U.S. pressure on Iran and Cuba accompanies reported strikes in Russia and transatlantic friction

Off Leash update May 4th

COMING UP THIS WEEK •Today is Star Wars Day: May the 4th be with you. In other news related to fabulous costumes, tonight is also the Met Gala. •Friday is Victory in Europe (VE) Day, marking the 81st anniversary of the formal end of WWII in Europe. •Russia celebrates Victory Day on Saturday, May 9. That traditionally involves a big parade showing off the latest military kit alongside marching military academy cadets, but the Kremlin said the hardware display would be toned down this year because of the "operational situation" in Ukraine. •Saturday is also the start of the Venice Biennale art festival. The organizers controversially re-welcomed Russia's participation in this year's event, despite its ongoing war in Ukraine that saw it banned from the 2024 Biennale. •The U.S. celebrates Mother's Day on Sunday.

COMMODITY AND COIN MARKET PRICES •Aluminum: $3,522/ton •Antimony (global avg.): $35,485/ton •Bitcoin: $79,708 •Cobalt: $56,290/ton •Copper: $12,997/ton •Ethereum: $2,360 •Gold: $4,583/toz •Lead: $1,949/ton •Natural Gas (Nymex): $2.84/MMbtu •WTI Crude Oil (Nymex): $103.01/barrel •Zinc: $3,345/ton

IRAN •Iran sent the U.S. a new, 14-point proposal for ending the war. Pres. Trump said he would "soon be reviewing the plan that Iran has just sent to us, but can’t imagine that it would be acceptable." However, Trump added that the ongoing back and forth "could lead to something very positive for all." •Separately, Trump announced a new initiative - dubbed Project Freedom - in which U.S. ships will guide vessels that are cut off by Iran's blockade of the Strait of Hormuz through the Strait to open seas, starting today. The Economist noted that the plan is "essentially a challenge to Iran: a bet that it would not want to take the risk of firing the first shots — or laying mines — in a challenge to the United States." •The U.S. Treasury also threatened vessels that pay tolls to Iran for safe passage through the Strait with sanctions violations. The U.S. has historically focused its limited sanctions-enforcement resources on punishing the entities closest to sanctions targets - as opposed to distant "counterparties" like shipping companies being extorted by sanctions targets - but that could change as Treasury seeks to exert "maximum pressure" on Iran.

UKRAINE •Ukraine launched another wave of drone attacks deep inside Russia, targeting its Primorsk oil terminal port (which is over 620 miles or 1,000 km from Ukraine) and other energy infrastructure. •That doesn't mean the temporary ceasefire that Presidents Trump and Putin proposed after their meeting last week is off the table. Ukraine hasn't publicly accepted or rejected the offer yet, and could be firing some parting shots to improve its position ahead of possible negotiations during the detente.

GERMANY •German Chancellor Friedrich Merz started a tiff with Pres. Trump when he said the U.S. is being "humiliated" in Iran. •Trump hit back by threatening to raise tariffs on European Union auto imports to the U.S. from 15% to 25% - a move that would disproportionately affect Germany, given its automaking strength - and to pull 5,000 U.S. troops out of Germany. •The U.S. has over 36,000 active-duty troops in Germany - more than in any other country outside of the U.S. except Japan - so withdrawing 5,000 of them isn't as drastic as it sounds. It merely brings U.S. force strength in Europe back to where it was before the Ukraine war.

CUBA •Citing Cuba's alleged ties to Iran and Hezbollah, the U.S. slapped broad new sanctions on Cuban entities and officials involved in the "energy, defense and related materiel, metals and ⁠mining, financial services, or security sector of the Cuban economy, or any other sector of the Cuban economy." •Hours after the new sanctions were announced on Friday, Pres. Trump told an audience in Florida that the U.S. will be "taking over" Cuba "on the way back from Iran," claiming that Cuba's government will see the USS Lincoln aircraft carrier "stop about 100 yards offshore, and they'll say, 'Thank you very much. We give up'." •Cuba - which has long relied on any help it can get, including from unsavory partners - called the new sanctions and thinly-veiled threats "illegal" and "coercive." In a way, they are probably intended to coerce Havana into ending its decades-long practice of offering a "permissive environment" for governments hostile to the U.S. to run intelligence and military operations from a base only 90 miles (145 km) from Florida. •Separately, a new report from the left-leaning Center for Economic and Policy Research (CEPR) assessed that U.S. sanctions on Cuba - which were imposed by Trump in his first term but continued through Pres. Biden's term - were "likely the primary cause" of a 148% increase in infant mortality from 2018 to 2025.