Unlike other recent weekends, the last weekend of the first half of the year was quite eventful. Some major news that could play an important role in the final half of the year were released.
On Friday, a US news site called Axios released a new report about Donald Trump’s frustrations with the World Trade Organization (WTO). The report said that the US president was considering exiting the agency, which acts as the arbitrator of global trade rules. The White House swiftly denied the allegations. On Sunday, Axios released a preliminary bill ordered by the White House on the same issue. In the new bill, the president would be at will of imposing tariffs from other countries. In an interview with Fox Business Network, the president reiterated that he would go ahead with his 20% tariffs on vehicles. This will hurt other countries like Japan, South Korea, and the European Union. It will also hurt the US through the retaliatory tariffs they will impose.
Another major news during the weekend was the election in Mexico. The election was an anticipated one at a time when the country is butting heads with its Northern neighbour over tariffs and NAFTA. In the first year of his presidency, Trump has threatened to exit NAFTA, which he has accused of being unfair to the United States. He has also accused the country of helping illegal migrants reach the US. The president has had a rough relationship with the former Mexican president. The tensions could continue under the new president.
In Iran, protests continued to rock the fragile country. This is significant because the country will likely continue to face the unemployment challenge in the foreseeable future. Most of the people protesting the government are young people who have become disappointed with the high rate of unemployment. As the US ramps up pressure on the country, we will likely see more protests that could lead to a change of government. The US has ordered all oil traders to cease their relationship with Iran by November. This has led to the exit of many companies in the country.
On Saturday, the US president sent a tweet after a conversation with the Saudi Arabia king. In the call, the two leaders talked about Iran and the oil prices. In the past few weeks, the president has complained that the oil prices were too high. In the call, the Saudi king agreed to increase production by more than 2 million barrels. This comes a week after Saudi Arabia led the OPEC countries to announcing slight addition to production. As shown below, oil prices dropped sharply at the market open.
In the European Union, Angela Merkel’s problems continued as her coalition partners rejected the immigration deal she initiated last week. Her minister for interior announced that he would resign if Merkel went ahead with her plans. He argued that the deal was insufficient in addressing the concerns. This puts Angela Merkel’s position as chancellor at risk. In response, the euro fell as shown below.