Trump's Iran War Push Falters as 4 Republicans Break Ranks

※[Global Morning Briefing] summarizes global news delivered by Seoul Economic Daily.

US House Passes War Termination Resolution; Trump Says "Ceasefire Deal Possible Within Weekend"

The US Congress has put the brakes on President Donald Trump's military operation in Iran for the first time. With some Republican lawmakers casting defecting votes, signs of bipartisan cracks are materializing.

According to Reuters on the 3rd (local time), the US House of Representatives passed a war powers resolution by a narrow margin of 215 to 208 that day. The resolution would force President Trump to withdraw US troops from Iran without separate congressional approval, a measure requiring congressional consent to resume attacks on Iran.

The House had attempted votes three times since March this year but failed each time. This time, four Republican lawmakers switched to favor, leading to the resolution's passage. Gregory Meeks, ranking Democratic member of the House Foreign Affairs Committee who introduced the resolution, emphasized the significance of the vote, saying, "A growing number of Republican lawmakers are listening to the voices of voters who do not want endless war in the Middle East."

For the resolution to have legal binding force, it requires Senate passage, but it will act as a political burden on President Trump. That day, the House also handled a vote on a Ukraine aid bill that President Trump has opposed. Six Republican lawmakers and one pro-Republican independent joined in favor.

When the resolution passed, President Trump criticized it through the social network service (SNS) Truth Social, saying, "4 bad Republican lawmakers and all Democratic lawmakers voted to limit my war powers in the middle of my final negotiation to end the war." He added, "Who would do such an unpatriotic thing? They would rather see America fail than give me another of my many victories."

Tensions between Israel and Lebanon, which emerged as a variable in the war termination negotiations, were temporarily patched up into a ceasefire agreement through Washington DC negotiations. This agreement is premised on the complete withdrawal of Hezbollah, the pro-Iran armed faction in Lebanon, and both sides also agreed to create a pilot zone exclusively controlled by Lebanese government forces. However, the actual feasibility of implementation remains uncertain, as six people died in southern Lebanon in an Israeli drone attack even on the day of the agreement.

Naim Qassem, leader of the Lebanese armed faction Hezbollah, rejected the agreement. According to the Associated Press, he said, "Our concerns and matters of interest are the cessation of attacks, a ceasefire, and Israel's withdrawal," adding, "We have never promised any side that we would stop resistance while occupation acts exist."

Meanwhile, Gulf oil-producing nations are accelerating the construction of a pipeline to replace the Strait of Hormuz. According to the Financial Times, Kuwait Petroleum Corporation (KPC) said it is discussing alternative pipeline plans connecting Gulf crude oil production sites and global markets with Saudi Arabia, the United Arab Emirates (UAE), and others.

At US House Hearing, "Korea Leans Left, Discriminates Against US Companies" Remarks

Remarks directly raising issues with Korea's political direction and treatment of US companies emerged in the US Congress, drawing attention. With circumstances of Coupang's political donation lobbying also overlapping, repercussions are expected.

At a US House Foreign Affairs Committee hearing on the 3rd (local time), Republican hardliner Rep. Darrell Issa (California) told Secretary of State Marco Rubio, "Korean democracy has tilted strongly to the left and is opening more doors to China," arguing, "It has begun to suppress US companies such as Meta and Coupang." Rep. Issa also requested that a Wall Street Journal (WSJ) column arguing the Korean government's left-leaning bias be entered into the meeting record.

Secretary Rubio answered in principle, "In democracies, sometimes leaders friendly to US national interests are elected, and sometimes leaders with different perspectives are elected." However, on the issue of discrimination against US companies, he said, "Frankly, I think this has affected the ability to conclude a trade agreement with Korea," suggesting a possible link to the Korea-US trade negotiations.

Rep. Issa, who has served 12 terms, is a former founder of automotive security device company Directed Electronics and directly exposed counterfeit damage near a Chinese factory at a 2005 hearing. He is a representative anti-China hardliner who has since steadily continued pro-Taiwan congressional group activities and anti-China legislation. He is known to have played a key role in April this year when 54 lawmakers belonging to the Republican Study Committee (RSC) sent a protest letter to Ambassador to the US Kang Kyung-wha urging an end to discrimination against US companies.

Coupang's lobbying activities are also drawing attention as the background to these remarks. According to the US Federal Election Commission (FEC), Rep. Issa was confirmed to have received a 5,000-dollar (about 7.6 million won) donation from Coupang's corporate Political Action Committee (PAC) last November.

US Treasury Yields Rebound on Middle East Inflation Pressure; Within-Year Rate Hike Odds Rise to 58%

As the Middle East war prolongs, pushing up international oil prices and inflation, and employment indicators exceeded expectations, US Treasury yields are again threatening psychological resistance lines. The market has begun to see the possibility of a within-year rate hike by the US Federal Reserve (Fed) at more than half.

On the 3rd (local time), the US 10-year Treasury yield recorded 4.49%, up 0.03 percentage point from the previous trading day, while the 30-year traded at 4.99%, up 0.02 percentage point. Both indicators briefly broke through the psychological resistance lines of 4.5% and 5.0%, respectively, during the session. Since the 10-year is the benchmark indicator of the global bond market and the 30-year is used as a reference rate for US mortgages and prime corporate bonds, this rebound could have ripple effects across the real economy.

Behind the interest rate jitters lies the stalemate in the Middle East situation. With US-Iran war termination negotiations sluggish, Brent crude and West Texas Intermediate (WTI) futures continued rising for three consecutive trading days. The US Energy Information Administration (EIA) said US commercial crude oil inventories as of the 29th of last month totaled 433.7 million barrels, down 8 million barrels in a week.

Employment indicators also dampened rate cut expectations. According to employment information firm Automatic Data Processing (ADP), private employment last month increased by 122,000 from the previous month, exceeding the market forecast (117,000). The Fed, in its June Beige Book released that day, assessed, "Due to rising energy costs from the Middle East conflict, inflation pressure is spreading to shipping, packaging, groceries, and even fertilizer sectors." On employment, it evaluated that while a low-hiring, low-firing trend was maintained in most regions, manufacturing hiring stood out thanks to demand in the defense industry and data centers.

Related to this, the US Department of Labor announced that new unemployment benefit claims last week (May 24-30) totaled 225,000, an increase of 13,000 from a week earlier. This was the highest number of claims in four months since the first week of February this year (230,000), exceeding the expert forecast (215,000) compiled by Dow Jones.

Based on the Chicago Mercantile Exchange (CME) FedWatch, the within-year rate hike probability rose from 54.0% the previous day to 58.0%, while the freeze probability fell from 44.9% to 41.3%, and the cut probability fell from 1.1% to 0.6%, respectively.

Meta Launches Business AI Agent on WhatsApp and Instagram

Meta, seeking to reduce its dependence on advertising revenue, has made its messenger and social network service (SNS) platforms a bridgehead for the business AI agent market. A battle for corporate customers with front-runners such as OpenAI, Anthropic, and Google appears to be intensifying in earnest.

Meta announced on the 3rd (local time) that it will launch "Meta Business Agent," a business AI agent designed to help companies provide personalized services to customers and increase productivity. Running on WhatsApp, Messenger, and Instagram, it can automate tasks such as customer consultation, product recommendation, and reservation processing. Meta introduced it, saying, "It can be installed within minutes and integrated directly into corporate infrastructure to boost productivity by up to 100-fold." The service is included in "Meta One," a subscription product for businesses and creators unveiled last week.

Meta entered this market thanks to the overwhelming scale of its platform. Two billion people access Facebook daily, and WhatsApp...