WarSclerotic

A Chinese state firm on Wednesday ruled out selling passenger planes to Iran to help the Islamic republic revive fleet renewal plans, while a Russian executive suggested Moscow would be wary of putting its own programs at risk of U.S. retaliation.

The move underscores the challenges Iran faces in rekindling plans to import planes after the U.S. reimposed sanctions, though Iran Air reiterated on Wednesday it would welcome offers from suppliers not subject to restrictions on the export of U.S. plane parts.

Deals to buy 200 aircraft from aviation giants Airbus, Boeing and European turboprop maker ATR have virtually all stalled after the United States withdrew from a 2015 nuclear agreement between Tehran and world powers and reimposed sanctions on firms including Iran Air.

Iran’s search for other suppliers was a talking point on the sidelines of Airshow China this week, where China promoted its growing aircraft industry as it looks to break into foreign markets for planes such as its long-delayed ARJ21 regional jet.

Asked whether Iran had shown interest in buying Chinese airplanes, Zhao Yuerang, general manager of manufacturer Commercial Aircraft Corporation of China, said, “No, we cannot sell to Iran. Iran is off the table.”

Pressed on China’s ability to sell the ARJ21 to Iran, he added, “We need to abide by regulations of both countries.”

In May, the U.S. Treasury’s Office of Foreign Assets Control revoked licenses to sell passenger jets to Iran that are required for any plane with more than 10% U.S. parts, regardless of where it is made.

Iran Air has said it is looking to buy planes from any company not requiring the U.S. permits and may consider Russia’s Sukhoi Superjet 100.

Asked at Airshow China in Zhuhai whether Moscow was in talks to sell the Superjet to Iran Air, a senior official with state holding company Rostec declined to comment in detail.

“This is a sensitive issue,” Viktor Kladov, Rostec’s director for international cooperation and regional policy, said. “You understand why, because we cannot endanger the whole Superjet program.”

Besides controlling exports for aircraft containing over 10% U.S. parts, analysts say the United States sets the tone for global aviation through its benchmark system of safety regulation and the widespread use of the dollar in plane deals.

Kladov said Russia’s industry would continue to follow international standards on regulation and aircraft safety but would strive to be independent commercially.

Rostec is already doing some deals in Russian and other currencies, he added.

Nation of Islam leader Louis Farrakhan warned U.S. President Donald Trump not to pull “the trigger of war in the Middle East at the insistence of Israel,” speaking Thursday while on a visit to Iran.

The 85-year-old Farrakhan, long known for his anti-Semitic comments, criticized the economic sanctions leveled by Trump against Iran after America’s pullout from the Iran nuclear deal.

Farrakhan told journalists in Tehran that he is “begging our president and the government that supports him to be very, very careful.”

“The war will trigger another kind of war which will bring China, Russia, all of the nations into a war and … the war will end America as you know it,” he said.

Farrakhan leads the Nation of Islam, a black separatist African American political and religious movement. The NOI has been largely closed off to outsiders, making it impossible even for those who follow the movement closely to gauge its strength.

For Farrakhan, the height of his prominence came when he organized the 1995 Million Man March in Washington, a symbol of black pride and empowerment.

Earlier on his trip to Iran, state television published a short video clip of Farrakhan trying to say “Death to Israel” in Farsi, a common chant at rallies in the decades after Iran’s 1979 Islamic Revolution. He began to repeat it, but the crowd at Tehran University sitting at Farrakhan’s event then substituted “America” for “Israel,” drawing laughter.

After the video clip spread online, Farrakhan issued a statement saying, “I never led a chant calling for death to America.

“I asked a question about how to pronounce the chant in Farsi during my meeting with Iranian students and an examination of the video shows just that,” he said.

On Thursday, Farrakhan reacted angrily to an Iranian state television’s request to repeat the chant. However, he kept his harshest words for Trump.

“It is your policies that are eroding trust for you in the world, favor for you in the world, and now you are pulling apart, confused,” Farrakhan said, addressing Trump. “If you do this, you will bring about – not the Iranian chant – you will bring about the death of the greatest nation that has been on this Earth in the last 6,000 years.”

A proposal by Brazil’s next president to relocate its embassy in Israel, following U.S. President Donald Trump’s lead, may set off a diplomatic storm in the Muslim world, threatening a key market for the world’s largest meat companies.

Brazil is by far the world’s largest exporter of halal meat, which complies with Muslim dietary rules. President-elect Jair Bolsonaro’s plans to move Brazil’s embassy from Tel Aviv to Jerusalem, strengthening relations with Israel, has already upset Egypt and could soon stir trouble with other Islamic nations.

“The reaction will be given not only as an individual country but on behalf of the whole Muslim world,” a Turkish diplomatic source said. “We are expecting Brazil to act with reason and not confront the Muslim world.”

Brazil exports $16 billion annually to the Middle East and Turkey, with just 3% going to Israel, according to government statistics.

More than a quarter of Brazil’s exports to the region are meat. Both Brazil’s JBS SA, the world’s top beef producer, and BRF SA, the No. 1 poultry exporter, have bet big on the growing demand for halal meat.

Brazil exports over $5 billion of halal meat per year, more than twice its nearest rivals, Australia and India, according to Salaam Gateway, a partnership between the Dubai Islamic Economy Development Centre and Thomson Reuters.

Bolsonaro’s proposal for the Israel embassy is part of his overhaul of Brazilian foreign policy, cozying up to major powers such as the United States and undoing what he calls leftist predecessors’ alliances based on “ideological bias.”

Trump’s decision to move the American Embassy in Israel to Jerusalem stirred a hornets’ nest in the Middle East, and the United States had few allies follow suit. Guatemala did so in the days afterward while Paraguay has since reversed a similar decision.

Israeli Prime Minister Benjamin Netanyahu praised Bolsonaro for the plan to move Brazil’s embassy, calling him a “friend.”

But after Egypt abruptly canceled a visit from Brazilian diplomats and business leaders this week, Bolsonaro said his decision on the embassy in Israel was not final.

Bolsonaro has shown already he is not afraid to give an important trade partner a poke in the eye, following the example of the U.S. president, whom he openly admires and emulates in both political style and foreign policy.

Like Trump, Bolsonaro railed against China on the campaign trail. He has softened his stance since the election last month, however, amid lobbying from diplomats and executives keen to protect relations with Brazil’s largest trading partner.

The pressure from the Middle East may prove blunter.

BRF Chairman Pedro Parente said on Thursday that the Israel embassy issue was “cause for concern.”

“We have a very important trade with Arab and halal markets. We are confident that when a discussion of the matter involves the relevant areas – the farm, trade and foreign ministries – they will certainly reach the best solution.”

BRF’s halal business segment contributed a quarter of its operating revenue and nearly half of its operating profit in the third quarter.

Halal chicken represented nearly half of Brazil’s overall chicken exports of $7.1 billion last year, according to Brazil meatpacking group ABPA.

“There is a $2-billion trade between Egypt and Brazil, mainly in the food agricultural sector, and within that sector mainly in beef and poultry,” Egypt’s Ambassador to Brazil Alaa Roushdy said.

He declined to comment on a hypothetical move of the embassy or if it could have any impact on trade.

BRF has processing plants in Turkey and the United Arab Emirates to meet growing demand for halal meat. The company aims to double its output of processed products in the Gulf by 2023, its head of halal operations said at an October event.

JBS sent more than an eighth of its exports to the Middle East and Africa in 2017, second only to the Greater China region.

Representatives for JBS declined to comment on the fallout from a potential embassy move.

The Arab-Brazil Chamber of Commerce expects Brazil’s total exports to a grouping of 22 Arab countries, which excludes non-Arab Muslim nations such as Iran, to swell to $20 billion by 2022, up from $13.5 billion in 2017.

Rubens Hannun, the chamber’s president, added that Brazil also stands to benefit from infrastructure investment from Arab sovereign funds. UAE’s Mubadala Investment Company, for example, poured some $2 billion into Brazilian commodities empire EBX earlier this decade.

“We do not want any noise in this relationship,” Hannun said. “We are afraid that would open a door for the competition.”