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
Arguments For and Against Macron’s Mercosur Threat
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
Small EU Countries Resist Franco-German Push for Protectionism
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
Modest Gains for Trump in NAFTA Renegotiation
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):
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
EU Defies Trump on Iran Deal and Trade
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
Democrats Poll Better for Senate, Trump Rethinks TPP
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.