Brexit scenarios: Toward the endgame
Prime Minister Theresa May has bowed to economic reality and unveiled a Brexit model that would keep the United Kingdom close to the European Union. The move provoked an immediate cabinet crisis and the resignations of leading Brexiters. Fear of a Labour government will probably keep other Conservatives in line, but Ms. May’s survival also hinges on the EU accepting her new strategy. Otherwise, a hard Brexit is plausible.
GIS Dossier: Europe as a global player – the basics
As tensions increase within the transatlantic alliance, Europe has begun to reconsider its own place in the world. With the U.S. continuing a long-term strategic retrenchment, its allies across the Atlantic may need to grow beyond their role as Washington’s junior partners. From the migrant crisis to the Iran nuclear deal, from trade wars to dealing with Vladimir Putin, Europe is being forced to declare itself. Will it act like a great power or an imposter?
Opinion: Ready for the next recession?
Economists enjoy delivering bad news. The current favorite being shared by academics and financial experts is that the world is headed for a recession, in 2020 or 2021 at the latest. But we regard this as unlikely, unless there is a major political accident – such as a trade war or turmoil in China. While a slowdown is always possible, especially in Western Europe, that does not make a recession.
Where the United States and global trade are heading
The U.S. is the world’s largest open economy and pillar of the global trading system. Yet its economic challenges today – government debt, wealth inequality, and labor force participation – cannot be reliably addressed through more open trade. One should therefore expect more U.S. steps to change the terms of trade and pressure leading exporters over the next two years.
Trump’s trade war is poised for a Pyrrhic victory
The flip side of the Trump administration’s drive to reduce the U.S. foreign trade deficit is that it will leave the rest of the world with fewer dollars to finance its budget deficit. President Trump could cut spending drastically or persuade the Federal Reserve to buy more bonds, but neither seems likely. More probably, he will do nothing as domestic rates rise and the dollar strengthens – widening the trade deficit again.
GIS Dossier: The North Korean opening
President Donald Trump’s surprising decision to hold summit talks with Kim Jong-un has triggered a round of high-stakes diplomacy, including repeat meetings between North and South Korean officials and a lightning visit by Mr. Kim to Beijing. There is nothing accidental about Pyongyang’s charm offensive. It is the moment the North Korean leader has been preparing for years.
Increasing oil competition in Asia
The first supertanker bearing U.S. crude oil to Asia after a 40-year export embargo was liftd left the Gulf Coast of Louisiana in February 2018. The event was hailed as the start of a new oil trading era, and possibly the start of a war for market share in Asia between U.S. shale producers and conventional exporters from the Middle East. In fact, of all oil exporters to Asia, the Middle Eastern producers should be the least concerned.
Brunei, a case of missing an opportunity
As its oil and natural gas reserves near depletion, Brunei is searching for ways to diversify its economy, but thus far the only country willing to invest in the strategically located sultanate is China. Europe, the United States and Japan are missing on an important business and geopolitical opportunity in Southeast Asia.
Opinion: Trade wars are bad, and nobody wins them
United States President Donald Trump insists that trade wars are “good” and “easy to win,” but history tells otherwise. His plan to slap tariffs on steel and aluminum imports will hurt U.S. producers and will likely cost far more jobs than they protect. The retaliation for such measures could hit global growth hard and lead to economic nationalism – a similar scenario occurred in the run-up to World War II.