Syria clashes, European defense plans, and U.S. trade shifts

Off Leash update 7 March 2025

SYRIA •Armed loyalists to deposed dictator Bashar al Assad - including many from Assad's minority Alawite sect - have been giving Syria's new government - largely comprised of former Sunni Islamists - a headache. •As is often the case in Syria, reporting is murky and it's hard to tell what actually happened and in what sequence. Officials said police carried out a successful operation in Jableh yesterday to arrest Gen. Ibrahim Huweija - a former henchman of Assad's father and a suspect in the 1977 murder of Lebanese Druze leader Kamal Bek Jumblatt. •But police faced fierce resistance from pro-Assad gunmen - perhaps led by Assad's "favorite soldier," Suheil al Hassan - that escalated into multiple clashes in villages across Latakia province, leaving 80 dead (by one report). There are separate reports that Assadists took control of the former dictator's hometown of Qardaha in the scuffle. •The government imposed a nighttime curfew and sent reinforcements - including helicopter gunships - to Latakia, while begging Syrians to refrain from "raising sectarian sentiments."

EUROPE AND UKRAINE •All 27 European leaders approved proposals to "facilitate significant defense spending at national level in all Member States" after a summit yesterday. •All of them except Hungary's Prime Minister Orban approved a separate measure reaffirming "Ukraine’s independence, sovereignty and territorial integrity." Orban abstained and instead said that Hungary would conduct a non-binding mail-in poll on allowing Ukraine to join the EU. [Orban made his position on that question clear to voters in a public statement declaring that Ukraine's accession to the EU "will destroy Hungarian farmers and Hungarian agriculture; ... it will destroy the entire Hungarian national economy, and I have no idea how we will control the crime that will flood into Hungary with this."] •Separately, the European Space Agency's new heavy-lift rocket, Ariane 6, successfully carried out its first commercial mission yesterday with the launch of a French military reconnaissance satellite. The EU previously depended on Russia's Soyuz rockets to put large satellites into orbit, but that arrangement ended in 2022 with the start of the Ukraine war. Now the EU has its own, independent launch capabilities.

TRADE •Pres. Trump announced another reprieve on tariffs on Canadian and Mexican goods after the levies imposed this week caused stock markets to tumble. •Now goods covered by the U.S.-Mexico-Canada Agreement (USMCA) that Trump enacted during his first term will be exempt from the new 25% tariffs for one month. •The White House estimates that around 38% of Canadian imports and 50% of Mexican imports are covered by USMCA and will thus be exempt until April 2, when Trump plans to impose reciprocal tariffs on all trading partners. •Pres. Sheinbaum of Mexico and Prime Minister Trudeau of Canada are still lobbying for a permanent reprieve. •China, meanwhile, has refused to bargain over the additional 10% tariffs applied to Chinese imports to the U.S. this week. Instead, Beijing warned that it will fight "any type of war" with the U.S. - including a trade war. So the new 10% added tariffs on Chinese goods will remain in place.

CRYPTO •Prices for the five cryptocurrencies that will be included in the new U.S. strategic crypto reserve - BTC, ETH, XRP, SOL, and ADA - dropped after the final order forming the reserve said it would be formed from the U.S. government's existing crypto holdings - and not from new purchases, as investors had expected.