President Donald Trump is back from his 9-day overseas trip that included Belgium where it was all about NATO during the 2-day meeting at the new NATO headquarters in Brussels and that ended on the Italian island of Sicily where a two-day 2017 G-7 meeting took place.
At the G-7 meeting, the participants agreed to disagree on climate change. This came to the open by the fact that the United States didn’t recommit itself to the “2015 Paris Agreement to reduce Climate Change.”
In the G-7 Taormina Leaders’ final Communiqué under section 32 we read: “The United States of America is in the process of reviewing its policies on climate change and on the Paris Agreement and thus is not in a position to join the consensus on these topics.”
The G-7 participants have also reiterated their commitment to keep their markets open and to fight protectionism, while standing firm against all unfair trade practices and, as they call it, will push for the removal of all trade-distorting practices – including dumping, discriminatory non-tariff barriers, forced technology transfers, subsidies and other support by governments and related institutions that distort markets – so as to foster a truly level playing field.
One could easily say that at the G-7 meeting the participants have kicked the can down the road as much as they could and at least until the upcoming G-20 summit that will take place on July 7-8 in the German city of Hamburg.
Perhaps, one of the most important, yes it could be historical, events has occurred in the aftermath of the G-7 meeting when German Chancellor Merkel said on Sunday at a German election campaign event (Germany has federal elections on September 24) when she told the audience: “Europe must take its fate into its own hands, we have to fight for our own destiny. We Europeans truly have to take our fate into our own hands. The times in which we could completely depend on others are on the way out. I've experienced that in the last few days.”
One could say it could, but hopefully not, that the days of unquestioned protection from the United States are no more as evident as they once were.
Nevertheless, question marks arise about the commitment clause that defines the “casus foederis” of Article 5 of the North Atlantic Treaty that has established the North Atlantic Treaty Organization (NATO) and whereby each member state of NATO commits to consider that an armed attack against one member state, in Europe or North America, to be an armed attack against them all.
Article 5 has been invoked only once in NATO history and that was by the United States after the September 11 attacks in 2001.
In the meantime, early today over in Singapore, San Francisco President John Williams, who this year doesn’t vote at the FOMC, gave a prepared speech wherein he stated: “The U.S. economy is about as close to the Fed’s dual mandate goals (maximum employment and price stability) as we’ve ever been … U.S. unemployment rate is 4.4 percent -- meaning that we’ve reached and even exceeded the full employment mark … although inflation has been running somewhat below the Fed’s goal of 2 percent, with the economy doing well and some of the factors that have held inflation down waning, I expect we’ll reach that goal by next year.”
During an interview with Bloomberg he said: "My view still is that three rate hikes this year makes sense, nothing has pushed me away from that. We should continue this gradual process of policy normalization in interest rates.”
Williams also expected the U.S. economy to grow at slightly less than 2 percent in 2017.
This is of course below what Treasury Secretary Steve Mnuchin told the Senate Committee on Banking, Housing and Urban Affairs a couple of weeks ago: “I believe that a goal of 3 percent GDP or higher economic growth is achievable if we make historic reforms to both taxes and regulation.”
Finally, Trump tweeted on Sunday afternoon: “I suggest that we add more dollars to Healthcare and make it the best anywhere. ObamaCare is dead - the Republicans will do much better!”
Investors will have to wait a little while to obtain more clarity about what Trump really meant…
Etienne "Hans" Parisis is a bank economist who has advised global billionaires and governments on the financial markets and international investments.
© 2023 Newsmax Finance. All rights reserved.