World Events Summary: 16th – 22nd January 2018

US Shutdown: political dysfunction in the U.S. continued to masquerade as an economic argument, resulting in another short-term government closure, followed by a deal to push out the real debate until 8th February. The compact calls for a vote on limited immigration reform but does not guarantee a viable outcome. Republican unified control of government makes it an easy blame-game target.

U.S.-China Trade: the Trump administration allowed the first Chinese acquisition of its term, in the semi-conductor industry, to take place. While this was a sign of continuing trade links the Trump team upended decades of official policy by stating that Chinese accession to the WTO was a mistake. This likely signals the end of the ‘engagement’ process and a move more towards ‘containment’. 

German Coalition Talks: the SPD delegates backed formal coalition talks with the CDU but by an unexpectedly close margin (362 vs 279). This reflects the ongoing disquiet in the party and polls which suggest its downward lurch in support is continuing. It remains to be seen whether additional concessions will be agreed by the CDU/CSU before the 440,000 SPD members vote on a final deal.