Why Political Risks May Dampen World Economies in 2020

Unless something truly drastic happens in the second half of the year, 2020 will be remembered as the coronavirus's year. But there were plenty of political risks to the global economy even before the coronavirus became a full-on pandemic. Let's take a look at where we are so far with some of these risks.

USA and China

Talk of a trade war between the United States of America and the People's Republic of China has been the cause of much consternation in recent years. So, the trade deal signed between them in January solves everything, right? That deal was a step in the right direction, but it was only the first phase. China's role as the place of origin for COVID-19, along with its suspected mismanagement and misinformation, has prompted widespread criticism from US President Donald Trump. What happens next? Probably continued uncertainty. However, it's reasonable to imagine that the realities of a post-COVID world will prompt the USA and the PRC to work out any trade deals needed to get business going again. Then again, China's increasingly authoritarian approach to Hong Kong will not help matters.

Shifting Sands for the EU

Is the European Union dominated too much by its two biggest economies (Germany and France)? Seeing how much COVID-19 has devastated the economies just below them (e.g., Spain and Italy), France and Germany will continue to dictate the path forward. If the two can get on the same. French President Emanuel Macron and German Chancellor Angela Merkel have not always seen eye-to-eye. Will the EU develop more ties with a Russia that they don't trust because they rely on Gazprom, or will they hammer out more trade deals like the one they have recently completed with Canada?

The UK

Now that Brexit has finally happened (sort of), the United Kingdom is tasked with actually making its trade deals. As has been the case for the past four years, the UK's future is uncertain. Small and medium-sized enterprises (SMEs) in Britain need to figure out what kind of policies they need and advocate for them.

Brazil

Brazil's ever-controversial president Jair Bolsonaro has come under severe criticism for his handling of COVID-19. The Brazilian economy has not been as strong as Bolsonaro had hoped. His environmental policies are nothing short of disastrous, scaring off many other nations from developing further ties with Brazil right now. The country remains in something of a holding pattern until their next election.

Whether you manage an SME in the US, EU, UK, Brazil, or in a developing nation where grounds are always shifting, you're going to have learned to be comfortable with uncertainty in 2020. Export Portal can help guide you through these choppy waters and even help you prosper.