the lines of its existing oil reserves. The EU can be surprisingly nimble when pressed. When Russia cut off gas deliveries in 2022, it managed to slash consumption and switch suppliers with striking speed. Yet it hasn’t finished the job of achieving energy independence. This time around, it needs to do better. – Bloomberg

James Stavridis writes: Finally, with Orban’s departure, the Hungarian military can rapidly modernize and seamlessly integrate with NATO. While it has only around 30,000 troops, Hungary is investing in frontline, modern equipment — including new German Leopard 2A7 tanks and formidable Swedish JAS39 Gripen fighters. While it is barely meeting the old NATO goal of spending 2% of GDP on defense, the incoming prime minister, Peter Magyar of the center-right Tisza party, has pledged to raise that to 5% by 2034. The end of Viktor Orban’s long political domination of Hungary is great news on many fronts, not least for the NATO alliance. – Bloomberg

Rosa Prince writes: Burnham might be popular now, but the contortion of keeping both Labour’s public-sector ultras and the bond markets happy would test the greatest leader. At least it seems some cabinet members understand their duty lies not in propping up Starmer but in figuring out what should follow. Next week McSweeney gives evidence to the same parliamentary committee on the Mandelson affair. What he says then could prove lethal for the PM. The cabinet must be ready to pick up the pieces if Starmer finally blows up. – Bloomberg

The Americas

Argentina’s government on Wednesday ​said it sent Congress an electoral reform bill it ‌said would cut costs, boost transparency and tighten party rules, including by eliminating mandatory primary elections. – Reuters

Bolivian President Rodrigo Paz on ​Wednesday appointed Marcelo Blanco ‌as the country’s new energy and hydrocarbons minister, replacing Mauricio Medinaceli ​less than six months ​into the new administration’s term. – Reuters

Colombian President Gustavo Petro is visiting Venezuela on Friday for key talks on border security and trade with the country’s acting president, Delcy Rodríguez. The meeting, their first, comes months after the U.S. military seized former Venezuelan President Nicolás Maduro and his wife from their home in January. – Associated Press

The Peruvian government moved forward with a contract to purchase new fighter jets, reversing course after the resignation of two key cabinet members and heavy pressure from the US. – Bloomberg

Juan Pablo Spinetto writes: Ambassador Shannon points to South Africa’s transition from the apartheid regime to Nelson Mandela in 1994 as a model. This will require a US government focused on building the political architecture to enable that election through diplomacy and voter engagement. “Regular Venezuelans didn’t have a voice at all in this process,” he reminds. Some in the business community may see Machado’s return as inconvenient. When the economic outlook appears to be improving, why risk stability for what may look like a far-fetched quest for democracy? The answer is blunt: Beyond any short-term gains, a country without functioning institutions, rule of law and effective governance will not get far. Venezuela needs democracy for economic progress; pursuing the reverse is simply unworkable. – Bloomberg

United States

It could take six months to fully clear the Strait of Hormuz of mines deployed by the Iranian military, and any such operation is unlikely to be carried out until the U.S. war with Iran ends, the Pentagon has informed Congress — an assessment that means the conflict’s economic impact could extend late into this year or beyond. – Washington Post

Over nearly eight weeks of war in Iran, Republicans in Congress have turned back repeated efforts by Democrats to halt the operation and force President Trump, who began the conflict without congressional authorization, to consult with lawmakers on the military campaign. – New York Times

A soldier injured in a suicide bombing on an American military base in Afghanistan can sue the military contractor who hired the bomber, the Supreme Court ruled on Wednesday. – New York Times

The Trump administration is demanding concessions from Canada before it will begin serious negotiations on the US-Mexico-Canada Agreement, says a member of Prime Minister Mark Carney’s advisory committee on US trade relations. – Bloomberg

Editorial: She reported that the service men and women of Britain were “proud to act in a just cause alongside American comrades,” a compliment that was greeted, again, by robust applause.The king’s speech to Congress is set for Tuesday. We find ourselves looking forward to it. His will be a harder task than his mother’s, as the combat phase of the war in which she spoke was short and swift and ended on our terms. We are not there yet in the current war. Nor is Britain where it was during the first Gulf War. All the more, we reckon, will be the interest what Charles has to say about how the relationship between our countries has been so special. – New York Sun

Matthew Continetti writes: The two democratic nations have special roles in the world. They share interests—and adversaries, most notably radical Islamists pursuing nuclear weapons. Supporters of Israel are supporters of America, and vice versa. Some Democrats understand the peril of abandoning longstanding commitments for grassroots enthusiasm and social-media buzz. The stakes aren’t only electoral. They are moral. “If it’s what’s necessary, I’ll be the last Democrat standing with Israel through this,” Mr. Fetterman told CNN recently. He is fighting an uphill battle for his party—and fighting it alone. – Wall Street Journal

Defense

Navy Secretary John Phelan was fired after clashing with top leaders at the Pentagon, including over administration efforts to revive US shipbuilding, according to people familiar with the matter, making him the latest high-profile Pentagon departure amid the war in Iran. – Bloomberg

The service is seeking an unmanned ground vehicle that can handle both casualty evacuation and resupply for tactical units. – Defense News

Editorial: Scaling new tech is a core reason to pass President Trump’s $1.5 trillion military budget. “We need a crash program for a high-low mix in munitions,” including offensive fires and interceptors, GOP Sen. Roger Wicker said at a recent hearing. The Trump Pentagon is expanding production lines for missiles like Patriot and Tomahawk, but Mr. Wicker said less than 3% of the current munitions acceleration effort is marked for low-cost munitions. Oh, and, “we are learning a lot” from Ukraine, Mr. Driscoll said. American lives in future wars may be spared thanks to lessons that would not have been learned if Ukraine had capitulated to Vladimir Putin. – Wall Street Journal

Mackenzie Eaglen writes: Every day that the military is stuck under a spending freeze known as a continuing resolution, the value of this historic budget request decreases. When the Pentagon operates on a CR, funding is frozen at the previous year’s approved amount, which in this case is much, much smaller. Locking in spending at the 2026 levels, which are more than 40 percent less than the proposed 2027 levels, wastes billions in taxpayer funds and ensures that the armed forces will not reap the full benefits of this buildup. If the budget is to have lasting impact, Congress needs to be an on-time partner. – National Review