Implications of the new US presidency: what awaits Ukraine? 19 November 2024 — 2:00PM TO 3:30PM Anonymous (not verified) 13 November 2024 Online

After 1000 days of Kyiv’s resistance, experts discuss how to secure Ukraine’s and Europe’s future.   

The 19 November marks 1,000 days since Russia’s full-scale invasion of Ukraine. The country faces an ever-more ferocious fight for its future existence.

The 19^th November marks 1,000 days since Russia’s full-scale invasion of Ukraine. The country faces an ever-more ferocious fight for its future existence.

Having been given time to adapt, largely due to the slow release of Western military aid, the Russian army is pressing home its advantage. Along the entire eastern frontline, the Russians are simultaneously bombarding Ukraine’s energy infrastructure and cities. With the election of Donald Trump in the US, it seems to many that the tide has turned definitively in Putin’s favour at the political, as well as the military, level.

Trump’s declared ambition to resolve the war in 24 hours implies a Russian-American deal, cutting Kyiv out of negotiations. Such an ‘agreement’ would endanger the country’s future and expose the rest of Europe.

This webinar will cover:

• Ukraine’s strategy of resistance in the context of Trump’s White House.
• The immediate risks during the transition period.
• How Kyiv sees Europe’s role in the new geopolitical environment. Will Kyiv completely give up on the US?
• The extent to which Germany, Ukraine’s second largest donor, can step in.  

Donald Trump’s policies risk making the US dollar a source of global instability Expert comment LToremark 13 November 2024

Although Trump favours a weaker exchange rate, his policies are likely to have the opposite effect. The risk is that the US dollar could become too strong, which is bad news for the global economy.

President-elect Donald Trump has a dollar problem. In recent months he has shown a clear preference for a weaker exchange rate to support the competitiveness of US exports and help reduce the US trade deficit. And yet, as the market has sensed since the US election, the much more likely outcome is that his policies end up strengthening the greenback. The risk is that the US dollar – which is expensive already – becomes more obviously overvalued, and this could increase the risk of global financial instability. 

The dollar has been on a rollercoaster ride in the past few decades. From 2002 until 2011, for example, the dollar weakened by around 30 per cent in inflation-adjusted, trade-weighted terms, according to BIS data. Yet in the years since 2011, the dollar has strengthened and is now at a more appreciated level than at any time since 1985.

What shapes this rollercoaster, broadly speaking, is the global balance of economic vitality: when the US economy gains momentum relative to the rest of the world, the dollar tends to strengthen; and vice versa. 

After China joined the WTO in 2001, the balance of economic vitality shifted decisively away from the US, in favour of China and other emerging economies. This was the decade of the commodity boom: the longest, biggest peacetime increase in commodity prices in nearly 200 years during which a sustained surge in China’s economy supported GDP growth across the developing world. The dollar weakened as a result.

But after 2011, a combination of factors – including the eurozone crisis and its aftermath, together with the sagging of the Chinese economy – tipped the balance of economic vitality back in favour of the US. The dollar strengthened once again.

And since both the European and Chinese economies remain very fragile, the balance of economic vitality seems likely to keep favouring the US dollar.

Two more considerations also point to a stronger US dollar under a second Trump administration.

The first is the exchange rate implications of Donald Trump’s proposed tariffs on imports. When the US imposes tariffs on a trading partner, the foreign exchange market tends to sell that trading partner’s currency, forcing it to weaken to offset the dollar-price increase induced by the tariff. This helps explain why the Chinese renminbi depreciated by some 10 per cent in 2018 after Trump began imposing trade restrictions on China in January of that year. 

More widespread tariffs on a whole range of US trading partners should therefore strengthen the dollar more broadly.

A stronger dollar should also result from the macroeconomic framework Trump seems likely to deliver. He will certainly want to extend his 2017 tax cuts beyond 2025 when they are currently due to expire, so a more sustained loosening of US fiscal policy seems likely. Since boosting the US economy will create inflationary pressure, the market will expect interest rates to end up higher than they might otherwise be. The resulting combination of looser fiscal and tighter monetary policy tends to be a stronger currency.

The dollar probably has a fair amount of room to keep going up, since it is not obviously overvalued just yet. The US current account deficit – the broadest measure of a country’s trade deficit, and a rough but useful measure of financial vulnerability – was a little over 3 per cent of GDP last year. 

This is around half the level it reached in 2006, just before the 2008 global financial crisis, meaning the risks arising from an overvalued dollar may be for the latter part of Trump’s second presidency.

A strengthening dollar is also not great news for the rest of the world economy. A strong dollar tends to depress global trade growth, restrict developing countries’ access to international capital markets, and make it more difficult for countries whose currencies will be weakening to keep inflation under control.

If and when the dollar becomes unsustainably expensive, a further problem will present itself: how to deal with an overvalued currency without risking a lot of financial dislocation.

This problem last occurred in early 1985, when the dollar was universally reckoned to be dangerously dear. At that time the US was able to call on trading partners who depended on the US security umbrella – the UK, Germany, France and Japan – to negotiate the ‘Plaza Accord’, which coordinated a series of interventions in the foreign exchange market that allowed the dollar to decline in a measured way.  

It is virtually unimaginable that something similar could be negotiated today, not least because Chinese policymakers believe that the post-Plaza strengthening of the yen in the late 1980s led to an economic disaster for Japan. Beijing will not play ball.

Without much scope for a negotiated decline in the dollar, more chaotic alternatives seem likely. 

One is that the market decides suddenly that it no longer has an appetite for expensive dollar-denominated assets, and this might lead to a messy adjustment in the foreign exchange market. 

Reading depends on spoken language. This is a simple statement with profound consequences for children whose spoken language differs from the language they are expected to read. For most children, the language skills they bring to school will support learning to read, which is mainly learning to understand their spoken language in a new form: print. However, some children’s language skills differ in important ways from the classroom language variety, and teachers rarely receive sound guidance on how to enhance their literacy instruction to meet these children’s needs.

Encouraging pre-kindergarten children to write affords teachers the opportunity to provide scaffolds to improve spelling development. Teachers, however, tend to provide more support than necessary to guide children's early spelling, which may stifle children's opportunities to engage in important thinking that helps them to grow in their literacy knowledge.

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