At this time of year, as regular readers know, I ask myself what were the biggest stories of the year slipping away, in terms of its business/financial news. Last year, for example, stories with a bearing on the financing of the war in Ukraine were dominant.
This year ... not so much. With the single exception of July that particular war stays outside of this list. The war in Gaza, and the question of "what next in financial/business terms for that fraught tract of land," does make an appearance. But Sino-American economic relationships dominate the list this year.
I'll break matters down by month as usual, and as is my habit I will avoid assigning priority among the various monthly champions. Each is tagged with a theme but each is a news story, NOT a theme. Each is a story about some "who" doing some "what" at a where and when.
January. Sino-America economic relations I. The new President of the US and certain Silicon Valley titans announced a private-public initiative on artificial intelligence. But with beautiful timing, the following day High-Flyer, a Chinese investment fund, announced DeepSeek, a new AI model that seems to have leapfrogged those titans in unexpected ways. Now the US public and private sectors are playing catchup. It was a sputnik event for software.
February. Sino-American economic relations II. A new trade war may have just begun between the People's Republic of China and the United States. President Trump announced draconian tariffs on goods from Canada, Mexico and China. But then almost immediately relented, for at least a cooling off period, with regard to Canada and Mexico. This gave the strong impression that China was the real target all along.
March. Gaza reconstruction. The Arab states collectively have put a new Gaza reconstruction plan on the table -- one that seems less reality challenged than does the 'Riviera' Trump plan set out a month before. The Arab plan would require an ante of $53 billion and would allow for the return of the displaced. Several foreign ministers of western European countries have endorsed the plan, at least as a starting point for further negotiations.
April. Euro-American economic relations. Europe has been looking for an alternative to reliance on Musk's Starlink in terms of a satellite-internet network. This is not a textbook economic competition; it is geopolitical rivalry, with economic tools. That becomes obvious this month: Europe wants a service independent of the current crowd in DC. Accordingly, Germany has been paying for Ukraine's access to a network operated by France-based Eutelsat.
May. POTUS's claims to tariff-creating powers. The International Trade Court agreed with plaintiffs who had asked it to strike down Donald Trump's ever-shifting schedule of "reciprocal tariffs." The bipartisan make-up of the three-judge panel who took this action seemed to augur well for the survival of the ruling and the death of this craziness. [An appellate court upheld the ITC decision in August.]
June. Japanese-US economic relations. President Trump signed an executive order approving of the acquisition of US Steel by Nippon Steel for $14.9 billion after two national-security reviews. POTUS says the US govt has a "golden share" of decision making on the combined company but details of that arrangement at this writing are not clear. Oddly, Trump's name has the same first four letters as the name of the last president who sought to nationalize the steel industry.
July. Financing a war Putin goes "Fortress Russia," seizing $50 billion in assets so he can continue the war with Ukraine. Seizures involve both the assets of western based businesses and those of domestic businesses. Economy of Russia is looking like something that would have been familiar to Leonid Brezhnev. Reuters does some solid investigating here. Near end of month Russia's central bank slashes key interest rate.
August: Showdown over control of the US central bank. On the evening of Monday, August 25, President Donald Trump purported to fire a Governor of the US Federal Reserve -- Lisa Cook. Cook said (accurately) he had no such power and she was not resigning, setting up a showdown. Cook has a Ph.D. in economics, UC Berkeley. She sues and the court -- in early September -- says she continues to be Governor until the matter of the President's supposed authority to fire her can be hashed out.
September: Argentina. Early this month the country's ruling party lost an election in the province of Buenos Aires. That seemed likely to enhance the difficulty for President Javier Milei and his party, La Libertad Avanza, in pushing through the market and pro-US-dollar reforms that Milei wants. The Peronists are fighting him on those reforms. [In October, Milei will win critical legislative seats with some expensive help from Donald Trump and the US taxpayers.]
October: South Africa. The Financial Action Task Force, an international body created by the G8 nations in 1989 as an effort to crack down on money laundering and terrorist financing, removes South Africa's rand from its "gray list" of suspect currencies. This is good news for South Africa which, importantly, is the "S" in the acronym BRICS -- a group with Brazil, Russia, India and China interested in shaking centrality of the US dollar. Another BRICS country will be very prominent in the financial news in the following month....
November: Brazil and climate change. The COP-30 summit opened on November 10, with representatives from 190 countries in attendance in Belem Brazil. The United States is not among them. The conference proved a good backdrop for a controversy specific to Brazil -- about infrastructure and Amazonian deforestation. Protestors repeatedly disrupted the proceedings to make the point that "our forest is not for sale."
December: Sino-American economic relations III. We end this year here we began it, with the single most important bilateral economic/trading relationship on the planet. This month the Trump administration permitted Nvidia to export its advanced H200 semiconductors for the PRC. This is a critical hardware component for getting and remaining on the cutting edge of AI research and until now it has been US policy to ensure that companies like Nvidia sell foreign companies only materials that are a few years BEHIND their own newest and shiniest.
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