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Wed 9 Jan 2019 / North America

Back to pre-1914 Fortress America

When Trump was elected in November 2016, I said he would be a unilateralist. In that spirit, he has redefined the aims of US foreign policy. We are back to pre-1914 'Fortress America'. The US entered the first world war only because of the German U-boat sinking of the RMS Lusitania. It entered the second only after the bombing of Pearl Harbor. Trump wants to confine US defence activity strictly to defend national interests. He no longer wishes to run the world, and has ended the doctrine of the US as global policeman codified by President John Kennedy in 1961.

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Wed 9 Jan 2019 / Global

Non-American should lead World Bank

Since the creation of the International Monetary Fund and World Bank at the end of the second world war, an American has led the Bank (Jim Yong Kim, who announced his resignation from the presidency on Monday, is Korean-American) and a European the IMF. This convention was logical in the post-war decades when the major advanced economies dominated the world economy, but the changing global landscape makes it outdated. To date, the duopoly has met no effective challenge. It is time for a change.

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Tue 8 Jan 2019 / Europe

British politics caught in zugzwang

The various pro- and anti-Brexit camps in the House of Commons are all caught in a sort of zugzwang, to borrow the phrase from chess – they are safe if they do nothing, but if any camp forces a vote it may end up triggering exactly the outcome it fears most. Prime Minister Theresa May appears to have the initiative, in that she can control the business of the Commons and decide what MPs vote on, when and in what order. But whenever she makes a move, whatever that move is, she risks weakening her position. And she cannot do nothing forever.

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Mon 31 Dec 2018

Why Trump is wrong on Powell

President Trump has shown spurious reasoning in attacking the Fed and Chairman Jay Powell. A reasonable debate can be conducted about the Fed rate hike. But all should recognise that both sides have plausible arguments, writes Mark Sobel. A 25 basis point rise will not kill the golden goose of the US economy.

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Mon 24 Dec 2018

US tax cuts must take the blame

After Wednesday's interest rate increase, Fed Chair Jerome Powell is likely to get the blame for the bursting of the stock market bubble. But it was Trump who introduced a large unfunded tax cut that made unavoidable the interest rate increases that have now brought down the stock market, writes Desmond Lachman.

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Fri 21 Dec 2018 / Global

US-China trade war postponed

On the sidelines of the G20 meeting at the beginning of December, US President Donald Trump and Chinese President Xi Jinping agreed to suspend announced tariff increases for 90 days – from 1 January to 1 April 2019 – while undertaking negotiations to avoid a trade war. In the light of the US midterm election results, Trump is turning his attention towards retaining the presidency in 2020. It may be best for him to enter into negotiations with China, play for drama, keep focus on his 'America first' initiative and, ultimately, conclude an agreement.

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Wed 19 Dec 2018

Radical risk-sharing rethink

The European Central Bank has decided a gradual approach to adjusting its reinvestments of maturing bonds according to its adjusted capital key. Now that its four-year €2.6tn bond-buying programme is coming to an end, there are more overt and effective ways to stabilise monetary union, through a more concentrated form of risk-sharing, writes Marcello Minenna.

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Mon 17 Dec 2018

Trump's trade policies backfiring

The US trade deficit stands at its highest level in the past 10 years and shows every sign of rising. There are at least three reasons why the US trade deficit is widening and will continue to do so despite increased import protection, writes Desmond Lachman.

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Fri 14 Dec 2018 / Europe

Power vacuum points to no-deal Brexit

With her back to the wall, Theresa May seems to have forged a strategy to achieve her goals, however lofty or improbable they seem. If the opposition parties in parliament and those Conservatives who voted against her in Wednesday's leadership challenge stand firm against May, the prime minister's deal with Europe will fail. A power vacuum seems likely to arise in London. Unless May miraculously reimposes her will over the Conservative party and convinces parliament of the value of her deal, Britain will drift towards a no-deal Brexit.

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Tue 11 Dec 2018 / Europe

Brexit tumult recalls Black Wednesday

The UK is in a fast-changing situation with much at stake. The degree of uncertainty over the future path of government policy on Brexit calls to mind the days running up to Black Wednesday in September 1992, when the UK attempted to raise base rates twice to defend the pound before crashing out of the European exchange rate mechanism. Prime Minister Theresa May has outlined three options for the UK as it looks to exit the European Union: her deal, no deal, or no Brexit at all. Though none seems probable, one of them must happen.

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