Conflict

WHAT'S NEXT?: Rising tensions around are bringing new and regional geopolitical threats and the possibility of eventual global war. Keep abreast of the unfolding drama and know where the risks and opportunities are in the world.

• [New] Insisting on full denuclearisation is likely to prompt Pyongyang to make good on threats to resume missile and nuclear testing in 2020, safely calculating that Trump would not risk a punishing war in an election year.
• [New] Over the past year, consumer confidence has remained high despite the uncertainties of the trade war, the challenge of modernizing trade with Mexico and Canada, and a range of threats from global politics.
• The federal deficit is projected to keep rising over the coming decade, driving US debt to the highest level since World War II over the next 10 years.
• Investors projected that with issues including the U.S. and China's trade war and central-bank rate increases in the rearview mirror, the global economy would likely be able to stage a modest rebound in 2020.
• Biodiversity loss was named as the third biggest risk to the world in terms of likelihood and severity this year by the World Economic Forum, ahead of terror attacks, infectious diseases and interstate conflict.
• Oil markets are set for another soft year in 2020 as demand growth is beset by downside risks related to the US-China trade war and general slowdown in industry across most major economies.
• Iran does not possess nuclear weapons, but the growth of its uranium enrich - ment capability over the past decade fostered anxious speculation about how Iran might behave as a nuclear power.
• While the trade war between China and the United States has hogged headlines and driven market anxieties over the past year, an equally large threat to the global economy has gotten little attention: a looming tax war.
• In terms of risks this century, nationalism has been responsible for most of the wars of the past two centuries, and nationalism is highly likely to lead to catastrophic war this century.
• The Thai economy could improve in the year ahead, especially if the planned signing of the 16-nation Regional Comprehensive Economic Partnership attracts new investment from companies seeking to offset risks from the U.S.-China trade war.
• The biggest risks to the global economy as it heads into 2020 are the continuation of the trade war, the volume of debt in emerging markets, and the potential failure of governments to take appropriate fiscal actions should the global economy decelerate further.
• While the trade war between the US and China appeared to be dying down, the market could be affected by President Donald Trump's decision to add Chinese firms such as Huawei to a trade blacklist last year.
• Signing of the trade deal on Wednesday eases Trump's 18-month trade war aimed at altering China's trade and economic practices, but will leave in place tariffs on about $370bn worth of Chinese imports per year.
• Despite concerns of slowdown in the European Union, the escalating trade war between the United States and China, and Brexit uncertainty in the fourth quarter, analysts project Hungary to deliver a 5% growth for the whole fiscal year of 2020.
• Analysts expect four of Japan's nine operating reactors to close temporarily next year while utilities make changes required under stricter anti-terrorism rules adopted after the 2011 Fukushima disaster.
• The next year will follow a jam-packed 2019, as markets surged from January lows despite trade war escalation, flashing recession warnings, the US House of Representative's impeachment inquiry, and slowing economic growth around the world.
• China will lower tariffs on products ranging from frozen pork and avocado to some types of semiconductors next year as Beijing looks to boost imports amid a slowing economy and a trade war with the United States.
• The clear top risk is a sharp deterioration of activity stemming from ongoing uncertainties around the US-China relationship, not just the narrowly defined trade war.
• President Trump is lashing out against the World Bank for lending to China, the US and China still do not have a trade deal, and global investors are back to fretting the trade war between the world's two largest economies will drag on forever.
• Further afield, geopolitical tensions and conflict in the Middle-East, ongoing uncertainty around Brexit and an increase in political unrest in South America are key downside risks to global economic growth in 2020.
• Officials from major automakers believe Trump will not impose new levies on vehicles from the European Union, Japan or elsewhere amid a trade war with China.

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Last updated: 18 February 2020