President Trump heads to Europe on Tuesday for a series of meetings in several EU nations.  On Wednesday and Thursday (11th/12th) the NATO summit.  On Thursday and Friday (12th/13th) a U.K. Visit. Saturday and Sunday (14th/15th) a visit to Scotland; and Monday the 16th a summit with Russia’s Vladimir Putin in Helsinki Finland.

The EU and U.S. media are one-upping themselves every few hours with apoplectic proclamations about horrible Trump and the high-minded need to save the angelic NATO mission of unbridled altruism; a liberally canonized Saint Merkel of Deutschland; as well as Londonistan’s Queen Elizabeth and Prime Minister Theresa May, from the horrors of a swaggering U.S. vulgarian…  Cue the audio visual:

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Seriously, after a while all of these faux-intellectuals begin to sound like Charlie Brown’s teacher. “The louder they spoke of their honor, the faster we counted the spoons“…
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With McCain dying, and Corker and Flake retiring, the Decepticon side of the deep swamp is being purged.  President Trump’s direct America-First policies and pragmatic common sense has severed one head from Cerberus, the three headed hound protecting Hades, DC.
In the geopolitical realm President Trump is using the U.S. atomic sledgehammer to reset decades of insufferable economic policy constructed specifically to the financial benefit of ideological ‘allies’; who have elevated their financial standing on the backs of U.S. deficits.
With Decepticons weakened, and many in DC realizing President Trump isn’t going to stop swinging the battle axe until the last one is crushed, politicians like Lindsey Graham have begun talking more truthfully about issues.  Watch in this interview as Graham is questioned about North Korea, and he immediately -and somewhat surprisingly- accurately identifies the core issue…. it ain’t North Korea.

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White House Office of Trade and Manufacturing Policy Director Peter Navarro appeared on Fox Business last night to outline the U.S. position in the ongoing trade reset against communist China.  Almost all of the financial media and economic punditry are intentionally obfuscating the underlying nature of China’s economic model.
China is a communist central government controlled economic system.  Free-market principles do not apply when dealing with China; therefore trade strategies based on ‘free markets’ cannot succeed against the centralized planning of a communist regime.

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President Donald Trump meets with Prime Minister of the Netherlands Mark Rutte in the Oval Office at the White House.
During remarks President Trump notes a phone call with Mexico’s winning presidential candidate Andres Manuel Lopez Obrador; and ongoing interviews/discussions with possible Supreme Court nominees.  [Four SCOTUS nominees were interviewed today and three or four more will come in the next few days.]
On the trade front President Trump notes the ongoing issues with the WTO (World Trading Organization), and a possible confrontation looming over structural changes needed to reset global trade disparities and establish open markets.

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Mexico’s president-elect Andres Manuel Lopez Obrador “AMLO” easily won yesterday’s election with 54% of the vote; the highest vote total in three decades.  In addition his MORENA party won an absolute majority in both the Mexican Senate (38% +/-) and the Chamber of Deputies (38% +/-).

The multinational financial community is in the process of evaluating how the nationalist win will impact all prior investing.  One of the key issues is NAFTA.  Multinational corporations have poured billions into Mexico as a structural method to utilize the trade deal to gain access to the U.S. market.
Despite his campaign position, AMLO is now affirming a positive intention to renegotiate NAFTA; however, he is speaking from both sides of the current issue.  Example:

[Today] Lopez Obrador said he supports reaching a deal on renegotiating the North American Free Trade Agreement with the United States and Canada.
[…]  Lopez Obrador said he will propose that his own team of experts be included in the talks. The winning candidate said he will make that proposal in a meeting Tuesday with current President Enrique Pena Nieto.

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White House national security adviser John Bolton appears on Face The Nation with Margaret Brennan to discuss North Korea and Russia.  Within the interview Bolton says the U.S. could dismantle North Korea’s nuclear and ballistic missile programs within a year if the North Koreans committed to scrapping their arsenal in accordance with the agreement reached in Singapore last month.

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The BBC’s condescending Emily Maitlis demands support for the European Union and challenges the sovereign authority of Hungary to self-determination.   Hungarian Foreign Minister Péter Szijjártó was having none of that nonsense, and pushed back against little Miss feelings.

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This occurs on the heels of Italy rebuking the EU immigration platform; and a weakened German Chancellor Angela Merkel having to beg political allies in Bavaria for support:

BERLIN (Reuters) – German Chancellor Angela Merkel’s political future rests in the hands of the Christian Social Union (CSU) on Sunday, when the Bavarian party’s leadership meets to decide whether to accept migration deals she brought back from Brussels.

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Within the German economy the auto-sector holds the largest political influence.  Because of this dynamic all German politicians kneel at the knee of the big industrial auto manufacturers.  It has been said that losing support from within the auto-sector is much worse on a German politician than losing support from party or parliament.
Because of this dynamic; and specifically because the German auto-sector is dependent on the United States as their biggest customer, President Trump holds leverage over German Chancellor Angela Merkel.  This makes Fraulein Merkel unhappy.

President Trump wants three EU issues resolved: 1) Germany to contribute the minimum 2% of GDP for their own NATO defense.  2) Germany/EU to support enhanced sanctions against Iran; and  3) President Trump wants all German/EU protectionist trade barriers and tariffs lowered or eliminated – and new trade deals negotiated.
To gain momentum on these initiatives, President Trump is using the economics of trade as leverage.  Trump has suggested a 20% tariff on all EU automobiles shipped into the U.S. [The same standard now likely proposed toward Canada]  The German auto-sector, and as a consequence the German economy, simply cannot survive without low cost access to the U.S. market, their biggest customer.
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Today Canada released an updated list of retaliatory tariffs designed as countermeasures to the U.S. Steel and Aluminum tariffs [SEE HERE] which will begin Sunday, July 1st.
Additionally, Foreign Minister Chrystia Freeland, Innovation Minister Navdeep Bains, and Employment and Labour Minister Patty Hajdu, announced they would initiate an emergency program to use Canadian taxes compensate workers, expand unemployment benefits, and subsidize impacted industry.  Yes, in a transparent display of political ideology (throwing capitalism directly out the window), Canada doubles-down on centralized government subsidies to offset market impacts.   Brilliant ‘eh!

Chrystia Freeland made the announcement on the floor of a Hamilton steel factory Friday. In a rare backdrop, Ms. Freeland actually entered a factory with machines and things, to deliver the carefully choreographed political message (video below – watch the last minute to understand).
Team U.S.A. have applied tariffs to Canadian softwood lumber, Steel and Aluminum as Canada refuses to negotiate new terms for NAFTA where North American products are prioritized.  Canada demands the ability to continue importing Asian, mostly Chinese, products for their assembly-based market.
With the latest counter-move by Justin and Chrystia from Canada, it is increasingly likely President Trump will levy a 20% tariff on imported Canadian automobiles.  Last month (May) the Canadian economy dropped over 31,000 Full-Time jobs.
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Earlier today President Trump delivered remarks celebrating the six month anniversary of the U.S. Tax Cuts and Jobs Act.   Today is also the last business day of the second quarter.

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Long time CTH readers might note in 2015 when we first saw candidate Trump’s economic policy initiatives, we began outlining the sequential economic possibilities if President Trump won. So far, all is going according to plan – STUNNINGLY According To Plan.  Seriously, go back and look –FEBRUARY 2016– two-and-a-half years ago.
The possibilities were obvious.  As a result we predicted repeatedly that Q2 of 2018 would be the beginning of the largest period of U.S. GDP and wage growth in the past 30 years.  Q2 2018 ends tomorrow and the results of Q2 will be announced in the next few weeks.  Everything is happening in a logical sequence as a result of Trump’s MAGAnomic plans.
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