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

North America

• Over the last month, tensions between the US and China have escalated to new highs. At the beginning of July, the two countries held dueling naval exercises in the South China Sea. Shortly after the exercises, US Secretary of State Mike Pompeo declared that most of China’s claims in the South China Sea are unlawful, a clear jab at Beijing. In addition, US President Donald Trump signed an executive order officially ending Hong Kong’s preferential trading status in response to the new national security law for the city. Furthermore, the US blacklisted more Chinese companies over Uighur human rights abuses. Amid the deteriorating relations with China, the US ordered China to close its consulate office in Houston which was considered an “unprecedented escalation” by Chinese officials. While these are just a few of the major events which have occurred over the last month, tensions continue to build over a range of issues which also include the pandemic, the expulsion of journalists in both countries, and Chinese hacking.
• Microsoft has announced that it is negotiating to buy the US part of Chinese-owned social media app TikTok. The app has become wildly popular in the US which has prompted concerns over data and tech security. Fearful that TikTok could share user data with Beijing or tailor content to serve Chinese interests, President Trump previously threatened to ban the app in the US. However, President Trump has reportedly given Microsoft and TikTok’s parent company, ByteDance, 45 days to solidify an agreement. The purchase could place Microsoft in a better position in the technology sector and further poke at Beijing.
• President Trump has sent hundreds of federal law enforcement agents to several cities, including Kansas City, Chicago, and Albuquerque. The President along with the Justice Department say the decision was made to confront a wave of crime and violence and bolster violent crime task forces. The move has sparked renewed backlash amid the already heightened scrutiny on federal law enforcement interventions. This skepticism has most recently been prompted by the deployment of Department of Homeland Security agents to Portland where the agents clashed with protesters in the name of protecting federal property from vandalism.
• The US and Russia launched a new phase of arms control talks in Vienna last month. The talks will cover a range of topics including military doctrines, transparency, and security in space. In less than a year, the New START agreement – the last remaining nuclear arms-control deal between the US and Russia – will expire. China was also invited to participate in negotiations, but refused the invitation. The US and Russia together possess about 90 percent of the world’s nuclear weapons, therefore making an arms control agreement between them critical to the stability of the nuclear world order. 
• Relations between India and the US are reaching new heights. A few weeks ago, the two countries conducted a cooperative naval exercise in the Indian Ocean, showing apparent strength against Chinese presence in the Pacific. Furthermore, India and the US are discussing the possibility of a free trade agreement. The two countries have been negotiating a limited trade deal since last year. The strengthened relationship between the US and India comes at a time when both are at odds with China.

Europe

• After a marathon summit, European Union (EU) leaders finally agreed on a massive coronavirus recovery package. EU members will jointly borrow 750 billion euros for an economic recovery fund. The fund will be disbursed in the form of grants and loans. At the summit, member-countries also agreed on a 1+ trillion euro seven-year budget. The negotiations exposed divisions within the bloc as Austria, Denmark, the Netherlands, and Sweden (a.k.a. as the frugal four) pushed for cuts while some of the other countries, including Spain and Italy, opposed them.
• In the second quarter of 2020, the eurozone’s gross domestic product (GDP) dropped a record-setting 12.1 percent. Spain saw the greatest decline, falling 18.5 percent and wiping out seven years of growth. While all eurozone countries are experiencing some level of a Covid-19-related shock to their economies, the effect has been disproportional. The most vulnerable countries, such as Spain and Italy, have been hardest hit while others, such as Germany and France, are returning to normal much quicker.
• A ceasefire between Ukrainian government forces and pro-Russian separatists in eastern Ukraine has gone into effect. The ceasefire agreement is supported by Russian President Vladimir Putin and Ukrainian President Volodymyr Zelensky, marking the latest progress in a series of failed peace efforts. Since 2014 when Moscow annexed and took over Ukraine’s Crimea peninsula and supported the rebellion in the eastern part of Ukraine, more than 13,000 people have died.
• In July, France, the United Kingdom, and Germany joined Australia and Canada in suspending their respective extradition treaties with Hong Kong. The action was made in response to China’s imposition of a new national security law on the city and the postponement of Hong Kong’s legislative elections.
• The United Kingdom (UK) has barred Huawei, the Chinese telecommunication giant suspected of being a front of the Chinese communist party, from the country’s 5G network. The UK has been pressured by the US to ban Huawei, claiming it will allow the Chinese government to spy on them. The move heightens tensions between the UK and China which have intensified since the new national security law was implemented by China in Hong Kong. Such recent actions taken by the UK and US are evidence that a mounting Western front against Chinese influence is emerging. 
• The famous sixth century Hagia Sophia has been reverted back to a mosque. The world-renowned piece of architecture was originally a Byzantine cathedral, then an Ottoman mosque, and was converted into a museum in 1934, making it a symbol of secularism in modern-day Turkey. Many view the transition of the Hagia Sophia as a major political move by President Erdogan because it brings him closer to fulfilling his pledge of making more room for Islam and, in turn, winning over more Muslim voters in the midst of a very weak economy and a hubristic agenda to take over land and claim sea rights that do not belong to Turkey.

Asia and the Pacific

• Hong Kong’s chief executive, Carrie Lam, used her emergency powers to postpone the September 6^th legislative elections until next year. Just a day before the announcement was made, 12 opposition candidates were barred from running in the election on grounds for opposing the new national security law. The decision has sparked international outrage and raises further concerns that the rights and freedoms of Hong Kong citizens are eroding. 
• Monsoon rains have flooded Bangladesh, Bhutan, India, Myanmar, and Nepal over the last few weeks. So far, more than 200 hundred people have died, and millions have been displaced. Officials warn that the floods will continue.
• In response to the US’ closure of the Chinese consulate in Houston, Texas, China has closed the US consulate in its Chengdu province. Chinese officials called the shutdown a “legitimate and necessary response”. The behavior between the two global powers sparks fear that diplomatic ties are beyond the point of no return.
• After coming close to finalizing an agreement to drawdown troops from the India-China border, talks between Indian and Chinese military officials have stalled. The decades-long border dispute reached new highs last month when 20 Indian soldiers were killed in a clash with the Chinese military.
• Singapore’s ruling party, the People’s Action Party, unsurprisingly won July’s election. The party has won the majority in every election since 1959, but public dissatisfaction is slowly rising. The opposition was able to grab 10 of the 93 parliament seats as a number of Singaporeans worry that the country’s leaders may be ill-equipped to shepherd Singapore through a global crisis.

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