“With a single tweet from Air Force One, Donald Trump torpedoed weeks of painstaking diplomacy and drove a wedge deeper between the US and the G7 countries that traditionally consider themselves Washington’s closest allies.
“The US president suddenly withdrew on Saturday night from the joint communiqué that Justin Trudeau, the Canadian prime minister, had brandished as the central achievement of the Group of Seven summit in Quebec.
“Mr Trump coupled the move with a highly personalised attack on Mr Trudeau. He called the prime minister “dishonest and weak”, and hinted that he was preparing to slap more tariffs on America’s northern ally in addition to punitive steel and aluminium duties already in place on EU countries, Japan, Canada and Mexico.
“Emmanuel Macron, France’s president, tweeted that the US faced a “united front” at the Canada meeting and found itself “isolated”…
“The fractious tone was set even before the summit started, as Mr Trump told reporters in Washington that he wanted Russia to rejoin the group — anathema to his counterparts, given their tattered relations with Vladimir Putin and Russian interference in western elections….
“Mr Trudeau described the US steel and aluminium tariffs on Canada as “insulting” at his end-of-summit press conference and vowed not to be “pushed around” — the comments that enraged Mr Trump as he flew to a nuclear summit in Singapore….
“EU countries already anticipate intensifying trade tensions, as they prepare retaliatory tariffs for the steel and aluminium duties and as Mr Trump puts Europe on notice that increased taxes on car imports may be next.
“I think even the Germans have had their eyes opened now,” said the European diplomat, referring to Berlin’s greater readiness than other European capitals to strike a trade deal with Mr Trump. “There was a hope that we could de-escalate this and start talking in a constructive way about what we can do. But after this performance I don’t see much hope even for that.”
“Are brewing exchange rate and debt crises in Argentina and Turkey localised events without broader implications? Or are they early warning signs of deeper fragilities in bloated global debt markets that are being exposed as the US Federal Reserve continues to normalise interest rates?”
“A rout in emerging-market assets has sparked concerns that the turbulence could spread from distant corners of the world to the U.S. and elsewhere.”
“Speaking from his empty shop there, the 32-year-old Gutierrez says he and other sellers are feeling a sharp economic pinch from [Nicaragua’s] upheaval, which he says “every day is going to get worse.”
“Nearly 30 years after declaring Polio eradicated in Venezuela, the first case of the disease has been reported in the country as it reels from an economic crash crippling its healthcare system.”
“Brazil has fallen into its worst recession on record and public services have largely been put on hold until October’s general election. With jailed former president Luiz Inácio Lula da Silva barred from running, right-winger Jair Bolsonaro currently tops the polls.”
“Saudi Arabia will host a regional summit to discuss the ongoing economic crisis in Jordan, where a proposed income tax rise recently triggered some of the largest protests in years.”
“Bar a miracle all economic indicators point in the direction of a deepening economic and financial crisis. Sanctioning Iranian oil and financial transactions would serve a severe blow to Tehran.”
“[South Korea has experienced its] deepest fall in employment since 2008 global crisis… Firms raise prices at faster rate despite easing cost inflation.”
“Finland has been a net borrower for the past ten years, with central government debt almost doubling since a low in 2008. Over that period, the Nordic nation lived through what policy makers dubbed “a lost decade” as the decimation of key industries — paper and consumer electronics — erased 100,000 jobs in an economy the size of Oregon.”
“Higher oil prices are expected to cause a rebound in UK inflation, adding to expectations that the Bank of England will carry out the rate hike it delayed in May in the coming months.”
“Italy’s new populist government will refuse to let a humanitarian boat carrying more than 600 refugees and migrants dock at any of its ports and has asked the tiny Mediterranean country of Malta to open its doors to the vessel, according to media reports.”
“As [auto] loan growth slows, [US banks] and other lenders have been tinkering with loan terms in an effort to gain more consumers. They are originating a greater share of loans with repayment periods of more than five years and, in some cases, extending loans to consumers who are stretching further to afford their purchases.”
The four horsemen:
“1. Oil price spike.
2. Fed interest rate spike and yield curve inversion.
3. Fiscal spending cutbacks by the national government.
4. Forward earnings dropping.”
“In the glut of cheap and easy money generated in the wake of the crash [of 2008], it has been the well-off, asset-rich and super-wealthy elite who have capitalised most as financial markets rocketed, while the cost of recovery has largely fallen on the unemployed, the less-well-off, lower-earning taxpayers and pensioners as fiscal austerity and debt deflation have taken their toll on growth and government finances. The burden should have been spread far more equitably.
“We are not out of danger yet…”