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How the Trump Dossier and the Syrian Crisis caused Russiagate

Washington Post confirms Trump Dossier caused Russiagate, triggering demands within an Obama administration humiliated at being bested by Russia in Syria for a massive showdown with Russia.

Alexander Mercouris

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On 11th January 2017, shortly after publication of the now notorious Trump Dossier, I speculated that this obviously fictitious document might have been the cause of the whole Russiagate scandal.

After carefully explaining why the document is certainly a fiction I made the following point

The big question is not whether the facts in this dossier are true or not; it is the extent to which the paranoid claims made in the dossier have shaped and might even have been the origin for the whole Russian hacking scandal.

I say this because media reports confirm that the dossier or extracts from it have circulated amongst US politicians (including Hillary Clinton and John McCain), US intelligence agencies, and within the media for weeks if not months. The earliest reports in the dossier are dated to July, which suggests that some of its claims – which include circumstantial details of who supposedly within the Russian government was behind the Clinton leaks – were already circulating early in the summer. That is a very early point in the Russian hacking story, making it at least possible that the dossier at least influenced the thinking of some of the people in the US intelligence community and in the media who have been pushing the Russian hacking scandal most aggressively.

Many have remarked on the absence of evidence in the ONDI report which was published last Friday. Even Masha Gessen – one of President Putin’s most relentless critics – has pointed this out.

Publication of this dossier looks like an attempt to provide “evidence” which the ODNI report failed to do. If so then that at least gives rise to the possibility that the dossier is the “evidence” – or more correctly a part of the evidence – that formed the background to the ONDI report but which the ODNI report omitted.

Whatever the truth of this, the fact that an obviously concocted dossier like this has circulated for weeks if not months with its source apparently still considered “unimpeachable” and “reliable” by the West’s intelligence agencies shows how wildly paranoid and ignorant about Russia the West’s intelligence agencies and its politicians and journalists have become.

Fantasy has replaced truth, and it seems that a clever fabricator out to make money has successfully cashed in on it, quite possibly doing serious harm along the way.

My speculation that the Trump Dossier is the original cause of the whole Russiagate scandal has now received dramatic confirmation from a massive article in the Washington Post about the Russiagate scandal, which though it never specifically refers to the Trump Dossier, makes it quite clear that the Russiagate scandal is based on it.

According to the Washington Post article in August 2016 the CIA received secret but supposedly conclusive intelligence that Russian President Putin was seeking to swing the US Presidential election to Donald Trump.  CIA Director Brennan was supposedly so concerned that he immediately sent a secret memorandum advising President Obama of this.

This is how the Washington Post describes it

Early last August, an envelope with extraordinary handling restrictions arrived at the White House. Sent by courier from the CIA, it carried “eyes only” instructions that its contents be shown to just four people: President Barack Obama and three senior aides.

Inside was an intelligence bombshell, a report drawn from sourcing deep inside the Russian government that detailed Russian President Vladi­mir Putin’s direct involvement in a cyber campaign to disrupt and discredit the U.S. presidential race.

But it went further. The intelligence captured Putin’s specific instructions on the operation’s audacious objectives — defeat or at least damage the Democratic nominee, Hillary Clinton, and help elect her opponent, Donald Trump…..

The CIA breakthrough came at a stage of the presidential campaign when Trump had secured the GOP nomination but was still regarded as a distant long shot. Clinton held comfortable leads in major polls, and Obama expected that he would be transferring power to someone who had served in his Cabinet.

The intelligence on Putin was extraordinary on multiple levels, including as a feat of espionage.

For spy agencies, gaining insights into the intentions of foreign leaders is among the highest priorities. But Putin is a remarkably elusive target. A former KGB officer, he takes extreme precautions to guard against surveillance, rarely communicating by phone or computer, always running sensitive state business from deep within the confines of the Kremlin

(bold italics added)

That this refers to the Trump Dossier is clear from the highlighted words.

The Trump Dossier purports to be a “report drawn from sourcing deep inside the Russian government that detailed Russian President Vladimir Putin’s direct involvement in a cyber campaign to disrupt and discredit the US Presidential race”, which is exactly what the report mentioned in the article is said to be.

The timing is right, with the early parts of the Trump Dossier dated to June 2016 and Brennan sending out his memorandum to Obama in August 2016.

No other report other than the Trump Dossier fitting the description of the report in the Washington Post article is known to exist, and the Washington Post article says that “Putin is a remarkably elusive target”, which makes it all but certain that no other such report exists.

Moreover the Washington Post article slips out these further very interesting comments about the report mentioned in the article

Despite the intelligence the CIA had produced, other agencies were slower to endorse a conclusion that Putin was personally directing the operation and wanted to help Trump. “It was definitely compelling, but it was not definitive,” said one senior administration official. “We needed more.”

Some of the most critical technical intelligence on Russia came from another country, officials said. Because of the source of the material, the NSA was reluctant to view it with high confidence.

(bold italics added)

The Trump Dossier is not a US confection but was compiled by Christopher Steele, who is British, and who is a former agent of the British intelligence agency MI6.  The fact that the Washington Post story says that “the most critical technical intelligence on Russia came from another country” therefore again clearly points to the Trump Dossier, which originated not in the US but in Britain.

In light of these comments I do not think there is any doubt that it is the early sections of the Trump Dossier that are being referred to, and which were what caused Brennan to send his memorandum to the White House in August.

As the above comments show, outside the CIA the US intelligence community was initially deeply skeptical.  “The NSA was reluctant to view it [the material] with high confidence”. Director of National Intelligence James Clapper made his skepticism clear.  In the words of the Washington Post article

In late July, Director of National Intelligence James R. Clapper Jr. noted that Russia had a long history of meddling in American elections but that U.S. spy agencies were not ready to “make the call on attribution” for what was happening in 2016.

“We don’t know enough . . . to ascribe motivation,” Clapper said. “Was this just to stir up trouble or was this ultimately to try to influence an election?”

The Duran picked up Clapper’s skepticism at the time.  Here is what I wrote about it on 29th July 2017

Clapper did not say Russia was behind the leak.  Though he did not clear Russia, he says US intelligence has not yet established the identity of the hacker.   He says that there was nothing especially difficult or complex about the hack, meaning that any of many parties could have done it.  He has pointed out that both the US and Russia routinely hack each other, and that they have been engaged in this sort of thing ever since the start of the Cold War, and that only “the tools have changed”.  He says he is “taken aback” by all the “hyperventilation” that has surrounded the story.

The Washington Post makes clear that leading Republicans in Congress and officials in the 50 US states were also skeptical, remaining so until late into the autumn, up to and beyond election day

On Aug. 15, Johnson arranged a conference call with dozens of state officials, hoping to enlist their support. He ran into a wall of resistance.

The reaction “ranged from neutral to negative,” Johnson said in congressional testimony Wednesday.

Brian Kemp, the Republican secretary of state of Georgia, used the call to denounce Johnson’s proposal as an assault on state rights. “I think it was a politically calculated move by the previous administration,” Kemp said in a recent interview, adding that he remains unconvinced that Russia waged a campaign to disrupt the 2016 race. “I don’t necessarily believe that,” he said.

Stung by the reaction, the White House turned to Congress for help, hoping that a bipartisan appeal to states would be more effective.

The meeting devolved into a partisan squabble.

“The Dems were, ‘Hey, we have to tell the public,’ ” recalled one participant. But Republicans resisted, arguing that to warn the public that the election was under attack would further Russia’s aim of sapping confidence in the system.

Senate Majority Leader Mitch McConnell (R-Ky.) went further, officials said, voicing skepticism that the underlying intelligence truly supported the White House’s claims.

By late September, under pressure from Brennan and the CIA, and also from the hardliners within the Obama administration – first and foremost Secretary of State Kerry and National Security Adviser Susan Rice – Clapper and the US intelligence community however fell into line.

Some residual doubts seem to have remained as shown by Comey’s refusal to sign the October 2016 joint intelligence statement as well as by the fact that the January 2017 ODNI report was drawn up by only three of the 17 US intelligence agencies and by the fact that the NSA refused to give “high confidence” to all the claims made in the January 2017 ODNI report.

However since circulation of the January 2017 ODNI report – fact free though it is – ‘group-think’ has taken over, and it is now career destroying heresy for any US politician or US official to express in public doubts that the Russians interfered in the Presidential election.

All this is disturbing enough.  The fact that the US intelligence community and the US political class have given credence to the Trump Dossier – obviously concocted and absurd though it is – shows both their profound paranoia about Russia and their staggering ignorance about it.

However the sequel is much more alarming.

The Washington Post article makes it clear that over the course of the autumn hardliners within the Obama administration sought to use the Russiagate scandal to escalate tensions with Russia to levels not seen since the Cuban Missile Crisis.  This is the range of action against Russia that they pressed for

The early options they discussed were ambitious. They looked at sector wide economic sanctions and cyberattacks that would take Russian networks temporarily offline. One official informally suggested — though never formally proposed — moving a U.S. naval carrier group into the Baltic Sea as a symbol of resolve.

(bold italics added)

What the Washington Post article does not say – though it will have been on the minds of all the US officials who discussed these options – is that October, when these proposals were discussed, was already a period of extreme tension between the US and Russia.

In September an agreement between US Secretary of State Kerry and Russian Foreign Minister Lavrov for a ceasefire in Syria was thwarted by a US bombing raid of Syrian military positions defending the eastern desert city of Deir Ezzor.  Following the collapse of the Kerry-Lavrov agreement the Syrian military backed by the Russians moved to wipe-out the Jihadi controlled enclave in eastern Aleppo.  Amidst a furious propaganda campaign in the West about Russian ‘war crimes’, reports began to circulate of planned US military action to break the siege of eastern Aleppo.  The Russians retaliated by deploying sophisticated S-300VM Antey 2500 anti aircraft missiles to Syria, and on 6th October 2016 warned that they stood ready to shoot down US aircraft that threatened their forces in Syria.  On 7th October 2016, in response to this Russian warning, the US backed down, with the White House confirming that all plans for military action in Syria had been called off.

In such circumstances to have sent a US naval carrier group to the Baltic Sea or to have launched cyber attacks against Russian infrastructure would have been beyond reckless.

More pertinently, what the Washington Post article also fails to say is that during this same period – late September to October 2016 – the Obama administration was being widely reported in the media to be planning action against Russia.  However the reason for the planned was not Russian meddling in the US election; it was Russian action in Syria.  Here is how I described it all at the time (2nd October 2016)

There is again talk of supplying Jihadi troops, presumably in the area around Aleppo, with shoulder held surface to air missiles (‘MANPADS’) (the Saker has explained why this would not be effective) and of the US pulling out of negotiations with the Russians (it is not obvious why the US thinks that would scare or impress the Russians) but the truth is that with a head on clash with the Russian military in Syria categorically ruled out by the US military, the US has no real cards left to play.

This is the reason for all the overblown rhetoric of Russian “barbarism”, of Russia becoming a “pariah nation”, of the death threats against Russian servicemen and civilians in Syria and elsewhere, of the talk of the US bombing of Syrian military bases in eastern Syria (this clearly refers to Deir Ezzor), and of the hints of imposing further sanctions (“coercive measures”) on Russia (a non-starter), and of expelling Russia from the UN Security Council or diluting its power of veto there (ditto). 

Given that some of the people involved in demanding action against Russia because of its actions in Syria were the same people who were demanding action against Russia in connection with the allegations in the Trump Dossier of Russian meddling in the election, it is hard to avoid the conclusion that what was really driving their demands was their anger and feelings of humiliation at the US having been bested by Russia in Syria.

That this was the real issue on the mind of the US officials who were demanding action against Russia is further shown by how the story of what happened at the G20 meeting between Obama and Putin in Hangzhou in September has been re-written.

The story today is that Obama used the meeting to warn Putin against hacking US voting machines, with the implication being that the warning was effective because no such hacking took place.  Here is how the Washington Post describes it

A month later, Obama confronted Putin directly during a meeting of world leaders in Hangzhou, China. Accompanied only by interpreters, Obama told Putin that “we knew what he was doing and [he] better stop or else,” according to a senior aide who subsequently spoke with Obama. Putin responded by demanding proof and accusing the United States of interfering in Russia’s internal affairs.

In a subsequent news conference, Obama alluded to the exchange and issued a veiled threat. “We’re moving into a new era here where a number of countries have significant capacities,” he said. “Frankly, we’ve got more capacity than anybody both offensively and defensively.”

At the time however the meeting between Obama and Putin in Hangzhou was being reported rather differently.  At that time the focus was on a plan Obama brought with him to Hangzhou for a ceasefire in Syria and specifically in Aleppo, which Putin however rejected.

It was only later that the focus of reporting of this meeting switched to the US election, with the fact that Syria was actually the main subject of discussion at this meeting no longer being mentioned.

Obama undoubtedly did raise the question of Russian interference in the US election with Putin during the meeting, and he certainly did threaten Putin both during and after the meeting with cyber warfare because he said as much at the time in public.  However  it is clear that this was a secondary issue.  The main topic of discussion at the meeting was Syria, with the ultimately abortive Kerry-Lavrov agreement following a few days after.

The hardliners failed to get the tough action they wanted against Russia.  The Washington Post speaks at length of their failure and disappointment.  Ultimately however all the proposals that were made turned out be counter-productive, risking more damage to the US than to Russia

Rice again ordered NSC staffers to finalize a “menu” of punitive measures to use against Moscow. The list that took shape was a distillation of ideas that had been circulating for months across three main categories: cyber, economic and diplomatic.

Again, the discussion ran into roadblocks.

Spy agencies wanted to maintain their penetrations of Russian networks, not expose them in a cyber-fusillade.

Treasury Department officials devised plans that would hit entire sectors of Russia’s economy. One preliminary suggestion called for targeting technology companies including Kaspersky Lab, the Moscow-based cybersecurity firm. But skeptics worried that the harm could spill into Europe and pointed out that U.S. companies used Kaspersky systems and software.

Several senior administration officials called for imposing sanctions on Putin personally or releasing financial records or other information that would embarrass him. Some objected that the latter proposal would send the wrong message — the United States would be engaging in the same behavior it was condemning. In any case, it was not clear how long it would take U.S. spy agencies to assemble such a Putin dossier.

“By December, those of us working on this for a long time were demoralized,” said an administration official involved in the developing punitive options……

The [eventual] election-related sanctions… have had [minimal] impact.

Officials involved in designing them said that the main targets — Russia’s foreign and military intelligence services, the GRU and FSB, and senior officials at those agencies — have few known holdings abroad or vulnerable assets to freeze.

“I don’t think any of us thought of sanctions as being a primary way of expressing our disapproval” for the election interference, said a senior administration official involved in the decision. “Going after their intelligence services was not about economic impact. It was symbolic.”

More than any other measure, that decision has become a source of regret to senior administration officials directly involved in the Russia debate. The outcome has left the impression that Obama saw Russia’s military meddling in Ukraine as more deserving of severe punishment than its subversion of a U.S. presidential race.

“What is the greater threat to our system of government?” said a former high-ranking administration official, noting that Obama and his advisers knew from projections formulated by the Treasury Department that the impact of the election-related economic sanctions would be “minimal.”

The one serious move which Obama did authorise was the planting of ‘cyber bombs’ in Russia’s infrastructure, a plan which apparently is still going ahead

The cyber operation is still in its early stages and involves deploying “implants” in Russian networks deemed “important to the adversary and that would cause them pain and discomfort if they were disrupted,” a former U.S. official said.

The implants were developed by the NSA and designed so that they could be triggered remotely as part of retaliatory cyber-strike in the face of Russian aggression, whether an attack on a power grid or interference in a future presidential race.

Officials familiar with the measures said that there was concern among some in the administration that the damage caused by the implants could be difficult to contain.

As a result, the administration requested a legal review, which concluded that the devices could be controlled well enough that their deployment would be considered “proportional” in varying scenarios of Russian provocation, a requirement under international law.

The operation was described as long-term, taking months to position the implants and requiring maintenance thereafter. Under the rules of covert action, Obama’s signature was all that was necessary to set the operation in motion.

U.S. intelligence agencies do not need further approval from Trump, and officials said that he would have to issue a countermanding order to stop it. The officials said that they have seen no indication that Trump has done so.

Putting aside the lack of morality and utter illegality of this measure, the Russians of course know all about it if only because former Vice-President Biden, former US President Obama, and now the Washington Post, have been unable to resist the temptation to brag about it.  Putin even talked about it with Oliver Stone in the fourth episode of the Putin Interviews.

The Russians will certainly take both countermeasures and preventative measures in response, though Putin – showing far more discretion than Biden, Obama and the Washington Post – refused to hint what they might be.  He did however point out to Stone that the structure of the US economy makes it far more vulnerable to cyber attack than the Russian.

The story of Russiagate since the autumn is of the US political class and the US intelligence community, having accepted the fictions of the Trump Dossier as true, desperately working overtime to prove them true.  That is impossible for the simple reason that they are not true.  Future historians will be incredulous at the credence given to this absurd document.

However the chronology of events provides a partial answer to this riddle.  Over and above the fury of Hillary Clinton and the Democrats at losing an election they were sure they would win, there is the further factor of the huge anger within the US political leadership and intelligence community and within the Obama administration at the humiliation (as they saw it) that the US suffered in Syria because of Russia.

That made them determined to strike back at Russia in whatever way they could, which led them to seize on the fantastic allegations of Russian meddling in the Presidential election in the Trump Dossier in order to justify doing so.

In the event, as the Washington Post article admits, they have inflicted minimal hurt on Russia itself.  Instead they have provoked a massive political crisis in the US.

Whilst that has stopped the rapprochement with Russia that President Trump wanted, with the US government essentially paralysed and with the US President at war with his intelligence services, it is difficult to avoid the impression that the greater hurt in the end has been done to the US.

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Skripal and Khashoggi: A Tale of Two Disappearances

Two disappearances, and two different responses.

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Authored by Finian Cunningham via The Strategic Culture Foundation:


Two disappearances, and two very different responses from Western governments, which illustrates their rank hypocrisy.

When former Russian spy Sergei Skripal went missing in England earlier this year, there was almost immediate punitive action by the British government and its NATO allies against Moscow. By contrast, Western governments are straining with restraint towards Saudi Arabia over the more shocking and provable case of murdered journalist Jamal Khashoggi.

The outcry by Western governments and media over the Skripal affair was deafening and resulted in Britain, the US and some 28 other countries expelling dozens of Russian diplomats on the back of unsubstantiated British allegations that the Kremlin tried to assassinate an exiled spy with a deadly nerve agent. The Trump administration has further tightened sanctions citing the Skripal incident.

London’s case against Moscow has been marked by wild speculation and ropey innuendo. No verifiable evidence of what actually happened to Sergei Skripal (67) and his daughter Yulia has been presented by the British authorities. Their claim that President Vladimir Putin sanctioned a hit squad armed with nerve poison relies on sheer conjecture.

All we know for sure is that the Skripals have been disappeared from public contact by the British authorities for more than seven months, since the mysterious incident of alleged poisoning in Salisbury on March 4.

Russian authorities and family relatives have been steadfastly refused any contact by London with the Skripal pair, despite more than 60 official requests from Moscow in accordance with international law and in spite of the fact that Yulia is a citizen of the Russian Federation with consular rights.

It is an outrage that based on such thin ice of “evidence”, the British have built an edifice of censure against Moscow, rallying an international campaign of further sanctions and diplomatic expulsions.

Now contrast that strenuous reaction, indeed hyper over-reaction, with how Britain, the US, France, Canada and other Western governments are ever-so slowly responding to Saudi Arabia over the Khashoggi case.

After nearly two weeks since Jamal Khashoggi entered the Saudi consulate in Istanbul, Turkey, the Saudi regime is this week finally admitting he was killed on their premises – albeit, they claim, in a “botched interrogation”.

Turkish and American intelligence had earlier claimed that Khashoggi was tortured and murdered on the Saudi premises by a 15-member hit squad sent from Riyadh.

Even more grisly, it is claimed that Khashoggi’s body was hacked up with a bone saw by the killers, his remains secreted out of the consulate building in boxes, and flown back to Saudi Arabia on board two private jets connected to the Saudi royal family.

What’s more, the Turks and Americans claim that the whole barbaric plot to murder Khashoggi was on the orders of senior Saudi rulers, implicating Crown Prince Mohammed bin Salman. The latest twist out of Riyadh, is an attempt to scapegoat “rogue killers” and whitewash the House of Saudi from culpability.

The fact that 59-year-old Khashoggi was a legal US resident and a columnist for the Washington Post has no doubt given his case such prominent coverage in Western news media. Thousands of other victims of Saudi vengeance are routinely ignored in the West.

Nevertheless, despite the horrific and damning case against the Saudi monarchy, the response from the Trump administration, Britain and others has been abject.

President Trump has blustered that there “will be severe consequences” for the Saudi regime if it is proven culpable in the murder of Khashoggi. Trump quickly qualified, however, saying that billion-dollar arms deals with the oil-rich kingdom will not be cancelled. Now Trump appears to be joining in a cover-up by spinning the story that the Khashoggi killing was done by “rogue killers”.

Britain, France and Germany this week issued a joint statement calling for “a credible investigation” into the disappearance. But other than “tough-sounding” rhetoric, none of the European states have indicated any specific sanctions, such as weapons contracts being revoked or diplomatic expulsions.

Canadian Prime Minister Justin Trudeau said he was “concerned” by the gruesome claims about Khashoggi’s killing, but he reiterated that Ottawa would not be scrapping a $15 billion sale of combat vehicles to Riyadh.

The Saudi rulers have even threatened retaliatory measures if sanctions are imposed by Western governments.

Saudi denials of official culpability seem to be a brazen flouting of all reason and circumstantial evidence that Khashoggi was indeed murdered in the consulate building on senior Saudi orders.

This week a glitzy international investor conference in Saudi Arabia is being boycotted by top business figures, including the World Bank chief, Jim Yong Kim, JP Morgan CEO Jamie Dimon and Britain’s venture capitalist Richard Branson. Global firms like Ford and Uber have pulled out, as have various media sponsors, such as CNN, the New York Times and Financial Times. Withdrawal from the event was in response to the Khashoggi affair.

A growing bipartisan chorus of US Senators, including Bob Corker, Marco Rubio, Lindsey Graham and Chris Murphy, have called for the cancellation of American arms sales to Saudi Arabia, as well as for an overhaul of the strategic partnership between the two countries.

Still, Trump has rebuffed calls for punitive response. He has said that American jobs and profits depend on the Saudi weapons market. Some 20 per cent of all US arms sales are estimated to go to the House of Saud.

The New York Times this week headlined: “In Trump’s Saudi Bargain, the Bottom Line Proudly Stands Out”.

The Trump White House will be represented at the investment conference in Saudi Arabia this week – dubbed “Davos in the Desert” by Treasury Secretary Steven Mnuchin. He said he was attending in spite of the grave allegations against the Saudi rulers.

Surely the point here is the unseemly indulgence by Western governments of Saudi Arabia and its so-called “reforming” Crown Prince. It is remarkable how much credulity Washington, London, Paris, Ottawa and others are affording the Saudi despots who, most likely, have been caught redhanded in a barbarous murder.

Yet, when it comes to Russia and outlandish, unproven claims that the Kremlin carried out a bizarre poison-assassination plot, all these same Western governments abandon all reason and decorum to pile sanctions on Russia based on lurid, hollow speculation. The blatant hypocrisy demolishes any pretense of integrity or principle.

Here is another connection between the Skripal and Khashoggi affairs. The Saudis no doubt took note of the way Britain’s rulers have shown absolute disregard and contempt for international law in their de facto abduction of Sergei and Yulia Skripal. If the British can get away with that gross violation, then the Saudis probably thought that nobody would care too much if they disappeared Jamal Khashoggi.

Grotesquely, the way things are shaping up in terms of hypocritical lack of action by the Americans, British and others towards the Saudi despots, the latter might just get away with murder. Not so Russia. The Russians are not allowed to get away with even an absurd fantasy.

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US-China trade war heats up as surplus hits record $34 Billion (Video)

The Duran – News in Review – Episode 136.

Alex Christoforou

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According to a report by the AFP, China’s trade surplus with the United States ballooned to a record $34.1 billion in September, despite a raft of US tariffs, official data showed Friday, adding fuel to the fire of a worsening trade war.

Relations between the world’s two largest economies have soured sharply this year, with US President Donald Trump vowing on Thursday to inflict economic pain on China if it does not blink.
The two countries imposed new tariffs on a massive amount of each other’s goods mid-September, with the US targeting $200 billion in Chinese imports and Beijing firing back at $60 billion worth of US goods.

“China-US trade friction has caused trouble and pounded our foreign trade development,” customs spokesman Li Kuiwen told reporters Friday.

But China’s trade surplus with the US grew 10 percent in September from a record $31 billion in August, according to China’s customs administration. It was a 22 percent jump from the same month last year.

China’s exports to the US rose to $46.7 billion while imports slumped to $12.6 billion.

China’s overall trade — what it buys and sells with all countries including the US — logged a $31.7 billion surplus, as exports rose faster than imports.

Exports jumped 14.5 percent for September on-year, beating forecasts from analysts polled by Bloomberg News, while imports rose 14.3 percent on-year.

While the data showed China’s trade remained strong for the month, analysts forecast the trade war will start to hurt in coming months.

China’s export jump for the month suggests exporters were shipping goods early to beat the latest tariffs, said ANZ’s China economist Betty Wang, citing the bounce in electrical machinery exports, much of which faced the looming duties.

“We will watch for downside risks to China’s exports” in the fourth quarter, Wang said.

Analysts say a sharp depreciation of the yuan has also helped China weather the tariffs by making its exports cheaper.

“The big picture is the Chinese exports have so far held up well in the face of escalating trade tensions and cooling global growth, most likely thanks to the competitiveness boost provided by a weaker renminbi (yuan),” said Julian Evans-Pritchard, China economist at Capital Economics.

“With global growth likely to cool further in the coming quarters and US tariffs set to become more punishing, the recent resilience of exports is unlikely to be sustained,” he said.

According to Bloomberg US President Donald Trump’s new U.S.-Mexico-Canada Agreement isn’t that different from the North American Free Trade Agreement that it replaced. But hidden in the bowels of the new trade deal is a clause, Article 32.10, that could have a far-reaching impact. The new agreement requires member states to get approval from the other members if they initiate trade negotiations with a so-called non-market economy. In practice, “non-market” almost certainly means China. If, for example, Canada begins trade talks with China, it has to show the full text of the proposed agreement to the U.S. and Mexico — and if either the U.S. or Mexico doesn’t like what it sees, it can unilaterally kick Canada out of the USMCA.

Although it seems unlikely that the clause would be invoked, it will almost certainly exert a chilling effect on Canada and Mexico’s trade relations with China. Forced to choose between a gargantuan economy across the Pacific and another one next door, both of the U.S.’s neighbors are almost certain to pick the latter.

This is just another part of Trump’s general trade waragainst China. It’s a good sign that Trump realizes that unilateral U.S. efforts alone won’t be enough to force China to make concessions on issues like currency valuation, intellectual-property protection and industrial subsidies. China’s export markets are much too diverse:

If Trump cuts the U.S. off from trade with China, the likeliest outcome is that China simply steps up its exports to other markets. That would bind the rest of the world more closely to China and weaken the global influence of the U.S. China’s economy would take a small but temporary hit, while the U.S. would see its position as the economic center of the world slip into memory.

Instead, to take on China, Trump needs a gang. And that gang has to be much bigger than just North America. But most countries in Europe and East Asia probably can’t be bullied into choosing between the U.S. and China. — their ties to the U.S. are not as strong as those of Mexico and Canada. Countries such as South Korea, Germany, India and Japan will need carrots as well as sticks if they’re going to join a U.S.-led united trade front against China.

The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris discuss the escalating trade war between the United States and China, and the record trade surplus that positions China with a bit more leverage than Trump anticipated.

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Via Zerohedge Trump Threatens China With More Tariffs, Does Not Seek Economic “Depression”

US equity futures dipped in the red after President Trump threatened to impose a third round of tariffs on China and warned that Chinese meddling in U.S. politics was a “bigger problem” than Russian involvement in the 2016 election.

During the same interview with CBS’s “60 Minutes”, in which Trump threatened to impose sanctions against Saudi Arabia if the Saudis are found to have killed WaPo reported Khashoggi, and which sent Saudi stock plunging, Trump said he “might,” impose a new round of tariffs on China, adding that while he has “great chemistry” with Chinese President Xi Jinping, and noting that Xi “wants to negotiate”, he doesn’t “know that that’s necessarily going to continue.” Asked if American products have become more expensive due to tariffs on China, Trump said that “so far, that hasn’t turned out to be the case.”

“They can retaliate, but they can’t, they don’t have enough ammunition to retaliate,” Trump says, “We do $100 billion with them. They do $531 billion with us.”

Trump was also asked if he wants to push China’s economy into a depression to which the US president said “no” before comparing the country’s stock-market losses since the tariffs first launched to those in 1929, the start of the Great Depression in the U.S.

“I want them to negotiate a fair deal with us. I want them to open their markets like our markets are open,” Trump said in the interview that aired Sunday. So far, the U.S. has imposed three rounds of tariffs on Chinese imports totaling $250 billion, prompting China to retaliate against U.S. products. The president previously has threatened to hit virtually all Chinese imports with duties.

Asked about his relationship with Vladimir Putin and the Kremlin’s alleged efforts to influence the 2016 presidential election, Trump quickly turned back to China. “They meddled,” he said of Russia, “but I think China meddled too.”

“I think China meddled also. And I think, frankly, China … is a bigger problem,” Trump said, as interviewer Lesley Stahl interrupted him for “diverting” from a discussion of Russia.

Shortly before an audacious speech by Mike Pence last weekend, in which the US vice president effectively declared a new cold war on Beijing (see “Russell Napier: Mike Pence Announces Cold War II”), Trump made similar accusations during a speech at the United Nations last month, which his aides substantiated by pointing to long-term Chinese influence campaigns and an advertising section in the Des Moines Register warning farmers about the potential effects of Trump’s tariffs.

Meanwhile, in a rare U.S. television appearance, China’s ambassador to the U.S. said Beijing has no choice but to respond to what he described as a trade war started by the U.S.

“We never wanted a trade war, but if somebody started a trade war against us, we have to respond and defend our own interests,” said China’s Ambassador Cui Tiankai.

Cui also dismissed as “groundless” the abovementioned suggestion by Vice President Mike Pence that China has orchestrated an effort to meddle in U.S. domestic affairs. Pence escalated the rhetoric in a speech Oct. 4, saying Beijing has created a “a whole-of-government approach” to sway American public opinion, including spies, tariffs, coercive measures and a propaganda campaign.

Pence’s comments were some of the most critical about China by a high-ranking U.S. official in recent memory. Secretary of State Michael Pompeo got a lecture when he visited Beijing days later, about U.S. actions that were termed “completely out of line.” The tough words followed months of increases tit-for-tat tariffs imposed by Washington and Beijing that have ballooned to cover hundreds of billions of dollars in bilateral trade.

During a recent interview with National Public Radio, Cui said the U.S. has “not sufficiently” dealt in good faith with the Chinese on trade matters, saying “the U.S. position keeps changing all the time so we don’t know exactly what the U.S. would want as priorities.”

Meanwhile, White House economic director Larry Kudlow said on “Fox News Sunday” that President Donald Trump and Chinese President Xi Jinping will “probably meet” at the G-20 summit in Buenos Aires in late November. “There’s plans and discussions and agendas” being discussed, he said. So far, talks with China on trade have been “unsatisfactory,” Kudlow said. “We’ve made our asks” on allegations of intellectual property theft and forced technology transfers, he added. “We have to have reciprocity.”

Addressing the upcoming meeting, Cui said he was present at two previous meetings of Xi and Trump, and that top-level communication “played a key role, an irreplaceable role, in guiding the relationship forward.” Despite current tensions the two have a “good working relationship,” he said.

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Massacre in Crimea kills dozens, many in critical condition

According to preliminary information, the incident was caused by a gas explosion at a college facility in Kerch, Crimea.

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“We are clarifying the information at the moment. Preliminary figures are 50 injured and 10 dead. Eight ambulance crews are working at the site and air medical services are involved,” the press-service for the Crimean Ministry of Health stated.

Medics announced that at least 50 people were injured in the explosion in Kerch and 25 have already been taken to local hospital with moderate wounds, according to Sputnik.

Local news outlets reported that earlier in the day, students at the college heard a blast and windows of the building were shattered.

Putin Orders that Assistance Be Provided to Victims of Blast in Kerch – Kremlin Spokesman

“The president has instructed the Ministry of Health and the rescue services to take emergency measures to assist victims of this explosion, if necessary, to ensure the urgent transportation of seriously wounded patients to leading medical institutions of Russia, whether in Moscow or other cities,” Kremlin spokesman Dmitriy Peskov said.

The president also expressed his condolences to all those affected by the tragic incident.

Manhunt Underway in Kerch as FSB Specialists Investigate Site of Explosion – National Anti-Terrorist Committee

The site of the blast that rocked a city college in Kerch is being examined by FSB bomb disposal experts and law enforcement agencies are searching for clues that might lead to the arrest of the perpetrators, the National Anti Terrorism Committee said in a statement.

“Acting on orders from the head of the NAC’s local headquarters, FSB, Interior Ministry, Russian Guards and Emergency Ministry units have arrived at the site. The territory around the college has been cordoned off and the people inside the building evacuated… Mine-disposal experts are working at the site and law enforcement specialists are investigating,” the statement said.

Terrorist Act Considered as Possible Cause of Blast in Kerch – Kremlin Spokesman

“The tragic news that comes from Kerch. Explosion. The president was informed … The data on those killed and the number of injured is constantly updated,” Peskov told reporters.

“[The version of a terrorist attack] is being considered,” he said.

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