Hidden reason for Trump leaving Iran deal

Citing “Iran Deal”, signed on 14/7/2015 in Vienna by the Permanent Five Members of UN Security Council plus Germany with Iran was not comprehensive, Trump left the deal on 8/5/2018. He alluded couple of reasons for his action but kept the real reason close to his chest:

It was not surprising that Trump found fault with the deal. He has been too scornful of the Iran Deal from the beginning. He bemoaned the fact that it did not address the concerns of Israel as regards to Iran’s missiles capacity and the perceived notion of Iran destabilising the Middle–Eastern theatre. For all purposes this is just smoke screen.

During the pendency of Iran Deal, Boeing negotiated with Iran Air for the sale of 80 Boeing 787 planes with a booking value of USD 16 Billion to be supplied over ten years that would provide jobs for more than 100,000 people. When the deal was ditched Boeing reported that the value was around USD 20 Billion. That could have been a real tangible benefit for USA.

Yet, Trump has a different calculation. His business strategy was two pronged: One, get the best out of the Iran Deal for USA. Two, deny the plums to European business sector. That is geoeconomics proper!

He was indeed right. Immediately after the deal was initialled Airbus signed USD 25 Billion deal to supply 118 planes including 73 wide body jets and 45 narrow body jets. Highlight of this is the proposed sale of 12 A380 superjumbos. By the way, A380 was hitherto below the break-even point. Undoubtedly, Iran was giving a boost not only to Airbus but also to A380.

Yet another remarkable European performance was in the cross hair of Trump. Trade between Iran and Europe shot up by 50% as regards to oil exports to countries such as Italy, Greece and Spain. Moreover, business openings for many European industries started to see the sunlight, mostly due to increased sale of oil by Iran exceeding 2.5 million bpd.

Trump wanted the cake and eat it alone. What transpired was Europe surging ahead in ordering more petroleum whereas US exports of crude oil to Europe starting to plummet.

Realizing, he must navigate business strategy amid geoeconomics the Deal Maker Donald Trump pushed the President Donald Trump to scupper the JCPOA alias Iran Nuclear Deal alias simply “Iran Deal“ on May 8^th of 20i8 laying waste the Obama legacy of long term peace making.

The bottom line is still President Trump dreams of a new Iran Deal during his watch in the second and last presidency. But in strategy you need two to tango. Admittedly Iran is not playing ball with Deal Maker Trump!

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist

 

 

 

Iran attacks Israel economy

Fine tuning her military strategy, Iran is harping on the economic muscle of Israel. In the end, it is economy that is stupid as Bill Clinton usually says. Breaking the geoeconomics backbone of Israel is the strategy Iran has been following since beginning of hostilities.

Iran knew that as a settler colony like Israel cannot last long when the elites and the rich begins to abandon the Promised Land. Most of the people who belong to this cabal cannot stand the regular barrage over their fashionable dwellings in elitist boulevards. Targeting the elites has twin purposes: wearing down their enthusiasm for Greater Israel concept and liquidating their valuable assets inside Israel. This is a classic business strategy followed by Iranian planners while executing their campaign.

Although the attack is localised into selected areas where the economic power brokers live, the macro purpose is not killing them but to kill the economic muscle leading finally to the dilution of geoeconomics clout hitherto enjoyed by Israel. Here are seven inter-connected steps that are unfolding in quick succession:

1. Destruction of the Stock exchange building in Ramat Gan whose market capitalization exceeds USD 475 Billion.

2. Commercial capital of Tel Aviv is almost one-third destroyed where banking finance, shipping, techno headquarters are located along with housing for their staff with related infra-structure facilities.

3. Valuable real estate is next in line. Tzamarot Ayalon in Tel Aviv, Dena in Haifa are significantly targeted. These locations boast fashionable living along with luxury dwellings and expensive boulevards for both residents and expatriates.

4. Vital cities such as Herzliya, Jerusalem and Beer Sheva are specially focussed by Iran. By the way, Microsoft HQ in Beer Sheva has been completely guttered.

5. Follow the money and kill it, is the new theorem Iran is postulating in cities that are connected to investment banking, venture capital and other financial professions that carry out intermediation. Collectively, these are located in financial centres in specific regions.

6. Manufacturing capacity as well as other processes involved in the value chain of major arms manufacturers such as Rafael, Elbit System and Israel Aerospace Industry are zoomed in for elimination.

7. Finally, in addition to the settlers, the focus of Iran is to create fear psychosis upon investors, venture capitalists, biz collaborators of domestic and foreign origin. Needless to say tourism sector is in doom and gloom as Iran continues her business strategy of scuppering the economic arm of Israel in generating income out of tourism which remains so far as a key forex earner for Israel.

The bottom line is once the economic muscle is atrophied any country would feel the pain domestically and thereafter abroad in the area of geoeconomics!

  

Cheers! 

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist

 

China Rare Earth ban tactical to strategic

Often in military conflict a tactical move would easily transform to a strategic one when the impact is tectonic. Business strategy is no stranger to this eventuality. President Trump failed to grasp this strategy manoeuvre when he imposed huge tariff on China. China responded with rare earth ban.

Most of the rare earth usually referred as RE are critical minerals. Out of these there are seven key critical ones, samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium. Most countries that are pitched on technology production such as United States are particularly vulnerable due to the supply chain disruptions that can be caused by the exporter.

According to International Energy Agency (IEA) China accounts for about 40% of global reserves, 68% of production and 88% of global supply of Rare Earth minerals. By 2030 two major countries that are in the game would fare according to the stats below:

Mining: China 54% and Australia 18% globally

Refining: China 77% and Australia 12% globally

More than mining it is refining that matters a lot. Once that stage is passed readying RE for export is the most critical function. As regard to RE China has all spectrum neatly fit into her exporting RE in the required form? Put it the other way, China dominates the entire supply chain from the mines to the ports.

If China chooses, there can be a supply chain disruptions at any time. All importing nations of RE have to be at the beck and call of the dragon. It is evidenced that response by importing nations is low bereft of a scintilla of negotiating clout.

The counter measure of RE Restrictions imposed by China to the Trump Tariff is hugely consequential as seen here-under:

a) It cripples US technology suave in terms arms manufacturing and chips production that has dual role in commerce & military

b) At present US stockpile of RE is at dangerously low level and expected to hit bottom before the on this year 2025

c) Entire gamut of productions for civilian use such as technology equipment, electric vehicles and other consumer electronics items have to halted till the supply of RE is replenished to the earlier levels.

In a classic tactical move ending as a startling manoeuvre in business strategy China was able to call the bluff of America and at the same time landed a critical blow to each and every country that dares to touch Chinese exports in the future?

Was it Sun Tzu or Carl Von Clausewitz?  

As a business strategist navigating amid geoeconomics, I submit that it is indeed Clausewitz whose expertise in creating fog of war, friction and chaos amongst allies & enemies has taught the Chinese how to respond to Trump Mania!

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist