What’s in a handshake? U.S. President Donald Trump and North Korean leader Kim Jong Un met at the Demilitarized Zone between North and South Korea yesterday. After a photo op laced with political symbolism (this was the first visit of a sitting U.S. president to North Korea) and some controversy (the chaos of the moment at one point had North Korean security officials jostling with officials on the U.S. side), Trump and Kim met behind closed doors for about an hour. After the meeting, the U.S. secretary of state said he expected negotiations with North Korea on its nuclear weapons program to begin in two to three weeks. Chinese state media said credit for the meeting belonged to Chinese President Xi Jinping, who held an official meeting with Kim in North Korea on June 20, while South Korea’s Unification Ministry said it hoped the meeting would be a “turning point” in negotiations. To us it seems little more than a handshake. Nothing that happened over the weekend suggests to us that North Korea is suddenly serious about denuclearization.
Speaking of nuclear weapons, Iran has finally grown tired of being the only country upholding the letter of the Iran nuclear deal. Fars news agency reported that Iran recently exceeded the 660-pound (300-kilogram) limit of 3.67 percent enriched uranium defined in the 2015 Joint Comprehensive Plan of Action. This was subsequently confirmed by Iran’s foreign minister in an interview with the Iranian Students News Agency. The move doesn’t come as a surprise – Iran has been warning that it intended to ignore the JCPOA limits for weeks now. As a result of U.S. economic and political pressure to get Iran to pull back from its expansion in the region and to stop developing its domestic missile capabilities, Iran already lost any of the economic benefits it could have hoped to reap from the JCPOA anyway. Tehran is now casting about for anything that gets the U.S. to take its interests more seriously. Initial prospects don’t look good. The U.S. announced on Friday that it had deployed F-22 fighter jets to the Al Udeid air base in Qatar – “to defend American forces and interests” in the region.
New Israeli airstrikes in Syria. A week after a trilateral meeting in Jerusalem between Israeli, Russian and U.S. national security officials, Israeli jets bombed as many as 12 Iranian targets in Syria. Israel has not commented on the attacks, during which the Syrian Observatory for Human Rights claimed 15 people died, including nine foreign nationals. The Syrian military said on Monday that the Israeli planes had launched their missiles at targets near Homs and Damascus from Lebanese airspace, and Turkish-held Cyprus said a Syrian anti-aircraft S-200 missile fired at Israeli jets crashed north of its capital, Nicosia. The airstrikes raise more questions than answers at this point, specifically, whether Israel and Russia have come to some kind of understanding in Syria. In January, Russia warned Israel that its “practice of arbitrary strikes” needed to stop – and deployed S-300 air defense systems to Syria to emphasize its point. Israeli press even reported earlier today that Russia had deployed S-300s in a Syrian province near Homs.
Hong Kong protests. After a few weeks of relative calm following massive protests in Hong Kong over a controversial extradition bill led to the bill’s indefinite withdrawal, tens of thousands of protesters returned to Hong Kong’s streets during the annual rally that commemorates the anniversary of Hong Kong’s return to Chinese rule. Hundreds managed to break into Hong Kong’s legislative chamber earlier today, spray-painting slogans and hanging a British colonial flag in the Legislative Council chamber. The video and imagery of the protests are striking, but these protests were also much smaller than those aimed at the extradition bill a few weeks ago. That means that as shocking as some of the imagery coming out of Hong Kong is right now, this won’t have much in the way of immediate political effect. It does, however, put even more pressure on Chinese officials in Beijing to figure out just how they are going to deal with this restive part of China’s domain.
Oil? Who said something about oil? Saudi Arabia and Russia on Sunday endorsed a policy of extending oil production cuts for the remainder of the year in order to prop up the price of crude oil. Earlier today, Iran’s oil minister said that his country would not block the deal and it looks like the rest of OPEC’s members are on board – but the cartel also said it was displeased with what it described as unilateral decision-making by Saudi Arabia and Russia that could in the long term threaten OPEC’s existence. Forgive us for beating a dead horse here, but the issue with oil is less and less about what OPEC and Russia do to try to prop up the price, or even Iran’s empty threats to block the Strait of Hormuz – it’s that there’s more supply than demand in the market, and unless OPEC and Russia are willing to consider much larger and more consistently applied production cuts, that will continue to be true.
Step right up, Vietnam! Vietnam, one of the undisputed beneficiaries of the U.S.-China trade war, reported a better-than-forecast 6.7 percent gross domestic product growth rate in the second quarter, on the heels of 6.8 percent growth in the first quarter. Meanwhile, on Sunday, the European Union and Vietnam finally inked a free trade deal, which could be ratified as soon as the end of the year. The news isn’t all good for Vietnam, though, which Trump described in an interview last Wednesday as “almost the single worst abuser of everybody” when it comes to trade. In May, Vietnam also earned itself a spot on a U.S. Treasury watchlist for currency manipulation. The Trump administration has been nothing if not consistent on trade – China was always going to be the first domino, not the only domino, in a reorganization of U.S. trading relationships, and the recent success enjoyed by countries like Vietnam on account of their being viable alternatives to China may be more ephemeral than they would like to think.
French disappointment. After EU leaders failed to reach a deal on who would be appointed to the bloc’s top positions, French President Emmanuel Macron angrily told reporters that the talks, which are set to resume tomorrow, were a “failure.” More significant, however, was Macron’s statement that he would strongly oppose any and all enlargement of EU membership until “a deep reform of [the EU’s] institutional functioning.” Arguably Macron’s signature foreign policy priority upon entering the Elysee was an attempt to tag-team with Germany to reshape EU governing structures in a way that would increase the authority of its institutions. Normally Macron being Macron about not getting what he wants wouldn’t rise to a level of much significance, but opposing EU enlargement means delaying membership talks with Albania and North Macedonia – the latter of which went through a controversial name-change recently, precisely so that it could begin EU accession talks. France already helped block the start of those talks last month. If France really does mean to stick to its guns here, it could have serious ramifications in the Balkans.
Keeping an eye on Turkey and Libya. We noted on Saturday that a spokesperson for the Libyan National Army accused Turkey of intervening in Libya’s ongoing civil war and warned that Turkish ships or companies operating in Libya were now LNA targets. Since then, the LNA has reportedly detained six Turkish citizens, and Turkey has had enough. The Turkish vice president said earlier today that if the Turkish citizens were not released immediately, “those responsible will become a legitimate target and the consequences will be severe.” The LNA released the six Turks shortly thereafter. While Turkey has mostly been in the news because of Istanbul’s mayoral elections, its interminable spat with the U.S. over the imminent delivery of Russian S-400s, and domestic political intrigue that has former Prime Minister Ahmet Davutoglu preparing to launch a new political party, Turkey’s behavior in the Mediterranean shouldn’t go unnoticed. That Turkey is involved at all in Libya should raise a few eyebrows, and that its involvement may now put Turkey in a position where a war of words won’t be enough to safeguard its commitments all the more so.
- Japan will restrict high-tech exports to South Korea over Seoul’s insistence on compensation for wartime labor; South Korea is already planning to file a complaint at the World Trade Organization to protest the move.
- S. and Taliban officials are meeting for their seventh round of peace talks; a Taliban spokesperson said achieving progress during the talks is “critical.”
- Protesters returned to the streets in Sudan yesterday to express their displeasure with the Transitional Military Council currently governing the country. Sudan’s state news agency said seven were dead and 181 hurt in the military’s crackdown on the protests.
- The IHS Markit Purchasing Managers’ Index for the eurozone fell to 47.6 in June, and to 45 for Germany, reflecting declines in both output and employment.
- The president of the Democratic Republic of the Congo, Felix Tshisekedi, said he was dispatching Congolese armed forces to Ituri province to restore stability to an area that has been beset by conflict between various armed groups and militias.
- The net inflow of foreign direct investment into Uzbekistan declined by over half in 2019 while foreign debt has increased 10.3 percent since the beginning of the year.
- A Metron Analysis public opinion poll said that the New Democracy party in Greece had 38.5 percent support compared to incumbent Syriza’s 5 percent ahead of elections on July 7.
- Indian Prime Minister Narendra Modi highlighted the country’s water crisis in a speech which said all Indians needed to work together now to “conserve every drop of water.”