Here are some critical issues to watch around the globe over the coming month:

North America

The United States has announced it will impose tariffs on Mexico to pressure them to curb migration. Starting in June, there will be a 5% tariff on all goods from Mexico that will rise to 25% over the next four months. With a possible rollback of steel and aluminum tariffs it seemed like the US, Mexico, and Canada were moving toward further negotiations of the USMCA. However, these tariffs the US is planning to impose on Mexico are in complete violation of such an agreement and give the impression that US President Trump will always turn to tariffs to resolve his frustrations.

Trade disputes with China escalated this month with Chinese tech-giant Huawei at the center of trade war news. The White House added Huawei to a trade blacklist, limiting the company’s ability to buy and use American products from suppliers like Google. At the beginning of the month, trade talks fell apart and US President Trump’s tariff threats rattled the stock market. Since then, the President has announced a reprieve of tariffs on US allies as more efforts are focused on China. In response to the escalation, China has put the buying of US soybeans on hold. The escalation could intensify and may result in a new tech paradigm while distorting prices and inflicting pain in many sectors.

President Trump’s legal battles continue with no end in sight. The president walked out of an infrastructure meeting with Democrats last week complaining about their investigations into his administration and saying he is no longer willing to work with them until such investigations cease. It is unlikely President Trump will see an end to the investigations anytime soon, as House Democrats issued a subpoena for his tax returns and Special Counsel Robert Mueller gave a statement on his report stating allegations of election interference “deserves the attention of every American” and refusing to absolve the president regarding criminal charges of obstruction of justice.

The US believes Russia is not adhering to the ban on nuclear weapons testing established by the Comprehensive Test Ban Treaty (CTBT) in 1996. The director of the US Defense Intelligence Agency, Lt. General Robert Ashley, made a statement saying Russia is “probably” conducting nuclear weapons tests.

Europe

The European Parliament election results this month reveal growing polarization and fragmentation in the European Union. The EU’s traditional centrist parties lost a number of seats to populist, Eurosceptics and non-traditional parties. While the populists did secure 23% of Parliament seats, it was not as large of a populist wave as was predicted by many. Populist gains were evident primarily on the national level in France and Italy, as Marie Le Pen’s far-right party and Matteo Salvini’s far-right Anti-Immigration League party won the most seats in their respective countries. However, the conservative European People’s Party and the center-left Progressive Alliance, Socialists, and Democrats took the most seats with pro-EU parties maintaining the majority. It was the largest voter turnout the EU has ever seen, demonstrating that voters are more concerned about what is going on in European politics than ever before.

Internal fights have erupted for the top EU positions between France and Germany, a fact that demonstrates how dysfunctional the EU has become.

UK Prime Minister Theresa May announced her resignation this month but not without stirring the Brexit pot once more. In reaction to Brexit chaos, the sterling pound hit a 3-month low. At least eight contenders are expected for the leadership of the Tory party which has been taking a hard (no deal) Brexit stand.

Greek Prime Minister Alexis Tsipras announced a snap election to be held at the end of June after his party, Syriza, suffered a devastating defeat to the New Democracy party in the European Parliament elections. It is clear the Greek people are frustrated with broken promises and failure to bring growth to the country’s economy.

Italy’s bank stocks and bonds fell after the EU announced that the country faces a four-billion-dollar penalty for failing to curb debt levels. A final decision on Italian public finances will be made by European Commission President Jean-Claude Juncker and announced on June 5^th.

Asia-Pacific

Japan’s Emperor, Akihito, abdicated the throne to his oldest son, Prince Naruhito, making him the first emperor in two centuries to abdicate. US President Trump was the first world leader to meet the new Emperor when he traveled to Japan for a week of festivities, dining, and golf with Prime Minister Shinzo Abe. Trump’s visit to Japan was seen as a success for Japanese foreign policy.

Deadly protests erupted in Indonesia after President Joko Widodo, or Jokowi, won the election in April. Supporters of Jokowi’s chief opponent, Prabowo Subianto, have engaged in violent protests that have killed six people and injured dozens more. The election and ensuing protests expose a growing religious and ethnic divisions in the country.

In India, Prime Minister Narendra Modi was re-elected for another five-year term. Prime Minister Modi and his BJP party are expected to push a more aggressive Hindu-nationalist agenda, which would heighten the fears of Muslim and Christian minorities in the country. On the other hand, investors are confident that Modi is good for business and will continue to bring stabilizing economic reforms and prosperity to the country.

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