Trump Putin Meeting in Helsinki: A Non-Summit

The most charitable thing that can be said of the Trump-Putin Summit Meeting in Helsinki yesterday, 16 July, is that it was the celebration of a non-summit, just like Alice in Wonderland’s non-birthdays.

Watch the highlights of this incredible moment in History, a “non-Summit” that sees an American President raging against his own country’s institutions while standing next to the leader of America’s historic enemy, Russia, whose avowed goal is to bring down Western democracies:

In the Video – As reported by the UK Guardian: Trump refused to back US intelligence agencies on their findings on Russian interference in the US presidential election. Trump declared the US and Russia’s relationship to be strong, while Putin dodged questions on rumored compromising material he held on Trump, and gave him a commemorative football . Trump condemned as treasonous after press conference with Putin. Most papers saw the Summit as a win for Putin: Trump portrayed as a “traitor” and  “Putin’s poodle”.The full text of the transcript is here.

Trump is putty in Putin’s hands. He wanted Putin to vow that he never meddled in American elections. Putin happily complied. That’s exactly what he wanted to say and has been saying all along. What a win for Putin!

The non-Summit had all the elements of fantasy: lots of handshakes, pats on the back and smiles; a two-hour, behind-doors, closed meeting, eye-to-eye with no interference from any Minister of Foreign Affairs (who needs them in the age of Trump?); a friendly lunch with all the aides ranked according to a strict protocol around a well-laid table (no tea kettles like in Alice’s world but close); long, serious discourses about peace and friendship prepared by each leader’s attendants to open the press conference that was to tell the world all the wonderful things they had agreed to.

Can a Non-Summit have a Positive Result?

The show fell apart when reporters asked questions. Trump began acting as if he were on Twitter, venting his usual obsessions, the Mueller probe, a witch hunt, no collusion, Hillary Clinton’s emails, where are they? Once again, he was on the defensive: “I beat Hillary Clinton easily … We won that race. And it’s a shame that there can even be a little bit of a cloud over it … We ran a brilliant campaign and that’s why I’m president.”

This is the kind of thing you say privately, but surely not on the world stage. With Putin smiling and shaking his head, giving him support, offering him a football, saying “the ball is in your court”. As it indeed was. An own goal. With Trump, way over his head, ranting against some of America’s founding institutions, the Department of Justice and the FBI.

It is interesting to see how this happened.

Read the rest on Impakter, click here.

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Trump’s Visit to Europe: War!

Trump’s one week tour to Europe, starting 11 July in Brussels, marks a watershed in Trump’s attack on the liberal world order. It is now clear that Trump is at war with Europe. The tour could have been a victory lap for the US President and that is how other US Presidents in the past (including Obama) played it.

Not Trump.

The trip started with a 2-day NATO meeting followed by a “working visit” in the UK – not an official trip as usual, London was not included.  The weekend was spent in Scotland, presumably to relax in the golf properties he owns. And the trip is to culminate with a one-on-one meeting with Vladimir Putin, Russia’s autocratic leader that Trump has often supported. Before joining the G7 meeting in Canada last month – a meeting that turned into a disaster -, he called for Russia’s return to the G7.

To assess Trump’s trip to Europe, one needs to remember that Putin is a man determined to bring down NATO and destroy the European Union. He sees them both as the enemy and the Kremlin constantly pushed that propaganda line at home and abroad.

NATO Meeting: Chaos

The moment he  arrived in Brussels , he lost no time in dressing down NATO’s Secretary General Jens Stoltenberg over breakfast:

Extraordinary outburst. “Germany is totally controlled by Russia”, this is “not appropriate”, he thunders.  Note Stoltenberg’s reply, trying to argue that with NATO “we stand together” – an argument that gets nowhere with Trump who has no appreciation for either collaboration or allies. Trump sees nothing beyond what he calls the “energy” issue that has turned it a “captive of Russia”: Seventy percent of Germany’s energy comes from Russia now that it has given up its traditional sources (coal and nuclear). And, he points out, the German-Russian gas pipeline consortium is headed by a former German Chancellor.

That last part is true, of course. He is referring to former German chancellor Gerhard Schroeder who is a top executive at the Russian-government controlled company (Gazprom) that is currently building Nord Stream 2 Pipeline under the Baltic sea to bring Russian gas to Germany.

But it’s not going just to Germany, as he implies.

Read the rest on Impakter, and the stunning strings of insults Trump managed to throw at UK Prime Minister Theresa May, click here.

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Escape from the Consumer Society: A Conversation with Mike Blue

Mike Blue is a talented writer even if you don’t agree with his philosophy: I don’t and that made for a great conversation between us – reported here on Impakter:

 

Our industrial society, ever since it began, has spawned fierce critics. Two of the best known lived in America: the transcendentalist Henry David Thoreau and the economist Thorstein Veblen. Thoreau gave us the definitive masterpiece of life in the woods with Walden in 1854. Later, in 1899, Veblen became famous with his Theory of the Leisure Class, a savage critique of “conspicuous consumption” depicting businessmen as modern-day “lords of the manor”. Now, following in their footsteps, we have Michael Blue, a young Australian author who has just published his own addition to the Thoreau and Veblen legacy: The Anatomy of Escape .

 

Anatomy of Escape ,book cover. It features the bus named Rosie in which the author lived in Sumatra while writing his book.

This is Michael Blue’s second book, the first was The Consumption Cleanse published two years ago, with  a long sub-title that said it all: “Giving up 13 consumption habits in 13 weeks for a better life and a healthier planet”.

The Anatomy of Escape, by contrast, is more ambitious. It is a crossover, partly memoir describing the high points of his own escape from the consumer society and partly guidebook telling his readers how to do it. In short, how to turn this kind of escape into a sustainable lifestyle.

Over the past year, Michael Blue has shared with Impakter several early drafts while writing his “escape” book. Choice pieces, like the explanation of why dogs always look happy (and cats don’t), the three-legged stool metaphor, or  what we can learn from Easter Island.

read the book and enjoyed it as much as I had enjoyed his articles for Impakter. But I wanted to know more. His desire to leave behind the consumer society in pursuit of happiness had always struck me as something out of the ordinary. It takes courage to abandon a career and choose to drift across the world.

When he wrote his articles for Impakter he was living in Indonesia, in an old bus converted into a house. Why do it? How to do it? His book provides answers, of course, but I still had more questions.

I got in touch with Mike and discovered that he had abandoned his bus.

He was now traveling across Colombia on a motorcycle, stopping now and then to write, nestling his computer in improbable places, including eagle nests with breathtaking views of the mountains. Eventually, we managed to have a long conversation that clarified many of my questions and doubts, here are the highlights.

Mike, I just finished your Anatomy of Escape and thoroughly enjoyed it. You have an original way to couch your ideas (e.g. the 3-legged stool! Dogs vs. cats!). It worked even in my case and that’s pretty amazing if you consider that I don’t really share your philosophy, at least not in full. While I share your distaste for the consumer society, I could never do what you’ve done, give up everything, leave behind home and family and live on the road. In short, drop out.

It might at first seem like that’s what I’ve done, drop out, but it wasn’t quite like that. I can see this clearly now in retrospect. Rather than dropping out, I feel like I have climbed out, out of the consumerism trap. And then I dropped in, if anything, to a life that I feel brings me so much more than it once did.

But climbing out of the “trap” as you call it, means giving up the lifestyle of the middle class, that I imagine you were born into. You are an accountant by profession, surely you had to give up a lot?

Read the rest on Impakter, click here.

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Trump’s Trade Wars: The End of American Supremacy?

Today Trump opened another battlefront in his trade wars, with duties slammed on Chinese goods worth $34 billion. Expect China to retaliate with counter tariffs on US imports. China’s commerce minister was quick to announce: “China promised to not fire the first shot, but to defend national core interests and the interests of the people, it has no choice but to strike back as necessary”. A few hours later, China filed a complaint with the World Trade Organization, its second one.

Conventional wisdom has it that nobody wins from a trade war. Is it wise to ignore it? Trump has no doubts, he is convinced his trade wars will Make America Great Again.

This reminds me of the Italian captain who sank his own boat out of bravado. Remember Captain Francesco Schettino who famously sank the Costa Concordia cruise ship off the Italian island of Giglio in January 2012? He did this serenading a pretty lady in the dead of night, showing off his ability to sail close to the rocks. The ship hit the shore, capsized and 32 passengers and crew died.

Think of that beautiful cruise ship as a metaphor for the international order that America built after World War II, ensuring peace and prosperity through, inter alia, global trade. Now, Trump, like Captain Schettino, is steering the world ship towards the rocks while serenading his base:

Extraordinary. Watch how Trump’s audience looks enraptured, captivated by his show. And the numbers Trump throws around are totally out of context. Consider what he says of Canada, referring in a tone of outrage to a 275% tariff barrier. As if US farmers don’t have access to Canada’s markets because of it.

Is that the case? The fact is that 275% tariff barrier (which is indeed outrageous) only concerns a very small section of the market, milk and milk products. On average, trade barriers with Canada, as with all other advanced countries, are very low, around 2% to 5%. Not really enough to drive imbalances in trade.

The Real Causes of US Trade Deficits

US trade deficits have other causes, and they are nothing new. They’ve been going on since the 1960s, arising mainly from:

The rest on Impakter, click here and let me know what you think!

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Europe’s Migration Problem: Why it is hard to solve

At the recent European Council meeting, the highest level venue in the European Union with all 28 leaders in attendance (including the UK), it looked like the EU was about to break down over its migration problem.

No doubt to Trump’s delight. He’s been actively fighting the European Union which he has always seen as a threat to MAGA. On Twitter, he has regularly attacked Germany, most recently with fake data, claiming that migrants are the source for a rise in crime (that hasn’t happened – crime rates are at the lowest level ever as Der Spiegel was quick to note). Also, according to a recent Washington Post reconstruction of events, Trump even tried to convince Macron to take France out of the EU for a “substantial bilateral trade deal”.

It is in this context of America’s abrupt withdrawal of support to Europe and its institutions that the Europe’s migration problem must be placed. Fueled by European populist parties aligned on Trumpian anti-immigration and euro-skeptic policies, there is violent disagreement within the EU on how to address the problem.

Italy has always been, along with Greece and Spain, on the forefront of the migrant invasion, and for decades it has addressed the migrant challenge alone, with no help from Europe. With the new government in place, this has changed.

The vice-premier and interior minister, populist strongman Matteo Salvini, has made it clear to all EU members, declaring that Italy would “no longer be Europe’s refugee camp”. Migrant rescue ships run by NGOs are no longer allowed to dock in Italian ports:

This led to a spat with France two weeks ago, but eventually France and Germany (after a conciliatory call from Angela Merkel) agreed with Italy that there was a need to share the burden.

Salvini’s populist friends in Eastern Europe have also made it very clear that they won’t play the game. Austria and the Visegrad group of countries (Hungary, Poland, Czech Republic and Slovakia) led by Orban, Hungary’s autocratic Prime Minister – have steadfastly refused to cooperate with EU members and will not accept any migrants sent their way.

That was the situation before the European Council meeting: gridlock.

Angela Merkel was panic-stricken: Her own interior minister, Horst Seehofer of the Bavaria-based Christian Social Union (CSU), a major ally in the government coalition, sounded like his Italian friend Salvini, determined to turn away migrants at the border. This is understandable: the CSU faces elections in October and is aligning itself on anti-immigration lines in an attempt to draw votes away from the anti-migrants, rightist-populist Alternative for Germany, a rising rival, currently the third party in Germany.

Either Merkel would find a solution at the European Council, or Seehofer would dissolve the coalition and she would probably have to resign as Chancellor.

In the end, after two days of harrowing discussions (27-28 June), the breakdown didn’t happen, there was a “minimal” agreement that probably saved Merkel’s political career.

No doubt Donald Tusk, the President of the European Council, played a role in the relatively positive result. But, as he says, this is “not a success yet”, much will depend on what happens next…

Read the rest on Impakter, click here. And let me know what you think! Are slamming doors shut really the only way to solve the migration problem?

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Trump’s Anti-immigration Policies Taken to a New Level

Trump is treading dangerous waters with his anti-immigration policies. No doubt Melania Trump’s visit to migrant children shelters was an unequaled media coup. To make sure nobody would misunderstand (especially Trump’s fans), she wore on her trip out to Texas and back (but not when she was visiting the shelters) a very special coat. Everyone took note including the foreign press:

The message on the back of her jacket is clear: ““I REALLY DON’T CARE, DO U?” But it’s not what you think, she is not rebelling against her husband, she just really likes children and she really believes in him, sharing in his worldview.

Trump’s tweet made this absolutely clear:

And of course, the policy of separating children from their parents wasn’t something Trump invented, it’s been “the Dems” all along – everything that’s wrong with US legislation on immigration is the Dems’ fault:

And if you don’t believe that, Trump has the winning video artfully edited to show what “needs” to be shown (and only that) – a very useful propaganda tool when tweets stop working:

So what is the real situation?

Read the rest on Impakter: click here. The end of the article was updated on 23 June. See you there!

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Trade War with China: Who Wins?

We are now facing an escalating trade war between the US and China – started by the US. The question is: can the US win? And what will it cost the world?

It is worth listening to Carlos Gutierrez, co-chairman at Albright Stonebridge Group, a major global corporation and former U.S. Commerce Secretary who spoke on 18 June on “Bloomberg Daybreak: Americas”:

He reminds us that the free-trade agreements that have been brokered since the 1980s are not as bad as Trump would have it: they have consistently given the US a surplus. The point is: There never was a similar agreement with China. And he doesn’t mince words in describing the dangers for the whole world. He urges restraint.

Clearly Trump is not listening. A few hours after Gutierrez talked to Bloomberg, Trump had threatened an additional 10% tariffs on another $200 billions worth of goods:

Trying to answer the question of “who wins a trade war”, Bloomberg has rounded some major experts asking them what they thought. While the answers are interesting, they all focus on the short term and unfortunately don’t go beyond are the framework of classical economic analysis which overlooks geo-political factors:

  • China has limited room to retaliate in a trade war escalation: It only buys $130 billion worth of American goods while the US deficit with China runs to $375 billion; this is a “high stakes game of poker” and “China will run out of U.S. imports that it can hit with tariff countermeasures long before the U.S. does” (Rajiv Biswas, IHS Markit Singapore);
  • China needs to open up to global innovation and investment: “both China and the U.S. and other countries can really benefit from this Made-in-China 2025 strategy” (William Zarit, chairman of American Chamber of Commerce in China);
  • This is creating a “perfect storm” for China’s export Industry: it’s not just Trump’s tariff war but also the probable US Senate ban on ZTE, the Chinese electronic producer that Trump wanted to save; such a ban would  stop it from importing the American chips it needs for its phones and other products, hitting at the very heart of Made-in-China 2025 strategy;
  • There will be winners and losers, for example, China will need to buy agricultural goods from other sources than the US and that will benefit countries like Australia and Brazil; many Asian countries that are part of the China value chain will be hit.

Instead, to evaluate the dangers from a trade war, we need to look at the longer term and more broadly to geo-political factors. And here, the picture is not so reassuring.

The trade war with the US is but a battle in a much larger war. A battle that surely hurts in the short run, but will leave China victorious in the long run. Because China has acquired the “soft power” weapons to win.

Forget the Trade War: China’s Soft Power is Poised to Conquer the World

What has been happening since Trump took over the White House is this: A political void has been created, a void in world leadership that China is eager to fill, and most likely will.

Consider the facts.

Read the rest on Impakter, click here.

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Trump Watch: Trade Wars to “Make America Great Again”

June 15 was a special day for Trump – good old television unexpectedly displaced his tweets. Two televised events gave him ample room to rant about fake news and push for his favorite justification for trade wars: resentment at “unfair treatment” of America by the rest of the world, allies included.

One was a surprise half-hour long  interview with Fox & Friends. A short video released by The Washington Post focuses on the main points he made:

The other was an 18 minute Q&A session with reporters outside the White House:

Significantly, Trump did not discuss trade at any point in either televised sessions, although on that same day he had just slapped steep (25%) new tariffs covering $50 billion in trade with China. Watching Trump make all his pet points, one is struck by the fact that he covered the same old topics. Those he’s been constantly and obsessively tweeting about.

First, Hillary Clinton and the possibility that his winning the presidency was never a clear-cut victory. He pretended to misunderstand the just released report from the FBI Inspector General – enabling him to claim the report “exonerates” him. The report does nothing of the sort, it reviews the FBI investigation into Hillary Clinton’s use of a private email server while she was secretary of state. It finds some faults with the then FBI Director James B. Comey for not adhering closely to protocol, along with others in his team, notably Peter Strzok and Lisa Page who were having an affair and exchanged over-the-top bragging emails.

Yet Trump calls the report a “horror show”, not because of what’s in it, he says, but because of the conclusion that there was no political bias in the FBI investigation.  Trump cannot accept that. For him, there was “total bias”; the FBI was a “den of thieves”; Comey is a “criminal”; the top FBI management is “scum”; if you “polled the FBI, the real FBI”, you’d find they all “love” him.

In short, there never was any collusion between his campaign and Russia. We’ve all heard that before, over and over.

Second point, on national security. America’s military, built up to the tune of $700 billion a year, will be bigger than ever. The wall is needed, borders must be secured, a “compromise immigration bill” cannot be supported. The separation of immigrant children from their parents at the border is regrettable but it’s the Dem’s fault.

Third point, the whole world and America’s closest allies especially, Europe, Japan and Canada, took “horrible”, “unfair” advantage of America both on trade and military aid. The only ally that got a nod of approval was Giuseppe Conte, the new Prime Minister of Italy, because they shared a common anti-immigration stand. This conveniently overlooks the massive differences in their stand: Italy, in spite of the recent spat with France over immigration – now resolved – is still receiving immigrants and does not separate children from parents.

For Trump, all will change now. We need to realize, he tells us, that President Obama “lost” Crimea, he “gave it away”. And that happened because Putin “had no respect for Obama”. With him at the helm, disrespect like that can never happen again. He is making friends with the right people, he can call up North Korea dictator Kim Jong-un anytime. And Putin, he feels, should be back in the G7.

What next: A Series of Trade Wars?

The mass of falsehoods was bewildering. Some American journalists wondered whether the Republican party would finally react, for example, Chuck Todd, NBC News political director tweeted:

Read the rest on Impakter, click here.

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Trump Watch: A “Historic” Summit with North Korea?

Just published on Impakter – I try to dissect what really happened in Singapore and what it means:

Predictably, Trump gushed over his “historic summit” with North Korea leader Kim Jong Un, making a string of optimistic declarations to reporters in Singapore. “I think both sides are going to be impressed with the result,” he said. “We’re going to take care of a very big and very dangerous problem for the world.” He claimed Kim’s commitment to denuclearization was “unwavering” and he added he would “absolutely” invite Kim to the White House to continue the talks.

No tweets yet, but plenty of videos of the event, here is the signing of the agreement – without releasing in advance the text to  journalists:

At the follow-up news conference, it became apparent that, with the signing of the so-called “Singapore agreement”,  the only thing of substance Trump obtained was that “working level talks” would now take place.

The point is this: They would have to take place within the framework of the agreement Trump and Kim Jong-un signed, just four points:

  1. to establish new U.S.-North Korean relations “in accordance with the desire of the peoples of the two countries for peace and prosperity;”
  2. to join “efforts to build a lasting and stable peace” on the peninsula;”
  3. to reaffirm the declaration Kim signed at his summit with South Korea’s president on 27 April 2018; and
  4. to recover the remains of Americans lost or killed during the Korean War.

Good intents and vague words. But that’s OK, it allows for total flexibility. The game will now be played at the diplomatic “working level” – and that means it’s in the hands of Mike Pompeo. And Trump was quick to reaffirm in a news conference following the meeting that sanctions on North Korea would continue.

Not a bad result. Trump looks like he’s achieve some kind of victory, and Kim Jong-un likewise. But it’s a meagre win for Trump – not much more than face-saving.

Read the rest on Impakter, click here.

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Trump Watch: G7, the Gig is Up!

The G7 fiasco was not entirely a surprise, but the extent of the damage done is stunning. Here’s my assessment of the future of the G7 (it’s coming up against China-led Shanghai Cooperation Organization that met at the same time as the G7!). The article is on Impakter, here is the opening:

This G7 was like no G7 ever since it was founded in 1997.  Even before leaving for Canada, Trump rocked the boat, suggesting the G7 should be a G8, with Russia back in – conveniently forgetting why Russia was kicked out in 2014 (for invading Crimea and abetting rebels in Eastern Ukraine).

Then he turned up late. A bilateral meeting with Macron had to be postponed. He missed most of a working breakfast on the issue of women, he skipped the climate change meeting. He left nearly a whole day early to fly to Singapore for his “historic nuclear summit” with North Korea’s dictator – even though this meeting is still two days off.

In the end, Trump blew it up, refusing to sign onto a joint communiqué he had agreed to before leaving. Expect the G7 never to be the same again – at least not until America produces another President.

In his news conference before leaving, Trump was his usual aggressive self, grousing about unfair tariffs slapped on the United States by its closest allies – a claim roundly rejected by economists. Far from being huge as Trump claims, average trade-weighed tariffs are marginal: the latest WTO data (2015) shows that for the EU they stood at 3 percent, Canada at 3.1 percent and the US was slightly lower, at 2.4 percent.

The problem is that they vary by product and in the US, states slam on additional barriers. Not to mention Buy American laws that keeps foreigners out of US government procurement. Moreover, it appears that Trump confuses the European VAT for a tariff. In short, the US trade deficit is not caused by tariffs but by Americans’ purchasing preferences.

Once on the plane, he tweeted his withdrawal, threatening future tariffs on automobiles and accusing Trudeau of “false statements”:

Then he doubled down with insults, calling Trudeau “very dishonest and weak”:

Something like this has never happened before, and the fact that the American President did it makes it a watershed event. It’s not just a matter of being astonishingly rude to democratically elected colleagues. It’s a matter of starting a trade war with allies that jeopardizes America’s leadership and threatens global prosperity. World politics won’t ever be the same again.

Read the rest on Impakter, click here.

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