Germany Can’t Blame Trump for Its Slowing Economy

Berlin Germany
A bird sits on top of one of the spires of the German Reichstag building in Berlin, December 31, 2005 (Max Braun)

Germany may be heading into a recession. Its economy shrank .1 percent in the second quarter of this year.

Donald Trump’s trade war with China is partly to blame, but it has also exposed Germany’s home-grown vulnerabilities: an overreliance on exports and weak domestic demand. Read more “Germany Can’t Blame Trump for Its Slowing Economy”

Arguments For and Against Macron’s Mercosur Threat

French president Emmanuel Macron answers a question from a reporter in Helsinki, Finland, August 30, 2018
French president Emmanuel Macron answers a question from a reporter in Helsinki, Finland, August 30, 2018 (Office of the President of the Republic of Finland/Juhani Kandell)

French president Emmanuel Macron has threatened to hold up ratification of an EU trade deal with Mercosur unless Brazil’s Jair Bolsonaro does more to fight fires in the Amazon Rainforest.

Canada, Finland, Ireland and the Netherlands have backed Macron up. Germany is less sure. Donald Trump is expected to side with Bolsonaro at the G7 summit this weekend.

Here are the arguments for and against the threat. Read more “Arguments For and Against Macron’s Mercosur Threat”

Small EU Countries Resist Franco-German Push for Protectionism

French president Emmanuel Macron speaks with Dutch prime minister Mark Rutte during a European Council meeting in Brussels, June 24, 2018
French president Emmanuel Macron speaks with Dutch prime minister Mark Rutte during a European Council meeting in Brussels, June 24, 2018 (Elysée)

Since the European Commission blocked a landmark merger of the French and German train manufacturers Alstom and Siemens, France and Germany have come out in favor of a “genuine European industrial policy” to compete with China and the United States.

Smaller countries, led by the Netherlands and Poland, are wary. Read more “Small EU Countries Resist Franco-German Push for Protectionism”

Modest Gains for Trump in NAFTA Renegotiation

Angela Merkel Donald Trump Justin Trudeau
German chancellor Angela Merkel, American president Donald Trump, Canadian prime minister Justin Trudeau and other G7 leaders meet in Charlevoix, June 8 (Flickr/Justin Trudeau)

On the heels of an arbitrary — and, it turns out, unnecessary — deadline, Canada, Mexico and the United States have finalized a renegotiation the North American Free Trade Agreement (NAFTA). The new deal is called the United States-Mexico-Canada Agreement (USMCA):

What’s in it? Read more “Modest Gains for Trump in NAFTA Renegotiation”

Italy Joins Trump in Resisting Canadian Trade

Prime Ministers Giuseppe Conte of Italy and Justin Trudeau of Canada meet at the G7 summit in Charlevoix, June 8
Prime Ministers Giuseppe Conte of Italy and Justin Trudeau of Canada meet at the G7 summit in Charlevoix, June 8 (Flickr/Justin Trudeau)

Italy has learned from Donald Trump that Canada is now the enemy of the West.

In an interview with the newspaper La Stampa, the country’s new agriculture minister, Gian Marco Centinaio of the far-right League, said he would ask parliament not to ratify the trade agreement the EU negotiated with Canada in 2016.

Without ratification by all 28 member states, the treaty cannot go into effect for the entire European Union. Read more “Italy Joins Trump in Resisting Canadian Trade”

EU Defies Trump on Iran Deal and Trade

French president Emmanuel Macron, Greek prime minister Alexis Tsipras and German chancellor Angela Merkel speak at a NATO summit in Brussels, May 25, 2017
French president Emmanuel Macron, Greek prime minister Alexis Tsipras and German chancellor Angela Merkel speak at a NATO summit in Brussels, May 25, 2017 (NATO)

EU leaders have closed ranks against the unilateralism of American president Donald Trump, announcing on the eve of a summit in Bulgaria that:

  • They will stay in the Iran nuclear deal so long as Iran abides by its terms. That means European companies will — for now — be able to continue doing business with Iran.
  • They are willing to start trade negotiations provided the United States exempt the EU from aluminum and steel tariffs.

Both decisions set Europe on a collision course with its ally. Read more “EU Defies Trump on Iran Deal and Trade”

Democrats Poll Better for Senate, Trump Rethinks TPP

The Washington Monument and United States Capitol seen from the Lincoln Memorial in Washington DC
The Washington Monument and United States Capitol seen from the Lincoln Memorial in Washington DC (Shutterstock/Orhan Cam)

The conventional wisdom in the United States is that Democrats are likely to take control of the House of Representatives in November while Republicans are likely to defend their majority in the Senate.

That’s changing, according to FiveThirtyEight.

Democrats are polling better in Arizona and Tennessee. Ted Cruz is still likely to win reelection in Texas, but Democrat Beto O’Rourke is mounting a serious challenge.

In Florida, it’s the other way around. The candidacy of Republican governor Rick Scott is making Democrat Bill Nelson’s reelection a little less likely.

For more, read my story from February. Read more “Democrats Poll Better for Senate, Trump Rethinks TPP”

Macron Marches On, China Retaliates in Trade War

Austrian chancellor Christian Kern and French president Emmanuel Macron visit Salzburg, August 23, 2017
Austrian chancellor Christian Kern and French president Emmanuel Macron visit Salzburg, August 23, 2017 (BKA/Andy Wenzel)

The moderate French Democratic Confederation of Labor (CFDT) has joined the hardline General Confederation of Labor (CGT) in weekly strikes against a proposed overhaul of the state railway company, yet President Emmanuel Macron shows no sign of budging.

Most French voters support his effort to end generous employment terms for new — not existing — rail workers, including automatic pay rises and early retirement.

That may change as travelers are exposed to frequent disruptions, but, as I argued here the other week, falling popularity is unlikely to keep Macron up at night. He has four years left for his reforms to start bearing fruit and there is no unified opposition against him. Read more “Macron Marches On, China Retaliates in Trade War”

Trump Agrees to Meet Kim, Trans Pacific Partnership Continues Without Him

Presidents Moon Jae-in of South Korea and Donald Trump of the United States meet on the sidelines of the United Nations General Assembly in New York, October 2, 2017
Presidents Moon Jae-in of South Korea and Donald Trump of the United States meet on the sidelines of the United Nations General Assembly in New York, October 2, 2017 (White House/Shealah Craighead)

Donald Trump has accepted an invitation from Kim Jong-un to meet one-on-one. It would be the first time a sitting American president met with the North Korean dictator.

North Korea craves international legitimacy, which the United States have deliberately withheld. Trump’s break with decades of policy is risky — but it’s not if existing policy has worked. North Korea remains a rogue state. It has only continued its ballistic missile and nuclear weapons programs.

The challenge now, as Fred Kaplan writes in Slate, is organizing a careful diplomacy that includes coordinating common negotiating positions with Japan and South Korea.

Unfortunately, Trump has yet to appoint an ambassador to Seoul. The State Department’s top North Korea expert has resigned. None of the three top foreign-policy officials in Trump’s government — Secretary of State Rex Tillerson, Secretary of Defense James Mattis, National Security Adviser H.R. McMaster — have much experience in Asia.

Also read this thread by Robert E. Kelly about why Korea hands are skeptical. Read more “Trump Agrees to Meet Kim, Trans Pacific Partnership Continues Without Him”

Five Stars Eye Coalition, Dutch Form Anti-Macron Pact, Cohn Resigns

The facade of the Palazzo Montecitorio, the seat of the Italian parliament, in Rome
The facade of the Palazzo Montecitorio, the seat of the Italian parliament, in Rome (Shutterstock)

Italy’s Five Star Movement may go into coalition after all. Having placed first in the election on Sunday, the populist movement is reportedly eying an accord with the left.

The Five Stars, center-left Democrats and left-wing Free and Equal would have a majority in the new parliament.

The Five Stars and Free and Equal share views. Free and Equal was formed last year by Democrats critical of Matteo Renzi’s market reforms.

Renzi has come out against a deal, calling the Five Star Movement “anti-European”. But he is on his way out as leader. The rest of the party may be willing to reverse his signature labor reforms in return for staying in power.

For the rest of Europe, a Five Star pact with the left would be better than a Five Star pact with the right. The worst-case outcome would be a government of the Five Stars, (Northern) League and Brothers of Italy — parties that are anti-EU, anti-immigration and pro-Putin. Read more “Five Stars Eye Coalition, Dutch Form Anti-Macron Pact, Cohn Resigns”