President Trump holds a bilateral meeting with German Chancellor Friedrich Merz — 3/3/2026
Summary
- Geopolitical Conflict: The US and Israel are actively engaged in a war with Iran ("Midnight Hammer"). Trump claims Iran's military capabilities are being "decimated" and regime change is imminent.
- Trade & Tariffs: A universal 15% tariff is in place. The Supreme Court has reaffirmed the President's power to use tariffs and embargoes broadly.
- Diplomatic Rifts: Trump explicitly threatens to cut off all trade and diplomatic relations with Spain and expresses strong dissatisfaction with the UK over energy policy and the Chagos Islands ("that island").
- Energy Policy: US-Venezuela relations have normalized with high oil production ("100 million barrels"). Trump criticizes European green energy policies, praising Merz for reversing Merkel's approach.
- Germany's Status: Unlike Spain and the UK, Germany is viewed favorably ("Germany's been great"), positioning it as the preferred European partner.
Trade Ideas
Donald Trump
President of the United States
Trump states, "We have massive amounts of ammunition... unlimited middle and upper ammunition... we're hitting them very hard." He also notes, "Their missile count is going way down" (referring to Iran) and that the US is "decimating" them. Active warfare ("Midnight Hammer") combined with the expenditure of "unlimited" munitions requires immediate and massive replenishment contracts. The mention of "high-end" munitions being stored globally implies sustained revenue for prime defense contractors. Long Defense Primes. The kinetic war with Iran guarantees order book growth for missile and ammunition manufacturers. Sudden peace treaty or ceasefire reducing immediate procurement needs.
Donald Trump
President of the United States
Trump says, "Spain has been terrible... I told Scott to cut off all dealings with Spain... We're going to cut off all trade with Spain." He cites their refusal to pay 5% defense contributions and denial of base usage. The President of the United States explicitly threatened a total trade embargo and diplomatic freeze on a specific Eurozone nation. This introduces existential economic risk for Spanish exporters and banking sectors reliant on US dollar clearing or trade. Short Spain (EWP). The political risk premium is not priced in for a total US embargo scenario. Diplomatic walk-back or EU intervention to shield Spain.
Donald Trump
President of the United States
Trump states, "I'm not happy with the UK either... This is not Winston Churchill we're dealing with." He criticizes their energy policy ("Open up the North Sea") and a lease agreement regarding an island (likely Diego Garcia/Chagos). While not as severe as the threat to Spain, the diplomatic relationship with the UK is fractured. Trump's criticism of their energy costs ("highest in the world") and refusal to cooperate on military logistics suggests the UK will be excluded from favorable trade exemptions. Avoid UK Equities. The "Special Relationship" is currently broken, removing the UK's historical hedge against US protectionism. UK government rapidly pivots policy to appease the US administration.
Donald Trump
President of the United States
Trump says, "Germany's been great. He's been terrific... I have a very good relationship with the country... with this new leader." In a trade war environment (15% universal tariff), the "least hated" nation wins. Trump explicitly differentiates Germany from Spain/UK, implying Germany may receive waivers or "favored nation" status within the EU block. Long Germany relative to EU peers. Capital fleeing Spain/UK risks will rotate into the German DAX as the safe haven of the US-Europe relationship. Germany's economy is export-heavy; if the 15% tariff applies strictly despite the praise, the DAX will suffer.
Donald Trump
President of the United States
Trump mentions, "Venezuela was so incredible... we've taken out a 100 million barrels of oil already... relationship's been great." Chevron (CVX) is the primary US supermajor with the historical licenses and infrastructure to operate in Venezuela. Trump's explicit endorsement of the Venezuelan oil flow confirms that US majors are operating freely there again. Long Chevron. They are the direct beneficiary of the political pivot to monetize Venezuelan reserves to offset war-driven oil spikes. Re-imposition of sanctions if the Venezuelan government ("Deli") falls out of favor.
