Last week, the focus among traders, investors, and policymakers was in Europe, where Donald Trump travelled for meetings with American allies. The first meeting was with the NATO leaders where he condemned the countries for low spending on defence. He singled out Germany for paying a lower fee to defence and for building a gas pipeline from Russia, the enemy of NATO members. After that, the president travelled to the United Kingdom where he met with Theresa May. Before the main meeting, his interview with Rupert Murdoch’s newspaper was published. On Friday, he met with the queen and then travelled to Scotland.
During the weekend, the president stayed at Scotland, where he consulted with advisors and received a phone call from Israel’s Benjamin Netanyahu on his meeting with Vladmir Putin of Russia. This meeting will happen in Helsinki, Finland and will be aimed at resetting the relationships between the two countries. Over the weekend, democratic officials in Washington called on the president to cancel the meeting with Putin. On the other hand, republicans asked him to go on with the meeting and advised him to be tough. On Sunday, he said that he had low expectations for the meeting.
On Saturday, Theresa May was interviewed with BBC and was asked about the advice she had received from Donald Trump. The US president had told her to ignore negotiating with Brussels and instead sue them. This was a tough choice for a prime minister who is embattled. Last week, she lost two of her key ministers and there are questions about whether she will hold on to power for longer. This week, the debate on Brexit will continue in parliament where the opposing sides will talk about the government’s proposals. Pro-Brexit legislators believe that the proposal weakens the country while pro-Europe support the proposal for keeping the ties with Europe intact.
In Washington, legislators aired their concerns about the ongoing trade conflict between the United States and other countries. The concerns grew after the Trump administration released a new proposal to put tariffs on Chinese goods worth more than $200 billion. This proposal was met with a bipartisan vote to protest the tariffs and the escalation on trade. On Sunday, Kevin Brady, a senior republican representative asked the president to convene an urgent meeting with China’s president, Xi Jinping. The meeting will be aimed at addressing the ongoing trade conflict and will come after their junior’s efforts to find a middle ground failed.
The head of Germany’s central bank, Jens Weidmann issued a warning to the government. In a report by German newspaper, Handelsblatt, the governor cautioned the government that the ongoing trade escalation was presenting more risks to the economy. This came a few months after the central bank lowered its growth forecast for the year while leaving the outlook as stable. In recent weeks, data from government and private sector has shown that the trade crisis is having problems with industrial output and factory orders falling.