Globalization Took Hits in 2016; Will 2017 Lead to More? - NBC 6 South Florida
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Globalization Took Hits in 2016; Will 2017 Lead to More?

The rise of Trump and the triumph of Brexit had their roots in the global financial crisis of 2008

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    NEWSLETTERS

    Globalization Took Hits in 2016; Will 2017 Lead to More?
    AP
    Theresa May, Donald Trump and Xi Jinping will be major leaders in 2017 of the U.K., U.S. and China, respectively.

    2016 was the year when globalization, the path that the world economy has largely followed for decades, took some hefty blows.

    The election of Donald Trump as U.S. president and Britain's decision to leave the European Union have raised questions over the future of tariff-free trade and companies' freedom to move production to lower-cost countries.

    Borders are back in vogue. Economic nationalism is paying political dividends.

    "We want our country back" was the rallying cry of those backing Brexit. A sound bite that had echoes in Trump's "Make America great again."

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    [NATL] Olympians Share Their Most Embarrassing School Memories

    From bad school pictures to awkward first day wardrobes, Team USA members can now look back on some of their most embarrassing school moments and laugh.

    (Published Friday, Aug. 18, 2017)

    The rise of Trump and the triumph of Brexit had their roots in the global financial crisis of 2008. Eight years on, the world economy has still to fully get past that shock to confidence — people are nervous, some angry, and many are seeking novel solutions to their problems. Next year, there's scope for more uncertainty with elections in France and Germany to name just two.

    Trump and Brexit were just two of the year's top stories in the world of business.

    BREXIT SHOCK

    In what was a sign of things to come, Britain voted to leave the EU in a referendum in June. The decision came as a surprise — certainly to bookmakers and many pollsters who had consistently given the "remain" side the edge — and means Britain has to redefine itself after 43 years of EU membership. Prime Minister David Cameron has resigned and the new government led by Theresa May is planning to trigger the formal process by which the country exits early next year.

    There are many shades of potential Brexit, from an outright divorce that could put up tariffs on goods and services, to a more amicable parting that sees many of the current trading arrangements kept in place. The pound's fall to a 31-year low below $1.20 at one point is testament to that uncertainty.

    TRUMP CARD

    2 Dead, 6 Injured in Knife Attack in Turku, Finland

    [NATL] 2 Dead, 6 Injured in Knife Attack in Turku, Finland

    Finland police said a man stabbed several people in Turku, Finland. Two people are confirmed dead and six others are injured. Police officers shot one suspect in the leg and took him into custody. Warnings were posted throughout the city for people to stay away from the downtown area.

    (Published Friday, Aug. 18, 2017)

    Pollsters and bookmakers got it wrong again a few months later when Trump defeated Hillary Clinton in the presidential election. Whether he translates his "America First" platform into action following his inauguration in January will help shape the global economy for the next four years at least.

    Trump has railed against long-standing trading agreements, including the North American Free Trade Agreement, punish China for the way it devalues its currency against the dollar, and tax U.S. firms that move jobs overseas. He has also laid out plans to bring America's creaking infrastructure up to 21st century standards, a new spending pitch that has the potential to boost jobs — but which could also lay the seeds of higher inflation.

    MARKETS MARCH ON

    Trump's victory did not cause the bottom to fall out of the stock market rally that's been largely in place since 2009, when the world economy started to first claw out of its deepest recession since World War II. In fact, both the Dow and the S&P 500 rallied to hit a series of record highs. Stocks have also benefited from a raft of big corporate deals this year — executives are seeing takeovers as a fast way to generate growth in what is otherwise a low-growth global economy disrupted by non-stop technological innovations.

    Notable deals in 2016 included the announcement of an $85 billion merger of Time Warner and AT&T and the $57 billion takeover of Monsanto by Germany medicine and farm-chemical maker Bayer. The $100 billion takeover of SABMiller by Budweiser maker Anheuser-Busch InBev was also completed.

    FED FINALLY DELIVERS

    Steve Bannon Out as White House Chief Strategist

    [NATL] Steve Bannon Out as White House Chief Strategist

    Steve Bannon has departed the White House, where he was President Donald Trump’s chief strategist. His tenure lasted seven months. White House chief of staff John Kelly and Bannon mutually agreed that Friday would be Bannon’s last day, according to a statement from the press secretary that said they were “grateful for his service.”

    (Published Friday, Aug. 18, 2017)

    During his campaign, Trump criticized Federal Reserve Chair Janet Yellen, saying she should be "ashamed" of the way she's run policy since taking the helm in 2014. A year ago, the Fed appeared set to follow up its first interest rate hike in nearly a decade with three or four more in 2016. In the event, there was no move until Dec. 14, when the central bank raised its main interest rate to a range between 0.5 percent and 0.75 percent.

    Many factors explained its hesitation to raise rates, including unease over the global impact of China's economic slowdown and, yes, uncertainty surrounding the U.S. election. But with the U.S. economy continuing to do better than most developed countries, unemployment below 5 percent, and inflation on the way up, the Fed finally delivered another hike. The markets are predicting another three or four increases next year. Those expectations have helped the dollar rally, especially as other major central banks persevere with super-loose monetary policies to breathe life into their economies

    CHINA'S KEY ROLE

    As the world's second-largest economy, China is playing a bigger role in the functioning of the global economy. Nowhere was that more evident than in the early months of 2016, when jitters over the scale of the slowdown in China caused wild swings in financial markets. Stocks took a pounding while commodities tanked, with oil skidding to 13-year lows, as traders factored in lower demand from resource-hungry China.

    The slump in commodities weighed heavily on economies like Australia that are big exporters of raw materials. China's economy is ending the year in relatively good health as authorities try to pivot the economy's focus from manufacturing to more consumer spending. But Trump's promises to take a tough stance in trade will be focusing minds in Beijing.

    OPEC TAKES A STAND

    Attack Kills 13, Police Kill 5 Suspects in Spain: Officials

    [NATL] 13 Killed in Car Attack in Barcelona; 5 Suspects Killed in Cambrils: Officials

    A white van jumped the sidewalk in Barcelona’s Las Ramblas district on Aug. 17, 2017. Police say 13 people have been killed and more than 100 injured in this terrorist attack. The area is one of the city’s top tourist destinations. Later, police shot and killed five terror suspects in Cambrils, Spain, in a separate incident.

    (Published Friday, Aug. 18, 2017)

    For the first time since Dec. 2008, at the height of the financial crisis, the Organization of Petroleum Exporting Countries cut its production levels. November's cut, soon followed by non-OPEC countries like Russia, helped push oil prices sharply higher. At over $50 a barrel, benchmark New York crude is markedly higher than the near 13-year lows around $30 recorded at the start of the year, when investors focused on high supply and concerns over an economic slowdown.

    The oil slump helped put several crude-producing countries into severe recessions, including Brazil and Venezuela, and even saw wealthy Saudi Arabia cut back on spending. The question for 2017 is whether OPEC — and non-OPEC — countries can deliver on their production promises. If they do and higher oil prices stick, that will push up inflation in the global economy.

    IT JUST GRATES

    One of the major reasons why popular sentiment has turned against governments has been a growing level of distrust of elites. Perhaps nothing illustrated the issue more than the so-called "Panama Papers," a leaked trove of data on thousands of offshore accounts that helped the wealthy, powerful and celebrities shelter their cash from the taxman, often without breaking the law.

    Critics say these tax schemes are the core of a system that gives an unfair advantage to big corporations and the wealthy. Outrage grew in the U.S. when it was revealed that Wells Fargo employees opened up to 2 million bank and credit card accounts fraudulently to meet sales goals. Bank employees also allegedly moved money between those accounts and created fake email addresses to sign customers up for online banking.

    It just grates.

    Manhunt For Suspects in Spain Terrorism Attacks

    [NATL] Manhunt For Suspects in Spain Terrorism Attacks

    Terrorism attacks in Spain left 14 people dead from two car rammings in Barcelona and Cambrils. A house explosion in Alcanar was also believed to be linked to the car attacks.

    (Published Friday, Aug. 18, 2017)