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

North America

• At a summit in Geneva last month, US President Biden and Russian President Vladimir Putin met to discuss relations which have turned icy over the last several months. While the meeting was full of tension, especially regarding recent cyberattacks on critical US infrastructure, the two leaders agreed to hold strategic-stability dialogue which will include arms control and cyber-related issues.
• The US and European Union (EU) reached a truce, ending a 17-year dispute over aircraft subsidies for manufacturers Boeing and Airbus. The agreement extends the suspension of an estimated $11.5 billion in tariffs for five years, giving the two parties time to hammer out the details of a more official deal. The dispute began in 2004 when the US withdrew from an aircraft subsidy pact after alleging that Airbus had acquired an equal share of the jet market thanks to subsidized government loans. The move comes as President Biden aims to reset relations with the EU.
• The US carried out airstrikes targeting facilities used by Iran-backed militias in Iraq and Syria in response to Iranian drone attacks on US interests in Iraq. Militant groups including Kata’ib Hezbollah and Kata’ib Sayyid al-Shuhada have vowed to retaliate in response to the attacks while an Iraqi military spokesperson called the airstrikes a “breach of sovereignty” in a rare criticism of the US military which leads an international coalition with Iraq’s military. The US actions could complicate US-Iraqi relations as well as ongoing negotiations to bring the US and Iran back into compliance with the 2015 nuclear deal.
• US Vice President Kamala Harris has been tasked with leading diplomatic efforts to address corruption and migration issues with the US’ Central American neighbors. Over the last month, Vice President Harris traveled to both Mexico and Guatemala to meet with leaders and explore initiatives to prevent the root causes of migration to the United States. While in Guatemala, she announced several aid and cooperation measures including regional task forces on anticorruption and human smuggling. Following Vice President Harris’ visit with Mexican leaders, both the US and Mexico announced they will begin high-level economic and security dialogues to boost cooperation.
• Afghan leaders, President Ashraf Ghani and High Council for National Reconciliation Chair Abdullah Abdullah, met with US President Joe Biden at the White House last month as the security situation worsens in Afghanistan. Despite efforts to negotiate a peace deal, the Taliban are back on the offensive. While President Biden remains committed to withdrawing all US troops from the country, he assured them that US support for Afghanistan was not ending. The Biden administration has proposed $3.3 billion in security assistance for Afghanistan next year and is sending 3 million Covid-19 vaccine doses to help the country battle the pandemic.

Europe

• US President Joe Biden and United Kingdom (UK) Prime Minister Boris Johnson have agreed to a new Atlantic Charter, reaffirming the “special relationship” between the two countries. The charter is modeled after the joint statement made in 1941 by Prime Minister Winston Churchill and President Franklin D. Roosevelt. The new charter outlines eight commitments to defend shared values against “old and new challenges” and lists modern-day threats such as disinformation, election interference, climate change, and global health crises.
• EU leaders rejected a proposal by France and Germany to hold a summit with Russia. The bloc has not held a summit with Russia since 2014 when Russia annexed Ukraine’s Crimea. While France and Germany argue opening communication channels with Russia will allow for the EU to have a unified policy towards Moscow, Poland and Baltic countries said a summit would send the wrong message to President Putin as East-West tensions have deteriorated over the last several months. 
• Australia and the UK have announced a trade deal, eliminating tariffs on a range of goods. It is the first agreement the UK has negotiated from scratch since leaving the EU. The deal is expected to reduce barriers to financial and other services, boost exports of traditional British products like Scotch whisky, and increase imports of Australian products like lamb and wine. The UK is hoping this deal will also help it join the trans-Pacific trade partnership.
• Sweden’s Prime Minister Stefan Lofven resigned last month after losing a no-confidence vote. However, he has not called snap elections and says he will try to form a new government to break parliament’s gridlock. Sweden’s traditional left-right political climate has been disrupted by the emergence of the nationalist Sweden Democrats which have become the country’s third-largest party.

Asia, Eurasia & the Pacific

• The Chinese Communist Party marked 100 years last week. In celebration, party leader and President, Xi Jinping, spoke to a crowd of thousands in Beijing’s Tiananmen Square proclaiming that any foreign forces that attempt to “bully, oppress, or enslave” China would meet a “Great Wall of steel.” Under Xi’s leadership, China has become much more assertive internationally as it uses its “wolf-warrior diplomacy” to crackdown on dissent and build up its power in the region.
• After 26 years, Hong-Kong’s pro-democracy newspaper Apple Daily has ceased publication, citing concerns over employee safety and a worker shortage. Prompting the decision was a police raid of the Apple Daily newsroom which resulted in the arrest of five editors and executives and the freezing of company accounts. The event is yet another example of mainland China’s crackdown on dissent and oppression of Hong Kong. 
• The situation Myanmar continues to worsen as the military junta tightens its grip on the country. Since the military coup in February ousted democratic leader Aung San Suu Kyi, the junta has cracked down on opposition and dissent by arresting thousands of protesters and even, reportedly, burning down a village whose residents opposed the junta. Over the last month, Aung San Suu Kyi began her trial, facing more than a decade in jail for a range of charges that many international leaders and human rights organizations are denouncing as politically motivated. Also last month, junta forces clashed with Myanmar’s People’s Defense Force, a group of militias that have emerged in opposition to the junta, in Mandalay, and Russia affirmed security ties with the military junta.
• After a three-month pause in demonstrations, pro-democracy protesters have hit the streets of Thailand again. Activists most recently held a march to commemorate the end of the country’s absolute monarchy in 1932 and continue calls for the resignation of Prime Minister Prayuth Chan-ocha as well as reforms to the country’s constitution. 
• China has challenged Australia at the World Trade Organization (WTO), intensifying the trade dispute between the two countries. China has filed a lawsuit at the WTO for Australia’s antidumping measures on Chinese-built goods. Just a week before, Australia challenged Chinese tariffs on wine imports which have devastated Australia’s overseas wine market. The two countries have been engaged in a tit for tat trade battle for several months now. At the G7 summit last month, leaders echoed Australia’s desire for a more assertive stance towards Chinese trade practices.

Middle East

• Global oil supply talks between members of the Organization of the Petroleum Exporting Countries and other major oil producers, known as OPEC+, have collapsed amid a disagreement between Saudi Arabia and the United Arab Emirates (UAE). The group was expected to reach a deal to increase oil production levels, but negotiations collapsed over how the UAE would calculate its production quota. Following the announcement that the talks were called off, the price of West Texas Intermediate crude oil rose to its highest level in six years.
• Israel and Hamas have been clashing over the last few weeks as Palestinian militant groups fly incendiary balloons over Israel and Israel responds with airstrikes. Since the Israeli military and Palestinian militant group Hamas agreed to a ceasefire on May 21^st, the two sides have engaged in this tit-for-tat fighting but have fallen just short of full-scale escalation. Egypt and the United Nations are increasing their efforts to mediate the conflict as the ceasefire breaks down.
• Former conservative judiciary chief Ebrahim Raisi won Iran’s presidential election. The elections were quite controversial as there were many calls to boycott the vote after hundreds of presidential candidates were denied by Iran’s Guardian Council, the body responsible for vetting presidential candidates. Many observers of the election believe the council rigged the election in Raisi’s favor as he is a close friend of Supreme Leader Ali Khamenei. Raisi is also under US sanctions for overseeing the deaths of political prisoners in 1988 and suppressing the Green Movement protests in 2009. Since claiming victory, Raisi has signaled a hardline on nuclear deal negotiations, raising concerns that a deal with the US will not be reached.   
• Israeli Prime Minister Benjamin Netanyahu’s reign has come to an end after a very tumultuous last few years. Israel’s legislature approved a new coalition government with a single vote, 60-59 in favor of ousting Netanyahu. The new government, which consists of eight different parties, will be led by right-wing Naftali Bennett for two years and followed by centrist Yair Lapid for another two.
• Germany and the United Nations co-hosted a conference in Berlin to address Libya’s transition to a democratic government. Libya’s December election and the exit of foreign fighters from the country were top items on the agenda. Last October, warring parties ended Libya’s six-year war with a formal ceasefire agreement. At the conference Libya’s interim government, led by Prime Minister Abdul Hamid Dbeibah, underlined its commitment to holding fair elections on December 24^th.

Latin America and the Caribbean

• Officials have yet to declare a victor of Peru’s presidential election as they consider right-wing candidate Keiko Fujimori’s demand that some ballots be declared null. Left-wing candidate Pedro Castillo reportedly won 50.2% of the votes while Fujimori received 49.8% of the votes. Though international observers have called the elections clean and fair, Fujimori has accused Castillo’s party of fraud and is calling for 200,000 votes to be declared null and another 300,000 to be investigated. The election has polarized Peru. 
• Colombian protest leaders announced a pause in weekly anti-government demonstrations which began at the end of April. The demonstrations, which were originally sparked by a now-withdrawn tax reform, have expanded to include protests that denounce economic hardship and police brutality. The pause will allow the protest organizations to focus on drafting bills to present to Congress when it begins a new session on July 20^th. Speaking on behalf of the national strike committee, Francisco Maltes said “That doesn’t mean protest will stop in Colombia, protest in Colombia will continue because the reasons behind it are still there.”
• Argentina and Mexico have recalled their ambassadors to Nicaragua, citing the country’s “worrying” actions in a joint statement. Recently, President Daniel Ortega’s government has begun a severe crackdown on political opposition. Nicaraguan authorities arrested more than 17 opposition figures last month bringing international condemnation and new sanctions from the US government.
• Argentina has reached a deal with the Paris Club of creditor countries to avoid defaulting on loan repayment. The deal relieves the country of having to pay a loan worth $2 billion in July, an amount that would have generated more exchange rate and macroeconomic instability, according to Economy Minister Martín Guzmán. Argentina will continue negotiations with the International Monetary Fund over the repayment of nearly $45 billion. The country has been in a recession since 2018 and the economy situation has been worsened by the coronavirus pandemic. Last year, GDP fell nearly 10% and roughly 42% of the country is struggling with poverty. 

Sub-Saharan Africa

• Ethiopia’s government has unilaterally declared a ceasefire in its conflict with regional forces in the Tigray region. The Tigray People’s Liberation Front (TPLF) said it has regained “complete control” over the regional capital, Mekelle. There has also been an apparent withdrawal of Eritrean troops which had been fighting alongside Ethiopia’s military, though Eritrea has not publicly acknowledged the ceasefire. Since the Ethiopian government forces launched a military campaign in Tigray eight months ago, the region has suffered a humanitarian crisis and large-scale atrocities. United Nation’s Secretary General António Guterres said he is “hopeful an effective cessation of hostilities will take place” after speaking with Ethiopian Prime Minister Abiy Ahmed.
• Ethiopia held national and regional elections last month despite the conflict in the Tigray region between government forces and rebel militias. The election results are expected to favor incumbent Prime Minister Abiy Ahmed, but at least one-fifth of parliamentary constituencies are not voting due to violence, the conflict, or logistical problems. The Tigray opposition group, Oromo Liberation Front, has boycotted the election. While Prime Minister Ahmed says the elections are a symbol of Ethiopia’s commitment to democratic values, international leaders have expressed concern over the recent detentions of opposition politicians, the harassment of the media, and the atrocities in the Tigray region.
• Anti-government protests have broken out in Eswatini, formerly known as Swaziland, prompting the government to implement at 6:00 PM curfew. Activists are demanding democratic reforms and the lifting of bans on opposition parties in the country. King Mswati III, Africa’s last remaining absolute monarch, has been accused of human rights abuses during his more than 30-year reign over the country.  Demonstrators want Eswatini to become a republic, allowing them to elect their own leaders and be governed by a president instead of a king.
• Donors from the World Bank, France, the US, and Germany are backing the production of 500 million Johnson & Johnson vaccines in South Africa. The donors have pledged $712 million in funding to produce the vaccines through 2022 using a South African manufacturing hub. 

World

• 130 countries are backing a 15% global minimum corporate tax rate. The US-led initiative seeks to force the world’s largest companies to pay taxes in countries where their goods and services are sold even in places where they do not have a physical presence. The preliminary agreement was negotiated at the Organization for Economic Cooperation and Development (OECD) and accepted by many large economies. However, some low-tax jurisdictions, like Ireland and Barbados, oppose the deal, arguing it would undermine their sovereignty. Exemptions to the deal are still being negotiated, but an agreement is expected to be finalized in October.

Suggest Reading

Myanmar’s Coming Revolution

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Central America’s Turbulent Northern Triangle

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