Switzerland-Davos 2020: American politics is the biggest risk facing the world right now, say experts

American politics is the biggest threat facing the world in 2020 and the looming presidential election will stress the country's institutions, influence economic and foreign policy and further divide an already polarized electorate, with potentially huge consequences for the climate, business and investors.

That's the view of experts at consultancies Eurasia Group and Control Risks.

The World Economic Forum, which is preparing to hold its annual meeting of political leaders and CEOs next week in Davos, is also warning of increased turbulence this year from trade conflicts and political polarization that makes it harder to tackle global challenges.

Control Risks says that President Donald Trump's campaign for a second term will drive decision-making in foreign policy, increasing the chance that investors will be caught off guard by populist moves favoring US factory workers or farmers.

"The campaign will focus foreign policy on managing crises, distracting US attention from non-urgent issues and geographies. Trump's thirst for deliverable 'wins' before the election, meanwhile, will amplify foreign leverage in trade and security relations," Control Risks wrote in a recent report.

Eurasia Group, which has designated US politics as the top risk for the first time in its annual assessment of the state of the world, warns that the election will be the most divisive in over a century, with the outcome likely to be viewed as illegitimate by roughly half the population.

The analysts expect the result to be contested, no matter which candidate triumphs.

"The 2020 election is an American Brexit — a maximally polarized vote where the risk is less the outcome than the political uncertainty of what the people voted for," Eurasia Group says in its report.

 "It's uncharted political territory, and this time in a country where uncertainty creates shock waves abroad."

In preparing its report ahead of the Davos meeting, the World Economic Forum surveyed 750 global experts and decision makers who named economic confrontations and national political polarization as the top risks in 2020.

Taken together, the reports depict a world facing thorny problems with few obvious solutions. Increasingly fractious politics in developed countries is undermining the rules that have underpinned trade and globalization for decades, giving elected leaders license to act unilaterally and stoking conflicts such as the trade war between the United States and China.

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US Economy: : The Next U.S. Recession Looking More Likely As Trump Weaponizes Trade And The Dollar - by Yuwa Hedrick-Wong

Recessions in the U.S. are typically caused by monetary tightening, financial crises stemming from asset bubbles or external shocks. In spite of the U.S. Federal Reserve’s U-turn on interest rate normalization, all three are casting darkening shadows over the American economy. Morgan Stanley warned in a report released this summer that the U.S. has entered a new phase of rising probability of a recession. What may spark the next recession, however, remains obscure. The final trigger is usually something entirely unanticipated. For instance, what tipped the economy over the edge and ignited the 2008/09 global financial crisis is not the widely observed collapse of the American housing bubble, but the unsuspected extraordinary concentration of ownership of mortgage-backed securities. This is why President Trump’s actions on trade and currency, which has made the global economy so much more turbulent, is so dangerous. Economic turbulence is spawning potential recession triggers that could unexpectedly tip the American economy into recession.

By weaponizing both trade and currency, President Trump has infected the global economy with deep uncertainty. In imposing sanctions and tariffs—as well as banning American firms from doing business with a growing list of foreign companies on grounds of national security—Trump has enfeebled world trade, turning it into a brake on global growth. The business outlook has dimmed because companies are no longer sure where and with whom they can invest and expand without incurring the ire of the President, and it is affecting companies in the U.S. as well as in the rest of the world. The China-U.S. trade war is especially damaging because it effectively puts business investment on ice and suspends any meaningful forward planning. Many American companies are also deeply worried about their business in China, which in recent years generates close to $300 billion revenues annually.

Trump is also weaponizing the U.S. dollar, instructing the U.S. Treasury to put more countries under surveillance for suspected “currency manipulation,” subjecting them to potential retaliatory sanctions. No surprise that China has been named currency manipulator after the yuan’s recent depreciation; but the list also includes many of America’s closest allies in Asia and Europe. Furthermore, Trump has also changed the rules to make it easier to label a country a currency manipulator. However, concurrent to these moves is Trump’s own hectoring the Federal Reserve to cut interest rates both to shore up faltering domestic growth and to weaken the dollar to make American exports more competitive. All of these shenanigans have made currency markets more volatile, undermining global trade growth, according to research by IMF chief economist Gita Gopinath.

Read more at: The Next U.S. Recession Looking More Likely As Trump Weaponizes Trade And The Dollar

Britain: Watch as planes - including the Airbus A380 - are buffeted by high winds as they land at Manchester Airport

Dozens of planes were buffeted by gusts as they landed on the airport's runway - watch video of an Aer Lingus flight and the Airbus A380 struggle in the winds as they land 

Airline passengers faced a see-saw ride when they arrived at Manchester in high winds today.
Dozens of planes were buffeted by gusts as they landed on the airport's runway.

Passengers on an Aer Lingus flight from Dublin were among those who safely touched down - closely followed by passengers an Airbus A380 from Dubai.

The Met Office has issued a 'yellow' weather warning for today, with gusts of up to 70mph expected in some parts of the region.

You can watch two dramatic videos of the landings below in the complete report by clicking on the link below.

Read and see more: Video: Watch as planes - including the Airbus A380 - are buffeted by high winds as they land at Manchester Airport - Manchester Evening News