Global economics, and the way the financial media spin, can be funny at times. On one hand the pretentious global community scoffs at American Exceptionalism and claims the U.S. is only one country amid a international community of equals; on the other hand the reality of the U.S. being the leading economy in the world, and their need to retain access therein, slaps them in the face like a cold fish…
Investment capital flows to the location of highest return. Amid the U.S. MAGAnomic growth; global investment is inbound to the USA. The EU and Asia are in a period of low to stagnant growth… lots of high-brow teeth gnashing. To make matters worse, Trump is leveraging their weakness against them as he renegotiates reciprocal trade deals.
The G20 IMF and World Bank’s 2019 Annual Spring Meetings of finance ministers (fancy name to describe Mnuchin’s job) is taking place in Washington DC. The finance ministers are stomping their feet at horrible Trump hoarding all the economic growth.
(Reuters) […] Policymakers from the Group of 20 industrialized countries are worried that the weakness evident in key economies could spread, especially if elevated trade tensions, such as those between the United States and China, escalate further.
“The balance of risks remains skewed to the downside,” Japanese Finance Minister Taro Aso said at a news conference following a meeting of G20 finance ministers and central bankers. “We recognize the risk that growth prospects might deteriorate if weakening in key economies feed into each other.”
[…] As the chair country of this year’s G20 proceedings, Japan wants to deepen talks on global imbalances – an effort to divert Washington’s attention from bilateral trade imbalances and stave off U.S. pressure to negotiate two-way trade deals.
German Finance Minister Olaf Scholz, speaking at an event on the sidelines of the meetings in Washington, said the rules-based order of multilateralism is increasingly under threat and leaders must uphold international cooperation. (read more)
Horrible Trump is not following the “rules-based order of multilateralism”. So what exactly does Germany mean by that?….
For the answer lets look at the EU proposal today to avoid Horrible Trump’s demands for fair and reciprocal trade agreements:
(Reuters 2) […] The EU is expected next week to give final clearance to the start of formal trade talks with the U.S. that could lead to the removal of duties on industrial goods and ease transatlantic tensions.
However, those talks face a series of hurdles, not least the U.S. insistence that market access for its farm products feature in the negotiations, something the EU has ruled out.
Germany, whose exports of cars and parts to the U.S. account for more than half the EU total, wants to press ahead with talks to ward off tariffs its carmakers, including Volkswagen, Mercedes maker Daimler and BMW.
France, with few car exports to the U.S., has resisted, insisting that climate change provisions should feature in any deal – a difficult demand given Trump’s withdrawal from the Paris climate agreement. (more)
So the EU demands include: continued blocks to U.S. agriculture exports; keep open access for their German high-end automobiles; and force the U.S. to join the climate change nonsense. This is their plan for “free, fair and reciprocal” trade?…. LOL.
Yet somehow they wonder why investment is flowing into the U.S.?
President Trump’s #1 economic challenge right now is to re-skill a new generation workforce to support all the expanded manufacturing investment in the U.S. This is not a bad problem to have… Hundreds of new and innovative vocational development programs are ongoing to increase the skills of the U.S. workforce.