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Donald Trump, Turning the Other Cheek — to Iran and Justin Trudeau

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Donald Trump, Turning the Other Cheek — to Iran and Justin Trudeau

Author: Greg Valliere

June 21, 2019

WHY DID TRUMP PULL BACK ON IRANIAN STRIKES? We spoke this morning to a Mideast expert about the president’s apparent decision to call off air strikes on Iranian military bases. It was a typically outside-the-box move by Trump, our source said — probably designed to show wavering U.S. allies that Trump is willing to go the extra mile to defuse the Persian Gulf crisis.

THE WHITE HOUSE IS TORN by conflicting camps; hard-liners want aggressive air strikes, but Trump is an isolationist who is extremely averse to getting the U.S. involved in still another Mideast conflict. He thinks the region is a quagmire that has cost this country dearly in terms of lives and money — and his political base agrees.

TRUMP’S MESSAGE TO IRAN that negotiations are preferable probably fell on deaf ears in Tehran. The increasingly hard-line ayatollahs are desperate for sanctions relief; the Iranian economy is crippled. They want Western European public opinion on their side, so portraying the U.S. as warmongers may win them some support.

IF THERE’S A THEME THAT UNITES BOTH COUNTRIES, it’s that neither seems to have a clear exit strategy. We think this crisis will not cool off soon — more tension near the Strait of Hormuz is likely, with the risk that an incident at sea could spin out of control. Last night’s reversal by the U.S. most definitely has not eliminated the threat of a conflict.

AS FOR TRUMP, he probably has infuriated hard liners like Lindsey Graham and John Bolton, but we give the president credit. If the U.S. ultimately launches air strikes, he can say — credibly — that the U.S. made a good faith effort to negotiate, only to have the Iranians rebuff any effort to talk.

* * * * *
JUSTIN TRUDEAU’S NEW FRIEND: There’s been little love between Trump and Canadian Prime Minister Justin Trudeau, but the two had a cordial meeting yesterday at the White House. They agreed that Nancy Pelosi should pick up the pace on negotiations on a NAFTA replacement, called the USMCA.

PELOSI, WHO’S LOCKED IN A BITTER PERSONAL FEUD with Trump, does not want to do him any favors, so she sounded non-committal on the USMCA when she met with Trudeau yesterday. We suspect she views this issue as a bargaining chip that she can play later this year when budget battles erupt.

RATIFICATION OF THE USMCA DEAL is still likely, but no time soon; Democrats still insist on opening up the treaty to environmental and labor reforms. In the meantime, it’s encouraging to see Trump and Trudeau have a civil meeting — could this be a good omen for constructive talks late next week between Trump and other world leaders like Chinese president Xi? U.S. and Chinese trade “sherpas” are already laying the groundwork for talks designed to jump-start trade negotiations.


The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.

The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.

AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.

About AGF Management Limited

Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.

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Written by

Greg Valliere

Greg Valliere

Chief U.S. Policy Strategist

AGF Investments

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