U.S. Treasury Secretary Steven T. Mnuchin shakes hands with Chinese Minister of Commerce Zhong Shan in Shanghai in July. (Photo: AFP/VNA) Hanoi (VNA) - Below is a recap of ten ofthe year’s most consequential headlines impacting consumers, investors andfinancial markets worldwide chosen by the Vietnam News Agency.
US – China trade war cools down
The US and China announcedon December 13 they had reached agreement on their phase-one trade deal, amajor development in the 18-month trade war. Accordingly, the US decided tosuspend import taxes that were set to take effect on December 15 covering 160billion USD worth of Chinese products. Trump also agreed to halve its 15-percenttariff on 120 billion USD worth of Chinese imports. In exchange for tariffrelief, China committed to increasing its purchases of US farm goods.
US – China trade tensionshave caused volatility on stock markets for months, and pushed the globaleconomy closer to a severe slowdown.
FEDcuts interest rate for first time in 11 years
The Federal Reserve (FED)lowered the benchmark Federal Funds rate by 0.25 percentage points on July 31to stimulate economic growth in the first reduction since the financial crisisin 2008. The FED continued to cut its interest rate in September and Octoberand then kept the interest rates unchanged at between 1.5-1.75 percent untilthe end of the year helped the US economy maintain stable momentum. The FED’srate cuts also resulted in higher stock and gold prices and a weaker greenback.Following the FED, many central banks around the world, including the Bank ofJapan (BoJ) and European Central Bank (ECB), slashed interest rates further toshore up their economies.
Oil-priceshock comes in September
Brent crude oil price jumped19.5 percent to 71.95 USD per barrel to reach its highest rate since the 1991Gulf War following drone strikes on two Saudi Arabian oil facilities thatremoved about 5 percent of global oil supplies. The price of crude oil hasrisen higher than the end of 2018 as a result of the Organisation of thePetroleum Exporting Countries (OPEC) and allies’ decision to deepen oil outputcuts and new progress in the US – China negotiations at the end of 2019.
Chineseyuan breaches key level of 7 to US Dollar
The Chinese yuan weakened belowthe key level of 7 to the US dollar for the first time in a decade on August 5following US President Donald Trump’s announcement of a new 10 percent tariffon 300 billion USD worth of Chinese goods from September 1. The US then labelledChina a currency manipulator in the context of the escalating trade war betweenthe two nations. Although China said it would not use its currency as a tool tocope with external disturbances such as trade disputes, many countries worriedthat a trade war could possibly spill into currency. The US had criticisedChina for creating unfair competition and a trade surplus by devaluating itscurrency.
Negotiationsfor RCEP wraps up
The ten member states ofthe Association of the Southeast Asian Nations (ASEAN) and Australia, China,Japan, New Zealand and the Republic of Korea completed negotiations for theRegional Comprehensive Economic Partnership (RCEP) on November 4. This is animportant milestone in the participating countries’ global economic integrationprocess in the context that trade protectionism is hampering globalisationprogress. The RCEP is expected to be a new-generation trade agreement, which ismore flexible and is able to reflect the modern development of global trade.
Facebook’sLibra plan appears to be in big trouble
Facebook on June 18announced a plan to issue a digital currency called Libra in mid-2020,cherishing its ambition to shake up the world’s banking system that allowscheaper transaction costs and enhances trust. However, the plan facedopposition from central banks and governments who worried the currency couldaffect global financial-monetary stability. Besides, Libra also challenges theroles of the US dollar while posing challenges to the fight against moneylaundering, tax invasion and cyber crimes, among others.
Boeingsuspends production of 737 Max aircraft
US aircraft manufacturerBoeing announced on December 16 that it would halt production of the 737 Maxaircraft from January 2020. The decision comes after aviation authoritiesgrounded the planes following two fatal crashes of Lion Air and EthiopianAirlines that killed 346 people. 737 Max order cancellations not only affectedBoeing’s revenue but also aircraft-part suppliers, airlines and financialinstitutions globally as well as the US economy.
A 737 Max aircraft in Washington, the US (Photo: AFP/VNA) Gianttech corporations face hefty fines
Facebook Inc in July agreedto pay a record-breaking 5 billion USD fine to resolve a government probe intohow the company lost control over massive troves of personal data andmishandled its communications with users in 2018. This is a prime example ofthe tightened management and investigation of giant tech corporations such asFacebook, Google, Amazon and Apple in the fields of personal data protectionand monopoly prevention. In March, the European Commission fined search giantGoogle 1.69 billion USD for illegally misusing its dominant position in themarket for brokering online search adverts. The European Union also opened aformal antitrust investigation to assess whether Amazon’s use of sensitive datafrom independent retailers who sell on its marketplace is in breach of EU competitionrules.
Forestfires cause irreversible damage
Forest fires raged in manyparts of the world, from South America, the US to Europe, Asia and Oceania. Firesin the Amazon rainforest – the planet’s ‘green lungs’ - not only devastated theenvironment and biodiversity but also burned away economic benefits worth some8.2 billion USD. Meanwhile, bush fires in Australia burnt destroyed 700 houses,at least 3 million hectares of forest, and decimated 20 percent of thecountry’s forest coverage.
World join hands to fight against plastic waste
Some 180 countries on May10 agreed to adjust the 1989 Basel Convention in a move to tighten themanagement of plastic waste trading. The amendment will make the global tradein plastic waste more transparent and better regulated, protecting humans andthe environment./.
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