It’s a quiet day in markets with US Core CPI a non-event coming in bang on forecast at 2.3% yoy. Headlines were focused on Trump’s travels and the latest NATO Summit where a “very happy” Trump held a press conference confirming he can now “believe in NATO” whose members have committed to “up spending [by] $33bn” with a commitment from a “very unified and much stronger” Alliance to swiftly meet the NATO 2% of GDP spending target. Agreeableness does not a dealmaker make.
Now – as a disappointing Brexit blueprint is published and infighting continues, and as Trump‘s international trade brinkmanship wars on – President Trump has the delightful duty of travelling to Blighty for four sunny days of diplomacy, business and pleasure. Sandwiched between a weekend of golf in Scotland and a Black Tie Dinner at Blenheim Palace with Prime Minister May and business leaders, President Trump will take afternoon tea with the Queen (perhaps Windsor Castle will offer him a teacup of Diet Coke) and be honoured with a royal salute and performance of Star-Spangled Banner by the Coldstream Guards.
Maybe all the pomp and aggrandising will curry favour with this President who is used to getting what he wants and is sure to relish an audience with the Queen. The “special relationship” between the US and UK has gone through many ups and downs, even just through the reign of Elizabeth II, and it’s not entirely clear where on the scale current relations stand. Her lifetime has spanned 15 US Presidents and her reign has endured 12; she has met every President (sans Johnson) since Truman in 1951.
Many see no reason for why the US, and especially Trump, would help the UK out of a tight trade spot when he’s so focused on short-term domestic boost to trade and production. The three pillars (historical links, elitist ties and aligned interests) of this special relationship are always tested by a fourth that all too often demands sycophantic bowing to US foreign policy. The likelihood is that the US will have few trade treaty treats to offer, and those that are tabled may demand we toe the line on more of their growth hampering protectionist policies: which hopefully we won’t cave to. But we remain a nation of hope and if anyone can uncover a soft spot in the President it would surely be Her Majesty The Queen.