This week’s news coupled with that of the last few weeks evidently reflects a changing axis. We are steadily seeing the end of the US – EU axis and the creation of new ones. The implications in relation to the economic relations among leading countries can be very significant.

The start of all this goes all the way back to the end of 2016 when Donald Trump was elected as President of the United States. The events of the last couple of weeks very much echo the statements made some 18 months ago. In this regard one cannot but admit that Trump is being very consistent in his policies. Moreover it needs to be recognised that the US does not owe any other country a living and other countries should just take note of developments and move on.

At the last G7 summit of the world’s leading economies, Trump had refused to sign the final communiqué. This sounded a bell of sorts. This week he also called the European Union a “foe” of the US. He was reported to have said that the US has “a lot of foes”. He said, “I think the European Union is a foe, what they do to us (US) in trade”.

One needs to put this against the scenario that is evolving here in Europe with regard to international trade and investments. This week Japan and the EU signed a trade deal to eliminate nearly all tariffs. This deal has been described as the largest bilateral trade ever. The pact signed in Tokyo runs counter to moves by the US to hike tariffs on imports from many US trading partners.

More significantly it covers a third of the global economy and markets of more than 600 million people, as such much larger than the US economy.

The imposition of import tariffs are certainly stoking the fire and this has brought China and the European Union closer

The President of the European Council, Donald Tusk, stated that the partnership is being strengthened in various other areas, including defence, climate change and human exchange and is “sending a clear message” against protectionism. The two parties also signed an agreement to allow data to flow between the EU and Japan, creating “the world’s largest area of safe data flows”.

Also this week, the EU and China agreed to develop further the EU – China strategic partnership at the 20th EU – China summit. They expressed their joint support for rules-based trade and reaffirmed their joint engagement to reform the World Trade Organisation. The final statement issued by the two parties also discussed migration, climate change and foreign policy.

In a report published at the time of this summit, it was revealed that China is investing nine times more into Europe than it is investing into North America. In 2017 Chinese foreign direct investment into North America dropped by 92 per cent from $24 billion to $2 billion. In the first six months of the year, newly announced Chinese M&A into Europe was $20 billion compared to $2.5 billion in North America.

Analysts do agree that these developments are the result of a shift in policies in both China and the US, while the EU is doing all it can to attract investment from China to its member states. The escalating trade disputes and the imposition of import tariffs are certainly stoking the fire and this has brought China and the EU closer.

The other development of this week is the message that emerged from the summit between Trump and Vladimir Putin, the President of Russia.

Both leaders sought to demonstrate that they want more cooperation between the two countries, that up to thirty years ago were sworn enemies.

At the G7 summit of five weeks ago, Trump had asked that Russia’s suspension from the summit as a result of its annexation of Crimea, should end.

So the changing axis that I referred to in the title of this week’s contribution is the manner in which economic relations between countries are evolving.

Are we witnessing the end of the US – Europe axis, that was based on both international trade and investment flows as well as political, defence and security priorities (remember NATO)?

And are we witnessing the development of two new axes – the US – Russia axis and the Europe – Asia axis? The former is more likely to be political in substance while the latter is likely to be economic.

Meanwhile it must be remembered that Trump and President of the European Commission Jean-Claude Juncker are due to meet next week.

We wait to see whether the changing axis which I have referred to is real or is indeed just perceived.

However we know that very often perception is reality.