“Heightened trade tensions between the United States and China have raised the risk of a recession next year if the dispute between the world’s two largest economies is prolonged and escalates further, according to economists and portfolio managers.
“Just over two weeks ago, Washington and Beijing seemed poised to reach an agreement to end a trade war that has hurt American businesses that rely on products made in China, increased costs for US companies and consumers, and contributed to an economic slowdown in China.
“But the dispute has escalated recently as the US raised tariffs to 25 per cent on nearly US$200 billion of goods from China on May 10 and is preparing to add levies to all Chinese-made products later this year. That has prompted Beijing to retaliate with its own tariffs, effective from June 1.
“The whiplash-inducing reversal in tone has unnerved investors and increased fears that an economic downturn is on the horizon more than a decade on from the global financial crisis.”
“What’s unsettling financial markets, allies and adversaries most is an inability to properly calculate and thus “bake in” this degree of geopolitical risk from a U.S. president who prides himself on his disruptive tactics.
“No one quite knows what unifying strategy binds these situations – nor what President Trump’s end game might be on each.”
“The yuan just hit its lowest level against the dollar since November 2018. That could make the trade war between China and the United States even more complicated. One US dollar bought 6.92 yuan on Friday.
“The Chinese currency has weakened by almost 2.7% this month and is now uncomfortably close to the symbolically important level of 7 to the dollar, last breached during the 2008 financial crisis.”
https://edition.cnn.com/2019/05/19/investing/stocks-week-ahead/index.html
“…many pointed to the economy, not the possible outbreak of war, as Iran’s major concern.
“Iran’s rial currency traded at 32,000 to $1 at the time of the 2015 nuclear deal. Now it is at 148,000, and many have seen their life’s savings wiped out.
“Nationwide, the unemployment rate is 12 percent. For youth it’s even worse, with a quarter of all young people unemployed, according to Iran’s statistic center.”
https://www.egyptindependent.com/for-iranians-economic-crisis-looms-larger-than-us-tensions/
“A set of deep-rooted economic challenges awaits India’s new government after election results are announced May 23.”
“There is not a single action put forward by this government that does not reflect capitalist interests.
“For instance, Bolsonaro’s latest decree authorizes parents to let their underage children learn how to shoot firearms without judicial permission.”
https://jacobinmag.com/2019/05/jair-bolsonaro-brazil-austerity-education-disorganization
““All of the most important components of GDP are negative,” said Hiroaki Muto, chief economist at Tokai Tokyo Research Center. “The economy has already peaked out, so we are likely to have a mild recession,” he said. “No one would object to delaying the sales tax hike.”
“The headline GDP expansion was caused largely by a 4.6% slump in imports, the biggest drop in a decade and more than a 2.4% fall in exports.”
“A senior adviser to the German government fears another European financial crisis could be brewing.
“The German government expects expansion of just 0.5% this year, down from 1.8% just a few months ago as manufacturing struggles with a number of challenges…
“The spending and tax spending plans of the Italian government there means its deficit and debt are ballooning, and set to breach rules set by the European Commission, further undermining the country’s financial credibility.”
https://www.bbc.co.uk/news/business-48258720
“As of 2017, more people have been forced by violence and conflict to flee their homes than live in the U.K. or France. Why it matters: That’s upwards of 60 million people — a global nation of refugees. If all of these asylum-seekers, internally displaced people and refugees were a country, they’d be the 21st most populous nation in the world, according to UNHCR estimates. More than half of refugees are under the age of 18.
“The crisis is the worst its been since World War II, and it’s not getting better.”
https://www.axios.com/refugee-population-world-9d7e786e-3773-4d17-ac0b-5baa3bee031e.html
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