IT was just a matter of time before the Western media’s proclivity to list the most powerful, the richest, and most anything among people and things would reach the world of chronology and dates. If leaders can be rated according to power and influence, so why not rate dates also according to importance.
The US media is testing its hunch that this week (June 10 – June 17) may be the “most important week of the year.”
Bloomberg started things rolling when it told its readers: ”Brace for the world economy’s most important week of the year.”
Bloomberg got the idea from Bank of America Corp. Strategists, which asked clients in a report ahead of five days of presidential standoffs, trade tensions and central bank meetings.
The bank noted that each event carries the potential to propel financial markets and shape the outlook for global growth.
Bloomberg figures that the confluence of so many major events taking place in the span of one week, and with each event having the power to disrupt or influence the markets for better or worse, makes this period unprecedented or extraordinary.
With the Group of 7 (G-7) and Western powers summiting in Canada and the Eastern bloc summiting in China at the same time and with Donald Trump meeting with Kim Jung-un in Singapore, nobody needs a map or a crystal ball to realize that these manmade events have the comparable power of a cyclone or quake.
Discord in Canada
President Trump’s chief economic adviser accused Canadian Prime Minister Justin Trudeau of stabbing the US and fellow G-7 negotiators in the back with “amateurish” verbal attacks during a domestic press conference.
But the president also felt he couldn’t be pushed around by the Canadian leader on the cusp of a major summit with the North Korean dictator Kim.
After Trump’s departure from the G-7, Mr. Trudeau held a press conference Saturday stating that all of the member nations, including the US, had signed a communique pledging to lower tariffs and other trade barriers. The US had imposed tariffs on steel and aluminum under the guise of national security, noting that Canadians stood “shoulder to shoulder” with Americans in overseas wars.
“Canadians, we’re polite, we’re reasonable, but we also will not be pushed around,” Mr. Trudeau said.
On Twitter, Trump called Trudeau’s remarks “very dishonest and weak,” citing Canada’s imposition of tariffs on dairy products. He instructed the US representatives not to sign the communique from the summit, raising new questions about Trump’s strained relationship with the leaders of historic allies.
Harmony in Qingdao
While Trump was leaving the Group of Seven in turmoil during the weekend, China’s Xi Jinping and Russia’s Vladimir Putin were putting up a different show on the other side of the world – in Qindao, China.
On Sunday, Xi and Putin toasted the expansion of the Shanghai Cooperation Organization, an eight-member bloc designed to coordinate security policies across Asia. The group, which welcomed new members India and Pakistan, as well as the presidents of Iran and Mongolia, pledged to increase cooperation on energy and agriculture and create more favorable conditions on trade and investment.
As the scope of the breakdown over US tariffs became clear, Xi took the podium to criticize what he said were new forms of “unilateralism” and “protectionism.”
China’s state-run media had fun with the contrasting images of the feuding democratic states and the orderly proceedings of the China- and Russian-led bloc.
Trump-Kim summit in Singapore
Donald Trump and Kim Jong-un will formally meet in Singapore today for their on-off summit, the first such meeting ever.
Trump has predicted “great success” and said it’s possible he could sign an agreement with Kim to formally end the Korean War.
Kim is taking a big gamble in leaving home for the summit with Trump. North Korea’s leader has left the bubble of his locked-down stronghold in Pyongyang. There’s just no precedent in North Korea’s history for Kim’s move.
Kim’s despot father only traveled out of the country by train, and rarely at that, because of fears of assassination. Kim, up until his recent high-profile summit with South Korea’s president on the southern side of their shared border, has usually hunkered down behind his vast propaganda and security services, or made short trips to autocrat-friendly China.
Other events of the week
UK Prime Minister Theresa May’s flagship Brexit legislation returns to the lower House of Commons after receiving a battering in the upper House of Lords, where it was amended 15 times. Ministers will be trying to overturn most of those defeats, with a combination of compromises and attempts to win rebel pro-EU lawmakers round. In two days of debating and votes on Tuesday and Wednesday, the key questions are about what kind of vote Parliament gets on the final Brexit deal, and whether Britain should be trying to stay in a customs union.
Given Theresa May’s narrow working majority, a handful of Tory backbenchers are enough to make or break her Brexit plans.
On Wednesday. the US Federal Reserve is set to hike its benchmark interest rate for a second time this year. Chairman Jerome Powell holds a press conference, and he and his colleagues will also publish new projections which could show them tilting toward four increases this year as a whole, rather than the three they hinted at in March. Elsewhere, Argentina’s central bank is expected to keep its benchmark rate of 40 percent as it tries to stabilize the peso.
The European Central Bank is shifting closer to the end of its bond-buying program with Thursday’s meeting of policy makers poised to hold the first formal talks on when and how to do it. About a third of respondents to a Bloomberg survey of economists predicted President Mario Draghi will set an end-date for purchases today, while 46 percent said he will wait until July to reveal details.
The Bank of Japan is likely to end the week exactly where it started with no tightening of monetary policy on the agenda. The BOJ is still buying vast quantities of Japanese government bonds and will have been encouraged to keep doing so by data showing it’s still far off its 2 percent inflation target and that the economy shrank in the first quarter.
June 15 is the deadline for the US to publish the final list of Chinese products subject to $50 billion in tariffs, which could be imposed shortly after. Also today, the Russian central bank sets interest rates, with economists currently leaning toward no change in the 7.25 percent benchmark although there is a chance of a cut.
No single event will have greater impact and importance than the Trump-Kim summit.
This alone, if it results in peace in the Korean peninsula, will surpass in importance the achievements or failures of the other summits.