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Over the weekend: North Korea talks backslide, Europe warns of tariff retaliation

With the US tariffs on China taking effect and the latest round of a US-China trade war in the books and in the rearview mirror, the weekend brought fresh trade concerns stemming from the US' current trade policies, and North Korea tensions are back on the rise as the recent visit from US State Secretary Mike Pompeo failed to achieve much of the new ground that US President Trump has been touting recently, while European leaders are beginning to come together against the US over trade, with France's Finance Minister Bruno Le Maire giving warning statements directed at the US.

The European Central Bank's (ECB)Weidmann, who is the current contender for the ECB President's seat, currently held by Mario Draghi, could see some contention for the position as new legal advice given to the ECB over the weekend implied that the ECB's Coeure could see an elevation to president, a move that many had previously thought impossible under current EU laws. Weidmann has broken away from the ECB on several key issues in the past, including quantitative easing policies. The ECB is expected to make a final decision on a new central bank president next year, but the search for loopholes that would allow the ECB to install a different candidate warns of a growing rift within Europe's key central banking authority.

US Secretary of State Mike Pompeo brushed off talks with North Korea that took place over Friday and Saturday, where the North Korean foreign ministry issued a scathing statement just hours after Pompeo's departure, claiming that US demands are going to lead to "a dangerous phase that might rattle our willingness for denuclearization that had been firm". Pompeo tried to undercut the blatant statement, saying the two sides had made "progress on almost all the central issues", but offered no specifics. The denuclearization of North Korea, a key platform for Donald Trump, appears to be running into trouble as North Korea becomes difficult to work with once again.

French Finance Minister Bruno Le Maire spoke on Sunday, delivering key warnings on trade protectionism aimed squarely at the Trump administration and giving another round of threats that the EU will retaliate if provoked on trade:

If tomorrow there is an increase in tariffs, like in the car industry, our reaction should be united and strong to show that Europe is a united and sovereign power. 

The question is no longer whether or not there will be a trade war, the war has already started. 

Let it be known that if we are attacked we will react collectively and we will react firmly.

 - Bruno Le Maire, via Reuters

Incoming Mexican Economy Minister Graciela Márquez spoke to the Financial Times over the weekend, stating that he believes US President Trump will be more willing to see a NAFTA deal as the current White House administration sees little forward momentum in most other avenues:

I think he's now willing to sign Nafta because he hasn't really had anything completed other than the Korean negotiation.

 - Graciela Márquez, via the Financial Times

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Joshua Gibson

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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