Geopolitics and Markets Review 8/7/2022

Farmers in the Netherlands are in protest over nitrogen emissions. The government wants to reduce these emissions that the farming industry produces through nitrous oxide which is a lot more powerful at warming the planet. It is produced from fertilizer use and livestock which as populations grow, albeit less rapidly in recent years, will require more food and hence more of these. Farmers are in protest as they will struggle to remain in business with a cut to nitrogen emissions. They are out in their tractors blocking roads and supermarkets as the government wants some areas to cut emissions by 70%.

Boris Johnson has resigned as prime minister of the UK. It came after a barrage of scandals came his way, including the COVID lockdown parties and the appointment of Chris Pincher as deputy chief whip. A replacement will be chosen by the conservative party in early September according to reports. The new prime minister will be thrown into the deep end, with the cost-of-living crisis and inflation not showing many signs of slowing down and a potential recession on the horizon. Also, relations with Europe aren’t at their best, with some calling for a stronger partnership with Brussels. The EU is looking rather fragile, with the Euro approaching parity with the dollar and energy shortages due to Russia diverting their exports the other way towards Asia. Will the UK look for other partnerships to get what it needs? I’ve been reading up recently on food self-sufficiency and who could feed their entire country without importing. The list is small, and if you couple this with countries that are energy self-sufficient as well then, the list shrinks even further. As global trade is dropping or at least changing direction, will new trade partnerships form, or will some countries see tougher times ahead as countries focus on themselves becoming more self-sufficient?