Anyone who worried that close ties between Trump and Putin was bad for the U.S. — and maybe even the world — slept much better on Thursday. Just days after a chemical weapons attack in Idlib, Syria, the U.S. government responded like actors to a script by launching Tomahawk cruise missiles in defense of human rights. In Moscow and in Washington, no matter where you sit on this fence, the air strike is seen as damaging to yet another “Russia reset.”
Some 59 cruise missiles were fired at a Syrian military airfield in Ash Sha’irat, located about 25 miles from the city of Homs. As has been reported elsewhere, the Pentagon notified Russia military in Syria before the strike. The airfield was fired upon because it is believed to have been the launching site for planes that were responsible for the chemical weapons attack. The U.S. blames the attack on the Syrian government. The mostly Qatari-funded Syrian Coalition said it was Bashar Assad’s military. No one questions Assad’s involvement, except Russia.
According to the Russian military in Syria, only 23 Tomahawk missiles hit their target. They were launched from two Navy destroyers located near the Greek island of Crete.
There were no casualties on Thursday.
Except perhaps two.
One, is the “Russia intervening in our election” narrative. That narrative is supposed to lead us to believe that Trump is a Putin puppet. To date, this serious month’s long surveillance operation has led to the resignation of National Security Advisor Michael Flynn for not telling Veep Mike Pence about his meeting with a Russian ambassador; news of a former Trump advisor named Carter Page and his (legal) Rosneft Russia broker deal; and a Paul Mannafort foreign consultancy gig with a Ukrainian president and an attempt at getting a contract with a Russian oligarch that was said to be a good deal for Putin.
The worst casualty from Thursday’s airstrike is clearly U.S.-Russia ties.
Trump has been nothing short of vilified for even wanting to talk to the Russians. The Trump-Putin bromance was tomahawked last night. It is unclear whether or not it was a fatal blow.
Vladimir Putin called the attack a “violation of international law” and an “attack on a sovereign state,” the Kremlin said in a statement on Friday morning.
For what it’s worth, Russia stepped in to backstop Assad in 2015. At the time, U.S.-backed rebel forces, including unsavory characters with allegiances to jihadi groups, were taking over the country. ISIS later played a large role in cities like Aleppo, and Russians began bombing runs to get them out, destroying much of the city and sealing Putin as the biggest roadblock to Washington’s decades-old, multi-trillion dollar regime-change policy in the Middle East.
Russia was hoping for a detente with Trump. But on Friday, the government tore up a 2015 military operations agreement it had with the U.S., The Washington Post reported from Moscow. The agreement is an important one because it gave both sides an open line of communication regarding air operations. Without it, there exists the possibility of military conflict in a worst-case scenario.
“We see the actions taken by the American side as a grave violation of the memorandum,” Russian defense minister Igor Konashenkov told reporters in Moscow today in a knee-jerk reaction to last nights attack. The U.S. did notify the Russian military and no Russian-owned assets were destroyed. Konashenkov said Russia would help Assad protect “sensitive infrastructure.”
The Russian media were relatively quiet last night. But on Friday morning, RT said the U.S. fell for Syrian Coalition “propaganda” on chemical attacks in Idlib.
Sputnik International gave space to Putin spokesman Dmitry Peskov who said the attacks helped ISIS and the al Nusra Front. “So far, it can be said unequivocally that these strikes did harm to the fight against terrorism,” Peskov told reporters.
It is unclear how many Syrian aircraft were destroyed at this time. A Syrian government-owned hangar used by the Russians was destroyed. And some Russian Mig-23 radar equipment owned by Syria was also destroyed.
It’s too early to truly say what this does for the Russia reset under Trump. Secretary of State Rex Tillerson, once lambasted by the press and the Democrats for being a “friend of Putin”, will be in Moscow to meet with his counterpart Sergei Lavrov later this month.
Tillerson said that Russia failed at destroying all of Syria’s chemical weapons, calling them “either complicit or incompetent.” If this is a “friend of Putin,” who needs enemies, right?
Tillerson’s meeting with Lavrov will likely set the tone going forward. Exxon, a company he managed for years, has a sanctioned oil deal with Rosneft in the Kara Sea.
Russia’s currency and stock market fell Friday morning with the VanEck Russia (RSX) fund down 2.3% in the pre-market hours in New York. The ruble is off by 1%. Russian equity analysts surveyed by the Kommersant business daily believe the events in Syria may now stop the inflow of foreign portfolio investment.
“Traders are feeling nervous as their confidence has been shaken now,” says Naeem Aslam, chief market strategist for ThinkMarkets in London. Oil and gold are the net beneficiaries of this event as traders turn on risk-off mode.
“We are seeing some traders adjusting to the situation early,” Aslam says. “Perhaps investors are thinking that there may not be any reason to panic yet as long as this conflict is contained. But the fact remains that Trump is unreliable and he takes unilateral actions which are equal to policy uncertainty creating more confusion for investors. As for Russia, the country is clearly displeased and there are chances of escalating geopolitical risk.”
Gold at $1,300 an ounce is looking more probable, Aslam predicts. Gold rose as much as $17 an ounce last night before pulling back. State Street’s SPDR Gold (GLD) is up 1.13% in the pre-market.
Meanwhile in Moscow, following a bomb scare at Afimall in the financial center, tense investors are cautiously hoping Trump’s tomahawks don’t go beyond that airfield. City investors also tell me that they are at least partially pleased that Washington notified Russia ahead of time, signalling a continued willingness to have an open dialogue. Cooler heads may end up prevailing, though it is much less likely today than it was 24 hours ago.
In a rather strange op-ed in Kommersant, the newspaper’s editor Maksim Yusin lamented Trump’s decision and longed for a Hillary Clinton presidency.
“I think Russians will come to regret their support for Trump and wish Hillary or Obama were in the White House,” Yusin wrote. Then, oddly, “Hillary would not have done this without talking to Putin or Congress first.”
Hillary told NBC News she would have ordered strikes on Syrian airfields as well.