Politics
(Washington)
You know that Mercedes or BMW you have sitting in your driveway? Kiss it goodbye, maybe. In a move that seems likely to cause as much consternation at home as abroad, President Trump is planning a broad ban on German luxury cars. Trump’s proposals have ranged from a 25% tariff on German cars (extremely heavy) to outright bans. He reportedly told French leader Emmanuel Macron that he would maintain his trade policy until “no Mercedes models rolled on Fifth Avenue in New York”.
FINSUM: BMW alone makes $8-9 bn in annual revenue from sales of cars in the US. If Trump wanted to start a bitter trade war, this would be a good first step. Americans aren’t going to like this one either.
(Washington)
First it was North Korea calling the summit into question, and then this week President Trump cancelled the meeting entirely. Now, despite Trump’s cancellation, Pyongyang says it will still meet with the US. Just minutes after Trump cancelled the summit, a senior North Korean leader said “We had set in high regards President Trump's efforts, unprecedented by any other president, to create a historic North Korea-US summit … We tell the United States once more that we are open to resolving problems at any time in any way”.
FINSUM: While it might be a bluff, we take it as an encouraging sign that North Korea is so eager to meet with the US.
(Detroit)
Just when it seemed like trade war ambitions were over for the White House, they are rearing their head again. President Trump has ordered the US Commerce Department to investigate whether the extensive use of foreign parts in the US auto industry is a threat to national security. The mandate he is using for doing so—Section 232 of the Trade Expansion Act, is the same as he used for his tariffs on aluminum and steel last year.
FINSUM: While we do understand the national security considerations, this could hurt both the car industry (because of increased costs) and spark retaliations from trading partners.
More...
(Washington)
In what should give investors a huge sigh of relief, President Trump has called off a trade war with China. The White House has called off the aggressive approach in light of China’s statement that it would try to increase US agricultural imports there. Trump says it would be good for US farmers, who were threatened with becoming a casualty in a trade war. Democrats are criticizing the president for cutting a deal too easily.
FINSUM: We do think the US has gotten the raw end of many trade deals (not that it did not play a large part in undermining itself), but trying to throw its weight around with China was a risky strategy.
(New York)
In a bombshell disclosure, a government ethics body has found that President Trump did, in fact, reimburse attorney Michael Cohen for the $130,000 payment he made to keep Stormy Daniels from taking her alleged affair with Donald Trump public. President Trump’s White House disclosed the payment as part of financial disclosure rules, with Trump affirming the payment on Twitter as well. The revelation refutes the president’s earlier claims that he had no idea about the payment.
FINSUM: So the reimbursement is one thing, but potentially more significant is the fact that this payment was not disclosed properly, which according to the Office of Government Ethics (OGE), was a violation.
(Washington)
US president Trump and North Korean leader Kim Jong Un have been planning a groundbreaking summit in the near future. The meeting has been touted for months as breakthrough in relations, especially following the friendly developments between North and South Korea recently. However, the whole meeting is now in doubt as North Korea has threatened to cancel. The country is angry over US-South Korea joint military training operations and does not want to be forced into a corner by the US over its nuclear program.
FINSUM: We are not foreign policy experts, but if the US wants to make progress with North Korea, we should make sure to keep them calm enough to meet with us. What happens thereafter is a separate decision.