Trump after marginalizing G20 attacks Europe and China where it hurts, brandishes currency war

President Donald Trump joins Xi Jinping, President of the People’s Republic of China, at their bilateral meeting Saturday, June 29, 2019, at the G20 Japan Summit in Osaka. (Official White House Photo by Shealah Craighead)

Last week’s G20 meeting in Osaka confirmed that the forum’s commonly shared concern about our future on the planet is definitively a thing of the past. Last week, the cacophony at the table of the 20 heads of the largest countries of the world – which first appeared last December in Buenos Aires – became a standard. However, Donald Trump and Xi Jinping felt obliged to give capital markets a reason to celebrate.

So, they said they are restarting trade negotiations. Of course, stocks gained a lot on Monday but then closed lower, leaving hefty wins only to traders and market makers, not to investors. The next day, Tuesday, capital markets also quivered. Investors returned again to safe havens. US treasuries and gold gained, while stocks continued to shake because everybody understood that what Trump and Xi said had only face value and the trade impasse remains far from being resolved. Restarting negotiations doesn’t mean anything about the outcome.

Caring for the markets

Undoubtedly, the two leaders showed a dangerously shortsighted attitude, despite representing the largest economies of the world. They know very well what the capital market sharks expect from them and they dutifully played the game. Trump and Xi, no matter how important their role is for their great nations and the rest of the world, still bowed to a handful of bankers and market makers, giving them what they wanted.

It’s a drastic shortening of the time horizon, actually telling all of us, hard working people, that we live just for the next few days. Nothing is certain anymore and hard working people must learn to live with the fear about what the next day may bring. For many years now we watch the top management in the league of the great business operating with a very short time horizon not exceeding the next quarter of the year.

Shortened time horizon

Usual business goes like that: a top CEO makes an announcement about reducing the work force by some tens of thousands workers. The stock of the company hits high scores, giving the opportunity to the market sharks for immense gains. And this, despite the possible long term harm this personnel reduction may mean for the real business. Some days or weeks later the price of the stock returns to lower grounds. Undoubtedly, nowadays, big money is made in the financial markets, or rather ‘casino capitalism’, not in the production shop floor or the drawing room.

Coming back to last week’s developments in Osaka, for the first time the G20 gathering didn’t exorcize protectionism. The world leaders concluded “We strive to realize a free, fair, nondiscriminatory, transparent, predictable and stable trade and investment environment, and to keep our markets open.” Not a single reference to repel protectionism. After the Buenos Aires meeting the references to protectionism definitely belong to the past. It’s a brand new international trade environment, where the US can take protective measures, while threatening the rest of the world not to retaliate.

The newest ‘new order’

Clearly, then, the Trumpist outlook for the global economy contains as key elements the fullest possible liberties and the greatest opportunities for the financial markets and of course for the US economy. The rest of the world must comply to this ‘newest order’. To consolidate this position, the White House announced last Tuesday a round of additional import tariffs of $4 billion on European Union products.

Attacking Europe

According to reports from Washington, the new list includes olives, Italian cheese and Scottish whiskey. The United States Trade Representative Robert Lighthizer’s office explained they have included 90 new categories to a long list of EU products (planes, tractors, food and others) to be super levied. The extra tariffs will be imposed soon on all those imports, if the two sides do not conclude a trade deal before 31 October.

To make things more difficult, the Americans said this US-EU trade deal must include the agro-food sector, otherwise there will be no agreement. This is a red line for the Europeans though. Last week, the French President Emmanuel Macron observed that the agricultural and food sectors will never be included in a US-EU trade deal. The reason is the vast differences between the two sides regarding key issues like the genetically modified products, the use of hormones in the animal sector, the environment and last but not least hygiene and consumer protection.

Clouds over the Atlantic

Unquestionably, then, the key trade disparities between the EU and the US are growing rather than being resolved as the two sides dig into their differences. It turns out that the same gloomy prospects characterize the US-China negotiations, despite the Trump-Xi hand shake in Osaka.

On both occasions, the US is the unruly party. In the Pacific, Trump wants to transform China’s socio-economic modus operandi in order to conclude a trade agreement. Over the Atlantic Ocean the US wants Europe to give in to decades old American demands (GMOs production, use of hormones in livestock, the environment, consumer protection).

Currency war?

It’s not clear, then, what Trump’s America is aiming at when attacking China and Europe where it hurts most; their way of life and doing things. In the latest incident, Trump accused China and Europe on Wednesday of currency manipulation.

He tweeted “China and Europe playing big currency manipulation game and pumping money into their system in order to compete with USA. We should MATCH, or continue being the dummies who sit back and politely watch as other countries continue to play their games – as they have for many years!” Obviously ‘matching’ means more aggressive action. Is it the beginning of a devastating currency war? Who knows. Trump can do anything to get reelected. Trade wars may not be enough…

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

The power of trust and values in the Fourth Industrial Revolution

COVID-19: Mental balance in pandemic times

This is why coral reefs are so vital for the planet

EU-Singapore trade agreement enters into force

Bigotry makes politicians ‘complicit in the violence that follows’ : UN independent experts

Study: Trade supports over 36 million jobs across the EU

Who can unlock the stalled Brexit negotiations? UK Premier sticks to her proposal

The financial future of Eurozone on the agenda of Friday’s ECOFIN council

Could play be a game-changer for the world’s forests?

What wealth managers can learn from family dynamics

Coronavirus: European Commission calls for action in protecting seasonal workers

5 ways to integrate Syrian refugees into the workforce

How to build a model for human security in the Fourth Industrial Revolution

Mergers: Commission opens in-depth investigation into proposed acquisition of DSME by HHIH

The impossible end of the war in Syria

Here’s how drone delivery will change the face of global logistics

European Accessibility Act: Parliament and Council negotiators strike a deal

Trade in digital services is booming. Here’s how we can unleash its full potential

UNICEF delivers medical supplies to Gaza in wake of deadly protests

A European student just sets the question of the day: What kind of education policies are missing in Europe?

Gaza investigators call on Israel to review ‘rules of engagement’ as Gaza protest anniversary looms

False promises to Small and Medium Enterprises

Car emissions: MEPs set end on gap between lab and real driving emission tests

‘Great Pacific Garbage Patch’ clean-up project launches trial run: UN Environment

UN, African Union make significant joint commitment to global health

Refugee crisis update: EU still lacks solidarity as Hungary and Slovakia refuse to accept EU Court’s decision

EU budget 2021: An annual budget focused on European recovery

Artificial intelligence: Commission takes forward its work on ethics guidelines

How regenerative agroforestry could solve the climate crisis

Talent is worldwide. Opportunity is not. How can we redistribute it?

Aviation Strategy for Europe: Commission signs landmark aviation agreements with China

Business uncertainty rises as US grants only temporary exception to EU for steel and aluminium tariffs

External action: more funds for human rights, development and climate change

These countries have the most nuclear reactors

Sanity in times of COVID-19

Decent working conditions for the young health workforce: what are the challenges and can we find solutions?

Sweden’s forests have doubled in size over the last 100 years

Migration crisis: how big a security threat it is?

US life expectancy is falling – here’s why

EU steps up its strategy for connecting Europe and Asia

Trade marks: Commission decides to refer Romania to the Court of Justice for not transposing the Trade Mark Directive

How interoperability establishes blockchain’s utility and effectiveness for trade finance

Confronting neo-mercantilism: why regulation is critical to global trade

When connectivity is not enough: the key to meaningful digital inclusion

What’s everyone talking about at Davos 2020?

Trump: Hostile to Europe, voids Tillerson’s “ironclad” ally pledge

Multiprofessional action against the indiscriminate use of antibiotics

Security Council hails ‘historic and significant’ joint peace declaration by Ethiopia and Eritrea

The future of energy is being shaped in Asia

Trump beats Clinton but Americans will learn the hard way that the US can’t change with an election

4 things ISPs can do to reduce the impact of cybercrime

Using the quarantine to your advantage

UNICEF backpacks used as a haunting symbol to call for greater protection of children living in conflict

EU Commission – US hasten talks to avoid NGO reactions on free trade agreement

China will be the world’s top tourist destination by 2030

Future-proofing the European banking market – removing the obstacles to exit

‘Our concern now is the southern hemisphere’ – COVID Action Platform convenes leaders on the challenges ahead

Energy Union: Commission calls on Member States to step up ambition in plans to implement Paris agreement

What are we actually working for?

Visiting North Korea, UN relief chief spotlights funding shortfall to meet humanitarian needs

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s