Weekend Review: Erdogan Wins the Turkish Election

Source: Forex News

On Friday, the US president announced that the US would place a 25% tariff on European vehicles. This led the index that tracks European vehicle manufacturers to fall by more than 2%. If this happens, it would mean trouble for Europe and its vehicle manufacturers which see the United States as an important market. Recent research show that the losses for these companies would be more than $5 billion a year. The US would not be spared either as the jobs of more than 165K people would be at stake. Presently, the EU has a tariff of 10% on all American vehicles while the US charges EU manufacturers a 2% tariff. Under Obama, the Transatlantic trade agreement was aimed at helping lower the tariffs between these countries.

Turkey is one of the world’s most important economies. Recently, the world has grown concerned with the leader, Erdogan. The concerns are that the leader has become more authoritative. Yesterday, the country went to an election to elect its new leader. At the end, Erdogan won the election easily. This was a setback to people who wanted a new leader to drive the fragile economy. In the past few months, Turkish Lira has fallen by half against the dollar. During the campaign, Erdogan promised to take a bigger role on the country’s monetary policy.

On Friday, OPEC leaders met in Vienna to deliberate on the future of crude oil. The leaders met to discuss the issue of supply and whether to have the status quo or increase production. In the end, the OPEC officials decided to increase the production by about 600,000 barrels a day. The meetings were tense with Iran announcing it would oppose any supply increase which was proposed by Saudi Arabia and Russia. There was also tension from the United States. The US president sent a tweet during the meeting asking the countries to increase the supplies. As shown below, the price of crude oil fell after the final decision.

In the European Union, Europe’s leaders met in Brussels to discuss an issue that has been a very contentious crisis for the past few years; immigration. Europe came into trouble when it demanded that all countries accept refugees and migrants from Africa. This led to a crisis that in part contributed to the Brexit crisis. Today, the crisis threatens the chancellorship of Angela Merkel of Germany. In this meeting, the officials agreed to some curbs into migration. Angela Merkel said that the region would work on how to control its borders and reduce migration to the region.  In the US, President Trump announced that he would favor a policy where illegal migrants are returned to their countries without the legal proceedings.

In the United States, the government announced fresh curbs for Chinese technology investments. In recent days, a good number of commentators have focused on China, which they view as the biggest threat to the country. In recent years, many Chinese companies have bought American companies especially those in technology sector. The Trump administration believes that these investments presents risks to the country. The new curbs are likely to reduce the amount of FDI flowing to the United States.

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