Here is a summary of important events that unfolded over the last month, and which may affect economic, financial, and geopolitical issues in the months ahead:

North America

• Following the Republican-led House of Representatives passing of a bill to raise the US government’s debt ceiling to $31.4 trillion, President Joe Biden has invited House Speaker Kevin McCarthy and Senate Minority Leader Mitch McConnell for talks at the White House. As the bill stands, it is not expected to pass through the Democrat-led Senate as Democrats oppose the spending cuts proposed in the bill. President Biden hopes to convince the leaders that Congress must act before the US reaches its debt limit, which has been projected to happen on June 1^st, as warned by Treasury Secretary Janet Yellen. A US debt default would have disastrous consequences for the US economy and would also be a major blow to the global economy.

•  Ahead of the expiration of Title 42 – a public health law that gave law enforcement the authority to swiftly expel migrants, including asylum-seekers, from the US under emergency health authorities related to Covid-19 – the Biden administration rolled out new restrictions on border crossings. Under the new border restrictions, migrants will not be eligible for asylum in the US if they did not already apply for asylum protection in another country or if they did not use lawful pathways to enter the US. Prior to the expiration of Title 42 and the implementation of the new policies, there was a surge of thousands of migrants at the US-Mexico border, but it has since subsided.

• President Biden announced his run for reelection, framing the announcement as a chance to restore the nation’s character. Biden is expected to secure the Democratic nomination, with no major Democratic challengers expected to emerge. Nonetheless, recent surveys have shown little enthusiasm for a second Biden term, even among Democratic voters. Meanwhile, at least 6 Republican candidates have emerged to run against former president Donald Trump for the nomination. Despite being indicted on multiple counts of financial fraud and, separately, being found guilty of sexual abuse and defamation of a woman, his presidential campaign has been undeterred.

• US Climate Envoy John Kerry has been invited by Beijing to visit China for talks on climate change soon. The invitation signifies that climate change remains an opportunity for cooperation between the US and China despite escalating tensions and heightened concerns over a US-China decoupling. President Biden has already given Kerry the go-ahead to engage in the talks and the issue is considered an important “free-standing” topic for both countries to discuss since the US and China are the top two greenhouse emitters.

Europe

• Turkey’s presidential race is heading to a runoff. Turkish President Recep Tayyip Erdoğan won 49.5% of votes in Sunday’s presidential election, outdoing his main challenger, Kemal Kılıçdaroğlu, by about 4%. Per Turkish law which states that a candidate must win at least 50% of the vote to be declared the winner, the election will head to a runoff vote for the first time in Turkey’s history. The vote will be held on May 28^th. It has been one of the tightest contests in Turkey’s history with a major point of contention being the Turkish economy, which has suffered greatly under Erdogan’s management. However, Erdoğan’s coalition is expected to retain its congressional majority.

• Reports from Ukrainian commanders, supported by satellite data, indicate that Ukrainian troops have begun making gains near the eastern city of Bakhmut. These gains are said to threaten Russia’s flanks, and Russian commentators are worried that Ukraine’s much-lauded spring counteroffensive has begun, but Russian officials deny that any breakthrough has occurred. This comes a week after two Ukrainian drones were filmed flying near the Kremlin before being destroyed by Moscow’s anti-air defenses. Following the incident, Russian President Vladimir Putin accused Ukraine and the US of an assassination attempt. Closer to the front lines, the Wagner mercenary group seems to be having supply issues, with group boss Yevgeny Prigozhin filming himself fuming over the lack of support from Moscow. Ukraine’s Western allies continue to bolster their support for the nation, with Germany announcing over the weekend that it will supply Ukraine with $3 billion in military aid.

•  The European Union (EU) reached a $47 billion deal on boosting the supply of semiconductors in Europe as European countries seek to reduce dependence on Asia and catch up to the US as it expands its domestic production following the US CHIPS for America Act. Semiconductor production is currently dominated by Taiwan and China. The subsidies seek to stimulate local manufacturing of chips to enhance European competitiveness in the semiconductor market, which will need to quadruple production in order to meet its target production goal.

Asia, Eurasia, & the Pacific 

• Since taking office in 2022, “Bongbong” Marcos Jr., son of the dictator Ferdinand Marcos, has reversed former president Rodrigo Duterte’s policy of increasingly close relations with Beijing, opting to reengage the US. To that end, Marcos met with President Biden in the White House this month as part of a four-day tour to signal the strengthening relationship. The visit is part of a broader policy trend as shown in an agreement earlier in the year to expand US access to four military installations in the Philippines. The moves come amidst a backdrop of heightening tension in the Indo-Pacific as China continues to expand, creating concerns among some countries, such as the Philippines, which has an active territorial dispute in the South China Sea with China.

•  India’s Foreign Minister was set to meet with both his Russian and Chinese counterparts ahead of a Shanghai Cooperation Organization (SCO) meeting hosted in India. The meetings come at a time of elevated tensions, with the Indian-China border dispute ongoing and Russia’s invasion of Ukraine sending geopolitical waves globally. Regarding Russia, India continues to maintain strong relations with its Cold War ally, while New Delhi accuses the Chinese of eroding ties by violating bilateral agreements. China for its part has opted to downplay the border dispute in an effort to avoid confrontation on the subject.

•  In a very unexpected result, Thailand’s progressive Move Forward party won the country’s parliamentary elections this weekend and on Monday announced they would form a coalition government with Pheu Thai and other pro-democracy groups. Move Forward and Pheu Thai together secured 292 seats of the 500 contested seats, and their coalition is expected to control 309 seats. Since 2019’s election which was not free and fair, anger, especially among Thailand’s youth, has been building against the long-reigning conservative, military-aligned government, and Thailand’s royal family. The election marks a major turning point for Thailand and democracy in the region.

• Diplomats from the 10-country bloc of the Association of Southeast Asian Nations (ASEAN) convened in the Indonesian resort town of Labuan Bajo earlier this month. The summit discussed rising tensions between China and the U.S., both of which many member countries have close ties to. It also discussed further economic integration through using local currencies for trade between member nations. A high-profile topic was the bloc’s efforts at continuing Myanmar’s peace process. Myanmar, a member nation, underwent a military coup in 2021 and has been fighting protesters, ethnic minority insurgents, and pro-democracy fighters ever since. ASEAN condemned the military junta’s human rights abuses, but little progress toward peace has been achieved.

• Japanese and South Korean foreign ministers met for the first time in nearly 7 years, symbolizing a new era of Japan-South Korea relations. The leaders indicated the two countries seek to cooperate on not just financial issues, but also desire to respond together on international issues related to North Korean missiles and Russia’s invasion of Ukraine. Seoul and Tokyo have been working to repair relations after a dispute over whether Japan had appropriately compensated South Korea for its past colonization of the peninsula had frozen cooperation on nearly all fronts.

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