THE GLOBAL PAYMENT SYSTEM RULES EVERYTHING AROUND ME

As billed, US President Donald Trump blasted Iran yesterday in his General Assembly speech, calling on other nations to join Washington in further isolating the Islamic Republic. The ballgame for Trump, as we wrote yesterday, is to force Tehran to agree to a more stringent version of the 2015 Nuclear Deal that the US, alone among its seven signatories, walked out on earlier this year.


The biggest point of leverage that the US has is its dominance of the global financial system, which enables Washington to force European companies to abandon their investments in Iran, even as Brussels pledges, with little effect, to shield them from US measures. When the next round of US sanctions hits Iran in early November, the Belgian-based messaging system that banks use to send money around the world – called SWIFT – will be under intense pressure to cut off Iranian banks even though Europe is opposed to the sanctions. Why? Because refusing to play ball with the US could expose the executives that sit on its board – and the global banks they work for – to US sanctions.

On Tuesday, the Financial Times reported that the US’s main partners in the Iran nuclear deal, the UK, France, Germany, China, and Russia, had agreed to a different approach: establishing an alternative payment system that would allow them to keep doing business with the Islamic Republic despite harsh new US curbs. The details are TBD, but in theory, a rival European payment system could enable interested parties to continue doing business with the Islamic Republic (or anyone else under US sanctions), by routing transactions through an alternative to SWIFT. But here’s the problem: any companies or banks that did so would probably risk US sanctions anyway. It would be risky to assume that the US, at least under Trump, is bluffing on this stuff.

Those practical matters aside, the fact that historically close US allies are joining China and Russia in challenging the 800-pound US financial gorilla is significant. America’s adversaries have long bridled at the US’s outsized influence over the financial system, which gives it a unique ability to inflict economic pain on countries that it disagrees with politically. The fact that the UK, France, and Germany are actively pushing a plan to skirt the US sanctions is a sign of how the US’s more confrontational, America-first approach is creating strange bedfellows.

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Nicholas Thompson, editor-in-chief of WIRED, explains the feud between Trump and Twitter and weighs in on Elon Musk's ambitious space plans:

What is happening between Trump and Twitter?

A lot. Twitter decided it had to fact check the president because the president said something that wasn't entirely true, and perhaps was false, about voting. Twitter cares a lot about lies about voting. So, they fact check Trump. Trump got really mad, said he's going to get rid of some of the laws that protect Twitter from liability when people say bad things on their platform. That started war number one.

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Trump promised a statement about China. Today's announcement was not about China. Most significant was about the World Health Organization, which is a distraction for Trump because it's weaker. They're reliant on the US, have no ability to hit back. But announcing they're pulling all funding and pulling out of the World Health Organization, the international governmental organization tasked with responding to pandemics, in the middle of a pandemic, is one of the stupidest foreign policy decisions that President Trump could make.

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The world's worst health crisis in a hundred years might not seem like the best time for the World Health Organization's biggest financial supporter to threaten to pull the plug on its operations, but that's where we are. On Friday afternoon, President Trump announced that the US is withdrawing entirely from the Organization.

The move comes ten days after the White House sent a withering four-page letter to the organization's Director General which accused the organization of ignoring early warnings about the virus' spread and bowing to Chinese efforts to downplay its severity. The letter closed with a threat to withdraw within 30 days unless the WHO shaped up to better serve "American interests." In the end, the Administration had patience only for 10 days after all.

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