February 2020 Geopolitical Event Watch

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K.P. O'Reilly PhD, JD

K.P. O'Reilly PhD, JD

February 2020 Geopolitical Event Watch

January 29, 2020

Coronavirus. Nearly 4,690 confirmed cases, and 106 deaths as of January 28 (See Figure 1). Reported cases in 12 countries outside of China. Fewer deaths are occurring, but more contagious than SARS with carriers capable of infecting others yet not showing symptoms. Researchers at the UK’s Lancaster University estimate 190,000+ cases in Wuhan by February 4. More conservative estimates suggest 59,000 infections and 1,500 deaths, twice the toll of the 2002-2003 SARS outbreak. The Economist Intelligence Unit estimates that the virus could cut 0.5 to 1% from China’s GDP. S&P Global warns that the outbreak could take as much as 1.2% off China’s economic growth. WSJ reporting on hit taken by US-based companies, including McDonald’s, Starbuck’s, Walt Disney, Marriott, Hilton, Delta, Carnival cruises, and others.

US presidential election. The campaign season kicks-off in earnest with the Iowa caucus on February 3. The results should further cull the Democratic field as the leading candidates emerge. Currently, Biden, Warren, Sanders, and Buttigieg are leading in the Iowa polls. Given the unpredictable nature of the caucus, a long-shot candidate could emerge. Alternatively, if any of the top four falters, it could weaken momentum going into the New Hampshire primary on February 11. The Nevada and South Carolina primaries end the month on  February  24  and  29, respectively.

US State of the Union Address (February 4). The day after the Iowa caucus, expect President Trump to use the national address to cover themes headlining his  2020  re-election campaign. A good dose of trade protectionism, border security  (“the wall”),  and immigration are sure to be in order.

South African Budget (February 26). Investors await Finance Minister Tito Mboweni’s budget presentation for evidence that the government can preserve the country’s last investment-grade rating from  Moody’s.  In  November,  Moody’s changed its outlook assessment to negative, indicating the need for a credible fiscal strategy to contain the rise in debt in the budget.

Trump visits India (TBD). While yet to be confirmed (partially due to unknowns related to ongoing impeachment proceedings in  US Senate), Trump is expected to make an official state visit to India next month. US-India trade relations will top the agenda as the Modi government seeks a partial trade deal following the USTR’s removal of India from the Generalized System of Preferences program last spring, resulting in tariffs on numerous Indian exports to the US.

Canadian ratification of USMCA. Canada is the last country to ratify the agreement. The process may be complicated as Prime Minister Trudeau lost his parliamentary majority last fall. Expect ratification,  but conservative lawmakers will seek to make a show of Trudeau’s weakened position.

 

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2020-02-27T09:52:41+00:00 By |