Since the outbreak of the COVID-19 pandemic, the oil industry has been one of the most heavily-affected sectors of the economy hit by the unprecedented crisis. The unique anomalies that have been noticed in the supply and demand equilibrium have shattered oil prices, leading to the historical moment in April 2020 when future oil contracts being traded in negative (below zero) rates.

As a renewed surge of CIVID-19 cases hits in a second wave, and given the latest developments following the outcome of the US elections, worries around the oil prices threshold are coming once again into the foreground.

Second Wave of COVID Raises Grave Concerns for Oil Markets

As we are leaving the summer far behind, more and more COVID-19-related cases and deaths are being reported at the global level. By mid-October 2020, there was a remarkable trend in the Covid-19 incidents across the world, indicating that a second more aggressive wave of the virus is due.

This has been the exact case up to date, as we are witnessing the virus numbers moving rapidly upwards. As a response several governments, including Germany, France, and the UK have decided to reimpose lockdowns across several parts of the country or in the national level.

This new situation has created grave concerns as the lockdown policies not only sharply reduce the daily consumption of oil products in the everyday life of the citizens in these countries, but also trigger a hard blow on the aviation industry as a whole.

With the volume of international trips being dramatically downsized, the demand for petroleum-based jet fuel is sharply falling, bringing down together the price of oil across the global markets. By early November and once UK Prime Minister Boris Johnson confirmed that the country was entering again a national lockdown, the market promptly reacted and showcased the aforementioned concerns, sending the WTI price under $34 a barrel at some point during last Monday’s session (November 2). This was the lowest since early June.

Prices briefly rebounded during that week, due to the volatility that the US elections have created and also the fact that OPEC+ has started reconsidering the scheduled easing of oil production by January 2021, pushing the prices to gain some momentum, but significant worries remain.

Biden’s Election and Potential JCPOA Renegotiation

The election of Joe Biden as the 46^th President of the United States could add further pressure on the short-term outlook of the oil prices. As mentioned earlier, the race to the US elections has helped the prices to shortly rebound by mid-week; however, Biden’s win could affect the short-term performance of oil for two major reasons.

On the one hand we should anticipate that the President-elect will adopt a much stricter policy towards the COVID-19 pandemic. While Trump has followed a focused strategy, trying to mitigate as much as possible the grave consequences of the virus on the US economy, namely enforcing measures to boost the finances of the states, Biden will most probably pursue a more aggressive approach, similar to the one that many EU countries have followed, through the implementation of new lockdowns in several parts of the country and a mask mandate.

At the same time, Biden has stated that a renegotiation with the Islamic Republic of Iran around the JCPOA is definitely on the table. The Joint Comprehensive Plan of Action or “Iran Deal” has been a long-term process between Iran and P5+1 seeking to terminate parts of the Iranian nuclear program in exchange for lifting economic sanctions from Tehran and assisting the struggling economy of the country.

During the mid-2010s, Joe Biden – as the US Vice President at the time – played a pivotal role in the planning and implementation of the deal; and apparently the new President-elect still deeply believes in it. Trump, to the contrary, has fought every aspect of the deal during his Presidency, calling it the “worst deal ever negotiated”.

A potential renegotiation with Iran would not be an easy path, as Trump’s backing off from what was agreed and the likely election of a hardliner in the place of Iranian President Hassan Rouhani by the summer of 2021 could further complicate an already flawed relationship.

If Tehran comes to an agreement with Washington and the sanctions are lifted, then we should anticipate millions of barrels of Iranian oil finding their way back to the global markets daily, further deteriorating the problematic supply and demand equilibrium. Regardless of the outcome of the negotiations though – which are expected to run in the long-term anyway – the very fact that Biden is willing to restart the talks with the Islamic Republic will likely create additional concerns and push the oil prices even lower in the near future.

How Might OPEC+ React to an Oil Collapse?

Under the current circumstances, it is likely that we are due to face another perfect storm for oil prices on a global scale in the near future. In early December, OPEC is scheduled to meet and discuss the Organization’s strategies, in order to mitigate the impact of the another sharp downtrend in the demand of the petroleum products.

OPEC+ had previously implemented a supply cut of 9.7 million barrels per day to tackle the unparalleled challenges, posed by the COVID-19 crisis. This decrease – which started on May 2020 – was limited to 7.7 million barrels per day by August 2020 with an additional scheduled supply boost of two million barrels per day in January 2021; apparently the January boost has been currently paused, considering the new facts.

This step has temporarily provided some support to the fluctuating prices but would have minimal impact in the months to follow. Predicting that the new COVID-19 wave will have many similarities with the first surge of the virus, it is highly likely that we will face another oil crisis in the near future, sending WTI prices below 30 USD per barrel by early 2021.

This is the most probable scenario, unless there is a breakthrough development on the COVID-19 front – like the Pfizer/BioNTech’s latest vaccine announcement which gave an impressive 10% boost to WTI- or OPEC+ decides to proceed with radical moves, sharply cutting further the global supply in order to manipulate the oil rates; still such a move would put at risk the viability and the long-term outlook of petroleum-based economies, especially those of the rich monarchies of the Gulf and thus any such bold actions are unlikely to occur.

L'articolo Are Oil Prices About to Go into Freefall Once Again? proviene da InsideOver.

The rise and fall of capitalism. Could we have predicted this earlier? The coronavirus pandemic sweeping across the globe may cause complications that are beyond imagination at this point. Cities once hustling and bustling with locals and tourists have now turned into ghost towns following massive lockdowns. Shops are shut, businesses suspended and millions forced out from their jobs. The consequences of the coronavirus could be sharp and deadly and, in the long-term, capitalism may end up taking the biggest hit.

How Does Capitalism Work?

To understand what capitalism is, let’s look at it this way: capitalism is an economic system where private exchange and ownership are the basis of the economic system instead of state-owned or socialized ownership. In reality, capitalism has shown itself to be a system where a few people end up owning the vast number of resources and wealth while the working class which is used by these capitalists to produce goods for local or global societies. The working class, in order to survive, must work for the ruling “owner” class and earn wages to carve out a basic living. However, if these corporations shut down, the average person won’t be able to survive due to the lack of income.

The capitalist society is one which is driven by profits. If an initiative is not worth the desired return, that plan could be canceled. Light is being shed on this system as healthcare systems collapse and world leaders scratch their heads before making the next move. Lockdowns in major economies like the United States, India, Brazil and almost all of Europe have led to the reduction in demand. The price of oil has fallen to a record low and corporations are betting on their next moves.

This has also put world governments in serious crisis. Citizens are questioning their leaders why effective measures weren’t enforced beforehand to stem the transfer of infections. With the inability to stop the spread and lockdowns being proposed as the ideal means to fight Covid-19, consumer spending is also taking a hit. Recession is here but so are issues for major industries, who have no consumers left to take care of. Share prices have also slumped as investor confidence continues to fall rapidly.

Helping Big Business or Citizens?

The main problem lies in governments trying to save big businesses over and above innocent people. Let’s take the example of Pakistan, a country closest to China where the virus initially broke out. Prime Minister Imran Khan said earlier that, “I would have gone for complete lockdown of the country had there been a similar situation in Pakistan like it had emerged in China and Italy.” He said that his government would not be able to provide food to the people and that, “the chaos and panic is more dangerous than coronavirus (Covid-19).” Despite being disguised as concern for ordinary people, this goes on to show that the survival and sustenance of capitalistic structures are preferred over the well-being of citizens.

Similarly, we can see in the United States that a ‘for-profit,’ capitalistic structure is dragging millions to the brink of death. Where private healthcare systems are made to gain advantage rather than helping people recover. In the $1 trillion stimulus package unveiled by President Donald Trump, over $360 billion are allocated for small businesses so that they don’t lay off their workers, while under the same program, Americans will be entitled to receive checks of $1,000. In a society where a routine check-up would cost anywhere from $200-$700, what importance will a thousand dollars have?

The Destruction of Small Business

To keep the economy running, it is essential that small businesses continue to progress. However, the problem is that these businesses will survive at the expense of their workers who in some cases don’t have access to apt precautions to fight the virus, risking their lives so that they can earn money to sustain their livelihoods. The capitalist structure is effective but harsh since it disregards basic human rights. Another harrowing detail of the stimulus plan is that hospitals and health centers are allocated $100 billion while big distressed companies get over $400 billion in funding. Not to forget the tourism and aviation industries which will have around $75 billion at their disposal.

In the United Kingdom, £350 billion were borrowed by the state to pour that amount into the bank accounts of both large and small businesses, while also suspending taxes. When we compare this situation with that of China, a country siding more towards an authoritarian and communist structure, we see that the health of citizens was heavily prioritized. Despite hiding the initial outbreak from the outside world, China built hospitals, installed surveillance cameras and entered into a lockdown which was capable of stemming the flow of the virus. China’s effective measures safeguarded the lives of its citizens.

Looking into the Future

When this coronavirus crisis ends, people will be more inclined to think about the choices they need to make in order to survive. An entirely different mindset will be visible across the globe as people come to terms with the problems that the real world faces. Many will continue doing the same: going back to their normal routines and enjoying life to the fullest, but for some it will be a completely different story altogether.

Yes, at this point in time many corporations are trying to safeguard the rights of their employees, but to what extent that will continue, only time will tell. However, others will be likely to make renewed choices about their health and mental well-being, the things they buy and how much they’re willing to put back into the economy for their own benefit. Will this signal an end of corporate and capitalistic greed and injustice? If we start thinking about what we need and what we want, the answer can be “yes.”

L'articolo Will Coronavirus Kill Capitalism? proviene da InsideOver.

There is no doubt that President Recep Erdogan has been trying to downgrade the impact of Covid-19, since the very first reports about the virus. Turkey has raised international concerns, as Ankara was insisting up until March 10 that no Covid-19 incidents had reached the country. This claim has been particularly controversial, considering that the new Istanbul airport is one of the busiest hubs in the world, while simultaneously there has been a massive number of Chinese tourists and business travelers all across Turkey over the previous months. And of course, we should highlight that Turkey borders Iran, the second most impacted country after China back in early March. The allegation that Covid-19 has not reached Turkey by then was utterly bogus and misleading.

Turkey’s Misinformation and False Assertions

Since the beginning of the global outbreak, Turkey has been reluctant to address the problem and take decisive countermeasures. Instead, the government has adopted a rather irresponsible stance, implicating that an outbreak in Turkey was highly unlikely despite the signs from other countries were clear and should be concerning. There has also been considerable delay in terms of accurate and reliable governmental guidance on how people should respond to Covid-19. There have also been reports about Turkish people trying dubious recipes in order to prevent the spread of the virus.

Since the Covid-19 outbreak has been moving from China to the Middle East and Europe, Turkey should react with transparency and responsibility in order to primarily protect their citizens and further the safety of the international community. However, the government decided to downplay the significant threat from the virus and have been trying until recently to ascertain the Turkish people that they should not be particularly worried about it. Once more and more cases were reported within Turkey, then the much-anticipated response came but it would not be farfetched to say that it’s been “too little too late”.

Ankara’s Anti-Coronavirus Measures

As per the latest measures adopted by Ankara, schools have been shut and restaurants, bars, and cafes have closed. Social and sports activities that involved the gathering of numerous people have been canceled while several travel restrictions have been imposed with many flights being suspended. Social distancing and self-isolation are also being advised, however, we have not seen a total lockdown as has been the case in many neighboring countries so far. At the moment of this writing on March 27, approximately 3,700 cases and 75 deaths have been reported in Turkey. There are important reasons to believe though that the in-country cases — and even the number of deaths — could be significantly under-reported, and also that these numbers will be rising dramatically on a daily basis in the weeks to follow.

During Erdogan’s latest televised speech, it has been mentioned that 8,500 suspicious incidents are being monitored in hospitals, while another 53,000 potential cases are being monitored at home. Apparently, there is a huge discrepancy between the official figures and the innuendo of the Turkish President. Also, Erdogan has tried to assure the Turkish people that the country will recover from the crisis quite soon, saying that the situation could get back to normal within the next two to three weeks through the appropriate measures and the right management.

This prediction exceeds even the most optimistic assessments; a more realistic estimation would be that within the weeks to follow the in-country cases will reach their peak and the consequences cannot be foreseen.

The Sharp Rise in Coronavirus in Turkey and Grim Economic Impact

The sharp rise in confirmed cases in Turkey is a worrying sign for the experts. The current findings suggest that the speed of the confirmed cases and deaths could present a violent outbreak in the days to follow, making Turkey one of the most affected countries of the virus. As has been noted so far, the initial numbers are not conclusive, and the virus can spread exponentially once a critical point has been reached. This has been the case in France and Spain so far despite the strict measures that have been imposed with a rather short delay. The unwilling response from the Turkish government could literally turn the country to the new Covid-19 hotbed.

Why is Erdogan Downplaying Coronavirus?

Ankara’s controversial stance has attracted much criticism but there seems to be a reason behind this inadequate reaction to the outbreak. Turkey has emerged as a new regional power over the last decade. Erdogan’s geopolitical maneuvers have rather isolated the country internationally.

Under normal circumstances, Turkey could negotiate with other major players taking certain risks and probably securing several gains. However, amidst the current crisis, Turkey has not an international backer to ensure the stability and continuity of the country’s already tense economy. There are no EU mechanisms to support Ankara, and of course, the Turkish economy cannot be even compared to nations such as the US and China. Considering that some of the sectors most impacted by the Covid-19 outbreak, like the tourism and airlines industries, are of critical importance to the country’s economy, one would understand why Erdogan is struggling to extend the “business as usual” mindset across many sectors of the country.

Official sources keep saying that the 5% growth target is still feasible for 2020, with the Minister of Treasury and Finance of Turkey, ascertaining that this will be the case. This absurd claim implies either that Turkish officials are trying to calm people with false statements, or that the global upcoming recession — since this is the most probable scenario due to the Covid-19 crisis — will be mostly absorbed by the Turkish base population. This potential could lead to extreme social and political unrest in the country. In either case, the 5% target is completely unrealistic. Amidst this environment of uncertainty and international isolation the Turkish lira will be under strong pressure in the months to follow — and recession will be looming.

L'articolo Erdogan’s Bluster Could Turn Turkey into the Next Covid-19 Hotbed proviene da InsideOver.

With the coronavirus wreaking havoc across the globe, slamming healthcare systems, forcing the closure of borders and causing an economic collapse, the world truly is unaware of which direction it’s headed in. While Italy, China and Iran remain the worst-affected countries by the impact of the virus, the entire world is coming to terms with the stark financial impact the virus will bring in the near future. Nearly all sectors worldwide have been impacted by the coronavirus which originated in Wuhan, China. Be it airlines, the food industry, sports or entertainment, the virus has managed to hit various nations where it hurts most.

No Nation is Truly Prepared

No entity is prepared for a calamity of such magnitude. No one had an idea that problems would worsen so drastically, turning a small outbreak in China into a pandemic where hundreds of deaths are being recorded on a daily basis. What comes to mind considering the financial situation across the world is the fact that were economies, businesses and governments prepared for such an event? We’ll partly have to blame governments and the virus itself for this major mishap.

The virus has shut down countries across the globe due to the fear that people will contract it if they are out in the open. Yes, the virus is real. Yes, the problems brought forward are huge. Countries across the globe are suffering from a potential collapse in their healthcare systems, not only financially. The trauma being experienced by people is not only physical but is also consuming their mind.

Economic Consequences

Starting off with global markets, the FTSE and Dow have now recorded the largest one day declines since 1987. Investors across the globe are fearing the safety and value of the money they have spent. At this point in time, they’re wondering whether economic recovery is even on the cards or not? In light of these events, they are now heavily depending on their respective governments to take actions that will help and stabilize economic growth. Governments in nearly 50 countries have slashed interest rates so that borrowing becomes easier and cheaper. This move will in turn lead to more spending, but how is one supposed to spend when lockdowns have been imposed and people are supposed to spend their time in isolation?

Travel Restrictions

Air travel has also been severely affected. The travel and tourism industry is in jitters after nearly 100 countries imposed travel restrictions. The European Union has also taken similar measures by banning travelers from outside for 30 days. Airlines which will suffer the most are Air France, Lufthansa and Emirates in terms of traveling between EU and non-EU countries. An estimated 48,000 flights and 10.2 million seats are at risk due to the ban imposed. The United States has taken the measure to ban visitors from Europe while countries worldwide are trying to curb Chinese travelers. The United Kingdom will bear the brunt of this decision since Chinese tourists to the United Kingdom are recorded to spend an average of £1,600 during their visits.

Oil Crash

The price of oil is also another major concern in the global economy. It hit its lowest point this year. The last time this happened was in June 2001. The Organization for Economic Cooperation and Development (OECD) has also forecast growth at 2.4%. The same figure in November 2019 stood at 2.9%.

How Lasting Will the Economic Damage Be?

While many are struggling to come to terms with the impact of the deadly Covid-19, a certain question lingers in the open. Will this pandemic have lasting effects on economies? The answer is yes. There can either be an indirect or a direct hit to consumer confidence. Indirectly, a shock would be seen in the real economy through financial markets. In that case, markets will fall and the household wealth will contract which will lead to higher savings. In such a scenario, economies will face steeper declines. In the case of a direct hit, the fear of the virus will alleviate the confidence within consumers. It will limit them to their homes and might make them pessimistic in the longer term.

At this point in time when markets are crashing and the coronavirus is on everyone’s mind, we must not panic because doing so will result in more troubles not only for consumers but also vendors, bringing about a negative change where no stakeholder involved will be able to reasonably plan for the future. To make matters safe and accessible for all segments of society and the global community, world leaders need to take prompt actions to stem the problems brought forward by this virus.

How Should Governments React?

No government should be solely dependent on financial projections since they’re currently indicating a great amount of uncertainty. There can be many other scenarios which experts should look into to help base their future decisions upon. Yes, the coronavirus is responsible for the current upheaval but if a clear analysis is given, the opportunity to reflect on decisions looking at the bigger picture could be more than enough to avoid panic. Secondly, governments should clearly track consumer signals. This would give companies and governments a leverage dealing with key insights through which apt formulations can be calculated. Lastly, all aspects both at the micro and macro levels should be under consideration.

All stakeholders must dig deeper and see what opportunities or consequences the Covid-19 can bring. Everyone involved in the world of finance and economics must also be open to adopting new technologies and processes in the post-crisis world. This will help ensure that such a crisis in the future will not cripple the world economy again.

L'articolo Global Economic Repercussions of Covid-19 proviene da InsideOver.

After the US’ pre-emptive strike and elimination of Soleimani, Iran has vowed revenge. There are indeed opportunities for Iran; however, it will have to consider whether risking a war with the United States that would amount to annihilating the regime, is worth it.

In the aftermath of the strike, Iran immediately convened its National Security Council, in which Iranian President Rouhani, some of its Ministers and the Generals of the Iranian Revolutionary Guards, all participated. On the agenda: discussing possible countermeasures.

In an interview with CNN on Sunday, Hossein Dehgan, Military Advisor to Iran’s Supreme Leader, confirmed that Iran would retaliate militarily by hitting US military targets. Dehgan moreover stated that Iran was not seeking a full-on war, but that a response was necessary. If, however, the US would indeed target cultural sights as President Trump threatened yesterday, all gloves would come off for Iran.

Iran’s first official action taken was also received on Sunday. The regime has now announced that it will suspend all commitments to the 2015 nuclear deal effective immediately.

It remains to be seen how serious Iran is about retaliating. What is certain, however, is that if Iran decided to attack the United States directly, all options would be on the table, including boots on the ground – reelection in November or not.

Whether this scenario can deter the regime is the question Washington and its allies ask themselves at this stage.

A viable option for Iran could undoubtedly be an Attack on US allies Saudi Arabia or the United Arab Emirates. These could either be carried out by drones – as at the end of 2019 or via terrorist attacks that aim at civilians.

The implications would be severe, particularly on the global economy, if Iran decided to attack oil fields or facilities. The risk of new attacks on oil tankers or production facilities in Saudi Arabia is increasing, which increased the oil price on Friday.

Another possibility would be to block the Strait of Hormuz, whether through warships or by mining the strait. The consequences for the global economy could be dramatic, as a fifth of the daily crude oil has to pass through the bottleneck of Hormuz. Also, there is the liquefied Qatari natural gas for the large economies of East Asia. While global oil reserves could keep supplies going for several weeks, the energy supply security would still be in jeopardy in the long run.

The third avenge for Iran to retaliate is by instructing its Hezbollah and Hamas deputies in Lebanon and Gaza to fire at Israel and start a war or mobilize its militias in Iraq or Syria. Hezbollah alone currently has at least 115,000 combat-ready missiles that it could fire at Israel at any time. According to reports, Israel’s military is on high alert. However, Israel remains the United States’ main ally in the Middle East. A US reaction would be inevitable, even though Israel has the military capacities to annihilate the attackers and retaliate in turn towards Iran.

In light of these scenarios, Washington has deployed more than three thousand soldiers to the Middle East in an attempt to protect American interests. The fact that Iranian missiles, the Revolutionary Guards of which have spent significant money to improve their range and precision, and which they are now producing themselves, are also in Syria, Iraq, and Yemen can make an attack imminent at any point. Hence, the risk of attacks on Americans in Iraq has also increased. As a result, the US embassy in Baghdad urged all Americans to leave the country immediately.

However, from this point forward, any retaliation by Iran will finally show its real face to the general public. A face of terror and repugnance. It will not be able to deny its role in the destabilization of the Middle East any longer, nor its role in orchestrating death and misery via its militias.

Unlike the previous administration, Donald Trump and Mike Pompeo have ceased the appeasement policy towards Iran and instead conduct a policy of maximum pressure. The latter includes the end of the nuclear deal, declaring Iran’s Revolutionary Guard a terrorist organization and making it almost impossible for Iran to sell its oil. Iran is thus running out of options.

Can it risk war in its current economic conditions and with most neighboring countries denouncing support for Tehran? While Iran certainly has the ability to retaliate, none of the scenarios can be considered rational or conceivable. One must not forget that the majority of regimes share one common goal: maintaining their power. Hence, a war with the US appears to be not only counterproductive but suicidal.

L'articolo A Retaliation By Iran Will Result in the Regime’s Eradication proviene da InsideOver.

The trade war lasted for almost two years. Now, the world’s two largest economies have found common ground with the first part of a major trade agreement between the United States and China, which is expected to be signed on January 15. No further punitive tariffs will be introduced for now. However, lasting economic peace between the two nations is unlikely, due to their respective diametrically opposed interests. 

Rumors about a breakthrough had been circulating through Washington since October. The signing of the agreement will take place in the White House with a delegation from China. Xi Jinping will not be present, however. Nevertheless, President Trump was satisfied and wrote on Twitter that a “very large and comprehensive” trade deal had been concluded. The second phase of the agreement would be signed in Beijing at a “later date.”

The trade war between China and the US has taken its toll on the global economy and, for the first time, has had China’s economy stagnating. Phase one of the trade deal is supposed to mark a paradigm shift towards de-escalation. Nonetheless, President Trump has, expectedly, made concessions towards China. During the trade war, he had continuously insisted that he would only agree to a complete trade agreement with China. Beijing called his bluff and offered step by step process with the newly agreed-upon first phase, while Trump recanted his original stance.  

However, eleven months before the election, the primary concern for Trump and his team is to sell success – and like most other leaders, Trump will present himself as the winner of the dispute. The likely results will confirm his claim. With the agreement in place, the economy will continue to grow while the stock market should see a positive impact also – for Trump, who has put most of his jetton on the economy card, a fantastic result. 

The exact content of the first phase has not yet been communicated. However, what the public knows so far is that China is committed to increasing its US imports by $200 billion over two years. Of this, at least $40 billion a year is expected to benefit US farmers, an essential group for Trump and his reelection campaign. Moreover, the agreement will set parameters on technology transfer, exchange rates, and intellectual property.

In return, the United States waived new punitive tariffs on consumer goods such as laptops and smartphones worth around $150 billion in December and the lucrative Christmas period. However, the 25 percent import fees imposed on goods worth $250 billion, which have been imposed since 2018, are supposed to remain unchanged. Additional tariffs of 15 percent on Chinese goods worth around $ 120 billion are to be halved. 

It is still unclear whether the first phase agreement provides for monitoring and enforcement mechanisms. Should China fail to fulfil its promises, both sides would likely have to begin from scratch. However, the latter will be an issue for the man sitting in the Oval Office in January 2021. It is also the timeframe by which the second phase of the agreement could be finalized, as several complex issues remain that have not been addressed in the current agreement. 

Trump originally started the trade war out of frustration that China was exporting significantly more to the US than vice versa. Inter alia, Washington called on Beijing to open its highly restrictive financial market, fight against copyright theft, and reduce government subsidies. In light of his base, Trump was also particularly concerned about boosting the sale of agricultural products such as corn and soybeans to China.

The agreement now is far from being a surprise but an inevitable result. With the election looming, and the fact that the trade war had begun to impact the American economy negatively, Trump had to make a deal. Otherwise, with a slumping economy, his reelection would have been in real jeopardy. After all, it is “the economy, stupid!” which has historically had the power to make or break a presidency. 

Naturally, President Xi Jinping is cognizant of the pressure Trump is facing, and even though he himself witnessed a stagnant economy, in China for the first time and detrimental to the country’s big plans, Xi Jinping has significantly more leverage than Trump since the former does not have to be democratically legitimized, but simply dictates.

Even if Trump can and will sell the deal as a great success, it is nothing more than a temporary fix. In the long run, the two countries will not be able to avoid conflict, as the US attempts to maintain its hegemony, and China seeks to rise to it.

L'articolo A Temporary Fix? The US And China Agree On A Trade Deal proviene da InsideOver.