over the weekend, Saturday night to be precise, I joined several university colleagues for an annual get together in Cambridge. In total, there’s about 20 of us, not every year as everyone available, but as we grow older, and reminisce more about our lives, more and more are present. This year, the entire group was together for the first time in almost a decade.
One of the participant works for the government. His career has not been spectacular, but has been consistent through all administration over the past 20 years. He is considered by all as an expert in his field. We were sitting together, nursing a brandy, when asked point blank, how the British government had achieved a trade agreement with the Americans in such a short period of time.
his answer was telling, he said well the home team needed a win, and Trump also needed a win, so we signed a shorthand version of a trade agreement between Britain and America, that covered about two dozen aspects of trade. It is by no me comprehensive, and we are certain it will lead to further friction.
I looked at my friend in disbelief, he continued by saying, there’s no way the government can have a trade agreement in 90 days, the fastest I ever saw, he said, was about nine months, it was done between Japan and the United States, and basically in Japan said yes to everything. Despite Japan’s total compliance, it still took nine months. In addition, there’s really no one to talk to in the US government, They have secretaries and under secretaries, but the bench is very shallow, the technicians are all gone and have not been replaced.
So what does that mean, I asked? It means, that sooner rather than later, Britain will be in a trade war with America again, because The administration does not understand what they agreed to. And no one is willing to explain it to them.
he then continued, and said look at the Europeans, they try to sit down for serious trade, talks with their counterparts in the US, and there was no one around. Phones were not answered. Emails were not opened. There’s no one on the other side to talk to. He continued, it’s the reality of administration which is 100% govern by the last 15 minutes of the presidents thoughts. In his mind, he cannot conceived that conversation can last for more than an hour. He thinks that the trade relationship between Europe and America is like discussing the supply of Toilet bowls in one of his Las Vegas hotels.
What my friend was saying, over our many drinks, was that trade war between America and the rest of the world was a certainty going forward. In large part, it explains the weakness of the US dollar. People, governments, are shoring up their defences. Getting ready for the obvious outcome. There’s a reason Brussel has been talking about a new trading order that excludes America. It’s not that people don’t want to trade with America, but it’s perceived as flighty and unreliable. Therefore, it cannot be a core partner.
aside from that, it was a great evening. But it was a cautionary tale, for the first six months of the Trump administration are just the beginning of the chaos. We can expect over the next 3 1/2 years.. The reality is that the US government, or rather Donald Trump, are trying to change the world order in increments of 90 days. No one inside the administration is able to tell the man, that things take more than 90 days.
Trump idea that everything can be resolved by the application of new tariffs is faulty, but no one will tell him. Because no one inside administration will talk to power, because they have been selected specifically because they have drunk the Kool-Aid.
The inclusion in this big beautiful bill, that Donald Trump sign on Friday, of provisions to impose additional withholding taxes, on dividends and interest, is proof , that no one is able to tell the administration, that trying to tax people who are trying to convince to lend to you is just a stupid idea.
Interesting times, as the Chinese would say
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