Jan 8, 2020

Axios AM

By Mike Allen
Mike Allen

🎰 Hello from Vegas, where I and several Axios colleagues are attending the world's largest tech convention — CES, formerly the Consumer Electronics Show.

1 big thing: Trump's red line ... Signs of respite
Where the missiles hit. Graphic: AP

Before Iran launched more than a dozen ballistic missiles last night at U.S. forces in Iraq, President Trump drew the brightest red line of his presidency when he tweeted a warning Saturday to Iran about hitting "American assets."

  • A Pentagon statement on the strikes said: "It is clear that these missiles were launched from Iran and targeted at least two Iraqi military bases hosting U.S. military and coalition personnel at Al-Assad and Irbil."
  • An initial search found zero American casualties, U.S. officials said.

Why it matters, from Axios' Jonathan Swan: Experts see that aftermath as a best-case scenario for de-escalation.

  • It could provide an off-ramp for Trump to declare victory and say the Iranians couldn't touch the U.S.
  • Iranians could claim they defended their honor.
  • Then everyone could walk away, and de-escalate.
Graphic: AP

Here's the latest on Iran's retaliatory strike, via AP:

  • U.S. embassies and consulates from Asia to Africa and Europe issued security alerts for Americans.
  • The FAA warned of a "potential for miscalculation or mis-identification" for civilian aircraft in the Persian Gulf in an emergency flight restriction.

Trump, who'll address the nation this morning, tweeted: "All is well!"

  • "Assessment of casualties & damages taking place now. So far, so good!"
  • "We have the most powerful and well equipped military anywhere in the world, by far!"

A hopeful signal from Iranian Foreign Minister Mohammad Javad Zarif, who tweeted: "Iran took & concluded proportionate measures in self-defense ... We do not seek escalation or war, but will defend ourselves against any aggression."

  • Between the lines: "Concluded" is the key word.

Go deeper.

Lester Holt anchors from New York; Richard Engel reports from Erbil, Iraq. Courtesy NBC News
2. Why oil prices aren't rising
Expand chart
Data: EIA. Chart: Axios Visuals

Despite the Middle East unrest, America’s average gasoline prices have remained under $3 a gallon, Axios energy columnist Amy Harder reports.

  • Why it matters: Practically speaking, it’s great for drivers' pocketbooks — and President Trump’s re-election campaign.
  • It also shows the remarkable cushion created by the U.S.’s booming oil production, which has doubled over the last decade.

Several events over the past few years, and especially the last nine months, have put the reliability of production in the oil-rich region at risk, including:

  1. The U.S. airstrike that killed Iranian general Qasem Soleimani.
  2. September's attacks on Saudi Arabia's oil facilities, which the administration blamed on Iran.
  3. The spring and summer attacks on oil tankers in the Strait of Hormuz, a narrow waterway bordering Iran that moves roughly one-fifth of all oil traded in the world.
  4. Sanctions on Iran's oil industry, which the Trump administration has imposed over the past couple of years.

By the numbers:

  • The national average price of a gallon of gasoline has been steady at $2.58, more than half of which is driven by global oil prices.
  • Global oil prices are hovering below $70 a barrel.
  • Oil prices have risen to varying degrees immediately following many of those big events — including nearly 20% after the September attacks on Saudi oil facilities — but they've always dropped quickly.

How it works: No country can ever be truly "energy independent" (as the popular political messaging goes) because oil is traded on a global market. But America is as close to it right now as it’s ever been.

  • The U.S. oil-production increase — from under six million barrels a day in 2010 to nearly 13 million today — is reducing its dependence on foreign oil and creating a supply surplus around the world.
  • This surplus is causing other nations — including those in OPEC, the mostly Middle East producing bloc — to curtail production. (Check out the chart above, which shows a near record-low of U.S. oil imports from OPEC nations.)

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3. Trolling Trump
Graphic: Axios Visuals

Saeed Jalili, a senior Iranian official who previously served as the country's chief nuclear negotiator, tweeted an image last night that appeared to mimic Trump's tweet after the drone strike on the Iranian general, reports Axios' Orion Rummler.

4. Pic du jour
Photo: Tom Brenner/Reuters

The federal government closed in D.C. at 1 p.m. yesterday for a surprise snowfall, seen here at the Lincoln Memorial Reflecting Pool.

5. Crash kills 176 in Iran
Graphic: Reuters

A Ukrainian airliner burst into flames shortly after takeoff from Tehran today, "killing all 176 people aboard," Reuters reports.

  • The plane "was a three-year-old Boeing 737-800NG en route to Kiev."
  • Both Ukrainian and Iranian officials said they suspected a mechanical issue caused the crash, which occurred just hours after Iran's missile attack on U.S. assets in Iraq, per AP.

Details, photo.

6. Apple diversifies beyond the iPhone

Illustration: Rebecca Zisser/Axios

Apple announces today that its services business, which includes software for things like news, gaming, apps, music and video, had its best ever year in 2019, Axios' Sara Fischer reports.

Why it matters: Apple has been focusing on growing its services business as iPhone sales have dropped.

  • Eddy Cue, Apple’s senior vice president of internet software and services, said in a statement: "We introduced several exciting new experiences for our customers, all while setting the standard for user privacy and security."

The backdrop: 2019 was a transformative year for Apple's services business. The tech giant introduced a gaming service called Apple Arcade, a subscription video service called Apple TV+, a subscription news app called Apple News+ and a credit card called Apple Card.

7. Pelosi: "Pray"
Mitch McConnell talks to reporters yesterday. Photo: Chip Somodevilla/Getty Images

Speaker Pelosi cut short an impeachment discussion with her leadership team at the Capitol last night, after an aide handed her a note about the missile strikes.

  • She asked Democrats to "pray,'' per AP.

Senate Majority Leader Mitch McConnell announced that he'll move ahead on approving rules for President Trump's Senate trial without negotiating them with Democrats, Axios' Alayna Treene reports.

  • Pelosi wrote to House Democrats: "Sadly, Leader McConnell has made clear that his loyalty is to the president and not the Constitution."
8. Bloomberg aims jobs plan at Trump
At a coffee shop in Richmond yesterday, Mike Bloomberg laughs with Mayor Levar Stoney. Photo: Steve Helber

Mike Bloomberg's economic agenda, out this morning, focuses on helping "the people and communities that have been short-changed by President Trump," with the goal of creating jobs and raising salaries, Axios' Alexi McCammond writes.

  • Why it matters: Bloomberg is tapping into a conversation we're hearing from voters all across the country, in our focus groups and on the campaign trail: Wages aren't keeping up, and Trump isn't talking about that.

Bloomberg will travel to Illinois, Minnesota and Ohio to sell his "All-In Economy" agenda, and Axios will be at all three stops.

9. Ivanka wants Americans to have their diplomas on their phones

Ivanka Trump is interviewed by Consumer Technology Association CEO Gary Shapiro. Photo: Ina Fried/Axios

Ivanka Trump said at CES that Americans should be able to carry their diplomas and other important records on their smartphones, Axios' Ina Fried reports from Vegas.

  • Why it matters: Trump's conversation focused on knocking down the barriers to employment and preparing workers for a rapidly changing economy.
  • Trump talked about the need for a greater focus on apprenticeships as the nation seeks to prepare for the jobs of the future.

Video of the talk, "The Path to the Future of Work."

10. 1 ⚾ thing: MLB probes Red Sox

Major League Baseball will investigate "whether the 2018 Red Sox illegally used video replay feeds to steal signs during games," the Boston Globe reports.

  • "The plan ... comes in the wake of a report by The Athletic in which three unidentified members of that team described in-game visits by players to the replay room ... to pick up the sign sequences of opposing teams."

How it worked: "[P]layers shared the information among teammates, thus allowing base runners to relay pitches to hitters."

Mike Allen

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