Is Trump attacking Europe in Yemen?

Key Markets report for Tuesday, 8 April 2025

In the Red Sea, the US forces are continuing to pound Yemen - like nobody’s ever seen before, of course - and the Yemenis are continuing to pound the US forces and Israel. In Friday’s TrendCompass report, I suggested that Trump’s gambit there was dumb given that the Yemenis have already endured ten years of bombardments, as well as famine and a cholera epidemic, but haven’t bowed to the empire. I wondered why the administration was insisting on bombing Yemen?

On the one hand, it seems futile. On the other, it’s exhausting the American crews and depleting their ammunition and equipment. That aspect of Operation Rough Rider (whatever happened to the Prosperity Guardian?) was underscored in a New York Times article published that same Friday, but also in a compelling post published by the Yemen Army on Saturday. The short video report, based on a "60-minutes" investigation, conveys the stark realities of dispatching bombing raids while dodging Yemeni missiles, day in and day out, like nobody’s ever seen before.

I suggested that the policy reflected, “an absence of imagination and diplomatic IQ.” But I may have been wrong. Yemen might not be the real target of the Operation Rough Rider at all. Instead, the target might be Europe. In a panel discussion published on Dialogue Works podcast on Friday, Colonel Lawrence Wilkerson, former Chief of Staff to General Colin Powell spoke about a major tabletop exercise they had conducted years ago (at around 9:05-minute mark).

The new “Strategic Cockpit of Competition”

Apparently, this was a very important exercise given that it was sponsored by the Joint Chiefs of Staff, the Pentagon, the Central Command, African Command, as well as a number of other American and European national security entities. According to Wilkerson, the Europeans were almost as well represented in this exercise as the Americans.

The group agreed that the Red Sea represented the new “strategic cockpit of competition,” since around 55% to 60% of the world’s commerce passed through that trade route. It would therefore become the “West’s strategic focus,” and the key reason why “we overloaded Djibuti with our military.” Wilkerson underscored that for the last 2000 years of history of empires showed that “control over trade routes dictated who’s boss and who’s not boss.” The Red Sea trade route is critical for Europe’s economies, since the bulk of the trade passing there is European trade. As JD Vance stated, only about 3% of US trade passes through the Red Sea.

Houthis leveraging Lloyd’s of London?

Today’s Operation Rough Rider achieved one important effect: it entirely blocked the Red Sea trade route. Before 15 March, Yemen’s Ansar Allah only banned the route to Israeli vessels. As professor Mohammad Marandi explained in discussion with Col. Wilkerson, “When Ansar Allah blocked the Red Sea to Israeli shipping, European shipping was still going through. It was only after the American started attacking that this became a much broader issue. … Now ships that go from Asia to Europe must go around the continent, because the Red Sea is no longer safe.” Ambassador Chas Freeman said that, in effect, the “Houthis are Lloyds of London to shut down maritime traffic.”

In other words, while Rough Rider hardly has any effect on Ansar Allah’s ability to wage war, it’s had the effect of shutting down Europe’s key trade route to Asia (that is, rendering it much slower and more expensive). The question is whether the Trump administration has done this inadvertently or deliberately? Ambassador Freeman suggested that the Houthis have leveraged Lloyds of London, but why should the same be beyond the US Administration’s imagination if they chose to do so?

A remarkably consistent policy

Trump had just slapped the EU with harsh tariffs and only yesterday gave the following statement to the media:

“The European Union was formed for one reason. You know what that was? To rip off the United States. Put that in your bonnet.”

What’s more, there seems to be a certain continuity in the policy of kneecapping Europe, which includes the destruction of Nord Stream gas pipelines. If there’s really a method to the madness, the question that remains is, where does the policy originate from? Who’s directing successive US administrations to undermine Europe? If I were the investigator in charge, my list of suspects would start with Wall Street banks.

Meanwhile, the Europeans are clueless

Europeans, meanwhile, seem blissfully unaware. They are zealously and singularly obsessed with Project Ukraine and have been caught completely off guard by their “oldest ally” slapping tariffs on them. The fact that the same ally also just blocked their key trade route doesn’t seem to even register on their radar. And Nord Stream still can’t even be mentioned in Europe’s very polite society.

In all, whether deliberate or inadvertent, American policy against Europe has been very consistent, steadily eroding Europe’s economic foundations and drawing its industries and businesses towards itself. Drunk on Project Ukraine, the Europeans aren’t even taking notice, let alone having any coherent response. All this is setting Europe up for an epic fall. I have to wonder if the current strength of the euro isn’t a unique selling opportunity. I suspect that it is, but time will tell.

To learn more about TrendCompass reports please check our main TrendCompass web page. We encourage you to also have a read through our TrendCompass User Manual page. For U.S. investors: an investable, fully managed portfolio based on I-System TrendFollowing is available from our partner advisory (more about it here).

Trading signals for Key Markets, 8 April 2025

With yesterday’s closing prices we have the following changes: