How much hope did Trump offer Meloni?

In early March Donald Trump said Elon Musk was doing “an amazing job.” Last week he said Governor Gretchen Whitmer of Michigan was doing an “excellent job.” On Thursday it was the turn of Italian prime minister Giorgia Meloni during her meeting at the White House. Trump declared that she was “doing a fantastic job.” 

What Trump found so fantastic was never specified, but he tossed a variety of bouquets in Meloni’s direction. Not least was his vow that “there will be a trade deal, 100 percent” with the European Union. It was qualified, however, by Trump’s claim that he’s in no rush to strike a deal with Ursula “the West no longer exists as we knew it no longer exists” von der Leyen, the president of the European Commission. 

Trump is exuding confidence that he can singlehandedly create an American NEP (New Economic Policy), but over the past week, the bond market has been punishing America for Trump’s trade tergiversations. One day he says he’s imposing sweeping tariffs on Europe. The next he blinks. And so on. The market doesn’t like uncertainty but it’s certainly what Trump does. He wants to keep friend and foe off balance.  

Despite Trump’s longstanding claim that America has been plundered by its so-called allies, the reverse is the case. Over the past several decades, Washington’s enormous deficits have been financed, more or less, by foreign buyers of American debt. In raising doubts about America’s economic and political stability, Trump has created capital flight from America to Europe. Not good. Not good at all, as Trump is often wont to say. 

Nor is this: on Thursday Trump breathed fire about Federal Reserve chairman Jay Powell who he’s preparing to turn into his fall guy should the economy crater. Powell signaled on Wednesday that the Fed was not going to move to slash rates in the hopes of juicing the economy and the faltering stock market. Instead, he pointed to the inflationary pressures of Trump’s tariff policy. Trump was indignant. “Powell’s termination,” he wrote, “cannot come fast enough!” Good grief. If there is one recipe for turning American into Weimar Germany, it would be firing Powell and embracing an easy money policy, one that would likely acquaint Americans with the practice of carting money in wheelbarrows to pay for a carton of eggs or loaf of bread. 

For his part, Trump seems unruffled by the prospect of higher inflation. Previously, he has referred to a recession as the financial equivalent of a dose of medicine. On Thursday, he retreated to denial. The idea that inflation had picked up was fake news. Grocery prices are down. George Orwell once described the Soviet Union as a place where yesterday’s weather could be altered by decree. At times Trump appears to have something similar in mind. 

For all his claims that he’s in no hurry to strike a deal, however, Trump is under pressure. The first deal that he’s apparently going to sign is a mineral one with Ukraine. “I assume they’re going to live up to the deal, so we’ll see, but we have a deal on that,” Trump said during his Oval Office meeting with Meloni. Will it be the first of many? Striking one with Europe may not be that difficult. China, America’s biggest trading partner, is a different matter. So far, Beijing has shown no signs that it’s in any rush to accommodate Trump. If the stock market continues to plunge and the bond market gyrates, Trump may discover that he’s the one who doesn’t hold the cards.