Brexit Leading Firms to Set Up Shop in Germany

According to an article put out by Reuters , with impending Brexit deals to be made over the next year, Germany has also reported around two dozen British-based firms opening offices in Germany, which could lead to offering at least 680 new jobs. For Britain, this could be signaling a disdain for the upcoming Brexit, while for Germany it will be a great way to capitalize on their close trade partner leaving the European Union. Most of these companies were in the Finance and Business Services industry, a little under a third being IT Services, and the other 40% being a mix of other industries.

It is important to note that these moves were likely in response to potential new tariffs and taxes to be paid through the exportation of good to Germany and the EU. In addition to this, Germany is the UK's second largest partner to whom they export goods. Do you believe that this could signal economic trouble lying ahead for the UK, or will their "business as usual" promises come to fruition?

Washington and Brussels put pressure on Brexit Britain

As Great Britain plans on exiting European Union on January 31st 2020, it hopes to improve trade relations with United States. In order to achieve this goal, Great Britain will have to comply with United States standard of trading which includes no digital tax on American companies operating in United Kingdom, abort its plan on letting Chinese company Huawei plant 5G cellular networks in U.K. and finally put maximum pressure on Iran so that it proves its loyalty to Washington. These trade terms aren't favorable and so Chancellor Sajid Javid hopes to improve trade with European Union bloc according to his recent talk at World Economic forum.However, EU is giving a tough time to U.K as European commission is planning to block U.K. from securing same rights as other European countries for, they fear that U.K will gain competitive advantage over European bloc and eventually move away from trading with her European counterparts. With the current scenario laid out, it is fascinating to see IMF being optimistic of Brexit Britain performing well above than France and Germany. Do you think IMF prediction of Brexit Britain would turn out true with all constraints imposed by Washington and Brussels? https://www.ft.com/content/6a9800c2-3d16-11ea-b232-000f4477fbca

Following the trade war with China, Trump mentions that he is interested in possibly posing automotive tariffs on European countries. The UK and Italy have discussed tax delays to prevent this from happening; however, Treasury Secretary Steven Mnuchin said that that will cause Trump to implicate the tariffs sooner. Trump is also discussing making some tax cuts again, while Jerome Powell has raised Federal Fund Rates. Trump said if they didn't GDP would have been higher. What positive or negative effects do you think economic tariffs on exports to Europe would have on our economy?

China's birth rate hits lowest level in modern history

According to Chao Deng of Marketwatch.com, China's birht rate fell by 4% in 2019, marking the third consecutive year of birth rate decline. While the Chinese government is putting in efforts to reverse this trend, it is already having consequences: nearly one fifth of China's population is age 60 or older, the population is swiftly aging, and the workforce is shrinking as more Chinese citizens retire. This may have negative impacts on the economy due to the price of labor increasing, not to mention healthcare as a larger portion of the population is elderly. Japan and South Korea apparently face similar problems, but on a much smaller scale than China is facing. They do, however, have a story to tell; other Asian countries who have experienced this phenomenon have shown that once declining, it is extremely difficult to get birth rate back up. This will likely bog down development in China to some extent, and experts at Capital Economics predict that China's growth rate will decrease by half a percentage point each year until 2030.

What do you think the Chinese government can do, if anything, to manage the impacts of this trend? What other consequences can you see arising from it that are not discussed in this article?

https://www.marketwatch.com/story/red-flag-for-economic-growth-as-chinas-birth-rate-hits-lowest-level-in-modern-history-2020-01-21

U.S. Union Membership Hits Another Record Low

Union membership has been declining for the past couple of decades, however, the number of union members fell by 170,000 in 2019 which was a year when US employers added more than 2.1 million jobs. This reduction in the share of the workforce in labor unions now amounts to 10.3%, the lowest portion recorded since 1983. Marick Masters, a business professor at Wayne State University, said, "The big picture presents the now familiar story of a gradual decline in unions across most industries". 

Considering that we are still experiencing the largest economic growth period in history, more and more people are entering the labor market which in context should lower working wages. Do you expect there to be a resurgence in unions in the near future? Is the decline in union membership responsible for stagnating wages?

China’s Improving Economic Data Masks Deeper Problems

https://www.nytimes.com/2020/01/16/business/economy/china-economy-gdp.html

Despite the increase in consumer spending, favorable trade deal with the U.S and standing as the second-largest economy, China is still facing a battle with its slowing economic growth figures. Since China opened up to the world about four decades ago, it has been facing some major challenges, and the largest one being their tendency to borrow. The country is loaded with trillions of dollars of debt, and this resulted in an annual growth rate of 6.1 percent reported last Friday. This is the slowest pace it has faced in the past 29 years, and careless borrowing has harmed the economy in the short run. As a result, China's corporate sector has been struggling to pay their bills as they are strapped for cash. The auto and property industry, two key drivers of growth, have been struggling with their sales alongside. Chinese companies will find it expensive to borrow in the future if their current debts are not curbed. Certain companies did not improve their sales, despite having borrowed large sums of money, and Larry Hu, chief economist at the Macquarie Group said these red flags indicate that the economy's recovery Is not likely in the next four quarters. 

What measures do you think China might take to alleviate the economic pressure from their debts?

US Economic Growth to top 3% in 2020?

The White House's top economic advisor, Larry Kudlow, believes that the US economy has a very realistic chance of topping 3% in 2020. This would be a very significant achievement, as we saw slower than normal growth in 2019 that caused many to believe a recession was looming. However, after a strong Q4 in 2019, partly due to holiday sales, the stage has been set for a promising 2020 economy. A major contributor in that assumption would be the manufacturing industry, which has seen an unexpected rise in output numbers early in 2020.

Do you see his as a sign of the threat of a nearby recession disappearing?