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G7 showdown looms as leaders rally against Trump

by | 7 Jun, 2018

A warm embrace for Trump and Trudeau, but appearances can be deceiving

Emmanuel Macron of France has joined Germany’s Angela Merkel in warning President Donald Trump that they won’t sign a joint statement of the Group of 7 at the summit in Canada this week (hosted by Canadian PM Justin Trudeau) without major concessions from the US, a French official in the president’s office said. This could make it the first G7 summit ever to end without a joint final ‘communique’ (or statement), due to major disagreements over US policy on the Iran nuclear deal, as well as the tariff’s placed on US allies including the EU and Japan.

The G7 could prove to be a turning point for the US. Either it will choose to give concessions to its allies, or relations could turn even more sour and the Trump administration could become more isolated on the world stage.

It’s unlikely Trump will give way on the Iran deal (given his desire to wipe away most of his predecessor’s actions on foreign policy), but may be open to renegotiating aspects of the Paris climate accord and the tariff action.

While the EU looks unwilling to relent, if reports are anything to go by (this time from the Wall Street Journal), Trump’s strong-arm tactics may have helped him to gain a potential win on trade with China, which has offered to purchase close to $70 billion worth of US goods over the next year if the Trump administration backs off proposed tariffs (says the WSJ).

Meanwhile, the European Union “expects to conclude the relevant procedure in coordination with member states before the end of June,” European Commission Vice-President Maros Sefcovic told a news briefing. She was referring of course to retaliatory tariffs on US goods if the US should decide to continue with tariffs against the 28-member bloc. Though it seems bizarre in some ways, the US seems to be closer to getting a good deal with China on trade rather than the EU, even though the EU and US have been closer historical allies.

Trump is expected to attend the G7 summit on Friday and Saturday, followed by his widely-anticipated meeting with Kim Jong-un on the following Tuesday.

Trump’s economic adviser Larry Kudlow downplayed tensions around the summit, calling the matter a “family quarrel”. Investors don’t seem too bothered, as US stock futures rose  ahead of Thursday’s market open.

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ALL RIGHTS RESERVED © INVSTR LTD. 2018

Risk Disclosure:
Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order.
Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.
Brokerage services are provided by the following:
US-traded securities, including fractional trading, are provided to Invstr users by DriveWealth LLC, a regulated member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions. For more information, including disclaimers, risk and transaction fees click here.
India account traded securities are provided by SIC Stocks & Services PVT Ltd. SIC does not make any personal recommendations to buy, sell or otherwise deal in investments. Investors make their own investment decisions. The services and securities provided by SIC may not be suitable for all customers and, if you have any doubts, you should seek advice from an independent financial adviser. For more information and disclaimers, click here.

 

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