Friday, June 15, 2018



di Maio (l) and Salvini, unlikely alliance
Italy just elected a populist coalition government powered by the left-wing Five-Star Movement of Luigi di Maio and the far-right League of Matteo Salvini, both Europhobes. After reluctantly accepting to keep the Euro as single currency, they quickly expressed their hostility toward the European Union and 'Brussels' which they blame for most of Italy's problems. The new Prime Minister, Giuseppe Conte, who will do his best to keep this rickety ship afloat, is a civil lawyer who has no previous government experience.

Prime Minister Giuseppe Conte
This new Italian government adds another layer (post Brexit) to the growing populism in Europe, where anti-immigrant sentiment and fear of loss of national sovereignty in the face of mass immigration have weakened the traditional center-right governments that have dominated for so long. After her party lost the last election, Angela Merkel was forced into a coalition with the center-left which has considerably weakened her at home and on the international scene. In losing the support of now-europhobic Italy, still the third-largest EU economy, fervently pro-Europe French president Macron will have to redouble his efforts to keep the EU engine from stalling without Mrs. Merkel by his side. We wish him well and cheer him on.

A strong and coherent European Union is more important than ever when Donald Trump's America First policy suddenly lands on your doorstep with a threat of punishing tariffs. Forgotten are the tales of French discontent or news of the continuing railway strikes in France that are hiccuping along at the rate of two days of shutdown per week, to little effect. Travelers have adapted to the reduced service and found alternative solutions, the hue and cry of the unions has died down to a whimper, and repeated street protests have simply not had the expected success.

CANADA and the G7

The attention has shifted to President Trump's decision to impose tariffs on steel and aluminum that, if applied, would have devastating effects on the EU economy, in particular on the auto industry in France and export-dependent Germany. Emmanuel Macron has called these tariffs (25% on steel, 10% on aluminum) illegal and has put the matter before the World Trade Organization in Geneva. "This is not a question of national security of the United States," he said. "It is protectionism, pure and simple, and that is unacceptable." Germany's Angela Merkel agreed, cautioning against a global trade war where "there are no winners". EU Trade Commissioner Cecilia Malmström called this "a bad day for world trade" and condemned this "economic nationalism that will penalize everyone, including the US". European Commission President Jean-Claude Juncker said the European Union now had no choice but to challenge the United States' action at the WTO and promised European counter measures, while European Council President Donald Tusk expressed concern over the fact that the rules-based international order is being challenged by its main architect and guarantor: the US.

The American elephant has wreaked havoc in the global china shop and left anger and frustration in its wake. But it also has united the EU countries as never before, and they wasted no time in agreeing on retaliatory tariffs on American products in the hope that the WTO will soon declare the US tariffs illegal and things can return to normal. Mexico and Canada will do the same, with Canada slapping retaliatory import duties as early as July 1st on American steel and a list of US consumer products worth C$16.6 billion, while simultaneously challenging the US tariffs before the WTO and under the NAFTA agreement.

Without distinction between friend and foe Trump is punishing us all for his trade imbalance with China. But with his America First policy and the unilateral cancellation of several multilateral agreements, he is increasingly isolating the US and encouraging other nations to work towards greater independence from the US, an ally whose word cannot be trusted and whose self interest today outweighs such universal interests as saving the planet from the devastations of global warming. Under Trump's presidency, the world has become angrier, more divided and more dangerous.

Six to One - speaking volumes
The summit of the seven leading industrial nations (G7) in Canada on June 8-9 quickly turned into a G6+1, with Canadian host Justin Trudeau and his counterparts from France, Germany, Italy, Great Britain, and Japan all condemning the new American tariffs and rejecting the "justification" that they would be a threat to US national security.

A combative Donald Trump appeared late at the summit and left early. Seemingly unconcerned about the outcry over his tariffs, he simply reiterated his complaint that Canada and Europe have long imposed unfair tariffs on the US but added that he thought a deal could be worked out. He also used the occasion to call for the G7 to let Russia back in (to form the old G8); this in ignorance of, or in spite of, the fact that Russia was expelled because of its illegal annexation of Crimea from Ukraine in 2014. Angela Merkel later said that all EU members at the summit agreed that Russia could not be readmitted as long as there was no clear progress on Ukraine. 

Nevertheless, even though the vote for retaliatory tariffs against US exports was unanimous, the G6 cannot afford to risk an all-out trade war with a nation that accounts for more than half of the combined GDP of the G7. France has already withdrawn two of its biggest companies, oil giant Total and automaker Peugeot, from Iran in fear of the American reprisals threatened by Mr. Trump against those who do business with Iran. The G6 may find Donald Trump repellent, they nevertheless intend to do everything they can to prevent the American tariffs from being implemented.

Eloquent body language
In the course of the Friday G7 meeting, Trump seems to have softened somewhat, promising separate follow-up negotiations with individual countries (he likes one-on-one dealing). The next morning he left Canada to fly to Singapore for his meeting with North Korean leader Kim Jong-un, leaving some of his entourage in place to attend the final sessions, including the one on climate change. But no sooner had a carefully crafted joint communiqué been shared with Trump than he tweeted from his plane that he would not sign it. This president who habitually insults people (and was on his way to meet North Korea's "little rocket man") took umbrage at Justin Trudeau when he said in a post-G7 press conference that Canada had felt insulted by the tariffs imposed on a long-time ally and that he planned to go ahead with reciprocal tariffs on American goods. Petulant and vindictive, Trump now got personal and nasty, calling Trudeau "weak and dishonest" and blaming him for the failure of this G7 summit.

What sandbox is this thin-skinned, impetuous, egocentric and ill-tempered man-child playing in??
Where are his handlers?! 


Historic handshake
Trump's June 12 meeting with North Korea's Kim Jong-un Dr. Strangelove meeting Rambo did nothing to reassure us. If anything, Kim appeared to be the winner of this first round: having the president of the United States flying halfway around the world to come and shake his hand and make the goodwill gesture of canceling military exercises in the area, without giving anything in return. And what did Trump get? A photo opportunity and the illusion that he had "solved the North-Korean problem".

Trump used the historic occasion to give a singularly embarrassing speech that talked about building hotels and condos on the beautiful beaches ("look at it from a real-estate point of view") and expressed his admiration for Kim Jong-un who "at only 26 years of age took over from his father and is running the country with a strong hand". In one of his inane tweets following the meeting he tells us that we can "now sleep better because there will be no nuclear war with North Korea." Deal done. Check off another victory for world peace. DT is ready for his close-up and, yes, for that Nobel Peace prize.

Having just savaged Prime Minister Trudeau of Canada, one of his closest allies, and then praised a brutal dictator who notoriously murdered his own half-brother among his other human rights abuses, it is clear that supreme leader Trump does not know the difference between right and wrong. Sleep better? Not likely. With nasty visions of a future controlled by two unhinged maniacs with the Red Button at their itchy fingertips, I will just try to stay calm and breathe in slowly, thinking positive thoughts. Like... uh... um ... hmm... let me get back to you on that.

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