Trump’s Jerusalem move may undermine his Iran policy

Significance Previously, the United States, like the rest of the international community, had held that the question of Jerusalem's status was an issue for final-status negotiations between Israel and the Palestinians. After taking East Jerusalem in the 1967 war, Israel declared the whole city as its “indivisible” capital; however, its settlements there are not recognised under international law. Impacts A two-state solution to the Israeli-Palestinian issue will become even more unlikely. Trump's high-profile gesture will shore up the domestic position of the Israeli premier. Fears of Palestinian violence could put short-term pressure on Israel’s currency and stock market. Trump will cement his appeal to core supporters (further helped by the anger of ideological opponents).

Significance On her return from the United States and Russia, President Dilma Rousseff's problems have not changed; indeed, most worsened during her absence. Brazil's economic outlook is bleaker, the governing political coalition weaker and the scope of the corruption scandal has widened. Impacts Congress will push back more strongly against spending cuts as the government's situation weakens. The PMDB as a whole is unlikely to follow Cunha's lead, at least in the short term. Lula's fate will have major longer-term implications for the future of the PT.


Subject The macroeconomic outlook for China. Significance Despite fears of a slowdown, China has kept up GDP growth of 6.8% year-on-year for three successive quarters. However, key measures of economic activity have weakened, and tensions are escalating with the United States over trade and technology. Impacts A swathe of new financial regulations and high-profile arrests will likely continue in 2018. Negotiations are likely to alleviate the immediate pressure from Washington, but underlying concerns over the tech sector will continue. A recently announced sweeping government reorganisation will be implemented, helping to tackle financial and environmental risks.


Significance Pragmatism will be to the forefront in the early implementation of the Phase One trade agreement between the two countries that came into effect in mid-February. At the same time, the hard line is more prominent in the Trump administration’s efforts to curtail China’s telecoms giants, Huawei Technologies and ZTE Corporation. Impacts The mistrust between the United States and China during the pandemic will discourage cooperation in other spheres. China’s drive to reshape the institutional architecture of global governance and to be self-sufficient in technology will continue. Despite disliking multilateralism, Trump will engage with multilateral bodies to curb China’s efforts to reshape global governance. Any US-EU trade agreement could seek to limit China exploiting additional fraying of US-EU relations caused by the pandemic.


Subject Profile of Ko Wen-je. Significance There are strong indications that Ko Wen-je, the independent mayor of Taipei, will run for election as Taiwan’s president in January 2020. Presidential hopefuls often launch their election campaigns with US trips to shore up relations with Washington, Taiwan’s key security backer; Ko will make a nine-day visit to the United States later this month. He also stated last month that he was considering forming a new political party; the single reason he would need a party of his own would be to make a run for the presidency. Impacts Ko would be a controversial and probably one-term president. Ko could have a game-changing impact in the short term but is unlikely to alter Taiwan's political landscape fundamentally in the long term. Ko would likely take a more moderate stance on China than Tsai does. Ko's outspokenness is what makes him popular, but it also makes him prone to gaffes that could ultimately undermine him.


Subject Sending high-level criminals to face incarceration in the United States is a perpetual source of controversy in both Colombia and Mexico. Significance The Colombian peace process has revived debate over extradition, raising questions of justice, sovereignty and national pride. Meanwhile, the escape of Sinaloa Cartel drug lord Joaquin 'El Chapo' Guzman from a Mexican high-security prison in July gave further weight to the arguments of those in Mexico advocating extradition to the United States. Impacts Prison systems and facilities are unlikely to improve significantly in the short-to-medium-term. Mexico will extradite more high-profile cartel members to the United States. Colombian paramilitaries are less likely to be extradited if implicated in human rights abuses. Colombian guerrillas will not be extradited.


Significance This is the latest in a series of deadly terrorist attacks attributed to al-Shabaab since late July hitting high-profile targets in Mogadishu. The militant group is succeeding in carrying out these strikes as the country prepares for a political transition. Impacts The United States and other Western backers of the Somali government will step up security support to safeguard the elections. Al-Shabaab will accelerate complex attacks into November aimed at soft targets. The attacks will fail to disrupt upcoming indirect elections but could undermine confidence in security and the political process.


Significance The hacking of emails of the Democratic National Committee (DNC) and Hillary Clinton’s campaign chair has touched off national discussion in the United States on Russia’s involvement and -- along with other high-profile cyberattacks believed to have been carried out by states such as those on Sony in 2014 and Saudi Aramco in 2012 -- have shone a spotlight on the complexity of attribution in cyberspace. Impacts Companies will increasingly find themselves in the crossfire of disputes between states. Governments will need to not only ramp up their country’s defences but also work with the private sector to ensure their cyber readiness. Societies may experience a challenge to democratic processes as states use cyber instruments to influence foreign elections.


Significance Canada has a temporary exemption, but Trump is calling for North American Free Trade Agreement (NAFTA) renegotiations to be completed speedily. The NAFTA and tariffs issues have, therefore, become fused, raising questions about the outlook for Canada-US foreign relations. Impacts In the short term, Canadian steel companies may benefit from reduced foreign providers’ presence in the United States. Canada’s NAFTA negotiators will not respond to the Trump team’s threat to impose tariffs. Canadian businesses will begin to migrate south to take advantage of the new and more competitive US tax regime. Canada’s efforts to diversify its foreign trade and decrease US dependence will further accelerate, but still face hurdles.


Subject China-Japan relations. Significance Recent developments suggest that the troubled relationship between China and Japan may be improving. Both sides appear willing to establish a measure of rapprochement and restart economic cooperation. Impacts Both governments see the Trump administration's unclear and inconsistent approach to Asia as an opportunity to exercise regional leadership. If Beijing can force Pyongyang to cease behaviour that threatens Japan, this would improve its relations with Tokyo significantly. Japan's outreach to China will be more than balanced by its cooperation with the United States, India and Australia.


Significance The aim is to maintain some political distance from the US policy towards Iran. The United Kingdom will be hoping for support from France, Germany and Spain, among others. Impacts European powers will be more inclined to support Hunt’s plans as they avoid direct alignment with the United States. Washington could put pressure on the Europeans to toughen their position on Iran in return for shipping security support. Iran will continue to apply pressure on the international community through additional threatening actions in the Gulf.


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