The Bully Pulpit or Just Bullying

Investment Analysis Clubs Macro Economic Trends and Risks
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I reference the above to US-EU trade. A macroeconomic issue.

European Commission President Ursula von der Leyen’s dash to Donald Trump’s Turnberry golf resort in Scotland last month to seal a highly unbalanced trade deal has raised fears among politicians and analysts that Europe has lost the leverage that it once thought it had as a leading global trade power.

Von der Leyen’s critics were quick to assert that accepting Trump’s 15 percent tariff on most European goods amounted to an act of “submission,” a “clear-cut political defeat for the EU,” and an “ideological and moral capitulation.”

If she had hoped that would keep the U.S. president at bay, a rude awakening was in store. With the ink barely dry on the trade deal, Trump doubled down on Monday by threatening to impose new tariffs on the EU over digital regulations that would hit America’s tech giants. If the EU didn’t fall into line, the U.S. would stop exporting vital microchip technologies, he warned.

His diatribe came less than a week after Brussels believed it had won a written guarantee from Washington that its digital rulebook — and sovereignty — were safe.

The EU has no cards to play. In fact, they are negotiating from a position of weakness relative to the USA.

The EU nations have too much debt:see my August 16 post “Apparently Accelerating National Debt is not Just a US Problem” about EU’s poor economic situation. Compounded by the fact that the EU has demographic issues and needs to ramp up defense spending.

The Politico author of the article referred to the Treaty of Nanking when the Great powers of Europe ran roughshod over China. Now they are receiving such treatment.

Will succeeding presidents ease up on the EU? Or will they just continue using our advantage as succeeding presidents did in the expansion of NATO eastward.

Perhaps Europe’s time of influence has pasted. Just as Russia’s influence will ebb in a decade due to economic and demographic issue.

The future focus of the US is in the Pacific-Asia region.

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NATO/EU continue to placate USA.

Sigh. This brings to mind Carole King’s song “It’s Too Late”.

Read the section titled “A Bridge Too Far?”.

When trying to raise defence spending, governments that don’t really want to do it but feel pressured to by the US have one seemingly enticing option: creative accounting. They can put all sorts of different items down as military spending which they were planning to build or spend on anyways.

The problem, however, is that the US is watching, and has its own opinions about what it deems frivolous military spending. Italy’s government recently went on the record to deny that it would count money spent building a bridge over the strait of Messina, between Sicily and Calabria, towards its new Nato spending target.

Perhaps not coincidentally, the clarification of Italy’s position came after Matthew Whitaker, the US’s ambassador to Nato, publicly poured cold water on the idea.

If European Nato countries want to stay on its good side, the interpretation of defence spending that they will have to stick to is the US’s, not theirs.

One big sticking point we can see coming up, for example, is military pensions. In some countries, they already count for a large proportion of overall military spending. Almost a fifth of all Italian defence spending, for example, is on soldiers’ pensions. In France, it is slightly lower, but still high comparatively at 16%.

As these costs increase, both in absolute terms and relative to military budgets, the European countries might argue for them counting as extra military spending. We can see the US taking a different view, insisting that only extra tanks, planes, missiles, fortifications, and actually serving soldiers count.

Regardless of the fairness too, what the US says will go. The problem is that we are not doing this extra spending to try and make ourselves truly independent of the US. We are doing it to try and prolong a transatlantic relationship that is, if not truly dead, nothing like what it previously was. We expect that, decades ahead, this will be viewed as one of Europe’s gravest strategic errors.

Stick a fork in the “transatlantic relationship”. It’s over. “Its Too Late” Baby.

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By George, Europe finally has got it.

Home to just 5 percent of the global population and a widening economic gap with other major powers, Europe isn’t just facing up to a world of continental empires but is at real risk of becoming America’s vassal.

This became apparent after the nonreciprocal concessions made to U.S. President Donald Trump on defense spending and trade, as well as Europe’s acceptance of a junior role in handling the war in Ukraine. Moreover, from Gaza to Nagorno-Karabakh, the EU’s involvement in conflicts abroad has become largely irrelevant, either due to its lack of credible international standing or unity.

For now, an unlikely alliance of Trump sympathizers and nostalgic Atlanticists appear to be dominating both the European Council and the Commission. Thus, the prevailing line has been to flatter and appease the U.S. president in the hopes of damage control, in turn fostering our political, strategic and even economic dependency on Washington — and it’s hardly working.

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Unfortunately, you had a typo that I fixed for you.

Even if we get a different administration in a few years, things are not likely to ever be the same as Europe will (for at least the foreseeable future) not be able to depend on us for more than 2-4 years at a time.

Even worse, Europe can’t be assured that they won’t be arbitrarily punished if they are more friendly to a subsequent administration.

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