Today In Issues:
FDD Research & Analysis
The Must-Reads
Rockets strike near U.S.-linked oil installation and military bases in Iraq, 3 wounded In first, Israel’s F-35s join massive drill simulating war with Hezbollah, Gaza As Iraq tries to beat the heat, U.S. renews sanctions waiver on power from Iran Trump creates doubt over use of U.S. force to protect Gulf oil Morsi’s death in Egypt puts Muslim Brotherhood back in focus Xi hails ‘new chapter’ with North Korea ahead of landmark visit Russia, China block UN from saying NKorea violated sanctions Hong Kong official defends police’s use of force against protesters Hudson Institute’s Seth Cropsey: America’s stake in Taiwan How 7.4 tons of Venezuela’s gold landed in Africa - and vanished Bloomberg's Eli Lake: The short, sad career of Patrick ShanahanIn The News
Iran
Top Trump administration officials signaled the U.S. didn’t intend to assume sole responsibility for safeguarding tankers in the Persian Gulf after attacks Washington blames on Iran, because America has become less dependent on oil supplies from the region. – Wall Street Journal
Iran is trying to rally support from Russia, China and other countries to help counter a U.S. campaign that has included crippling economic sanctions and thousands of additional troops committed to the Middle East. – Wall Street Journal
The simmering standoff between the United States and Iran is feeding global concern that both countries are inching perilously close to war. It has also focused attention on Iran’s network of proxy forces throughout the Middle East. – Washington Post
After unilaterally withdrawing from the landmark 2015 Iran nuclear accord last year, the Trump administration embarked on a “maximum pressure” campaign against Tehran that was intended to force Iran to abandon many aspects of its expansive foreign policy in the Middle East. – Washington Post
U.S. Special Representative for Iran Brian Hook plans to travel to Paris next week for talks about Iran with senior British, French and German officials, a senior European diplomat and another source familiar with the matter said on Tuesday. – Reuters
Iran has declared it “will not wage war against any nation” after the US announced that a further 1,000 troops are to be sent to the Middle East amid rising tensions. – The Guardian
Britain, France and Germany plan a new push to keep Iran in the 2015 nuclear deal despite Tehran’s threat to violate one of its central limits, but they may be nearing the end of the diplomatic road they embarked on more than 15 years ago. – Reuters
A year after the United States pulled out of the Iran nuclear agreement, the pact is at severe risk of collapse and the European Union is caught in the middle, struggling to keep supply lines open to the Islamic Republic’s wilting economy under the threat of U.S. sanctions. – Associated Press
Afshon Ostovar writes: Moreover, by displaying a willingness to target civilian maritime traffic, Iran is challenging the United States and its regional allies to a test of wills. Iran is forcing the Trump administration to confront the limits of its maximum pressure campaign and revealing the flexibility of U.S. red lines. The attacks in Fujairah led to a muted response by the Trump administration.[…] As much as Iran might be signaling a willingness to expand tensions into conflict, it is also probably trying to find a way, short of war, out of its current predicament. – Foreign Policy
David Rosenberg writes: Whatever else you might say about 40 years of Islamic rule in Iran, economically it’s been an abject failure. The country remains almost wholly dependent on oil exports and otherwise produces nothing apart from carpets and pistachio nuts that the world wants. The economy doesn’t even make things Iranians want, as long as they can buy imported products. That fundamental weakness of the Iranian economy has become clear as Europe struggles to create mechanisms to get around the American sanctions. – Haaretz
Amos Harel writes: Iran may soon escalate its conflict with the United States, possibly choosing the Israeli border as the target, Israeli and Western intelligence sources say. They say Tehran is disappointed with its failure to force the Americans to reconsider the strong sanctions they’ve imposed on Iran and on companies doing business with the Islamic Republic, which have stoked a serious economic crisis. – Haaretz
Turkey
Acting U.S. Defense Secretary Patrick Shanahan and his Turkish counterpart Hulusi Akar are in contact about Ankara’s plans to buy a Russian air defense system, and may meet during NATO meetings in Brussels next week, NATO’s commander said. – Reuters
Turkey said on Tuesday a U.S. warning that Ankara would be removed from Washington’s F-35 fighter jet program unless it drops a planned purchase of a Russian air defense system was out of keeping with the spirit of NATO partnership. – Reuters
Thousands of supporters of the Muslim Brotherhood in Turkey took to the streets of capital Ankara and Istanbul on Tuesday to mourn former Egyptian president Mohamed Mursi, with some chanting slogans blaming Cairo authorities for his death. – Reuters
Gonul Tol writes: Despite what might look like a gloomy picture for the Yildirim campaign, there are those who think that Erdogan would have never called for a rerun of the election without making sure he would win — one way or another. Will Erdogan pull a trick out of his hat? He might, but not without a huge cost for his already damaged image and the country’s faltering economy. – Middle East Institute
Israel
The Israeli Air Force is holding a large-scale multi-day exercise simulating combat action on multiple fronts, the army said Tuesday, with the air force’s F-35s taking part for the first time. – Times of Israel
A spokesman for Palestinian Authority President Mahmoud Abbas said on Tuesday that President Donald Trump’s yet-to-be-unveiled peace plan was a “conspiracy” the Palestinians would “thwart.” – Algemeiner
The International Atomic Energy Agency (IAEA) signed an agreement to recognize Palestine as a state as it joined the international body on Tuesday. – Jerusalem Post
Next week’s meeting in Jerusalem between the national security advisers of Israel, the United States, and Russia is “very important for the stability of the Middle East during these turbulent times,” said Prime Minister Benjamin Netanyahu on Tuesday. – Jerusalem Post
Egypt will pay a $500 million fine to Israel for backing out of an agreement to provide natural gas, following jihadist attacks on the pipeline in the Sinai peninsula. – Arutz Sheva
Qatar has in recent years funnelled hundreds of millions of dollars into relief projects in Hamas-controlled Gaza, which it views as helping stave off privation and fighting with Israel. – Reuters
Iraq
The U.S. has allowed Iraq to import natural gas and electricity from Iran without risking sanctions for another four months, Iraqi officials said, as Baghdad braces for protests over power cuts during the scorching summer months. – Wall Street Journal
A rocket landed Wednesday on the edge of a compound housing staff from global oil giant ExxonMobil, wounding three people near Iraq’s southern city of Basra — the latest in a string of attacks on U.S.-linked targets in the region. – Washington Post
A rocket landed near an Iraqi military base hosting U.S. forces in the northern city of Mosul late on Tuesday, an Iraqi military statement said, the second such incident in two days. – Reuters
Gulf States
U.S. President Donald Trump said he was prepared to take military action to stop Tehran from getting a nuclear bomb but left open whether he would back the use of force to protect Gulf oil supplies that Washington fears may be under threat by Iran. – Reuters
The US secretary of state, Mike Pompeo, has called on other nations to help safeguard tanker traffic in the Persian Gulf following a spate of attacks on ships which Washington blames on Iran. – The Guardian
Secretary of State Mike Pompeo has blocked the inclusion of Saudi Arabia on a U.S. list of countries that recruit child soldiers, dismissing his experts’ findings that a Saudi-led coalition has been using under-age fighters in Yemen’s civil war, according to four people familiar with the matter. – Reuters
Senators are paving the way to block President Trump’s arms deal with Saudi Arabia as soon as this week. – The Hill
Middle East & North Africa
The election of Mohammed Morsi as Egypt’s president seven years ago marked the height of the Muslim Brotherhood’s political power in the Middle East. His death in custody at 67 comes as the Islamist group struggles for relevance after a state crackdown on its supporters. – Wall Street Journal
Russia told the United States on Tuesday to drop what it called provocative plans to deploy more troops to the Middle East and to cease actions that looked like a conscious attempt to provoke war with Iran. – Reuters
U.N. chief Antonio Guterres appealed to Russia and Turkey on Tuesday to stabilize northwest Syria as the U.N. aid chief said that some hospitals were not sharing their locations with the warring parties because that “paints a target on their back.” – Reuters
Korean Peninsula
Russia and China on Tuesday delayed a U.S. request for a U.N. Security Council sanctions committee to demand an immediate halt to deliveries of refined petroleum to North Korea over accusations Pyongyang violated a U.N. cap, diplomats said. – Reuters
Chinese President Xi Jinping called for starting a “new chapter” with North Korea in a newspaper commentary published in Pyongyang ahead of the first visit by a Chinese leader in 14 years. – Bloomberg
Chinese President Xi Jinping praised North Korea for moving in the “right direction” by politically resolving issues on the Korean Peninsula in an essay published in both countries’ official media Wednesday on the eve of Xi’s visit to Pyongyang to meet North Korean leader Kim Jong Un. – Associated Press
Russia and China have blocked the U.N. Security Council committee monitoring sanctions against North Korea from declaring that Pyongyang breached the annual limit for importing refined petroleum products which are key for its economy, two U.N. diplomats said Tuesday. – Associated Press
China
President Trump and Chinese President Xi Jinping agreed to meet in Japan next week, lifting financial markets and spurring hopes for a trade truce that could stave off a fresh round of tariffs. – Wall Street Journal
China and the United States are rekindling trade talks ahead of a meeting next week between Presidents Donald Trump and Xi Jinping, cheering financial markets on hopes that an escalating trade war between the two countries would abate. – Reuters
James Freeman writes: The G-20 gathering of political leaders from large economies can often be a threat to the health of those economies. But if Mr. Trump can use this meeting to persuade Chinese dictator Xi Jinping to stop mistreating U.S. companies—in return for ending American tariffs—economic health is sure to improve worldwide. – Wall Street Journal
Asia
This city’s embattled leader signaled that her government is unlikely to resurrect a proposed extradition law, which she suspended on Saturday following mass protests, in an effort to quell the biggest public unrest in 22 years of Chinese rule. – Wall Street Journal
The public is wary of seeing Communist Party-ruled Beijing wield still greater influence that would imperil civil liberties such as independent courts and the freedom to speak out against the local government, privileges not enjoyed in the mainland. Officials in Beijing back the unpopular extradition legislation. Lam is stuck in the middle. – Associated Press
Hong Kong is bracing for fresh rallies on Friday, which many fear could turn violent, as protesters gave city authorities until Thursday to meet their demands on the retraction of the city’s controversial extradition bill. – The Guardian
China has finished building the outer safety dome at its first overseas “Hualong One” nuclear reactor in Pakistan, with the project scheduled to be finished by the end of 2020, the China National Nuclear Corp (CNNC) said late Tuesday. – Reuters
Seth Cropsey writes: China’s leaders fear and detest Taiwan, in large measure because it’s an American ally. In the event of an attack on Taiwan by a hostile nation (read: China), the U.S. is pledged to aid its ally. Failure to fulfill that pledge would effectively encourage other regional allies such as South Korea and Japan to make accommodations with Beijing. That would be an unmitigated disaster: Control of Taiwan would allow Beijing to menace Japan’s southwest islands and the U.S. Marine base on Okinawa, to enforce its wrongful claim to the South China Sea. – Wall Street Journal
Hal Brands writes: Finally, the Indo-Pacific strategy underlines the awkward matter of whether that region truly is America’s priority theater. Because no matter what the strategy documents say, the Trump administration just can’t seem to maintain strategic focus. Right now, the U.S. risks being consumed by a deepening diplomatic and military crisis in the Persian Gulf, one caused partially — although far from entirely — by Trump’s efforts to ratchet up the pressure on Iran. The administration is saying one thing about its geopolitical priorities, yet it is continually doing another thing in terms of the fights it picks. – Bloomberg
Sumit Ganguly and S. Paul Kapur write: India has emerged as a central partner in U.S. efforts to balance rising Chinese power. To this end, the United States has invested heavily in India, brokering an agreement to afford it access to nuclear materials and technology; enabling Indian acquisition of cutting-edge military and dual-use systems; and declaring India to be a “major defense partner” and “lynchpin” of its strategy in Asia. These efforts to build capacity in India leave an essential question unanswered, however: even if the United States significantly augments India’s strategic capacity, will India prove willing to contribute to U.S. balancing efforts in the region? – The National Interest
Europe
The government of President Emmanuel Macron is preparing to cut the country’s unemployment benefits as the French leader seeks to reboot his economic overhauls and put months of violent yellow-vest protests behind him. – Wall Street Journal
As tensions between Washington and Tehran escalate, European leaders find themselves in an uncomfortable place they have feared ever since President Trump pulled out of the Iran nuclear deal 13 months ago and restored punishing sanctions against Tehran. – New York Times
To President Trump, economics has always been a zero-sum game: If another country is winning, the United States must be losing. That view became clear on Tuesday, when Mr. Trump accused the European Central Bank of trying to prop up Europe’s economy and weaken its currency to gain a competitive edge over the United States. – New York Times
European Union governments failed on Tuesday to make good on a promise to open membership talks with North Macedonia and Albania, which face further delays to their hopes of joining the bloc due to resistance from northern Europe. – Reuters
The European Union will examine retaliatory measures against Turkey over its drilling activities in the southeastern Mediterranean, in a move that risks pushing relations between Ankara and Brussels to a new low. – Bloomberg
Editorial: Mr. Trump is right that the eurozone has attempted a competitive devaluation as a substitute for hard reforms, but he’s wrong to think it’s working for Europe. He’s also wrong to think it would work for the United States. – Wall Street Journal
Edward Lucas writes: Presidential rhetorical fireworks aside, it is almost certain (and desirable) that the bulk of the U.S. military presence in Europe remains in Germany. Moving some American troops to Poland – if that indeed happens – would be militarily and diplomatically sensible. It will strengthen the bilateral relationship with an important ally and make NATO’s defensive presence in the region more credible. It is not political punishment, and should not be portrayed that way. – Center for European Policy Analysis
Africa
Unidentified gunmen on motorbikes attacked two villages in central Mali, killing at least 41 people in a part of the country where ethnic reprisal attacks have surged in recent months, a local mayor said on Tuesday. – Reuters
More than 300,000 people have been displaced this month by ethnic violence in Ituri province in the Democratic Republic of Congo, the UN says. There are fears that the latest clashes – between Hema cattle-herders and Lendu farmers – could hamper efforts to combat an Ebola outbreak in the region. – BBC
The seas off West Africa’s oil-rich coastline are now the most dangerous in the world for shipping, according to a new report. One Earth Future, which produces an annual State of Maritime Piracy, says that while attacks have been falling substantially in some regions of the world, in West Africa they’ve been on the rise and are now more frequent than anywhere else. – BBC
Latin America
Venezuela’s political opposition welcomed funds from private donors and foreign governments as the movement to remove authoritarian leader Nicolás Maduro gained momentum earlier this year, with money earmarked to help hundreds of Venezuelan soldiers who defected to neighboring Colombia. – Wall Street Journal
The government of Venezuelan President Nicolás Maduro is selling off his country’s gold reserves. Some of it has passed through a secretive operation in East Africa, a gambit that evades U.S. sanctions. – Wall Street Journal
Brazil’s state-controlled banks are bracing for potentially heavy losses after Odebrecht SA, the construction conglomerate at the center of a regionwide corruption scandal, filed for the largest-ever bankruptcy in Latin America. – Wall Street Journal
President Trump praised Mexico’s efforts to intercept Central American asylum seekers and said that Guatemala was getting ready to sign an agreement that would make it a final refuge for people fleeing poverty and violence in the region. – Wall Street Journal
Ecuador President Lenin Moreno insisted Tuesday the United States would not be installing a military base on the Galapagos Islands, a day after the government revealed that American aircraft would be able to use an airstrip there. – Agence France-Presse
Cybersecurity
Facebook Inc.’s plans to create a new cryptocurrency that can be used for everything from commerce to money transfers is facing pushback from angry U.S. lawmakers. – Bloomberg
Hawley on Wednesday will introduce a bill requiring companies to prove they are politically “neutral” before they receive protections under Section 230 of the Communications Decency Act (CDA), which largely gives internet platforms legal immunity over content posted on their sites by third parties. – The Hill
Several provisions in the Senate’s version of the annual defense policy bill aim to increase oversight of cyber activities in the Department of Defense, including a new two-star general officer to serve as the senior military adviser to cyber policy. – Defense News
The House on Tuesday rejected an amendment that would have limited the government’s ability to collect Americans’ personal communications without a warrant. – The Hill
Cyberattacks in the Middle East are on the rise, according to a new report. The Middle East region, and especially the United Arab Emirates, saw a growing number of attacks in the six months leading to March this year, according to DarkMatter, a cybersecurity firm based in the UAE. – CNBC
Trump Administration
Republican senators quickly backed Patrick Shanahan’s decision to withdraw his nomination to be the permanent Defense secretary in the wake of multiple reports describing past domestic violence incidents involving his family, with some voicing surprise at the allegations. – The Hill
Matthew Continetti writes: So does the continuing revolt against global elites. One of the many oddities of this presidency is that a uniquely American figure such as Mr. Trump is part of a worldwide phenomenon. But there really can be no doubt that Mr. Trump was among the first heralds of an anti-elitist turn that has disrupted politics from London to Melbourne. The issues animating this upheaval have not disappeared. Nor is Mr. Trump likely to. – New York Times
Eli Lake writes: It’s hard not to feel some sympathy for Patrick Shanahan. The acting U.S. secretary of defense said Tuesday he is leaving government because of “a painful and deeply personal family situation” from a decade ago that he had hoped to keep private. Now the details have become public, and the FBI’s lingering questions are the ostensible reason that Shanahan has withdrawn from consideration to replace James Mattis, who resigned as the Pentagon’s chief in December. – Bloomberg