Trump says ‘strange things’ afoot surrounding coronavirus origins

WASHINGTON (Reuters) – U.S. President Donald Trump said on Friday that “a lot of strange things are happening” regarding the origins of the novel coronavirus.

The source of the virus is a mystery. The broad scientific consensus is that the novel coronavirus originated in bats.

Fox News reported on Wednesday that the virus originated in a Wuhan laboratory as part of China’s effort to demonstrate the capability of its efforts in identifying and combating viruses. Trump has said his government is seeking to determine whether the virus emanated from a laboratory in China.

“A lot of strange things are happening but there is a lot of investigation going on. And we’re going to find out,” Trump told reporters at the White House.

Trump also cast doubt on China’s death toll, which was revised up on Friday. China said 1,300 people who died of the coronavirus in the Chinese city of Wuhan – half the total – were not counted, but dismissed allegations of a cover-up.

The U.S. president said on Friday that many more people must have died in China than in the United States, which is currently the epicenter of the global pandemic and has reported the largest number of deaths in the world linked to the virus.

“We don’t have the most in the world deaths. The most in the world has to be China. It’s a massive country. It’s gone through a tremendous problem with this, a tremendous problem – they must have the most,” Trump told reporters.

China reported that 4,632 people have died of the novel coronavirus within its borders. U.S. coronavirus deaths topped 35,400 on Friday, according to a Reuters tally.

Washington and Beijing have publicly sparred over the virus repeatedly. Trump initially praised China’s response to the outbreak, but he and his top aides have also referred to it as the “Chinese virus.”

(Reporting by Steve Holland; Writing by Makini Brice; Editing by Sandra Maler)

Trump stops Europe flights, China says coronavirus outbreak may end by June

Reuters
By Liangping Gao and Andrea Shalal

BEIJING/WASHINGTON (Reuters) – Travelers scrambled to rebook flights and markets reeled on Thursday after U.S. President Donald Trump imposed sweeping restrictions on travel from Europe, hitting battered airlines and heightening global alarm over the coronavirus.

But China, where the disease originated, said its epidemic had peaked and the global spread could be over by June if other nations applied similarly aggressive containment measures as Beijing’s communist government.

Trump had downplayed risks to the United States during the crisis, but with epidemics ballooning from Iran to Italy and Spain, he limited travel from continental Europe for 30 days.

“This is the most aggressive and comprehensive effort to confront a foreign virus in modern history,” he said in a prime-time televised address from the Oval Office on Wednesday.

That sent markets into a tailspin, with European shares plunging to their lowest in almost four years and oil also slumping.

It also sent stressed travelers rushing to airports to board last flights back to the United States.

“It caused a mass panic,” said 20-year-old Anna Grace, a U.S. student at Suffolk University on her first trip to Europe who rushed to Madrid’s Barajas airport at 5 a.m. to get home.

The outbreak has disrupted industry, travel, entertainment and sports worldwide, even throwing the Tokyo Summer Olympics into question. But its progress in the epicenter of China’s Hubei province has slowed markedly amid strict curbs on movement, including the lockdown of its capital Wuhan.

Hubei logged just eight new infections on Wednesday, the first time in the outbreak it has recorded a daily tally of less than 10. Beyond Hubei, mainland China had just seven new cases, six of them imported from abroad.

“The peak of the epidemic has passed for China,” said Mi Feng, a spokesman for the National Health Commission.

OVER BY JUNE?

The Chinese government’s senior medical adviser, Zhong Nanshan, an 83-year-old epidemiologist renowned for helping combat the SARS outbreak in 2003, said the crisis could be over by mid-year.

“If all countries could get mobilized, it could be over by June,” he said. “But if some countries do not treat the infectiousness and harmfulness seriously, and intervene strongly, it would last longer.”

The coronavirus has infected more than 126,000 people across the world, the vast majority in China, and killed 4,624, according to a Reuters tally.

Already annoyed at what it considered over-draconian travel restrictions by Washington early in the crisis, Beijing smarted again at latest U.S. criticism of its handling.

White House national security adviser Robert O’Brien accused China on Wednesday of initially covering up the Hubei outbreak, saying that cost the world two months in response time.

In fact, retorted Chinese Foreign Ministry spokesman Geng Shuang, China’s efforts bought the world time and “immoral and irresponsible” remarks would not help U.S. epidemic efforts.

The World Health Organization (WHO) now officially describes the crisis as a pandemic, meaning it is spreading fast across the globe.

“Describing this as a pandemic does not mean that countries should give up,” WHO chief Tedros Adhanom Ghebreyesus told diplomats in Geneva. “The idea that countries should shift from containment to mitigation is wrong and dangerous.”

Trump’s surprise travel order, which starts at midnight on Friday, does not apply to Britain or to Americans undergoing “appropriate screenings”, he said. “The restriction stops people not goods,” he tweeted after his speech.

EU DISAPPROVAL

The 27-nation European Union (EU) bloc was not impressed.

“The European Union disapproves of the fact that the U.S. decision to improve a travel ban was taken unilaterally and without consultation,” European Commission president Ursula von der Leyen and Council president Charles Michel said in a statement.

The market plunge hit airline and leisure stocks particularly hard.

“This is something that markets had not factored in … it’s a huge near-term economic cost,” Khoon Goh, head of Asia Research at ANZ in Singapore, said of the U.S. move.

Although exempt from Trump’s ban and no longer a member of the EU, Britain also expressed disappointment, saying it would have an impact on its economy.

But U.S. Vice President Mike Pence defended the new restrictions, saying the epicenter of the pandemic had shifted from Asia to Europe. “We know there will be more infections in the days ahead. We’re trying to hold that number down as much as possible,” Pence told NBC’s “Today” program.

In the United States, classes were suspended for two weeks in the greater Seattle area, which accounts for the bulk of at least 38 U.S. fatalities from the disease.

Oscar-winning American actor Tom Hanks tested positive in Australia, where he is on a film shoot.

Despite fears for the Tokyo Olympics, the torch relay got started in Greece when the flame was lit by the rays of the sun in ancient Olympia – albeit in a scaled-down ceremony and without spectators.

(Additional reporting by Ryan Woo, Stella Qui, Kevin Yao and Gabriel Crossley in Beijing; Alexandra Alper, Steve Holland, Susan Heavey, David Lawder, and Richard Cowan in Washington, Marine Strauus in Brussels, William Schomberg in London, Stephanie Nebehay in Geneva, Karolos Grohmann in Ancient Olympia; Writing by Nick Macfie; Editing by Robert Birsel and Andrew Cawthorne)

Factbox: Trump impeachment – What happens next?

WASHINGTON (Reuters) – The U.S. Senate will conclude its impeachment trial of U.S. President Donald Trump this week, with a final vote set for Wednesday. The Republican-controlled chamber is all but certain to acquit the president.

Monday Feb. 3

– The Senate trial will resume at 11 a.m. (1600 GMT) with Chief Justice John Roberts presiding. There will be four hours of closing arguments by the House impeachment managers and White House lawyers. The trial will then be recessed and the Senate will hold a regular session to hear speeches from senators on whether Trump should be convicted or acquitted. Roberts will not be present for this session.

Tuesday Feb. 4

– Speeches by senators continue. Trump is scheduled to deliver his annual State of the Union address to both chambers of the U.S. Congress at 9 p.m. (0200 GMT).

Wednesday Feb. 5

– The trial resumes with a final vote expected on the acquittal or conviction of the Republican president by 4 p.m. (2100 GMT).

(Reporting by David Morgan, Susan Cornwell and Richard Cowan; Editing by Andy Sullivan and Sandra Maler)

What’s in Trump’s Middle East peace plan

By Stephen Farrell

(Reuters) – More than two years after he first proposed a plan to revive the long moribund Israeli-Palestinian peace process, U.S. President Donald Trump released details on Tuesday of his proposal to solve a conflict that has frustrated peacemakers for decades.

WHAT ARE THE KEY ISSUES?

* The status of Jerusalem, including historical sites sacredto Judaism, Islam and Christianity. * Establishing mutually agreed borders. * Finding security arrangements to satisfy Israeli fears ofattacks by Palestinians and hostile neighbors. * The Palestinian demand for statehood in territory – theWest Bank, Gaza Strip and East Jerusalem – captured by Israel inthe 1967 Middle East War. * Finding a solution to the plight of millions ofPalestinian refugees. * Arrangements to share natural resources, such as water. * Palestinian demands that Israel remove its settlements inthe West Bank and East Jerusalem. More than 400,000 Israelis nowlive among about 3 million Palestinians in the West Bank, withanother 200,000 settlers in East Jerusalem.WHAT DOES THE PLAN SAY?

The White House released a statement immediately after Trump’s televised address outlining the main points:

* A map to set out borders for “a realistic two-statesolution, offering a viable path to Palestinian statehood.” * A demilitarized Palestinian state to live peacefullyalongside Israel. * The proposed map more than doubles the size of the landcurrently used by the Palestinians. * Israel agreed to a four-year “land freeze” to secure thepossibility of a two-state solution. But a senior Israeliofficial later played down the notion of a settlement freeze. * The status quo to be preserved at Jerusalem’s TempleMount/al-Haram al-Sharif complex. * Israel to “continue to safeguard” Jerusalem’s holy sitesand to guarantee freedom of worship to Jews, Christians, Muslimsand other faiths. * Jerusalem to stay united and remain the capital of Israel. * The capital of the State of Palestine to include areas ofEast Jerusalem. Israeli Prime Minister Benjamin Netanyahu latersaid the capital would be in Abu Dis, which lies one mile eastof Jerusalem’s historic walled Old City. * An earlier – economic – part of the plan announced lastJune called for a $50 billion investment fund to boost thePalestinian and neighboring Arab state economies.WHY WAS IT RELEASED NOW

Critics say both Trump and Netanyahu are intent on diverting attention away from domestic troubles. Trump faces an impeachment trial while Netanyahu was indicted on corruption charges in November. Both deny wrongdoing.

They also both face re-election campaigns – Netanyahu in March and Trump in November. Netanyahu twice tried and failed to secure a majority in the Israeli parliament last year.

Trump repeatedly delayed the launch of his plan to avoid causing election problems for Netanyahu because of the likelihood that any concessions on settlements or Palestinians statehood would create problems for him among his right-wing voter base.

But Trump faces his own political clock and could ill-afford to wait for months for Israel to decide its next prime minister, according to a source familiar with the peace team’s thinking.

WHAT ARE ITS CHANCES?

The last Israeli-Palestinian peace talks collapsed in 2014.

Enduring obstacles include the expansion of Israeli settlements on occupied land over decades, and generations of mutual suspicion.

In November the United States reversed decades of policy when Secretary of State Mike Pompeo announced Washington no longer regarded Israeli settlements in the West Bank as a breach of international law.

Palestinians and most of the international community view the settlements as illegal under international law. Israel disputes this.

The last two decades have also seen the rise to power in Gaza of the armed Islamist movement Hamas, which is formally committed to Israel’s destruction and is in the midst of a decades-long power struggle with the Western-backed Palestinian Authority, headed by President Mahmoud Abbas.

WHAT WAS THE REACTION?

Speaking after Trump in Washington, Netanyahu described the announcement as “a historic day.”

He compared Trump’s plan to former President Harry Truman’s 1948 recognition of the state of Israel.

“On this day, you became the first world leader to recognize Israel’s sovereignty over areas in Judea and Samaria that are vital to our security and central to our heritage,” he added, using the Biblical names for the West Bank.

Abbas called Trump’s plan the “slap of the century.”

“I say to Trump and Netanyahu: Jerusalem is not for sale, all our rights are not for sale and are not for bargain. And your deal, the conspiracy, will not pass,” Abbas said in a televised address in Ramallah in the Israeli-occupied West Bank.

The Islamist militant group Hamas, whose stronghold is in Gaza, was scathing.

“Trump’s statement is aggressive and it will spark a lot of anger,” Hamas official Sami Abu Zuhri told Reuters.

“Trump’s statement about Jerusalem is nonsense and Jerusalem will always be a land for the Palestinians.”

The Palestinian leadership has argued that Washington can no longer be regarded as a mediator after a series of Trump decisions that delighted Israel but infuriated Palestinians.

These included recognizing Jerusalem as the capital of Israel, moving the U.S. Embassy in Israel from Tel Aviv to Jerusalem, and slashing hundreds of millions of dollars in humanitarian aid to the Palestinians.

The cuts were widely seen as a means of pressuring the Palestinian leadership to come back to the negotiating table. So far, that has failed.

(Additional reporting by Maayan Lubell, Jeffrey Heller, Dan Williams and Rami Ayyub in Jerusalem; Nidal al-Mughrabi in Gaza and Ali Sawafta in Ramallah; Writing by Stephen Farrell; Editing by Mark Heinrich and Marguerita Choy)

Trump trial enters pivotal week as calls for witnesses grow

By Richard Cowan and Karen Freifeld

WASHINGTON (Reuters) – U.S. President Donald Trump’s impeachment trial enters a pivotal week on Monday as his lawyers resume their defense following a fresh report that could intensify pressure on Senate Republicans to call former national security adviser John Bolton to testify.

The New York Times cited an unpublished Bolton manuscript as saying that Trump told him he wanted to freeze security aid to Ukraine until its officials helped with investigations into Democrats, including former Vice President Joe Biden, and his son, Hunter Biden.

The elder Biden is a leading Democratic contender to face the Republican president in the Nov. 3 U.S. election. Hunter Biden worked for a Ukrainian energy firm while his father was vice president.

The report, which did not quote the manuscript but cited multiple people describing Bolton’s account, may undercut a key element of Trump’s defense: that there was no quid pro quo when he asked Ukrainian President Volodomyr Zelenskiy to investigate Biden and his son, Hunter Biden, in a July phone call.

Bolton’s lawyer Charles Cooper said in a statement on Sunday that the manuscript had been submitted to the White House for a standard prepublication security review for classified information.

“It is clear, regrettably, from The New York Times article published today that the prepublication review process has been corrupted and that information has been disclosed by persons other than those properly involved in reviewing the manuscript,” Cooper said.

A Bolton aide said he had not given the manuscript to anyone else besides the White House for review.

White House spokeswoman Stephanie Grisham cast doubt on the timing of the report, which was published around the time pre-ordering for Bolton’s book began.

Trump denied the allegations in a series of tweets early on Monday.

“I NEVER told John Bolton that the aid to Ukraine was tied to investigations into Democrats, including the Bidens … If John Bolton said this, it was only to sell a book,” Trump wrote.

Trump’s team has previously said he was well within his constitutional authority to press Zelenskiy to investigate the Bidens as part of what he says was an anti-corruption drive. The Bidens deny wrongdoing.

In only the third presidential impeachment trial in U.S. history, Democrats argued last week that Trump should be removed for encouraging Ukraine to interfere in the 2020 U.S. election by pressuring its leader to dig up dirt on Biden.

Trump’s defense tried to turn that election interference line against the Democrats in its opening argument on Saturday by warning against removing a president less than 10 months before Americans vote on whether to give him a second term.

The president’s team will continue with his defense on Monday afternoon.

While the Republican-controlled Senate is highly unlikely to remove Trump from office, it is important for him to try to blunt the Democratic accusations to limit political damage to his bid for a second term.

The report drew immediate Democratic demands that the Senate call Bolton as a witness, an issue the 100-member chamber is likely to address later in the week.

The impeachment trial rules provide for a two-step process on whether to subpoena witness and documents, with an initial vote on whether to consider doing so and, if approved, subsequent votes to actually call witnesses or demand documents.

Democrats argue this could allow Republicans have it both ways – allowing them to first vote “yes” on whether to proceed and then vote “no” on actually allowing witnesses or documents.

As a result, vulnerable Senate Republicans could make the case to moderates that they had voted in favor of witnesses in the first vote while avoiding alienating Trump supporters by refusing to actually call any in later votes.

If the Senate called witnesses or demanded documents, the trial could lengthen. If not, the Senate could vote toward the end of the week on whether to remove Trump from office.

If that were to happen the trial could be over before the first U.S. voting contest takes place in Iowa on Feb. 3 and before Trump is scheduled to deliver the annual State of the Union address to a joint session of Congress on Feb. 4.

(Additional Reporting by Pete Schroeder, Arshad Mohammed, Tim Ahmann, Makini Brice, Steve Holland and Lisa Lambert; Writing Arshad Mohammed; Editing by Shri Navaratnam and Chizu Nomiyama)

Trump taps lawyer Dershowitz, others for impeachment trial defense

WASHINGTON (Reuters) – Former independent counsel Ken Starr and lawyer Alan Dershowitz will join U.S. President Donald Trump’s impeachment trial defense team led by White House counsel Pat Cipollone and Trump attorney Jay Sekulow, Trump’s legal team and a source said on Friday.

Trump adviser Pam Bondi and former independent counsel Robert Ray will also be on the team, according to the source who is familiar with the team’s composition.

(Reporting by Karen Freifeld; writing by Susan Heavey; Editing by Alistair Bell)

U.S., China set to sign massive purchases deal, easing trade war

By David Lawder

WASHINGTON (Reuters) – U.S. President Donald Trump and Chinese Vice Premier Liu He will sign an initial trade deal on Wednesday that will roll back some tariffs and see China boost purchases of U.S. goods and services, defusing an 18-month conflict between the world’s two largest economies.

Liu said the two sides will work more closely together to obtain tangible results and achieve a win-win relationship despite differences in their political and economic models, China’s official Xinhua news agency reported on Wednesday.

U.S. officials called the deal a huge win that marked a significant shift in Washington’s relations with China, but said it included a tough enforcement measure that could trigger renewed tariffs if Beijing does not live up to its promises.

The Phase 1 agreement caps a trade war marked by tit-for-tat tariffs that has hit hundreds of billions of dollars in goods, roiling financial markets, uprooting supply chains and slowing global growth.

Some analysts and economists have questioned whether the outcome of the drawn-out talks justified that economic pain.

Trump and Liu, who led the Chinese side in the trade talks with Washington, are scheduled to sign the 86-page Phase 1 deal at a White House event at 11:30 a.m. EST (1630 GMT) before over 200 invited guests from business, government and diplomatic circles.

It is not clear at this time whether the entire document will be released on Wednesday.

Trump, who entered the White House in 2017 vowing to rebalance global trade in favor of the United States, has already begun touting the deal as a pillar in his 2020 re-election campaign, calling it “a big beautiful monster” at a rally in Toledo, Ohio last week.

“Our farmers will take it in. I keep saying, ‘Go buy larger tractors, go buy larger tractors,'” Trump said.

The centerpiece of the deal is a pledge by China to purchase an additional $200 billion worth of U.S. farm products and other goods and services over two years. That will help reduce the bilateral U.S. trade deficit in goods, which peaked at $420 billion in 2018. The United States had a small services trade surplus with China of $40.5 billion in 2018.

Top White House economic adviser Larry Kudlow told Fox News the agreement would add 0.5 percentage point to U.S. gross domestic product growth in both 2020 and 2021.

Kudlow said the deal called for China to buy an additional $75 billion worth of U.S. manufactured goods over the two-year period. A source told Reuters this week that would include aircraft, autos and car parts, agricultural machinery and medical devices.

Beijing will boost energy purchases by some $50 billion and services by $40 billion, mostly in the financial sector, Kudlow said.

The Reuters source said agricultural purchases will get a $32 billion lift over the two years, compared to a 2017 baseline of U.S. exports to China.

When combined with the $24 billion in 2017 farm exports, the $16 billion annual increase approaches Trump’s goal of $40 billion to $50 billion in annual agricultural sales to China.

China will significantly increase imports of U.S. soybeans after the Phase 1 deal is signed, the Global Times reported on Wednesday, citing comments from a senior Chinese economist at a state think tank.

Wang Liaowei, senior economist at the China National Grain and Oils Information Center, which is under the National Food and Strategic Reserves Administration, also told the paper that imports of U.S. products such as pork and cotton could also see a jump.

Although the deal could be a big boost to farmers, planemaker Boeing <BA.N>, U.S. automakers and heavy equipment manufacturers, some analysts question https://af.reuters.com/article/commoditiesNews/idAFL4N29J26S China’s ability to divert imports from other trading partners to the United States.

“I find a radical shift in Chinese spending unlikely. I have low expectations for meeting stated goals,” said Jim Paulsen, chief investment strategist at Leuthold Group in Minneapolis. “But I do think the whole negotiation has moved the football forward for both the U.S. and China.”

TARIFFS TO STAY

The Phase 1 deal, reached in December, canceled planned U.S. tariffs on Chinese-made cellphones, toys and laptop computers and halved the tariff rate to 7.5% on about $120 billion worth of other Chinese goods, including flat panel televisions, Bluetooth headphones and footwear.

But it will leave in place 25% tariffs on a vast, $250 billion array of Chinese industrial goods and components used by U.S. manufacturers.

U.S. Treasury Secretary Steven Mnuchin told CNBC on Wednesday the deal would boost the U.S. economy, and that Washington could lower tariffs as part of a Phase 2 agreement that would address complex issues such as cybersecurity.

Mnuchin said the U.S. relationship with China was complicated and Washington would continue to raise humanitarian and national security concerns with Beijing in separate discussions. “You have to negotiate different pieces at different times,” he said.

He said Chinese telecom equipment maker Huawei Technologies Co Ltd was not a “chess piece” in the economic negotiations.

China’s Global Times said the Phase 2 discussions may not start anytime soon.

Evidence is mounting that tariffs have raised input costs for U.S. manufacturers, eroding their competitiveness.

Diesel engine maker Cummins Inc <CMI.N> said on Tuesday that the deal will leave it paying $150 million in tariffs for engines and castings that it produces in China.

The company issued a tepid statement of approval on Tuesday: “We believe this is a positive step and remain optimistic that all parties will remain at the table in order to create a pathway to eliminate all of the instituted tariffs.”

Lighthizer and Mnuchin insisted there were no side agreements to remove more tariffs after the November U.S. elections. Mnuchin on Wednesday reiterated that Trump could consider easing tariffs if the two countries move quickly to seal a Phase 2 follow-up agreement.

CORE ISSUES UNTOUCHED

The Phase 1 deal includes pledges by China to forbid the forced transfer of American technology to Chinese firms as well as to increase protections for U.S. intellectual property.

But it stops well short of addressing the core U.S. complaints about China’s trade and intellectual property practices that prompted the Trump administration to pressure Beijing for changes in early 2017.

The deal contains no provisions to rein in rampant subsidies for state-owned enterprises, which the administration blames for excess capacity in steel and aluminum and says threaten industries from aircraft to semiconductors.

It also fails to address digital trade restrictions and China’s onerous cybersecurity regulations that have hobbled U.S. technology firms in China.

China has agreed in the Phase 1 deal to open its financial services sector more widely to U.S. firms, and to refrain from deliberately pushing down its currency to gain a trade advantage, the latter prompting Treasury to drop its currency manipulator label on Beijing.

(Additional reporting by Lisa Lambert, Andrea Shalal, Echo Wang, Alexandra Alper, and Herb Lash in New York, and Se Young Lee and Stella Qui in Beijing; Editing by Simon Cameron-Moore and Paul Simao)

U.S., Iran draw back from brink but new threats show crisis not over

By Babak Dehghanpisheh, Parisa Hafezi and Ahmed Aboulenein

DUBAI/BAGHDAD (Reuters) – Iran spurned the U.S. president’s call for a new nuclear pact and its commanders threatened more attacks, after both sides backed off from intensified conflict following the U.S. killing of an Iranian general and Tehran’s retaliatory missile strikes.

Concern the Middle East was primed for a wider war eased after U.S President Donald Trump refrained from ordering more military action on Wednesday and Iran’s foreign minister diplomat said missile strikes “concluded” Tehran’s response.

But each side’s next move in their protracted shadow war was uncertain, although Iranian generals resumed their habitual barrage of warnings to Washington.

Trump’s Democratic critics have accused him of reckleness in his handling of Iran.

But analysts say that in an election year, he wants to avoid getting into a drawn-out conflict. In turn, Iran will try to avert direct confrontation with superior U.S. forces but can call on proxy militias across the region as U.S. sanctions bite.

Iran fired missiles on Wednesday at bases in Iraq where U.S. troops were stationed in retaliation for the killing in a U.S. drone attack of powerful Iranian general Qassem Soleimani in Baghdad on Jan. 3.

The actions followed months of tension that has increased steadily since Trump pulled the United States out of Iran’s nuclear pact with world powers in 2018 and reimposed sanctions that have driven down Tehran’s oil exports and hammered its economy.

Trump told Americans in an address on Wednesday: “The fact that we have this great military and equipment, however, does not mean we have to use it. We do not want to use it”.

The Iranian missiles fired on military bases in Iraq had not harmed any U.S. troops, he said. Iran “appears to be standing down, which is a good thing for all parties concerned,” he said.

‘ECONOMIC TERRORISM’

Trump also said it was time for world powers to replace the 2015 nuclear accord with a new deal that would allow Iran to “thrive and prosper”.

But Trump, who was impeached last month, also said he would impose more stringent sanctions on Iran, without giving details.

Iran’s U.N. ambassador Majid Takht Ravanchi said in response that Tehran could not trust any idea of dialogue when Trump was threatening to intensify the “economic terrorism” of sanctions, the official news agency IRNA reported.

Iran’s powerful Revolutionary Guards also issued new threats to Washington, with one senior commander warning of “harsher revenge soon” and another saying Wednesday’s missile strikes were only the start of a series of attacks across the region.

The new head of the Quds Force, which handles Iran’s foreign military operations, said he would follow the course pursued by his slain predecessor Soleimani.

“We will continue in this luminous path with power,” Brigadier General Esmail Ghaani said.

Soleimani carved out a sphere of Iranian influence running through Syria, Lebanon, Iraq and Yemen, challenging regional rival Saudi Arabia as well the United States and Israel.

Soleimani was a national hero whose funeral drew vast crowds of mourners. The West saw him as a dangerous and ruthless enemy.

The military comments contrasted with Wednesday’s remarks by Iranian Foreign Minister Javad Zarif, who said Tehran did not want an escalation.

Despite tough talk, analysts said Iran would not seek a conventional war with Washington although it might turn to allied forces in the area.

“I’m not expecting further direct attacks from Iran. We are likely to see more indirect responses through proxies,” said Ali Alfoneh, senior fellow at the Arab Gulf States Institute in Washington.

He said there might be a chance for a negotiated solution to the latest standoff as “the Trump administration does not appear to actively pursue a war and Iran needs sanctions relief”.

Trump has often criticized his predecessors for involving the United States in long and costly foreign wars.

PATIENCE

Washington said it had indications Tehran was telling its allies to refrain from new action against U.S. troops.

U.S. Vice President Mike Pence, speaking on Fox News, said: “We continue to receive word that Iran is standing down, but at the president’s direction we’re going to remain vigilant.”

In neighboring Iraq, Muslim Shi’ite groups opposed to the U.S. presence there also sought to cool emotions that have been running high for weeks.

Moqtada al-Sadr, an influential Shi’ite cleric opposed to U.S. and Iranian interference in Iraq, said the crisis was over and called on “Iraqi factions to be deliberate, patient, and not to start military actions”.

Kataib Hezbollah, an Iran-backed militia the United States blamed for an attack in Iraq in December that killed a U.S. contractor, said “passions must be avoided to achieve the desired results” of expelling U.S. forces.

Washington said Iran launched 16 short-range ballistic missiles in Wednesday’s strikes, with at least 11 hitting Iraq’s al-Asad air base and one striking a facility in Erbil.

Satellite pictures of al-Asad base before and after the strikes showed damage, including to aircraft hangers.

The images offered limited insight into Iran’s strategy but gave some indication of missile accuracy, an analyst said.

“The impacts are not scattershot across empty fields or airstrips on the southern side of the base,” Dara Massicot, policy researcher at RANDCorporation, said, adding that they did not appear to be purely symbolic strikes.

“Early warning, maybe tip-offs, missile failures, and on-base readiness saved lives,” Massicot said.

U.S. and European government sources said they believed Iran had deliberately sought to avoid U.S. military casualties in its missile strikes to prevent an escalation.

(Reporting by Ahmed Aboulenein and Ahmed Rasheed in Baghdad, Babak Dehghanpisheh, Parisa Hafezi and Ghaida Ghantous in Dubai, Jeff Mason in Washington; Writing by Edmund Blair; Editing by Angus MacSwan)

U.S. consulate warns employees as gun battles rock Mexican border city

MEXICO CITY (Reuters) – The United States consulate in Mexico’s border city of Nuevo Laredo issued a security alert on Wednesday, warning against gun battles and urging government employees to take precautions.

Gun battles have killed at least three people this week in the northern city bordering the Texas city of Laredo, media have said. It one of the Mexican cities where the U.S. government has sent asylum seekers to wait as their cases are decided.

“The consulate has received reports of multiple gunfights throughout the city of Nuevo Laredo,” it said in a Twitter post. “U.S. government personnel are advised to shelter in place.”

On Twitter, users purportedly from Laredo reported hearing gunfire ringing out from the neighboring Mexican city.

In a Twitter post late on Wednesday, Francisco Cabeza de Vaca, the governor of Tamaulipas, the state home to Nuevo Laredo, blamed the attacks on its Cartel of the Northeast.

“After the cowardly attacks on the part of the Cartel of the Northeast in Nuevo Laredo, the (government of Tamaulipas) will not let down its guard and will continue acting with strength against criminals,” he wrote.

Tension over the cartels intensified in November when suspected cartel members massacred three women and six children of U.S.-Mexican origin in northern Mexico.

U.S. President Donald Trump has threatened to designate the groups as terrorist organizations in response to a series of bloody security breaches triggered by cartel gunmen.

(Reporting by Julia Love; Editing by Clarence Fernandez)

In gesture to Trump, US allies close to deal to pay more for NATO running costs

By Robin Emmott

BRUSSELS (Reuters) – NATO allies are closing in on a deal to contribute more to allied running costs to reduce the United States’ share of funding, three diplomats familiar with the matter said.

Agreement would meet a demand by U.S. President Donald Trump, though France has made clear it will have no part in the deal, which the alliance hopes to reach before its 70th anniversary summit in London next week.

Trump has accused European allies, especially Europe’s biggest economy Germany, of taking U.S. protection for granted and says they need to spend much more on their own defense.

The reform of financing for the U.S.-led military alliance would seal months of negotiations after NATO Secretary-General Jens Stoltenberg put forward a proposal.

The agreement would mean European allies, Turkey and Canada contribute more towards the annual $2.5-billion budget to run the North Atlantic Treaty Organisation headquarters, international staff and military assets under NATO command.

Compared to the hundreds of billions of dollars that allies spend on their armed forces each year, it is a small sum. But it is one that allies hope would silence Trump’s statement in July 2018 that the United States “pays tens of billions of dollars too much to subsidize Europe”.

“It is a political gesture,” one senior NATO diplomat of the possible deal. “There is no alliance without the Americans.”

France opposed the proposal long before President Emmanuel Macron described the alliance on Nov. 7 as “experiencing brain death”, French diplomats have said.

With 30,000 troops deployed and ships across the world, Paris says it already does more than its fair share in defense, maintaining a high level of combat readiness of French forces and pouring billions of euros into defense research.

Paris will not block the proposal, but will abstain, the three NATO diplomats said.

France’s defense spending is higher than Germany’s as a percentage of economic output, data shows. Paris says it will also meet a NATO target to spend 2% of national output on defense by 2025 at the latest, while Germany will reach that level only in 2031, according to French and German officials.

NUMBERS GAME

Canada has said its support for the funding agreement should not set a precedent for other international organizations, the diplomats said. Italy has yet to decide its position, they said.

All 29 NATO member states contribute to the budget on an agreed formula based on gross national income, but this formula would change after the proposed reform.

“It will be a more cumbersome mechanism,” a second NATO diplomat said.

Under the proposal being negotiated for the 2021 budget, the U.S. contribution to the alliance’s annual budget would fall to around 16% from 22%. Germany’s would rise to the same level as the United States and others’ contributions would also rise.

Only seven NATO countries currently meet or exceed the NATO target of spending 2% of national output on defense – the United States, Britain, Greece, Poland, Latvia, Lithuania and Estonia.

(Editing by Timothy Heritage)