Auto Stocks Jump After White House Decides To Hold Off On Car Tariffs

Shares of car makers slumped in the minutes before Monday’s close following a Bloomberg headline hinting that the US investigation into possible national security tariffs on imported cars could soon materialize. However, it appears that the White House has decided to hold off on any auto tariffs – for now, at least.

According to Bloomberg, European auto stocks climbed after people familiar with the matter said the White House is planning to hold off on imposing new tariffs on imported cars as officials consider revising a preliminary report on the findings of an investigation into possible tariffs that was ordered by Trump in the spring.

Trump met with his top trade advisers on Tuesday at the White House to discuss a draft report on a Commerce Department investigation into the impact of car imports. After the meeting, the administration concluded it wasn’t ready to act on tariffs and that the report would be subject to further changes.

In recent months, companies and governments from Europe to Asia had warned Trump that tariffs on car imports would hurt the U.S. economy and disrupt the global auto industry.

An auto trade war would deal a blow to car-makers from General Motors Co. to Toyota Motor Corp., which have built their supply chains to take advantage of countries with low duties. The National Automobile Dealers Association estimates that the tariffs would add as much as $2,270 to the cost of U.S.-built cars and $6,875 to the cost of imported cars and trucks.

Officials present for Tuesday’s meeting at the White House included Ross, Treasury Secretary Steven Mnuchin, U.S. Trade Representative Robert Lighthizer, National Economic Council Director Larry Kudlow and Senior Adviser Jared Kushner.

European Union Trade Commissioner Cecilia Malmstrom said Tuesday that Europe expects to be exempted from any new U.S. automobile tariffs, at least temporarily. “We are under the assumption that is still valid,” Malmstrom said, referring to a pledge made by the U.S. and EU in July not to impose new tariffs on each other. She is in Washington this week to meet with Lighthizer.

Following the report, shares of Japanese carmakers such as Toyota and Honda rallied in Tokyo trading Wednesday: Toyota jumped as much as 2% while Honda rose 2.6%, Subaru rallied 4.1%, while Mazda gained 2$ and Nissan 1.9%. In Europe, the Stoxx 600 Automobile & Parts Index was the best-performing component of the Stoxx 600, climbing 0.4% while the broader benchmark fell 1.2%. Some of the best performers included: Valeo (+2.1%), BMW (+1.3%), Volkswagen (+0.7%) and Renault (+0.7%).

Autostocks

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German Economy Shrinks For First Time In 3 Years As Car Production Collapses

After notching a tepid growth rate in the prior quarter, the Bundesbank’s warnings that the economic engine of Europe faltered during the third quarter have proved accurate.

In what was its worst GDP print in three years, Germany saw its economy contract 0.2% in Q3, putting Europe’s strongest economy on the bring of a technical recession and providing the clearest sign yet that economic growth in the euro area stalled just as the ECB was preparing to end its massive bond buying program with an eye toward raising interest rates late next year, according to Bloomberg.

While the hope is that the setback is related largely to new emissions tests that temporarily disrupted car production, the data will feed into fears that the euro area’s expansion has faltered as the Continent faces down risks including Italy’s confrontational populism, the looming Brexit, and the ongoing US trade conflict (which threatens to hammer the German auto industry if Trump changes his mind and decides to pursue tariffs). But analysts have found at least one scapegoat to blame the contraction: according to Bloomberg, Germany’s economic ministers hope the contraction was largely driven by new emissions tests that temporarily disrupted car production. Data from the VDA German carmakers’ association appears to bear that out, as the agency said September production plunged 24% compared with a year earlier.

Cars

At least one analyst said they expect auto production to rebound, as a second quarter of declining growth would be “highly unlikely” especially as that would put Germany in a recession.

“The good news is that the economy will expand at a decent clip so long as auto output doesn’t take another leg down – and that’s highly unlikely. We expect a material rebound as industrial production picks up a bit further through the quarter.”

Germany’s Economy Minister Peter Altmaier echoed that view during a speech in Berlin, saying the GDP figures were “not particularly pleasing but were also not a secret,” and that it’s no catastrophe, we had similar numbers in 2015.” If anything, the data showed us that the expansion “is a tender flower” that must be protected (the implications of which, we imagine, were not lost on Draghi).

“All experts say that the expansion will continue.” “But it also shows that an expansion is a tender flower and that we have to work to make sure it continues.”

Germany’s statistics office doesn’t offer a detailed breakdown of GDP but it did say that exports and private consumption both dropped last quarter while equipment investment and construction rose. The poor print out of Germany was expected to weigh on growth later in the year.

The third-quarter weakness in Germany dragged on the euro area, with data later on Wednesday forecast to show its economy expanded at the weakest pace since 2014. While the ECB has already downplayed the loss of momentum, a year-end revival isn’t assured. Germany’s manufacturing sector – which accounts for almost a quarter of economic output – may feel the pain of trade tensions and China’s slowdown.

So far, at least, the ECB is choosing to see this as a one-off. But if tepid growth persists for another quarter, the market could begin repricing expectations surrounding a late-2019 rate hike.

Any signs of persistent weakness in Germany, which accounts for a third of the euro area economy, would play into the thinking among ECB policy makers as they complete their exit from three years of large-scale bond-buying.

But Chief Economist Peter Praet said while there’s been a slowdown in the euro area, domestic demand remains “robust.”

“Fluctuations in the data can’t hide the fact that the economic upturn in Germany and the euro area remains intact,” Bundesbank President Jens Weidmann said on Wednesday.

Germany’s economic ministry is calling for a return to growth in the fourth quarter.

“Indicators for manufacturing and the overall economy, as well as the development in the export environment, underline” a return to growth in Q4. But as auto sales in China and the US weaken, Germany’s production delays might also mask the fact that the underlying global demand for German cars has diminished.

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Nord Stream 2 Could Still Be Derailed By U.S. Sanctions

Authored by Tim Daiss via Oilprice.com,

The potential for more tensions in relations between the U.S. and Russia continue to mount. Late last week, U.S. Energy Secretary Rick Perry said that Washington could still impose sanctions related to the building of the controversial Nord Stream 2 pipeline, which would bring Russian gas directly to Germany under the Baltic Sea. Perry made his comments in Warsaw as the Trump administration tries to convince EU members to sign LNG deals with U.S. producers to offset over reliance on Russian pipeline gas.

On Thursday, Polish state-run gas firm PGNiG signed a long-term LNG deal with U.S.-based Cheniere Marketing International. Poland has been fervent in its resistance to the Nord Stream 2 pipeline as well as working to reduce its reliance on geopolitically charged Russian gas. Moscow, for its part, has cut gas supply to Europe in the past during cold winter months to exert its influence in the region.

Warsaw and Washington also signed on Thursday a joint declaration on enhanced energy security cooperation.

“This is also a clear signal that the U.S. strongly supports a pro-Poland and pro-Europe energy security policy,” Perry said.

“Energy security in turn requires energy diversity. That is the reason we oppose the Nord Stream 2 project which would further increase the dangerous energy dependence many European nations have on the Russian federation,” he added.

Poland consumes around 17 billion cubic meters of gas annually, more than half of which comes from Russian energy giant Gazprom under a long-term deal that expires in 2022. However, Poland has said that it would not renew the gas supply deal, making the country race against time to replace the contract with new gas volumes.

When asked at a news conference whether Washington could impose sanctions on companies working on the project, Perry replied:

“I saw no signals where we would ever get to the point where we can support Nord Stream 2.”

He added that “sanctions were an option that the president maintained.”

The Nord Stream 2 pipeline has also been a point of contention between Trump and Germany as well. In a televised meeting with reporters and NATO Secretary-General Jens Stoltenberg before a NATO summit in Brussels earlier this year, Trump said it was “very inappropriate” that the U.S. was paying for European defense against Russia while Germany, the biggest European economy, was supporting gas deals with Moscow.

However, since then, Germany has indicated that it wanted to buy more LNG from the U.S., with plans to build three LNG receiving terminals. Germany also remains firm in its support for the Nord Stream 2 pipeline. The $11 billion gas pipeline will stretch some 759 miles (1,222 km), running on the bed of the Baltic Sea from Russian gas fields to Germany, bypassing existing land routes over Ukraine, Poland and Belarus. It would double the existing Nord Stream pipeline’s current annual capacity of 55 bcm and is expected to become operational by the end of next year.

Russia’s Gazprom is the sole shareholder in Nord Stream 2, shouldering 50 percent of the 9.5 billion-euro ($11 billion) bill. Gazprom’s Western partners are Austrian OMV along with Uniper, Wintershall, Shell and Engie.

Russia, for its part, claims that security concerns over the Nord Stream 2 pipeline are unfounded and that it is a purely economic venture. It also accuses the Trump administration of trying to erode Russian gas supply market share in Europe in favor of more expensive U.S.-produced LNG.

Russian Energy Minister Alexander Novak said in September that the pipeline would go forward even if sanctions were put in place. “We hope that there will be no sanctions. If U.S. restrictions are imposed, the project will be implemented anyway, the pipe laying has already started,” Novak told reporters, adding that the plan envisions the project to be completed by the end of 2019.

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Ireland Probes Possible UFO Sighting After Multiple Pilots Report “High Speed, Bright Lights”

In what sounds like a repeat of the infamous 2004 “Tic Tac Incident”, when a US Navy ship witnessed what looked like a strange, tic tac-shaped object with “no visible means of lift” flying off the coast of California, a UFO sighting by commercial pilots off the coast of Ireland has triggered an investigation by the Irish Aviation Authority, RT reported.

The strange flying vessel was first spotted by a Britsh Airways pilot on Nov. 9 at 6:47 am local time. At the time, the pilot was flying over the southwest coast of Ireland. At the time of the report, the pilot was flying from Heathrow to Montreal, and made a call to Shannon Air Traffic Control to ask if Ireland was conducting military exercises. When they said no, the baffled pilot shared what he had seen.

NASA

In a recording of the call obtained by RT, the pilot can be heard saying they witnessed a “a bright light” that had been flying at a very fast speed beside her plane before it “disappeared at very high speed.”

And as it turns out, the British Airlines pilot wasn’t the only one to see the vessel. After a Virgin Airlines pilot joined the conversation to suggest that it might have been a meteor re-entering Earth’s atmosphere, the pilot added that there were “multiple objects following the same sort of trajectory,” and that they were “very bright where we were.”

Then a third pilot joined the conversation to say “Glad it wasn’t just me,” and reported a UFO that was “astronomical, it was like Mach 2.” Ground control replied that “other aircraft in the air have also reported the same thing so we are going to have a look and see.”

The IAA later said it had filed reports of unusual activity in response to the claims.

“This report will be investigated under the normal confidential occurrence investigation process,” read the IAA statement to the Irish Examiner.

Meanwhile, in a separate report, RT pointed out that US astronaut Leland Melvin admitted on Twitter earlier this year that he had seen something “organic, alien-like” floating out of the payload of a space shuttle roughly a decade earlier. In response to a question about whether he had ever witnessed alien life, he shared a story about spotting a “translucent, curved, organic” object in the cargo area of his space craft, which prompted him to call his colleagues on Earth and ask what it was.

Though ground control suggested to Melvin that what he had seen was just ice that had broken off of a Freon hose. “I was about to say ‘Houston we have a problem’ but know everyone spins-up when those words are uttered from a space vehicle,” he said.

Asked if NASA might have lied to maintain calm, Melvin said he didn’t think so…but that “you never know.” 

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Brickbat: London’s Burning

Grenfell TowerBritish police have arrested five people on suspicion of a public order offense after video of them burning a mock-up of the Grenfell Tower in a bonfire went viral. The Grenfell Tower, a residential building, burned in 2017 killing 72 people. Prime Minister Theresa May was among those who condemned the individuals in the video.

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ACTA 2.0 – The End Of Freedom On The Internet

Via GEFIRA,

Freedom of expression is a thorn in the side of EU technocrats. The new intellectual property law adopted by the European Parliament in September threatens our fundamental rights.

Internet means freedom. Still. We can (still) freely retrieve content with our search engines. We can (still) freely and without further ado access the sources in a text. This will soon change.

Article 13 of the controversial law says that website operators and Internet providers will be held accountable for the content of their customers and readers. The new law thus obliges them to use the so-called upload filters. The filter obligation leaves it to the software to decide what users are allowed to upload and what not. In plain language it says the provider will control and censor our activities on the net: every uploaded photo, video, every text will be checked.

The question arises: what criteria will apply to this censorship and how and by whom will this filter software be programmed? The EU Commission will certainly soon be proposing detailed guidelines to combat fake news, the spread of terrorism on the Internet, and to combat those who infringe copyrights. All right, but it will also be a tool to suppress the critics of the EU, independent bloggers who want to throw light on the incompetence and insolence of the Brussels technocrats, dissidents (not left-wing liberals). And I bet: the directives will be introduced very quickly and eagerly in all EU countries.

Source: shutterstock.com

Article 11 deals with the introduction of a kind of tax on links. From now on, when we publish a link on our website, we have to pay the owner (the author or publisher) for it. Technocrats believe that if we refer to a specific source and link it in our text, the source is entitled to a remuneration.

Of course, there is not a word of exact amounts in the law, this should only be determined after negotiations with EU member states. Now, if an editorial staff decides to earn with the new law, then search engines will not show up results containing links to their content. A double-edged sword for editors and publishers, because customers can now turn to the sources that will continue to make their content available free of charge. The law turns the Internet, which we know, upside down. The work of the journalists, the scientists, who have to publish online and quote in their publications in order to be credible and to prove their theses, is made more difficult.

The existence of whole net culture with its memes, music remixes, parodies, the media archive of Wikipedia, etc. and the most important thing: freedom of opinion, is threatened. The new law should secure the future of the press. Freidhelm Greis of Golem.de calculated that the new EU ancillary copyright law actually favours only large publishing houses and editorial offices, not the smaller and more critical ones. The Axel Springer publishing house would receive at present nearly 64 per cent of the incomes from the left taxation.

This proves who the Brussels technocrats serve. They are gradually depriving us of our freedoms so that big companies can make even higher profits. One company that will lose with the introduction of the new EU directives is Google. It would have to share millions of euros of its revenue even in Germany with the website providers, publishers and cycling companies to which its search results are passed on.

Google has already had such experience in Spain, where such a controversial law was introduced as early as 2014. The publishers hoped the law would make them richer. Payable licenses on current press releases should make the American company cough up money for them. And look what happened: Google simply shut down its Google News in Spain in order not to have to pay any fees. Although Google News did not contain advertising, with which the company mainly earns its money, there has been no added value for Google since then that came from this information service (Google simply lost many readers). And the Spanish publishers have “shot themselves in the foot with it: because with external access the access have decreased by double-digit percentages”.

Finally, I shall quote just one other Article 11, the Charter of Fundamental Rights of the European Union:

 “Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers.”

Copyright must not jeopardise fundamental rights. Period.

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The Most Popular Political Figures In The UK

In a time of political upheaval and uncertainty in the UK with key figures pulling in very different directions, where do the public’s affections lie?

Unsurprisingly, as Statista’s Martin Armstrong notes, it is as split as the political landscape itself.

Infographic: The most popular political figures in the UK | Statista

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According to the latest YouGov ‘Ratings‘, Boris Johnson and Theresa May enjoy the most positive opinions from the public, both of which having a 32 percent favourability rating.

The Labour leader Corbyn is in third place with 30 percent of respondents saying they view him positively.

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Unwrapping Armageddon: The Erosion of Nuclear Arms Control

Authored by Conn Hallinan via Dispatches From The Edge blog,

The decision by the Trump administration to withdraw from the Intermediate Nuclear Force Agreement (INF) appears to be part of a broader strategy aimed at unwinding over 50 years of agreements to control and limit nuclear weapons, returning to an era characterized by the unbridled development weapons of mass destruction.

Terminating the INF treaty – which bans land-based cruise and ballistic missiles with a range of between 300 and 3400 miles – is not, in and of itself, a fatal blow to the network of treaties and agreements dating back to the 1963 treaty that ended atmospheric testing of nuclear weapons. But coupled with other actions – George W. Bush’s decision to withdraw from the Anti-Ballistic Missile Treaty (ABM) in 2002 and the Obama administration’s program to upgrade the nuclear weapons infrastructure – the tapestry of agreements that has, at least in part, limited these terrifying creations, is looking increasingly frayed.

“Leaving the INF,” says Sergey Rogov of the Institute of U.S. and Canadian Studies, “could bring the whole structure of arms control crashing down.”

Lynn Rusten, the former senior director for arms control in the National Security Agency Council warns, “This is opening the door to an all-out arms race.”

Washington’s rationale for exiting the INF Treaty is that the Russians deployed the 9M729 cruise missile that the US claims violates the agreement, although Moscow denies it and the evidence has not been made public. Russia countercharges that the US ABM system—Aegis Ashore—deployed in Romania and planned for Poland could be used to launch similar medium range missiles.

If this were a disagreement over weapon capability, inspections would settle the matter. But the White House—in particular National Security Advisor John Bolton—is less concerned with inspections than extracting the US from agreements that in any way restrain the use of American power, be it military or economic. Thus, Trump dumped the Iran nuclear agreement, not because Iran is building nuclear weapons or violating the agreement, but because the administration wants to use economic sanctions to pursue regime change in Teheran.

In some ways, the INF agreement is low hanging fruit. The 1987 treaty banned only land-based medium range missiles, not those launched by sea or air —where the Americans hold a strong edge—and it only covered the U.S. and Russia. Other nuclear-armed countries, particularly China, India, North Korea, Israel and Pakistan have deployed a number of medium range nuclear-armed missiles. One of the arguments Bolton makes for exiting the INF is that it would allow the US to counter China’s medium range missiles.

But if the concern was controlling intermediate range missiles, the obvious path would be to expand the treaty to other nations and include air and sea launched weapons. Not that that would be easy. China has lots of intermediate range missiles, because most its potential antagonists, like Japan or US bases in Asia, are within the range of such missiles. The same goes for Pakistan, India, and Israel.

Intermediate range weapons—sometimes called “theater” missiles—do not threaten the US mainland the way that similar US missiles threaten China and Russia. Beijing and Moscow can be destroyed by long-range intercontinental missiles, but also by theater missiles launched from ships or aircraft. One of the reasons that Europeans are so opposed to withdrawing from the INF is that, in the advent of nuclear war, medium-range missiles on their soil will make them a target.

But supposed violations of the treaty is not why Bolton and the people around him oppose the agreement. Bolton called for withdrawing from the INF Treaty three years before the Obama administration charged the Russians with cheating. Indeed, Bolton has opposed every effort to constrain nuclear weapons and has already announced that the Trump administration will not extend the Strategic Arms Reduction Treaty (START) when it expires in 2021.

START caps the number of US and Russian deployed nuclear weapons at 1550, no small number.

The Bush administration’s withdrawal from the 1972 ABM treaty in 2002 was the first major blow to the treaty framework. Anti-ballistic missiles are inherently destabilizing, because the easiest way to defeat such systems is to overwhelm them by expanding the number of launchers and warheads. Bolton—a longtime foe of the ABM agreement—recently bragged that dumping the treaty had no effect on arms control.

But the treaty’s demise has shelved START talks, and it was the ABM’s deployment in Eastern Europe—along with NATO’s expansion up to the Russian borders—that led to Moscow deploying the cruise missile now in dispute.

While Bolton and Trump are more aggressive about terminating agreements, it was the Obama administration’s decision to spend $1.6 trillion to upgrade and modernize US nuclear weapons that now endangers one of the central pillars of the nuclear treaty framework, the 1996 Comprehensive Test Ban Treaty (CTBT).

That agreement ended the testing of nuclear weapons, slowing the development of new weapons, particularly miniaturization and warheads with minimal yields. The former would allow more warheads on each missile, the latter could increase the possibility of using nuclear weapons without setting off a full-scale nuclear exchange.

Nukes are tricky to design, so you don’t want to deploy one without testing it. The Americans have bypassed some of the obstacles created by the CTBT by using computers like the National Ignition Facility. The B-61 Mod 11 warhead, soon-to-be-deployed in Europe, was originally a city killer, but labs at Livermore, CA and Los Alamos and Sandia, NM turned it into a bunker buster, capable of taking out command and control centers buried deep in the ground.

Nevertheless, the military and the nuclear establishment—ranging from companies such as Lockheed Martin and Honeywell International to university research centers—have long felt hindered by the CTBT. Add the Trump administration’s hostility to anything that constrains US power and the CTBT may be next on the list.

Restarting nuclear testing will end any controls on weapons of mass destruction. And since Article VI of the Nuclear Non-Proliferation Treaty (NPT) requires nuclear-armed powers to eventually disarm their weapons of mass destruction, that agreement may go as well. In a very short time countries like South Korea, Japan and Saudi Arabia will join the nuclear club, with South Africa and Brazil in the wings. The latter two countries researched producing nuclear weapons in the 1980s, and South Africa actually tested one.

The demise of the INF agreement will edge the world closer to nuclear war. Since medium range missiles shorten the warning time for a nuclear attack from 30 minutes to 10 minutes or less, countries will keep their weapons on a hair trigger. “Use them or lose them” is the philosophy that impels the tactics of nuclear war.

In the past year, Russia and NATO held very large military exercises on one another’s borders. Russian, US and Chinese fighter planes routinely play games of chicken. What happens when one of those “games” goes wrong?

The US and the Soviet Union came within minutes of an accidental war on at least two occasions, and, with so many actors and so many weapons, it will be only a matter of time before some country interprets a radar image incorrectly and goes to DEFCON 1—imminent nuclear war.

The INF Treaty came about because of strong opposition and huge demonstrations in Europe and the United States. That kind of pressure, coupled with a pledge by countries not to deploy such weapons, will be required again, lest the entire tapestry of agreements that kept the horror of nuclear war at bay vanish.

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Visualizing China’s Belt And Road Investment Map

The fifth anniversary of China’s Belt and Road Initiative (BRI) was recently marked in Beijing.

This 900 billion U.S. dollar transcontinental development project was launched in the autumn of 2013 when president Xi Jinping proposed the building of the Silk Road Economic Belt and the 21st Century Maritime Silk Road – the two main segments of the ambitious economic cooperation campaign. As Statista’s Agne Blazyte explains:

The first one refers to a half-dozen land corridors connecting China with Southeast Asia, South Asia, West Asia, the Middle East and, from there, Europe.

The second one is a sea route linking Asia, Africa and Europe.

This “project of a century”, as Xi Jinping calls it, is meant to improve connectivity between Asia, Europe and Africa, and consequently to increase trade and development. Undoubtedly, BRI is also a geopolitical plan to boost China’s regional power.

Infographic: China's Belt and Road investment map  | Statista

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By now, more than 100 countries and international organizations have signed BRI cooperation agreements with China.

So far, given that most of investment projects are associated with infrastructure development, BRI has mainly benefited China’s state-owned enterprises. Some regions of the vast investment landscape are doing better than others.

Due to proximity to China and the demand for better infrastructure, Southeast Asia remains a high priority for China’s SOEs. Other important beneficiaries are India, Pakistan, Bangladesh and Myanmar, partly due to the size of their populations and growing market potential.

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Escobar: Decoding The Hypersonic Putin On A Day Of Remembrance

Authored by Pepe Escobar via The Asia Times,

Sitting alongside French President Macron during the 100th anniversary to commemorate the end of World War I, Putin and Trump stole the show in Paris…

The Elysee Palace protocol was implacable. Nobody in Paris would be allowed to steal the spotlight away from the host, President Emmanuel Macron, during the 100th anniversary of Armistice Day marking the end of World War I.

After all, Macron was investing all his political capital as he visited multiple World War I battlefields while warning against the rise of nationalism and a surge in right-wing populism across the West.

He was careful to always place the emphasis on praising “patriotism.”

A battle of ideas now rages across Europe, epitomized by the clash between the globalist Macron and populism icon Matteo Salvini, the Italian interior minister.

Salvini abhors the Brussels system. Macron is stepping up his defense of a “sovereign Europe.”

And much to the horror of the US establishment, Macron proposes a real “European army” capable of autonomous self-defense side by side with a “real security dialogue with Russia.”

Yet all these “strategic autonomy” ideals collapse when you must share the stage, live, with the undisputed stars of the global show: President Donald  Trump and President Vladimir Putin.

So the optics in Paris were not exactly of a Yalta 2.0 conference. There were no holds barred to keep Trump and Putin apart. Seating arrangements featured, from left to right, Trump, Chancellor Angela Merkel, Macron, his wife Brigitte and Putin. Neither Trump nor Putin, for different reasons, took part in a “walking in the rain” stunt evoking peace.

And yet they connected. Sir Peter Cosgrove, the governor general of Australia, confirmed that Trump and Putin, at a working lunch, had a “lively and friendly” conversation for at least half an hour.

No one better than Putin himself to reveal, even indirectly, what they really talked about. Three themes are absolutely key.

On the Macron-proposed, non-NATO European army: “Europe is … a powerful economic union and it is only natural that they want to be independent and … sovereign in the field of defense and security.”

On the consequences of such an army: It would be “a positive process” that would “strengthen the multipolar world.” On top of it, Russia’s position “is aligned with that of France.”

On relations with the North Atlantic Treaty Organization and Washington: “It is not us who are going to withdraw from the INF Treaty. It is the Americans who plan to do that.” Putin added that Moscow has not scheduled military drills near NATO borders as an attempt to appease an already tense situation. Yet Russia has “no issue with” NATO drills and expects at least a measure of dialogue in the near future.

Enter the Avangard

Vast sectors of the US Deep State are in denial, but Putin may have been able to impress on Trump the necessity of serious dialogue due to an absolutely key vector: the Avangard.

The Avangard is a Russian hypersonic glide vehicle capable of flying over Mach 20 –  24,700km/h, or 4 miles per second – and one of the game-changing Russian weapons Putin announced at his ground-breaking March 1 speech.

The Avangard has been in the production assembly line since the summer of 2018, and is due to become operational in the southern Urals by the end of next year or early 2019.

In the near future, the Avangard may be launched by the formidable  Sarmat RS-28 intercontinental ballistic missile and reach Washington in a mere 15 minutes, flying in a cloud of plasma “like a meteorite” – even if the launch is from Russian territory. Serial production of Sarmat ICBMs starts in 2021.

The Avangard simply cannot be intercepted by any existing system on the planet – and the US knows it. Here is General John Hyten, head of US Strategic Command:

 “We don’t have any defense that could deny the employment of such a weapon against us.”

Iran as the new Serbia?

I wish I had been in Paris – my home in Europe – to follow these concentric World War I–related plots live. But it was no less fascinating to follow them from Islamabad, where I am now, back from the northern part of the China-Pakistan Economic Corridor (CPEC). The British Empire used 1.5 million to 2 million Indian colonial subjects to fight, and die, for empire in that war. Quite a few were Punjabis, from what is now Pakistan.

As for the future, Trump is certainly aware of Russia’s hypersonic breakthroughs. Trump and Putin also talked about Syria, and might have touched on Iran, although no one at the working lunch leaked anything about it.

Assuming the dialogue continues at the Group of 20 summit in Buenos Aires at the end of November, Putin might be able to impress on Trump that just as Serbia catalyzed a chain of events that led great powers to sleepwalk into World War I, the same could happen with Iran leading to the terrifying prospect of World War III.

Team Trump’s obsession on strangling Iran into economic submission is a no-go, even for the Macron-Merkel-led European Union. On top of it, the Russia-China strategic partnership simply won’t allow any funny – reckless – games to be played against a crucial node of Eurasia integration.

Putin won’t even need to go hypersonic to make his case to Trump.

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