VW Among Several European Automakers To Halt Vehicle Shipments, Raise Prices, In Response To Tariffs
Here come the price hikes…
European automakers are hiking prices and shifting production to the U.S. in response to Trump’s auto tariffs. Volkswagen will add import fees to vehicle prices, while Volvo and Mercedes-Benz are considering expanding U.S. manufacturing to avoid the 25% duties, according to Bloomberg.
German brands like BMW, Porsche, and Mercedes are especially exposed, but strong U.S. demand—particularly for SUVs—keeps the market attractive despite the rising costs.
Trump’s tariffs, which took effect Thursday, mark a “fundamental turning point in trade policy,” said Hildegard Müller, head of Germany’s auto lobby VDA. She warned the move would create “only losers,” including U.S. consumers facing “rising inflation and a reduced choice of products.”
The Bloomberg article says that Volkswagen notified U.S. dealers it will add import fees and temporarily pause shipments from Mexico and Europe, according to Automotive News. A spokesperson confirmed the memo but declined to elaborate.
The tariffs have already shaken the industry—buyers are rushing to make purchases, and shares of German automakers dropped sharply Thursday. Mercedes and Volkswagen fell over 3%, while BMW slipped as much as 4.3%.
Mercedes may move production of a model to Alabama to offset tariffs and is weighing pulling its cheaper cars from the U.S. after a 58% sales jump in its top-selling import, the GLC SUV. Germany’s economy minister backed EU talks with the U.S. but warned of a “clear and decisive response” if no deal is reached, calling the tariffs a risk to global stability.
Volkswagen, which builds cars in Tennessee, still imports key models from Europe and Mexico. The U.S. now makes up 20% of its revenue, helped by a 7% sales boost in 2024.
BMW imports 60% of its U.S. sales and depends on European parts for its South Carolina plant. Mercedes’ Alabama factory faces similar supply chain exposure.
Volvo plans to expand U.S. production, while Ferrari will hike U.S. prices up to 10%. British automakers warned Americans will likely pay more for iconic brands like Bentley and Mini.
“These tariff costs cannot be absorbed by manufacturers,” said Mike Hawes of the UK’s auto trade lobby, “thus hitting U.S. consumers who may face additional costs and a reduced choice of iconic British brands.”
‘DOGE Impact’: Federal Govt Layoffs Dominate Biggest March Job Losses In 36 Years
Over the last two months, DOGE actions have been attributed to 280,253 layoff plans of federal workers and contractors impacting 27 agencies,according to Challenger tracking.
Another 4,429 job cuts have come from the downstream effect of cutting federal aid or ending contracts, impacting mostly Non-Profits and Health organizations.
The Government led all sectors in job cuts in March with 216,215, all of which occurred in the federal government.
So far this year, the Government has cut 279,445, an increase of 672% from the 36,195 cuts announced in the first quarter of 2024.
March’s total is the third-highest monthly total ever recorded.
The highest monthly total occurred in April 2020 when 671,129 cuts were recorded, followed by May 2020 with 397,016. It is the highest total for the month of March on record, since Challenger began reporting on job cut plans in 1989.
“DOGE Impact” leads job cut reasons this year.
“Job cut announcements were dominated last month by Department of Government Efficiency [DOGE] plans to eliminate positions in the federal government. It would have otherwise been a fairly quiet month for layoffs,” Andrew Challenger, Senior Vice President and workplace expert for Challenger, Gray & Christmas.
Companies’ hiring plans fell in March from 34,580 in February to 13,198. So far this year, companies plan to hire 53,867 workers, a 16% decrease from the 64,163 new hires announced in the first quarter of 2024. It is the lowest Q1 hiring total since 2012 when 52,540 new hiring plans were announced.
Meanwhile, according to the government’s official data, the labor market is awesome with only 219k Americans filing for jobless claims for the first time last week – a level that has been basically consistent for the last three years
Kentucky, Illinois, and Iowa saw the biggest rise in initial jobless claims last week while Texas and Massachusetts saw the biggest decline…
And despite the surge in layoffs across the Deep ‘Tri-State’, initial jobless claims have been falling…
But continuing jobless claims broke out of its recent range and above its Maginot Line of 1.9 million Americans…
That is the highest since November 2021.
Continuing Claims across The Deep ‘TriState’ continue to rise…
So who are you going to believe – WARN notices, Challenger Grey, or the BLS?
Will tomorrow’s payrolls print be the tie-breaker?
The transgender shooter behind the 2023 Nashville elementary school attack that killed six people, including three children, had been planning it for years while struggling with mental health issues, according to a police report released Wednesday.
The nearly 50-page investigative case summary by Metro Nashville Police closes the agency’s probe into the shooting at the Christian, private Covenant School in March 2023.
Contrary to widespread media reports, the investigation said that no manifesto existed.
“In this case, a manifesto didn’t exist. Hale never left behind a single document explaining why she committed the attack, why she specifically targeted The Covenant, and what she hoped to gain, if anything, with the attack,” the Nashville police report states.
Instead, the shooter, Audrey Hale, left behind “a series of notebooks, art composition books, and media files created by Hale documenting her planning and preparation for the attack, the events in her life that motivated her to commit the attack, and her hopes regarding the outcome of the attack,” police determined.
Hale, who once attended Covenant, was killed by police.
Hale identified as a man at the time of the attack, but the police report uses female pronouns. The report doesn’t refer to Hale as transgender.
“She began to use the name ‘Aiden Williams’ in the years prior to her death and used male pronouns on her social media and networking accounts. Nothing has been found to suggest she initiated or was undergoing a transition at the time of her death, including medical documentation,” the report states.
“During her autopsy following her death, it was determined she was biologically female.”
Hale began receiving treatment at Vanderbilt University Medical Center on April 23, 2001, when the shooter was just six years old. She first fantasized about committing a mass shooting in November 2017, after watching documentaries about school shootings and “remembering her social struggles in middle school,” according to the Nashville police report.
By December 2018, Hale also began planning an attack at a different middle school where she had once been a student, the report says. Months later, her therapist became “concerned,” and recommended Hale take part in a psychological assessment at VUMC, according to the police report. That assessment occurred in June 2019.
“Based on records from the assessment, VUMC confirmed the mental health disorders Hale was already known to have and identified her depression and anxiety as the largest aggravating factors. They made no mention of psychosis and noted Hale denied having any plans to harm herself or others, nor the means to do so,” the Nashville police report states.
After her assessment, Hale participated in an eight-week “intensive outpatient program.”
“For a short period of time, the treatment seemed to work, as Hale’s writings tended to be more positive, and fewer mentions of depression and anxiety were present. She seemed more hopeful about life and the possibility of finding independence and success,” the police report states.
“But these feelings quickly faded, as the social and personal factors that drove her depression in the first place never left. Hale quickly sunk back into deep rage and despair.”
Hale continued to fantasize about school shootings for the next several years until she carried one out the morning of March 27, 2023. Hale’s shooting spree lasted about 20 minutes before police killed her.
Transgender Christian school shooter Audrey Hale began receiving treatment at Vanderbilt University Medical Center in 2001, when she was 6.
According to the Nashville police report released today, Hale first fantasized about committing a mass shooting in November 2017.
“Due to the audible fire alarm, the earplugs she was wearing throughout the attack, and the sound of her own gunfire, Hale never heard the police officers as they entered the lobby behind her. One officer then fired a 5.56mm caliber rifle at Hale, striking her and knocking her to the ground,” the Nashville police report states.
“As the officers approached Hale to take her into custody, they saw she still had possession of her firearms and her arms were moving. A second officer fired a 9mm caliber pistol at her. She was fatally wounded by the officers’ gunfire.”
The people killed in the shooting at Covenant were: Evelyn Dieckhaus, Hallie Scruggs, and William Kinney, all 9 years old; Cynthia Peak, 61; Katherine Koonce, 60; and Mike Hill, 61.
The Tennessee Star still has an ongoing lawsuit to compel MNPD and the FBI to release Hale’s full writings.
The Star reported Wednesday that it’s extended a settlement offer to FBI Director Kash Patel, who had called for Hale’s “manifesto” to be made public before he became director.
“FBI Director Kash Patel indicated that he would release Hale’s writings if made the agency’s director, and SNDM has extended a settlement offer that would see the lawsuit dropped in exchange for Patel dropping the agency’s opposition to their release around the time of his confirmation. The FBI has yet to respond to the offer,” the Star reported.
The evidence held by law enforcement on Hale includes more than 100 gigabytes of data, which includes over 900 pages of her writings.
President Trump’s late afternoon announcement on Wednesday—”Liberation Day“—unveiled a far more aggressive tariff policy than top Wall Street analysts had anticipated, prompting panic dumping in global equities and futures markets overnight.
Of particular concern is Trump’s stance toward China. The total effective tariff rate on Chinese imports surged to 54%, a dramatic increase of 34% from the previously imposed 20% in additional levies tied to fentanyl and earlier duties.
Trump’s Liberation Day has drawn swift condemnation from Beijing, which has described the escalating tariff war as “unilateral bullying.”
Nikkei Asia quoted China’s Ministry of Commerce, warning that it “firmly opposes” Trump’s tariffs and “will resolutely take countermeasures to safeguard its own rights and interests.”
The Commerce Ministry noted that the US “ignored” the benefits of a global trading system, adding, “The so-called ‘reciprocal tariffs,’ which are based on subjective and unilateral assessments by the United States, are not in line with the rules of international trade, seriously jeopardize the legitimate rights and interests of the parties concerned, and are typical of unilateral bullying.”
The ministry did not discuss specifics on the countermeasures. A ministry spokesperson told reporters that Beijing hopes to “resolve various issues through equal consultation.”
In other words, it’s just a matter of time before Beijing mounts a countermeasure against the US, whether that’s targeted tariffs, export controls, or other measures (such as targeting US Big Tech). Or as we’ve recently seen: Beijing Derailing Panama Port Deal.
Guo Jiakun, a spokesperson for China’s Ministry of Foreign Affairs, sang the same tune: China “firmly opposes” Trump’s trade war escalation, which “seriously undermines” the rules-based global trading system. He urged Washington to resolve trade differences through talks.
However, President Trump tried that with the Chinese Communist Party in his first term with the so-called “Phase One” agreement. Beijing committed to purchasing $200 billion of additional US exports. Yet, the phase one deal with the CCP was derailed by Covid disruptions.
The Trump administration’s goal with reciprocal tariffs against literally the entire world, including some cases of near triple-digit reciprocal tariffs that will lead to a historic emerging markets shock, is to reverse a half-century or more of de-industrialization policies in the US that have hollowed out the nation’s core and produced a national security threat as the world fractures into a bipolar state.
In financial markets, the People’s Bank of China set the daily reference rate for the yuan at 7.1889 per dollar, weakening the currency. This allows the yuan to depreciate and support export competitiveness. A move like this will only draw accusations of currency manipulation from Trump.
“We maintain our view that the PBOC will not allow a sharp [yuan] depreciation given capital outflow risks and the government’s objective to restore confidence in the Chinese economy,” HK Mizuho Securities analyst Ken Cheung wrote in a note earlier.
Goldman analysts Andrew Tilton and others told clients:
On April 2, President Trump announced “reciprocal” tariffs on trading partners with exclusion of products that are subject to sectoral tariffs, resulting in what we estimate to be an increase of 26pp in the average effective US tariff rate on China, which would bring the total effective tariff rate on Chinese goods to 58%.
This is much higher than we and the market had expected. Similar to the experience when the previous two 10% tariff increases were imposed on China earlier this year, we think the Chinese government is likely to retaliate with some targeted tariffs on US products as well as non-tariff measures like export controls.
We expect policymakers to continue to resist significant CNY depreciation. We believe the government will step up easing measures to offset the additional growth drag from higher tariffs. We are not changing our 2025 full-year GDP growth forecast of 4.5% at this time due to better-than-expected Q1 data and increased policy easing expectations, as well as remaining uncertainties regarding whether some of the tariffs could be negotiated down in the coming months. That said, we acknowledge downside risk from slowing global growth after the large, across-the board US tariff increases.
S&P Global Ratings credit analyst Ming Tan warned that Trump’s tariffs could exacerbate China’s weak economy:
“The drag on China’s economy from higher tariffs will transmit to banks. We expect problem loans will rise over the next few years and could leap as high as 6.4% of total loans in a downside scenario.”
Fred Neumann, chief Asia economist at HSBC, had a big-picture view for clients: “The era of Asia’s export manufacturing-led development has come to an end, and the region will need to develop markets closer to home.”
In Warning To Turkey, Israel Strikes Several Bases Across Syria
Israel on Tuesday carried out several major airstrikes on Syria, including targeting the capital of Damascus, according to state agency SANA.
“An Israeli occupation airstrike targeted the vicinity of the building of the scientific research center in the Barzeh residential district of Damascus,” the outlet said. This area has been hit several times in recent years, as it conducted chemical weapons research under Assad.
Separate airstrikes rocked a military airport in Hamas, and reportedly the T4 airbase in Homs province, in central Syria (Syrian desert).
No causalities were initially reported, but some sources say they were particularly intense, with five airstrikes launched on the Hama air base in less than half an hour on Wednesday evening.
Regional war correspondent Elijah Magnier observers of the strikes:
After bombing Damascus, Israel also bombed Syria, Hama and the T4 airport, challenging Turkey, which was/is planning to establish a military air base at the same bombed airport.
Since Bashar al-Assad’s ouster on December 8, Israel has conducted literally hundreds of strikes on army bases, weapons storehouses, and alleged chemical weapons sites.
The timing of these fresh strikes is interesting especially given Turkey’s growing closeness to the new Jolani regime.
We earlier featured reporting which says Turkey is mulling the takeover of Syria’s T4 airbase, and could provide aircover to the new government, given it has no air protection to speak of. It appears Israel wants to ensure this doesn’t happen:
A source familiar with the matter told MEE that Turkey has begun moving to take control of the T4 air base, located near Palmyra in central Syria. “A Hisar-type air defense system will be deployed to T4 to provide air cover for the base,” the source said.
“Once the system is in place, the base will be reconstructed and expanded with necessary facilities. Ankara also plans to deploy surveillance and armed drones, including those with extended strike capabilities,” the same report said.
Israel sends a warning to Turkey by heavily striking bases across Syria, saying that Ankara shouldn’t try to prevent Israelis from flying over the airspace https://t.co/VlF5ewcsis
While Iran has long been Israel’s enemy number one in Syria, Turkey is increasingly being viewed from Tel Aviv as a dangerous regional rival, especially as it cozies up to Hayat Tahrir al-Sham/AQ militants in Syria. Israel now wants to ensure it has complete dominance over Syria’s skies for the foreseeable future.
California Representative Maxine Waters, ranking member of the US House Financial Services Committee, used her opening statement at a markup hearing to criticize President Donald Trump’s business and ethical entanglements with the crypto industry, including the launch of a stablecoin by a family-backed company.
Addressing lawmakers at an April 2 hearing, Waters said Trump had used his position as president to leverage “multiple crypto schemes” for profit, including a US dollar-pegged stablecoin launched by World Liberty Financial (WLFI) — the firm backed by his family.
The California lawmaker pointed to Trump’s memecoin launched in January, his plans to establish a national cryptocurrency stockpile, and “his own stablecoin,” referring to WLFI’s USD1 token launched in March.
Rep. Maxine Waters addressing the House Financial Services Committee on April 2. Source: GOP Financial Services
“With this stablecoin bill, this committee is setting an unacceptable and dangerous precedent, validating the president and his insiders’ efforts to write rules of the road that will enrich themselves at the expense of everyone else,” said Waters, adding:
“Trump likely wants the entire government to use stablecoins from payments made by the Department of Housing and Urban Development, to Social Security payments, to paying taxes. And which coin do you think Trump would replace the dollar with? His own, of course.”
Waters does not stand alone in her criticism of Trump’s crypto ventures, with many lawmakers and experts across the political spectrum suggesting potential conflicts of interest.
Committee Chair French Hill, who spoke on stablecoins before Waters, also reportedly said that the Trump family’s involvement in the industry makes legislation “more complicated.”
“If there is no effort to block the President of the United States of America from owning his stablecoin business […] I will never be able to agree on supporting this bill, and I would ask other members not to be enablers,” said Waters.
Representative Bryan Steil, who introduced the Stablecoin Transparency and Accountability for a Better Ledger Economy, or STABLE Act, did not immediately address Waters’ concerns about Trump’s stablecoin but referred to establishing safeguards for consumers.
Hill did not mention Trump in his opening statement but said there needed to be a “clear federal framework” for payment stablecoins.
Crypto legislation moving through Congress
The committee will consider amendments to the STABLE Act, as well as bills to combat illicit finance using emerging financial technologies and blocking the US government from issuing a central bank digital currency, or CBDC.
The markup hearing was a necessary step before the committee could vote on whether to advance the bills to the House of Representatives.
ICC Blasts Hungary For Ignoring Arrest Warrant As Orban Hosts Netanyahu
The International Criminal Court (ICC) has denounced Hungary’s decision to defy its arrest warrant for Israeli Prime Minister Netanyahu after The Hague charged him with war crimes last year related to the Gaza war.
Netanyahu is set to begin a four-day visit to Hungary on Wednesday. Hungarian Prime Minister Viktor Orban made it clear he will not enforce the arrest warrant upon issuing the invitation. This despite Hungary being a founding member of the ICC.
This marks only Netanyahu’s second international trip since the warrant was issued, and he’s had to avoid Europe altogether until now. The only other trip was to the United States, where he had received a standing ovation in Congress.
Last November, when Budapest first unveiled the formal state invitation, Orban dismissed the ICC’s arrest warrant as “shameful” and “absurd”.
It should be noted that Hungary had also long ago declared it would never arrest Russian president Vladimir Putin should he visit the country. The conservative populist Hungarian leader had further accused The Hague of “interfering in an ongoing conflict for political purposes” – in reference to Israel’s Gaza operations.
ICC court spokesman Fadi El Abdallah in a fresh statement said that it is not for parties to the ICC “to unilaterally determine the soundness of the Court’s legal decisions.”
“Any dispute concerning the judicial functions of the Court shall be settled by the decision of the Court,” he said, asserting that member nations have an obligation to carry out the rulings of the court.
The Associated Press has observed that “Members of Orbán’s government have suggested that Hungary, which became a signatory to the court in 2001, could withdraw.”
Amnesty International was also among the human rights groups blasting Hungary’s provocative invitation, with a spokesperson saying, “Hungary’s invitation shows contempt for international law and confirms that alleged war criminals wanted by the ICC are welcome on the streets of a European Union member state.”
More anger directed at Orban as he’s already unpopular among Western European leaders, and a longtime thorn in the side of EU counterparts…
It is outrageous that any European Union state would allow Netanyahu to visit without arresting him on his outstanding International Criminal Court warrant. Hungary is no exception even though Viktor Orban routinely flouts the rule of law. https://t.co/xLoxM5YeQM
Israel’s Gaza operations started again last month, and Gaza health authorities say that over 1,000 Palestinians have died since then. This brings the official number of deaths to over 50,000. However, Israel has disputed these figures, and has claimed that tens of thousands of the casualties are actually Hamas fighters.
Days ago Israel’s military once again ordered the evacuation of Rafah, and emerging reports say that in Gaza City food and water are becoming scarce. Netanyahu has vowed, despite an avalanche of international criticism, to pursue Hamas until the group is eradicated and can no longer attempt to assert its rule over Gaza.
Violent crime and sexual assault cases have increased in number even further in Germany, according to police statistics.
The number of “non-German” suspects has also risen by over 7 and a half percent, according to the figures seen by German newspaper Die Welt.
The statistics show that violent crime as a whole was up by 1.5 per cent in 2024, a new record high for the country.
1/ German federal crime stats for 2024 are out:
▶️ Overall violent crime up 1.5% over 2023, which itself was a 15-year high.
▶️ Homicide +.9%
▶️ Violent sex offenses +9.3%
▶️ Aggravated assault +2.4%
▶️ Robbery -3.7% https://t.co/hYxhZ76xbj
The report states that the number of murder and manslaughter cases are up by almost 1 per cent in a year, while serious sexual crimes including rape and sexual assault leading to death have risen by a whopping 9.3 per cent in 2024.
3/ ▶️ Overall crime dropped slightly, mostly owing to the German government’s decision to legalize cannabis (the number of cannabis offenses dropped 53%).
▶️ Number of non-German suspects overall stable at just under 50%, 17.5% of criminal suspects are asylum-seekers.
As we have previously noted, the “non-German” suspects aspect is also misleading given that many of the “German” suspects of crimes are really foreigners who have obtained German citizenship, or they are Second or third generation migrants.
2023’s stats revealed that violent crime in Germany rocketed to a 15 year high, and 2024’s stats show that it continues to climb.
Over 41 percent of all crime suspects in Germany are foreigners, despite only representing 15 percent of the total population. Foreign migrants were also responsible for 58.5 percent of all violent crimes.
Meanwhile, the new German government coalition, which is likely to be the Christian Democrats (CDU) and the Social Democrats (SPD) is looking to ban “lies,” according to a working paper that emerged from the group “culture and media” between the two parties.
What constitutes ‘lies’ you might ask. Well, Bild newspaper received a copy of the working paper, which outlines “disinformation and fake news” as threats to democracy.
Given that anything that goes against the leftist government narrative is deemed to be ‘disinformation’, you can see where this is headed.
Another part of the paper addresses “hate and agitation.” Again, you can see where that’s heading.
As we previously highlighted, District council member Marie-Thérèse Kaiser of the AfD Party was found guilty of ‘incitement’ by a district court after she posted a link to the government’s own statistics on crimes committed by migrants, specifically rape, and asked why they are so disproportionately high.
Opposition parties on the right, including AfD, have continually argued that the data shows the urgent need for a cap on immigration, and have argued that such ‘integration’ policies are a key component of the coalition government’s race to naturalize millions of foreigners, thereby masking the truth of who is behind the crime surge.
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Saudi Arabia and other Gulf states have imposed a ban on US warplanes using their air fields or skies to attack Iran after US President Donald Trump over the weekend threatened to bomb the country.
Saudi Arabia, the UAE, Qatar and Kuwait have all told the US they will not permit their airspaces or territories to be used as a launchpad against Iran, including for refuelling and rescue operations, a senior US official told Middle East Eye. The official spoke on the condition of anonymity to discuss sensitive military planning. “They do not want to be drawn in,” the official said.
The Gulf states’ intransigence is a setback for the Trump administration, which has hoped to use massive air strikes on the Houthis in Yemen as a show of force to corral Tehran to the negotiating table on a nuclear deal. If Iran realizes the US’s oil-rich Arab allies are not on board with strikes, it could harden their negotiating position.
The Gulf states were more accommodating on the Houthi strikes, a former US official briefed on the matter told MEE without divulging which Gulf countries the US used as a launchpad for recent strikes.
The former official, also speaking on condition of anonymity, said the US felt confident it had enough Gulf support, including to launch important recovery flights, if any American aircraft were downed during those operations.
The Trump administration has been courting the Gulf states to come on board as it ramps up a “maximum pressure” campaign against Tehran. US defense and intelligence officials met with both their Emirati and Saudi counterparts in March in Washington DC, around the time of the first Houthi strikes.
In quick succession, the Trump administration approved long-stalled arms sales to Qatar and Saudi Arabia. Doha received approval to purchase MQ-9 Reaper drones, and Riyadh secured weapon systems that convert unguided air to ground rockets to precision rockets.
Trump said on Monday that he plans to visit Saudi Arabia and potentially other Gulf states as early as May.
US turns to Diego Garcia base
The US has been moving warplanes and cargo to Jordan and Gulf states at the highest level since the 7 October 2023 Hamas-led attacks on southern Israel morphed into a simmering regional conflict.
According to flight tracking data shared on X by open source analysts, the number of US military cargo flights to the region has surged by 50 percent compared to previous highs. In response to the Gulf states’ ban, the US has amassed B-2 bombers at Diego Garcia base in the Indian Ocean, the official said.
This is not the first time American war planners leaned on Diego Garcia’s strategic position as an alternative to Gulf air bases. During the late 1990s, when the US was bombing Saddam Hussein’s Iraq and Saudi Arabia imposed a freeze, the US used the Chagos Islands base as a launchpad.
Open-source satellite information provided by Planet Labs earlier this week showed three B-2 bombers on the US base. Other open-source accounts shared imagery suggesting at least five B-2 bombers were on the base.
The Chagos Islands base is within 5,300 kilometres of Iran, well within the B-2 refuelling range of approximately 11,000 kilometres. B-2s are capable of carrying 30,000-pound “bunker-buster” bombs that would be needed to penetrate Iran’s nuclear sites deep underground, known as the Massive Ordnance Penetrator. Diego Garcia complicates Iran’s power of deterrence against the US.
Iran’s tit-for-tat warnings on Gulf
In October 2024, when Iran was girding for Israeli retaliation over its second direct missile attack on Israel, the Islamic Republic warned Gulf states it would bomb their oil facilities in response to an Israeli strike.
Those carefully constructed tit-for-tat warnings allowed Iran to ward off an Israeli strike on their energy facilities at the time. However, if the US uses Diego Garcia to attack Iran, it could avoid the Gulf states’ airspace altogether, or at the very least, give Gulf monarchs some plausible deniability about being involved in strikes. That gives Iran fewer options to deter American or Israeli strikes by threatening the Gulf.
Iran was believed to be behind the 2019 attack on Saudi Arabia’s Aramco oil facilities. But Iran and the Sunni Gulf monarchs have patched up ties since then. The Telegraph reported on Monday that Iranian military commanders were being urged to launch pre-emptive strikes on Diego Garcia.
Behnam Ben Taleblu, an Iran expert at the Foundation For Defence of Democracies think tank in Washington, said on X that while Tehran’s ballistic missiles’ range is publicly capped at 2,000 kilometres, it could hit the island by giving intermediate range ballistic missiles to the Houthis which it may be able to produce, launching Shahed drones from ships or using container-launched cruise missiles that Russia and China produce to attack from the Indian Ocean.
From Pacific to Middle East
Trump raised the specter of a new Middle East war in an interview on Saturday, threatening “bombing the likes of which they (Iran) have never seen before” if Iran doesn’t agree to a nuclear deal.
Trump is pursuing maximalist demands on Iran’s nuclear programme. National security advisor Mike Waltz said recently that the US wanted to see a “full dismantlement” of Tehran’s nuclear capabilities.
Iran, which insists its nuclear program is for civilian purposes, has rejected that. The Trump administration’s demands also put the US on a collision course with Russia, with which it is trying to reset relations. Russia built Iran’s first nuclear power plant at Bushehr, and its state-run atomic energy giant Rosatom says it is in talks to build more.
Regional diplomats and analysts are trying to decipher whether the US military build-up in the Middle East is designed to put teeth behind Trump’s threats or if the US is preparing for a strike. In addition to cargo flights, the US has ordered two aircraft carriers to the Middle East. Notably, the US has moved the carrier Carl Vinson out of the Pacific and to the Middle East, despite heightened tensions around Taiwan.
The US has at least 40,000 troops in the Middle East. The majority are located in the oil-rich Gulf states, where they are based at a string of strategic air and naval bases.
Saudi Arabia’s Prince Sultan Air Base is home to the US’s 378th Air Expeditionary Wing, which operates F-16 and F-35 jet fighters. The US operates MQ-9 Reaper drones and jet fighters out of the UAE’s Al Dhafra Air Base. Kuwait’s Ali al-Salem Air Base is home to the 386th Air Expeditionary Wing.
Qatar’s Al Udeid Air Base hosts the regional headquarters for US Central Command. It has also hosted some Israeli military officials, MEE has previously reported, but it’s not clear if those officials are still in the country. The island kingdom of Bahrain is home to around 9,000 US troops that belong to the headquarters of the US Naval Forces Central Command and the US Fifth Fleet.
Trump warned last weekend that Zelensky will have “some problems – big, big problems” if he “tries to back out of the rare earth deal” amidst reports that the latest version of this agreement is very lopsided. It allegedly compels Ukraine to contribute half of its revenue from all resource projects and related infrastructure into a US-controlled investment fund, pay off all US aid from 2022 onward through these means, and give the US the right of first offer on new projects and a veto over resource sales to others.
These tougher terms can be considered punishment for Zelensky picking his infamous fight with Trump and Vance at the White House in late February, but the whole package is being sold to Ukraine as a “security guarantee” from the US. The argument goes that America won’t let Russia threaten these projects, which also include pipelines and ports, thus leading to it at the very least resuming 2023-levels of military-intelligence aid and maybe even directly escalating with Russia to get it into back down.
Ukraine kinda already has such Article 5-like guarantees from the US and other major NATO countries per the bilateral pacts that it clinched with them all throughout last year as explained here, but this proposed arrangement gives the US tangible stakes in deterring or immediately stopping hostilities. The trade-off though is that Ukraine must sacrifice part of its economic sovereignty, which is politically uncomfortable since Zelensky told his compatriots that they’re fighting to preserve its full sovereignty.
If Zelensky agrees to Trump’s lopsided resource deal, then the optics of any ceasefire, armistice, or peace treaty would pair with de facto global recognition of Russian control over the fifth of Ukraine’s pre-2014 territory that Kiev still claims as its own to craft the perception of a joint asymmetrical partition. Not only might Zelensky’s political career end if Ukraine was then forced to hold truly free and fair elections, but his envisaged legacy in Ukrainians’ eyes as this century’s top “freedom fighter” would also be shattered.
He doesn’t have any feasible alternative though since going behind Trump’s back to reach a comparatively better deal with the Brits and/or Europeans wouldn’t result in the “security guarantees” that he’s convinced himself that Ukraine needs in order to compromise with Russia. No one other than the US has any chance of militarily taking on Russia, let alone the political will, and not to mention solely over their investments in a war-torn third country whose resource wealth is reportedly questionable.
If Zelensky keeps dillydallying, then Trump might once again temporarily suspend military and intelligence aid to Ukraine as leverage while tacking on even more punitive terms as revenge. The conflict with Russia would also naturally continue, thus making it impossible for Ukraine to develop its resource industry and related infrastructure even if it reached a deal with someone else. The longer that the conflict lasts, the greater the likelihood that Russia will destroy more of those same assets too.
But if Zelensky accepts the latest deal on offer, then he’d obtain the “security guarantees” that he’s looking for, thus making him more likely to accept a ceasefire and then possibly leading to Trump putting further pressure on Putin to follow suit such as imposing strict secondary sanctions on Russian oil clients. Zelensky would sacrifice his political career, his envisaged legacy in Ukrainians’ eyes, and part of his country’s economic sovereignty, but he’d avert a much worse scenario than if he rejected this deal.
