Showing posts with label National Trade Council. Show all posts
Showing posts with label National Trade Council. Show all posts

Friday, July 21, 2017

Steve Bannon In "Self-Imposed Exile" After Disputes With Trump's Inner Circle

Back in February when Time Magazine ran a cover dubbing Steve Bannon "The Great Manipulator," we wondered whether there was any truth to the assertion or if it was just a clever attempt to sow discord in the White House.  Here"s what we said previously in a post entitled "Is Steve Bannon "The Great Manipulator" Or Is It All Just More "Fake News"".





Various mainstream media outlets would like for you to believe there is discord in the White House between President Trump and Steve Bannon.  The typical narrative goes something like this:  Steve Bannon is "The Great Manipulator" (as Time Magazine described him) pulling all the strings from behind the scenes and Trump, the perpetual narcissist, is growing weary of competing for the spotlight.



The question is whether any of it is true or if this is just more "fake news" from a mainstream media intent upon doing anything possible to sow the White House discord they so desperately seek?



Of course, if the media were actively looking to leverage a "character flaw" of a President they see as intent upon always capturing the spotlight, putting staff members on the cover of prominent national magazine covers would be a great way to execute that plan.



Bannon



Of course, if sowing discord was the intent then it just may have worked.  As Politico points out today, following alleged disputes between Steve Bannon, Jared Kushner and others within Trump"s inner circle, Bannon has apparently resorted to living his daily life in "self-imposed exile" in the White House.





Steve Bannon has largely disappeared from the White House’s most sensitive policy debates — a dramatic about-face for an operative once characterized as the most powerful man in Washington.



Bannon, chastened by internal rivalries and by President Donald Trump’s growing suspicion that he is looking out for his own interests, is in a self-imposed exile, having chosen to step back from Trump’s inner circle for the sake of self-preservation, according to several White House advisers who spoke to POLITICO on the condition of anonymity to avoid angering a colleague.



He was absent from Trump’s recent trips to Europe for the G-20 summit and from his visit with French president Emmanuel Macron. Bannon’s non-attendance is all the more noteworthy given his interest in European history and politics, particularly his antipathy to the European Union.



As Politico notes, whereas Bannon was, not long ago, a near-constant presence in the Oval Office — often seen standing over Trump’s shoulder or sitting in on calls with world leaders — he now spends hours camped out at the conference table in the office of White House Chief of Staff Reince Priebus, reading the news or working on his phone.


Steve Bannon



Meanwhile, it"s apparently not just the Oval Office where Bannon"s presence has been limited as he"s pretty much removed himself from all policy discussions as well.





For Bannon, reduced visibility has brought reduced influence. On trade, his protectionist views are well known; though he initially joined a series of White House meetings begun in the spring to resolve disagreements between advisers with disparate views on the subject, from free traders like economic adviser Gary Cohn to protectionists like National Trade Council director Peter Navarro, he has not shown up at one in six weeks.



Nor did Bannon attend a major policy meeting on Tuesday on trade policy towards China, even though he is known to favor tough economic measures towards Beijing. He did, however, have time for a meeting with former Trump campaign aides David Bossie and Corey Lewandowski that focused on political issues, including how to woo back Republican senators who had abandoned Trump on health care.



Bannon has not been entirely absent from the West Wing’s heftiest policy discussions. On Monday, he attended a meeting of the NSC’s Principals Committee, which includes top officials from throughout the government, according to a senior White House aide. Though the president removed Bannon from the NSC in April, the aide estimated that Bannon has been at approximately 20 percent of the Principals Committee meetings since then. Bannon has reportedly dueled with McMaster over troop levels in Afghanistan and Iraq and Syria, in each case warning against deeper U.S. involvement.



“He follows everything closely. He knows what’s going on. I don’t know if he has a feeling that strategically it’s better if his hands aren’t directly on things, but he’s definitely in the fold on the legislative agenda,” said Sam Nunberg, a former Trump political adviser.



Of course, following controversies surrounding everyone from Bannon to Kellyanne Conway and Sean Spicer, there have been never-ending media reports of late suggesting that a shakeup of the White House staff is inevitable at some point in the not so distant future...a shakeup which Politico thinks could come next month...





But he now plays a surprisingly minor role in key administration policy debates. White House aides speculate about whether Bannon is trying to protect his job amidst long-running talk of a White House staff purge. Several West Wing advisers said they expect Trump to decide once and for all on a White House shakeup during his planned vacation next month, when he is expected to consult with friends beyond the Beltway. “If there is a big staff shakeup, it will be in August,” said a senior White House aide. “My guess is that Bannon probably sees that and doesn’t want to be in the press.”



...mission accomplished?

Saturday, February 18, 2017

Merkel Says There Is A "Problem" With The Euro, Blames Mario Draghi

Two weeks ago, German finance minister Wolfgang Schauble confirmed Donald Trump"s charge that the Euro is far "too low" for Germany, but said he is unable to do anything about it and instead blamed Mario Draghi. “The euro exchange rate is, strictly speaking, too low for the German economy’s competitive position,” he told Tagesspiegel on February 5. “When ECB chief Mario Draghi embarked on the expansive monetary policy, I told him he would drive up Germany’s export surplus . . . I promised then not to publicly criticise this [policy] course. But then I don’t want to be criticized for the consequences of this policy.”


Then, on Saturday, his boss German Chancellor Angela Merkel echoed her finance minister, and also admitted that the euro is indeed "too low" for Germany, but once again made clear that Berlin had no power to address this "problem" because monetary policy was set by the independent European Central Bank.


"We have at the moment in the euro zone of course a problem with the
value of the euro,
" Merkel said in an unusual foray into foreign
exchange rate policy.


Merkel also confirmed that Germany benefits from not having the Deutsche Mark, whose value would be far higher, and instead piggybacks on the weakness of other European nations, implicitly confirming recurring allegations that Germany benefits from the misery of Europe"s periphery.


"The ECB has a monetary policy that is not geared to Germany, rather it is tailored (to countries) from Portugal to Slovenia or Slovakia. If we still had the (German) D-Mark it would surely have a different value than the euro does at the moment. But this is an independent monetary policy over which I have no influence as German chancellor."


We showed this :fair value" divergence two weeks ago in the following chart:



Merkel"s comments addressed recent criticism by Peter Navarro, who has accused Germany of profiting from a "grossly undervalued" euro.  The chancellor made her remarks at the previously discussed Munich Security Conference, where Vice President Mike Pence was eager to reassure European allies of American "unwavering" support for NATO even as he asked the organization"s member states to pay up.


The euro has fallen nearly 25 percent against the dollar over the past three years, touching a 14-year low of $1.034 in January. But it has since risen to roughly $1.061. In late January, Peter Navarro, the head of Trump"s new National Trade Council, said the euro"s low valuation was giving Germany an edge over the United States and its European Union partners.


His comments came weeks after Trump himself said the dollar"s strength against the Chinese yuan "is killing us", deepening concerns that his administration could pursue a more confrontational, protectionist approach to trade.


Merkel and other German officials pushed back forcefully at the time, however in an odd reversal, first Germany"s finance minister, and now Merkel herself admits that Trump is right, at least when it comes to Germany, whose current account has continued to soar, and come to think of it, with Germany"s export dominance, so has the current account of Europe, which in December hit a new all time high.



A recent note by Bank of America"s Athanasios Vamvakidis confirmed how materially the EUR is undervalued relative to the USD:





Our models suggest that the Euro is undervalued, but only by about 2% in trade weighted terms. It was much more undervalued in the early days of QE, by 7%, and in the early 2000s, by 18%. However, EUR/USD is undervalued by 9.6% (Chart 4). This reflects the strength of the USD, which is overvalued by 13.4% in trade weighted terms. Compared with the rest of G10, the Euro looks cheap against NZD, CHF and JPY and expensive against NOK and SEK (Chart 5).





And so, not one but two strong hints by Germany"s most powerful politicians that Trump should take his fight against the "grossly undervalued" euro away from Berlin, and focus on Frankfurt and the ECB, and specifically Mario Draghi, will Trump"s inevitable focus on the European Central Bank - and its massive balance sheet...



... change the dynamics of European monetary policy, and prompt an even faster taper of Draghi"s asset purchases? We don"t know. We do know, however, that we will pay good money for a solid, decent twitter fight between @realDonaldTrump and the @ECB, in other USD or EUR.