Where’s the global economy headed?
This is the question that keeps awake investors from all over the world, as uncertainty is looming over several key international affairs.
Here are the top five current areas that have a significant effect on the international economy, with strong implications for the US.
As the largest trade partner of the US, an economic shake-up in the European Union is set to affect the economic relations between the two.
Last month Mario Dhragi, President of the European Central Bank, said that “a significant amount of monetary policy stimulus is still needed” to support the EU’s economy which shows weaker performance than expected.
The sentiment was shared by David Lipton, the IMF’s first deputy managing director, who “warned how European Union member states are at risk from economic disaster unless they ‘strengthen their defenses’ ahead of a potential downfall,” as reported by express.co.uk.
The beginning of April didn’t bring any better news, as it came with a lower inflation rate than desired and a weaker manufacturing PMI.
Ask anybody involved with Brexit what is currently going on there, and the most likely response will be shrugged shoulders.
British PM Theresa May already tried three times to get the MPs to approve her deal with the EU, to no avail.
While the UK can’t decide on an action and has already postponed its exit, the EU is growing impatient, with the US also anxiously awaiting the Brits’ final decision.
The turmoil, while a global concern, is even more problematic for the States which already experienced in 2016 the negative impact of the Brexit referendum.
If the UK exits the EU without a deal, US companies that have set up shop on the Island will need to find other ways to the lucrative European Union market.
Speaking of uncertainty, the US-China trade deal has been in the works for close to a year, with its faith still hanging undecided.
Reuters reported that this week might be decisive for whether the trade war will come to an end anytime soon.
While both parties have made solid progress, topics such as tariffs and enforcement of the agreement are still holding back the US and China from shaking hands.
Analysts warn that if there’s no agreement reached in the coming couple of months, the world might be headed for a recession, which coupled with the Brexit uncertainty will greatly affect developing economies, but also big players including the US.
Self-employment and freelancing have been steadily rising, and it is estimated that by the end of the next decade the majority of the US workforce will be freelancing.
While globalization has pushed new frontiers and allowed international trade to boom, it hasn’t come at no cost.
The low entry barrier to many online jobs and the easy access to cheap labor from developing countries has resulted in many US companies outsourcing jobs at the expense of hiring from within the country.
But all is not doom-and-gloom for American specialists as the CNBC reported last year that there’s an increase in business from developing economies preferring to outsource to US workers instead of turning to cheaper, but lower-skilled labor at home.
Recently an investigator hired by Jeff Bezos said that Amazon’s CEO’s communications were hacked by Saudi Arabia.
This is only one the latest of high-profile international hacking cases that show that even somebody who’s made billions through technology is not immune to cyber attacks.
Industrial espionage and cyber attacks aiming to find dirt on high-profile personas are becoming more common and sophisticated, turning into a serious external threat for the US economy.
Last July Fortune quoted William Evanina, director of the National Counterintelligence and Security Center, saying: “Our economic security is our national security,” adding that those who seek American secrets “will almost certainly continue to deploy significant resources and a wide array of tactics to acquire intellectual property and proprietary information.”