RUTHFULLY YOURS

Next week’s G-20 meeting in Hamburg promises to be more interesting than usual. The expected unhinged leftist crowds are already much in evidence and could be counted on for a dose of violence and turmoil. More seriously, this time the fireworks are more likely to come from inside the conference rooms than outside. In preparation for the event, the German chancellor Angela Merkel has already accused Trump of “Abshottung” (door closure or foreclosure) and promised to challenge him directly on a number of issues. Whether she already feels like the leader of the free world (as many pundits are trying to convince her that she actually is), or not is unclear, but she obviously has Trump in mind when she argues that “abshottung” from “climate change, terrorism and migration” is a huge mistake, or when she promises to conduct negotiations “so that they serve the Paris Agreements.” No wonder her party’s election platform for the first time does not mention America as Germany’s key ally and friend.

If there was any surprise in this, it came earlier when the German chancellor openly sided with a blatantly pro-Russian project called Nord Stream 2 that could seriously damage the European Union. Like Nord Stream 1, Nord Stream 2 is a Russian diversionary pipeline designed to bypass Ukraine and Eastern Europe, damage them financially, and enhance Putin’s political clout and the dependence of Western Europe on Gazprom. This was clearly seen as a provocation by the U.S. Senate, which voted 97 to 2 to impose sanctions on any company participating in this scheme. Yet, Angela Merkel and her socialist coalition partners, whose former party boss and current Putin lackey, Gerhard Schroeder, is the president of Nord Stream 2, promptly warned the U.S. to mind its own business. In doing that, Merkel, disregarded the vigorous protests of 13 Eastern European countries and those of the European Energy Union, which clearly cannot coexist with Nord Stream 2. This is yet another disturbing case where the dominant power in the EU has disregarded the interests of its EU partners to curry favor with Putin. Perhaps, somebody should have told Mrs. Merkel that blatantly disregarding the bipartisan will of the American Senate is never a smart idea on the part of somebody who still depends on the United States for its security.

Whatever the case, President Trump needs to be prepared for a hostile reception. It will help him to know a bit more about who Frau Merkel is as a politician and what exactly she stands for. So far, he has challenged her on Germany’s huge trade surplus with the United States, which is not smart and makes him look like a petty mercantilist. The reason for that is that while Germany does have a huge trade surplus with us, it is a relatively underdeveloped country in information technology, high tech, and financial services, where the U.S. can and does run circles around it. It could easily be proven, for instance, that when digital and financial services, licensing revenues, and investment returns are emphasized, the U.S. runs a much bigger surplus than the Germans do in trade.

The fact is that while Trump may not be quite right on the German trade surplus and its causes, Merkel’s 12-year rule in Germany has, for the most part, been unsuccessful, not to say disastrous. To start with, it was under Merkel’s leadership that Germany abruptly decided to ban nuclear power on the absurd assumption that the Fukushima disaster could repeat itself in Germany, a country that has never had a tsunami or an earthquake larger than 5 on the Richter scale. This irrational decision by the chancellor to do away with a legitimate industry that produced 25% of the country’s clean and inexpensive energy, apart from its dubious legality and lack of scientific and economic rationale, led to greater dependence on Russian gas and made inevitable the ‘energy transition’ (Energiewende) to renewable energy, whose disastrous consequences are only now coming into focus. Suffice it to say that the Germans already pay three times more than Americans (twice as much as the French) for their electricity, including a surcharge that is twice the market price of a kilowatt hour.

On Tuesday, North Korea launched what it called a Hwasong-14.

The missile flew only a little more than 550 miles downrange but reached an altitude of 1,740 miles. Fired on a normal trajectory, the Hwasong-14 would have traveled at least 4,100 miles.

The missile was not, as Pyongyang claimed, “capable of hitting any part of the world,” but it was an intercontinental ballistic missile and able to reach the fringes of the American homeland, all of Alaska and the approaches to the main islands of Hawaii.

The ICBM test sets up a confrontation, not just between the U.S. and North Korea but also between the U.S. and China.

In his televised New Year’s Day message this year, North Korean leader Kim Jong Un suggested his regime would soon conduct an “intercontinental ballistic rocket launch,” in other words, a missile test.

One day later, President-elect Trump tweeted this: “It won’t happen!”

It just did. And to add insult to injury, it happened on July 4.

So now that the Norks have unmistakably defied Trump, there are two things in particular to watch in the coming days. First, analysts will be seeing how the White House handles the Chinese.

The U.S. is trying to rally the international community and, as part of this effort, has called for a closed-door UN Security Council session, now scheduled for Wednesday.

If the past is any guide, China, along with junior partner Russia, will try to stall and water down measures proposed by the U.S. In the past, Chinese rearguard actions helped North Korea because Washington, although insisting it had the right to act beyond UN measures, rarely did so.

Trump, however, has made it clear that the U.S. will act alone to defend itself. And this missile test, much more than the others this year, is perceived as putting Americans at risk.

If Beijing resorts to its old playbook, it risks Trump imposing severe costs. This week, after all, follows a series of decisive actions against a China that disappointed Trump over not doing more to defang North Korea.

From Monday to Thursday, Trump hammered Beijing. On Monday, the American president welcomed the leader of China’s adversary, India, to the White House in an unmistakable signal to the Chinese. On Tuesday, the State Department dropped China to the worst ranking—Tier 3—in its annual Trafficking in Persons report. On Thursday, the Treasury Department sawed off the Bank of Dandong, a shady Chinese bank, from the global financial system and sanctioned a Chinese shipping company and two Chinese individuals. That same day, the administration notified Congress of a proposed sale of arms to Taiwan, which Beijing considers a breakaway province.

And on Sunday Trump iced the cake when a U.S. Navy destroyer, the Stethem, passed close by a Chinese-held island in the South China Sea in a “freedom of navigation” exercise that enraged Beijing.

If the Chinese do not come around fast at the Security Council, they could find themselves the target of more Trump actions. Secretary of State Rex Tillerson’s statement on the missile launch looks as if the administration is targeting North Korea’s enablers as much as the North itself. A renewed campaign against Beijing will signal that last week’s actions were indeed the beginning of a tougher approach toward China.