Trump warns of further strikes if Iran retaliates | Iraq's parliament votes to expel U.S. military
In today's updates:
* Trump comments on killing of Soleimani
— Update on Mideast tension:
- Trump comments on killing of Soleimani. “We took action... to stop a war. We did not take action to start a war,” President Donald Trump said in his first public comments since the strike. He said the U.S. didn’t seek regime change in Tehran, but he called on Iran to end its reliance on proxy fighters, which he said destabilize the region. "General Qassem Soleimani has killed or badly wounded thousands of Americans over an extended period of time, and was plotting to kill many more...but got caught!” the president tweeted. “He should have been taken out many years ago!” He warned: “I am ready and prepared to take whatever action is necessary and that in particular refers to Iran.”
- Trump's red line. On Dec. 27, the Trump administration’s red line was crossed when a rocket attack carried out by the Iranian-backed Kataib Hezbollah militia killed an American contractor at a base near Kirkuk, north of Baghdad. That led to the targeting of Soleimani, the commander of the Iranian Revolutionary Guard’s overseas wing.
- Sen. Lindsey Graham (R-S.C.), who said he was briefed on the Soleimani operation beforehand when he was at Mar-a-Lago at the beginning of the week, said Friday on Fox and Friends that Iran will “come after us with a vengeance if we do not reset the table pretty quickly” as he advocated targeting Iran’s economy and oil infrastructure.
- Iran Supreme Leader Ali Khamenei warned that a “hard revenge awaits criminals” for the death of Gen. Soleimani, who was killed in a strike at the Baghdad Airport, along with Abu Mahdi al-Mohandes, the leader of a powerful Iraqi paramilitary group that is backed by Iran.
- Iran President Rouhani vows U.S. will pay “not only today but also in the years to come.” Hassan Rouhani has warned that Iran’s response to the killing of the country’s most revered military commander would be long and drawn out, as he drew parallels with the U.S.-engineered coup that reinstated the Shah in 1953. “This crime that the U.S. committed . . . is similar to the coup attempt . . . and similar to the downing of Airbus passenger flight in the Persian Gulf [in 1988],” Rouhani said on Saturday in a meeting with the family of Soleimani. (The U.S. shot down a passenger flight over the Gulf that was wrongly identified as a fighter jet in 1988. All 290 passengers and crew were killed.) “These crimes will never be forgotten.” Rouhani indicated that Iran’s response could be a lengthy one. “Americans did not realise what a great mistake they made and that they will pay for the consequences of this crime not only today but also in the years to come.”
- The Iraqi parliament voted in favor of expelling U.S. troops from the country. The vote in Parliament on Sunday is not final until Prime Minister Adel Abdul Mahdi signs the draft bill. Earlier on Sunday, Mahdi indicated he would, having urged lawmakers to take action. Previously, Mahdi condemned the strike as a flagrant breach of terms governing the presence of U.S. forces. He told parliament that Iraq’s government must establish a timetable for the withdrawal of all foreign troops “for the sake of our national sovereignty... What happened was a political assassination,” Mahdi said of the strike. “Iraq cannot accept this.”
- U.S. State Dept. official comments. “The conditions were met to take decisive action to eliminate a very, very, very effective terrorist in the heart of the Middle East to save hundreds of American lives,” a senior State Department official told reporters on Friday. The attack against the US embassy in Baghdad was the step too far. “There were things he (Soleimani) could do that nobody else could do,” the other senior State Department official said. “And we are not safe in the region as long as Iran is pursuing this general strategy, but we are safer without him than we are with him.”
- White House formally notifies Congress of its strike on Iranian military leader. The notification, required by law, is entirely classified and likely outlines President Trump's justification for the attack that killed a top Iranian leader. Observers expect it to ignite a new debate over the president’s war powers and Congress’s role in authorizing new military action abroad.
- White House says Trump used Iraq War authorization to kill Soleimani. President Trump used the 2002 congressional authorization for the war in Iraq to launch the strike in Baghdad that killed Iran’s most senior military leader, according to his national security adviser. Democrats have demanded to know the legal justification for killing Soleimani. “The administration must work with the Congress to advance a bonafide de-escalatory strategy that prevents further violence,” House Speaker Nancy Pelosi (D-Calif.) said. Trump was required to send a written explanation justifying the move within 48 hours under the War Powers Act. Speaking to reporters, national security adviser Robert O’Brien said Trump made his decision after receiving intelligence that Soleimani was traveling around the Middle East plotting “imminent” attacks against American troops and diplomats. “The president exercised America’s clear, inherent right of self-defense to counter this threat," he said. “It was a fully authorized action under the 2002 [Authorization for Use of Military Force] and is consistent with his constitutional authority as commander in chief to defend our nation and our forces against [an] attack like those that Soleimani has directed in the past and was plotting now.”
- The 5,000 U.S. troops in Iraq are part of an array of forces numbering 80,000 throughout the region at bases and at sea. U.S. officials said Friday that some 3,500 troops from the 82nd Airborne Division would be sent to Kuwait as early as this past weekend.
- Potential retaliation against the U.S. includes the region’s oil shipping and infrastructure. Iranian forces could seed the Persian Gulf with mines and fire missiles at U.S. bases, oil fields and desalinization plants in the Arabian peninsula. Cyberattacks against American businesses and institutions, experts say, is also an option. Experts have warned about the possibility that Iran’s proxy forces in the Middle East could step up attacks on U.S. and partner forces, with Iraq the most likely front. “In the hours after Suleimani’s death, one thing is clear: Iran will respond,” Henry Rome, Iran analyst for the Eurasia Group, wrote in a note to the firm’s clients. “Iranian leaders are proud and quite risk acceptant. We expect moderate to low level clashes to last for at least a month and likely be confined to Iraq. Iranian-backed militias will attack U.S. bases and some U.S. soldiers will be killed; the U.S. will retaliate with strikes inside of Iraq.”
- Trump warns of further strikes if Iran retaliates. President Trump said the U.S. is prepared to hit dozens of Iranian assets if Tehran targets Americans in retaliation for the U.S. strike that killed Soleimani. “Let this serve as a WARNING that if Iran strikes any Americans, or American assets, we have targeted 52 Iranian sites...some at a very high level & important to Iran & the Iranian culture,” Trump wrote on Twitter on Saturday night, explaining that the 52 targets are symbolic of the 52 Americans taken hostage in Iran beginning in 1979. Trump in the tweet that he was prepared to target Iran itself. The president continued that the sites will “BE HIT VERY FAST AND VERY HARD” if Iran targets Americans or U.S. assets, adding, “The USA wants no more threats!”
— Washington Post article (link): With Trump’s farm bailout came surprising profits, but little help for the neediest. Here are some of the quotes in the focus article on farm income and President Trump's trade mitigation program (Market Facilitation Program).
Some of the quotes in the article, below, are similar to comments analysts have made for years regarding who gets farm program payments.
- “The Agriculture Department now estimates 2019 was farmers’ most profitable in five years. What happened? Three words: Market Facilitation Program. Or, as it’s more commonly known, the farm bailout.”
- “If you look at the prices, the weather and the trade imbalances, you’d expect the farm sector to be in a terrible spot,” Montana State University economist Eric Belasco said. “It’s not.”
- Belasco said because the MFP money is distributed based on acreage and not farmers’ need, about half of the money (47%) went to the largest 10% of operations. The numbers come from an analysis by Belasco and his colleague, Vincent Smith. (Both men are also affiliated with the right-leaning American Enterprise Institute.)
- “The philosophical question is: Should we have trade aid for farmers who are at a low risk of losing their farm?” Belasco asked. “Most other safety-net programs are income-adjusted,” he added later. “Farm policy doesn’t do that at all.”
- “Farmers as a whole keep expecting their farm income to be better than what it turns out to be,” said Robert Dinterman, an agricultural economist at Ohio State University who constructed the farm-bankruptcy database the Washington Post analyzed in their story. So, he added, “each year farmers are digging themselves in a larger and larger hole — they’re accumulating more debt than they’re able to pay off... “I don’t think there’s any reason to think there’s going to be any relief in the future,” Dinterman said. Only a dramatic new round of government payments or an emphatic resolution to Trump’s ongoing trade wars could change the industry’s trajectory, he said.
- According to Belasco, 7 in 10 assistance dollars have gone to farmers growing corn and soybeans.
- According to University of Illinois economist Scott Irwin, the MFP payments have “fully compensated” farmers for the damage from the trade war with China. But it’s possible that the trade war dynamics may soon reverse for farmers. “If the trade deal [with China] is signed and it’s real, I think we’re going to be looking at a China-driven miniboom in the ag sector,” Irwin said. He then clarified that if the United States somehow really did sell as much as $50 billion in agricultural commodities to China, that miniboom would upgrade to a “full-scale boom.” “I don’t even know how we’d get to that number,” Irwin said.
— Other items of note:
Trump pushes to exclude climate change/global warming in infrastructure planning. U.S. agencies would no longer be required to consider the impact of global warming when analyzing the environmental effect of big infrastructure projects, according to a Trump administration plan to revamp a 50-year-old environmental law, the New York Times first reported Friday (link). The proposal would change the 1970 National Environmental Policy Act (NEPA), which requires in-depth analysis of projects that could have major environmental effects, including long-term impacts that courts have said include climate change. The proposed changes are aimed at speeding approvals for pipelines, oil and gas leases, highway construction and other kinds of development. The law was last updated in 1978. The plan will shorten the time frame for the environmental reviews and the reviews will no longer consider the cumulative effects of a project. The regulations would have to be finalized before they could take effect, and environmental groups are sure to challenge them in court.
Senate has confirmed 187 judges during President Trump’s tenure, with 13 coming just during the one week the House spent debating impeachment. There are currently 79 vacancies in the federal judiciary, and Trump and McConnell aim to fill all of them as soon as they can.
— Markets. The Dow on Friday finished down 233.92 points, 0.81%, at 28,634.88., The Nasdaq fell 71.42 points, 0.79%, at 9,020.77. The S&P 500 lost 23.00 points, 0.71%, at 3,234.85.
For the week, the Dow declined 10.38 points, or 0.04%, while the S&P 500 fell 0.2% and the Nasdaq rose 0.2%.
For the year of 2019, the Dow was up 22.3%; the S&P 500, 28.9%; and the Nasdaq a huge 35.2%.
U.S. oil prices rose more than 3% on Friday, adding to crude’s risk premium. Brent crude ended the session up 3.52% at $68.58 a barrel, off the session peak of $69.50, the highest level since the mid-September attack on Saudi oil facilities. West Texas Intermediate crude was up 2.96% at $62.99 a barrel. The session high was $64.09 a barrel, its highest since April 2019.
Gold on Friday rose 2.3% to $1549.20 and the yield on the 10-year Treasury note fell 0.093 percentage point to 1.787%, as investors sought out safety.