Shaun Riordan | President Trump is in trouble. He lost control of the House of Representatives in the mid-term elections. But Trump is not like most US Presidents. Moreover, he knows that moderating his position will lose his base and consequently the 2020 election.This is all bad news for Europe. Germany’s economy is already teetering on the edge of recession. Tariffs on car exports to the US (not to mention a no deal Brexit) would push it over the edge, dragging the rest of Europe down with it.
Shaun Riordan | The currency markets seem to have given the Turkish Lira a temporary respite. But the underlying problems remain the same: an unsustainable current account deficit; excessive dependence on foreign currency denominated (especially dollar denominated) debt; and high inflation.
BoAML do not think the Juncker-Trump trade agreement is a game changer. Rather they argue that the deal lowers the near-term risk of an auto trade war, supporting their cautious optimism on Europe. However, the deal is largely symbolic in nature, and as we have seen with past “ceasefires”, it may not last long.
Gabriel Felbemayr, since 2010 Director of the Centre for Foreign Economy at the Ifo Institute in Múnich, explains that “the EU has a clear advantage over the US in the old economy: cars, machinery and chemicals. But the US enjoys an advantage in the so-called new economy, in digital and financial services, leisure. This is the target for the EU.”
America’s interests — not to mention image — took a major hit in Helsinki during the meeting between US President Donald Trump and Russian President Vladimir Putin. This is more than sufficient to provoke America’s concern about the direction Donald Trump is taking the country.
J. P. Marín-Arrese | The latest trade offensive launched against China will inevitably escalate into full-fledged warfare. Imposing tariffs on 200 billion imports amounts to a vicious and indiscriminate attack triggered by mere irritation at the counter-veiling measures undertaken by the Asian giant. Unleashing such large-scale hostilities will raise the stakes prompting further bouts of unfettered retaliation on both sides. The US is already threatening to punish all trade flows totalling 500 billion.
Trump’s policies are boosting inflation, stimulating asset values, depreciating debt, increasing growth prospects and decreasing democrat chances at the forthcoming polls.
Huan Guocang via Caixin | What did Kim Jong Un and Donald Trump achieve during their meeting in Singapore last week? Judging by the media response to the summit, the two made few breakthroughs and neither stepped out of his expected role.
Shaun Riordan | Trump’s behaviour at the Singapore Summit with Kim Jung Un has little to do with foreign policy, or indeed North Korea. Like his attacks on allies at the G7 Summit last week, it is aimed at the mid-term elections for Congress. Long-time US allies count for little compared to Trump’s domestic political needs. Europe must take responsibility for its own future.
Donald Trump has announced the US’ withdrawal from the agreement with Iran and will reimpose economic sanctions on that country. Bankinter analysts believe OPEC and Russia hold the possible solution to the crude supply problem, substituting the production which could be withdrawn from Iran.