Newsroom Pro's 8 things at 8 am

Photo: Lynn Grieveson

In today's email we focus on the implications for New Zealand of a US under President Trump.

1. Can we still follow the US?

The world's attention was on London's terror attacks over the weekend, and sadly, on President Donald Trump's bizarre series of early morning tweets in response.

Trump attacked London's mayor and used the incident to argue for his travel ban. Hard on the heels of Trump's decision to withdraw America from the Paris Climate Change Accord, the latest set of unhinged tweets and mixed signals served only to further unsettle confidence in America's previous position of global leadership.

That uncertainty was also on display over the weekend in our region's biggest foreign policy and defence set-piece of the year - the annual Shangri-La Dialogue in Singapore.

Newsroom's Foreign Affairs and Trade Editor Sam Sachdeva spoke to Defence Minister Mark Mitchell after the meetings. Mitchell still sees America in the leadership position, but many others now see it as an open question.

“We’ve already seen several cases where US officials say one thing, but President Trump tweets the opposite," Victoria University's David Capie told Sam from Singapore.

“A lot of Asian partners that badly want an engaged US are asking themselves, 'who do we believe?'”

With the US walking away from the Paris deal and the TPP, there was a sense that it was leaving space for others to fill, Sam reports here at Newsroom Pro.

2. Trump bump flattened

The global turmoil emanating from the White House (see more on that below in the latest news from the Gulf States) is also having an unsettling effect on the global economy.

US economic growth is slowing and expectations of a Trump-driven 'reflation' of the global economy have faded into the distance as hopes for US tax cuts and infrastructure spending have been swamped under a welter of headlines about legislative failure and scandal.

The so-called 'Trump Bump' to global interest rates has now been well and truly flattened.

There were more signs of a stuttering US economy over the weekend, which is having an impact on New Zealand too.

US non-farm payrolls rose 138,000 in May, which was weaker than the average of 180,000 seen in the previous year and below economists' forecasts for around 185,000. Annual wage growth was unchanged at 2.5 percent and the unemployment rate fell from 4.4 percent to a 16 year low of 4.3 percent, but largely because 429,000 people dropped out of the workforce, the BLS reported.

The US dollar fell to a seven month low as investors reduced their expectations for US economic growth and rate increases later in the year. The New Zealand dollar rose in response to a three-month high of 71.4 USc over the weekend.

3. Quote of the day

Perhaps symptomatic of the dismay within and around the White House over Donald Trump's words and actions, US Defence Secretary James Mattis sought to reassure worried observers about America's current direction.

“To quote a British observer of us, from some years ago, bear with us: once we’ve exhausted all possible alternatives, the Americans will do the right thing.”

See more on those comments and the discussions around that in Sam's piece on Newsroom Pro.

4. A civil defence review

Closer to home, the Government announced the terms of reference of a review of Civil Defence arrangements on Friday.

Sam Sachdeva has a closer look at Newsroom Pro at why the system needed a shake-up in the wake of failings around the Kaikoura earthquake and what might happen next.

The Budget has allocated $19.5m towards hazard monitoring over the next four financial years, starting at $3m in 2017/18 before rising to $4.5m in 2018/19 and $6m for the two years afterward.

However, it’s not yet clear where that money is going, Sam reports.

A government-produced factsheet about the funding says it will “enable the development of 24/7 natural hazards monitoring”, but a Cabinet decision on who should receive the money will depend on the outcome of a business case being developed by GNS Science with support from other government agencies which is expected to be finished by July.

5. 'Don't mess with Phil'

Auckland Mayor Phil Goff was also busy late last week shepherding a targeted rate for hotel and motel owners through the Council.

Newsroom Co-Editor Tim Murphy has taken a look at Goff's ability to make stuff happen in and around the Council.

"Take on the Godfather Mayor Phil Goff at your peril," Tim writes.

"The former MP and Labour cabinet minister has brought a bare knuckle Wellington style of politics into the old Town Hall and the 'family' (as they like to refer to themselves) of the Council, local boards, CCOs and subsidiaries are having to adjust, fast."

There's plenty more here in Tim's piece on Newsroom.

6. While you were sleeping

Saudi Arabia, Egypt, the United Arab Emirates and Bahrain cut all diplomatic and transport links with Qatar over the weekend, saying the tiny Gulf state was supporting terrorism and Iran. They banned Qatari planes from landing and forbade travel through their airspace. They also stopped exporting food to Qatar. The move caused food hoarding in Doha, which imports 80 percent of its food from its neighbours. (Reuters)

This analysis in the Washington Post explains why Qatar's neighbours appear to have suddenly turned on the Gulf state. Donald Trump's visit was a catalyst for the move, which may also throw global energy markets into turmoil because Qatar supplies a third of the world's LNG.

7. Coming up...

Fired FBI Director James Comey is scheduled to testify before an open hearing of the Senate Intelligence Committee on Thursday (Friday morning NZ Time). President Donald Trump decided not to invoke his executive privilege to stop Comey testifying.

Britain holds its General Election on Thursday night. Prime Minister Theresa May's Conservative Party is still expected to win, but her poll lead has narrowed from over 20 percentage points to low single digits in the last fortnight over her plans for a 'dementia tax' to force rest home residents to sell their homes to pay for care and revelations May cut police numbers by 20,000 when she was Home Secretary from 2010 to 2016. Auckland University's John Morgan analyses the prospects here.

Trade Minister Todd McClay will attend the OECD Trade and Economic Ministers Council Meeting in Paris this week. McClay is scheduled to meet with European Trade Commissioner Cecilia Malmstrom and said he would push to start trade negotiations with the EU. He will also meet US Trade Representative Ambassador Robert Lighthizer ahead of a visit to Washington later this month.

Associate Housing Minister Alfred Ngaro faces a potentially chilly reception when he speaks at the Community Housing Aotearoa annual conference in Wellington on Wednesday morning.

Parliament resumes later today for the last week of its three-week Budget sitting session. The Parliamentary Caucuses will meet later this morning.

8. One fun thing

Polls show Britain's election race has tightened dramatically in the last fortnight. That creates the tantalising (although still unlikely) prospect, of a Prime Minister Jeremy Corbyn having to meet with a President Donald Trump.