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Trump Reminds Europe that a World of Chaos Has Arrived

Trump Reminds Europe that a World of Chaos Has Arrived (article)

Trump Stormed into Europe and Repeated Lines from Peter Zeihan and Ian Bremmer……

While post-WWII institutions show clear signs of instability, NATO`s future as a strong and unified entity is questioned, the European Union disagreeing on political issues – especially the migrant crisis, and of course with the British fighting for a Brexit deal that doesn`t expose the UK to the US (note that a hard Brexit would force a strong US trade deal, and expose London to an unpredictable Trump), many think that an injection of stability was needed this week to bring calm to the UK and the continent in the form of a cool, measured leader.

Enter President Donald J. Trump, who touched down in Europe, and was of course his usual self. He clearly had a well-scripted plan to dismantle Germany and Angela Merkel, ask NATO members to pay up 38 billion dollars of “money owed” and after reminding PM May that she should listen to his advice on Brexit, then performed a perfectly Trump-esque 180 degree turn and praised her for doing a wonderful job. In the end, he seemed very pro-May, very anti-Merkel. Our partners counted 3 open attacks on Germany and Merkel, clearly targeting her leadership position (he even said that Germany gets a free ride from the US while spending billions of dollars on Russian energy, filling Putin`s pockets). In true Trump form, after a series of threats and insults, he jumped on Air Force One and played several rounds of golf at his course in the north. He did remind everyone that he loves the United Kingdom because his mother was from Scotland. Trump left the Europeans wondering, what in the world just happened?

Here`s what just happened.
The Global Order is out of date, it is a system designed and built in a post WWII world and it is failing, and has been breaking apart since 2008. The American pubic has lost interest in managing the global system and without US playing policeman and protector of free trade in the world, the system falls apart. Trump is only accelerating the process by offering a bilateral deal with the United Kingdom. The world will fracture, the global trading system will turn into a series of regional or bilateral free trade treaties. An example is that Japan just signed a landmark deal with the EU to reduce tariffs of over 90 percent in products from fine wines, to cars and much more. This is the new normal and President Trump is the deal maker that people do not want to do business with, but in most cases have very few options.

We are Classiarius feel that the United States, Canada and Mexico will take the lead. Here`s a scenario.
1. Tighten up the alliance called NAFTA – please discount the noise from the White House – as NAFTA is the most powerful and secure food, energy and trading alliance world history.
2. Using the NAFTA Alliance as a negotiating tool, the US, Canada and Mexico can offer energy security, food security and access to 500 million consumers. South Korea, Japan, China and 50 other countries will be happy to trade with NAFTA, as it will be the new security alliance for any single country that plugs into the system. In short, the old global Bretton Woods system will pivot and break down into a NAFTA and Friends System.

A geopolitical scientist named Peter Zeihan has been writing books about the chaos we are now seeing in the world. Another guru named Ian Bremmer wrote a book in 2012 called a G-ZERO World that talks about the winners and losers when each country is forced to go out on its own once the US pulls out of the global management business and China steps in. Both of these gurus have, for several years now, pointed out the importance of NAFTA and the US/Canada/Mexico alliance that will be fully energy independent and overtake the Middle East and Russia as a major supplier of energy to the world.

At Classiarius, once the initial Trump noise fades, NAFTA will continue to thrive and will be the template for the future, others in Asia will copy this system.

Team Classiarius



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