The Day at a Glance | July 8 2020

AMLO visits Washington

Mexico`s President, Andrés Manuel López Obrador, arrived at Washington yesterday to meet with US President Donald Trump today. During the meeting, the USMCA will be celebrated and issues concerning its implementation will be addressed; even though the discussions will extend to issues regarding drug trafficking, security and migration. Originally, Canadian Prime Minister Justin Trudeau was planning to participate in the meeting, but declined the invitation and said he did not wish to attend the dialogue with a country that constantly threatens to impose tariffs. The heads of State will be accompanied by public officials and ministers, in addition to business leaders. Obrador has expressed he plans to thank the US President for his respectful treatment of Mexicans, but for opposition leaders in Mexico, this visit is a mistake that risks humiliation because of the constant criticism made by the US President towards Mexicans and US elections that are coming up. Both Presidents seem to have forged a cordial and respectful relationship and will have their first face-to-face meeting since they were both elected.

Concerns of retaliation on behalf of the US.

News reports speculate of likely additional sanctions on China on behalf of the US government, once the new security law goes into effect in Hong Kong. Bloomberg reports that members of the White House are designing a plan to undermine the fixed exchange rate of Hong Kong`s dollar, which is something that has provided investment security in this global financial center. The plan would involve limiting access to funds in dollars of Hong Kong`s main banks and is being revised by the Department of State. Ultimately, this measure would restrict access to dollars in markets and in the Chinese economy. There are no agreements within the administration regarding this measure`s implementation and is still not likely to be carried out, however it highlights the US`s ability to retaliate against China and the potential escalation concerning frictions between both countries. At the moment, the Chinese government has started to request digital platforms` user information (WhatsApp, TikTok, etc) in Hong Kong in efforts to track down individuals that promote ideals that oppose the Communist Party. In the United States, banning the TikTok platform is being considered, after suspicions of Pekin having access to sensitive information regarding US citizens through the application. It`s expected that within the following days President Donald Trump will sign executive orders aimed at sanctioning China and incentivizing the relocation of productive Chinas in the US.

United Kingdom announced new fiscal stimulus

Chancellor of the Exchequer Rishi Sunak has committed, in front of the British Parliament, to do whatever is necessary to save jobs and revive the economy through tax cuts and providing businesses with resources for them not to let go any workers. Sunak announced a 2 billion euro package (2.5 billion dollar). For every employee rehire by companies during the return to normalcy that is lived in the country, the government will contribute one thousand pounds as a bonus; additionally, he plans to pay salaries of up to 200 thousand young workers. These resources are in addition to the 5 billion pounds assigned to infrastructure investments (schools, hospitals, roads), announced last week by Prime Minister Boris Johnson. These actions on behalf of the UK send a positive sign to the market and it`s expected that other governments will follow its footsteps in order to back a global economic recovery. In Europe, the approval of a fiscal package will be discussed next week, however recent news suggest that there is still no agreement between member countries of the EU and the package`s approval may have to wait. In the US, the White House has expressed it wants a new fiscal package that does not exceed one trillion dollars and will focus on supporting unemployed citizens.