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Welcome to Factal Forecast, a look at the week’s biggest stories from the editors at Factal.
We publish our forward-looking note each Thursday to help you get a jump-start on the week ahead.
At least six people were killed and dozens more injured in Yemen last week when Israeli airstrikes hit the port of Hodeidah in retaliation for a Houthi drone strike in Tel Aviv that killed one person. In this week’s Factal Forecast podcast, Senior Editor Jimmy Lovaas and Editor Agnese Boffano discuss the rising tensions and what impact the hostilities may have on the ongoing war in Gaza as well as the Yemeni public.
Listen now or download on your favorite platform.
Week of July 26-Aug. 2
A Look Ahead
July 28 – Venezuela presidential election
Incumbent President Nicolas Maduro will face former diplomat Edmundo González Urrutia on Sunday in Venezuela’s presidential election.
What’s happened so far
Maduro came to power in a tight 2013 election as the chosen successor of late socialist icon Hugo Chavez. The 2018 election was boycotted by the opposition to protest Maduro’s democratic backsliding and authoritarian tendencies. Shortly after Maduro’s inauguration in 2019, the leader of the country’s National Assembly, Juan Guaido, made a failed attempt to seize power with the backing of the United States. Venezuela’s economic performance since 2013 has been among the world’s worst, with hyperinflation climbing above 300 percent a year with food insecurity at all time highs.
The impact
With the country in a state of economic crisis, the limited polling that exists has shown González could win decisively, but it remains to be seen if Maduro would surrender power in the event of a loss or launch another protracted presidential crisis like that of 2019. González is actually the third candidate put forward by the center-right opposition, as 2023 primary election winner María Corina Machado and her replacement Corina Yoris were both disqualified from seeking office. Thus far, at least 24 members of the opposition’s campaign have been jailed or are seeking asylum.
July 28 – U.S.-Japan security talks
U.S. Secretary of State Antony Blinken and Secretary of Defense Lloyd Austin will meet with their Japanese counterparts on Sunday for talks, amid a Chinese nuclear arsenal expansion that prompted the United States to reiterate that Japan and South Korea both fall under the American “nuclear umbrella.”
What’s happened so far
Deterring China and Russia through increased security cooperation in the Indo-Pacific region has been a key priority for the Biden administration, with officials in Washington making high-level visits to Australia, the Philippines, Korea, and Japan. The increasingly tense security environment is reflected in Japan’s historic defense spending increase and the possibility of upgrading the U.S. forces commander there to a four-star position.
The impact
The meeting is likely to contribute to the first-ever joint document on extended deterrence being compiled by the two countries’ governments that is expected to be completed later this year, according to a report from Yomiuri Shimbun. The document is not expected to be publicly released, but would contain details of U.S. capabilities and commitments in both peace and war time, including nuclear – one of the more tangible symbols of a continued U.S. determination to increase its diplomatic and military presence in the region.
What Factal will be watching for during Paris 2024
As with any major global event, Factal editors will be closely monitoring the potential for disruptions throughout the Games, amid concerns over everything from cyber attacks and terrorism to protests and extreme weather. Read more on our blog.
July 30 – U.S., Philippines foreign and defense chiefs to meet
The U.S. foreign and defense secretaries are scheduled to meet their Philippine peers in Manila for joint talks on Tuesday.
What’s happened so far
The United States’ visit follows a recent flare-up in tensions in the South China Sea, involving confrontations between the Chinese Coast Guard and Philippine resupply missions for a grounded warship at the disputed Second Thomas Shoal. Interestingly, the Philippines turned down U.S. offers of support and avoided invoking their mutual defense treaty, eventually reaching a provisional agreement to de-escalate tensions with China on their own.
The impact
Strengthening the Philippine-U.S. alliance, economic ties and security challenges will be up for discussion during the meeting, while Blinken and Brown will also meet with Philippine President Ferdinand Marcos during their visit.
Aug. 1 – Ukraine payment moratoriums expire
A two-year agreement to freeze Ukraine’s foreign debt will expire on Thursday.
What’s happened so far
The deal was initially struck in 2022 in the months following Russia’s full invasion of Ukraine and moved to freeze payments on $20 billion in international bonds. With Ukraine’s economy collapsing following Moscow’s full invasion, the agreement helped Ukraine save $6 billion and initiate the beginning of a slight recovery in 2023 after fending off Russia’s attempt to conquer Kyiv.
The impact
Ukraine struck an unprecedented agreement earlier this week to restructure its debt, marking the first time a country has done so in the midst of a full-scale war. The debt restructuring is key to stabilizing Ukraine’s economy as it continues to struggle as the war with Russia drags on with no end in sight after two-and-a-half years.
Aug. 1 – Italy’s Albanian migrant center to open up
Italy’s Prime Minister Giorgia Meloni has announced that its contested migrant centers being built in Albania will be operational starting Thursday.
What’s happened so far
During a visit to Rome by Albanian Prime Minister Edi Rama last November, the two officials ratified a €670-million ($728 million USD) project where Italy will have access to two facilities in Shengjin and Gjader, Albania. These facilities, administered by Italian authorities, are set to operate as reception centers for up to 3,000 migrants who arrived on Italian soil and are in various stages of their asylum-seeking processes.
The impact
Since her election as prime minister in October 2022, Meloni has continued to push forward with anti-immigration policies, including a much contested legislation change seeking to limit activities of rescue organizations operating in the Mediterranean. Italy’s interior ministry says government actions to combat immigration arrivals have led to a 60 percent decrease of migrants who reached the southern European country in the first six months of 2024, compared to the same period last year. Despite this, rights groups have long described the route from North Africa to the central Mediterranean as an incredibly busy and perilous journey, leading to more than 3,000 deaths in 2023 alone.
Aug. 1 – U.S. says tariff increases on Chinese EVs, batteries and chips to start
A drastic increase on U.S. tariffs for some Chinese goods, notably electric vehicles, is set to come into force next Thursday.
What’s happened so far
In 2020, the Trump administration, along with Canada and Mexico, replaced NAFTA with the USMCA trade agreement. Part of that agreement lets Chinese vehicles enter the United States at a lower tariff rate as long as they are assembled in Mexico. Chinese EV companies, because of large government subsidies, have outpaced the United States in producing electric vehicles at a lower price, making significantly more than any other country in 2023. In May, President Joe Biden announced the tariff on Chinese EVs would be increased significantly to 102.5 percent. The European Union followed suit by announcing a 38.1-percent tariff on Chinese EVs.
The impact
Biden said what China is doing is not competition, but “cheating,” and lawmakers have expressed concerns of cheap Chinese electric vehicles flooding the American market via Mexico. At least one nonprofit called it an “extinction-level event” for the auto industry. But this comes at a time when EV sales are lagging in the United States, meaning another avenue to reduce usage of fossil fuels will likely be shut down because of the ongoing trade dispute with China.
Aug. 1 – Iceland president takes office
Iceland’s new president Halla Tómasdóttir will take office on Thursday after triumphing in the country’s election.
What’s happened so far
Incumbent President Guðni Thorlacius Jóhannesson, who had served two four-year terms and was not term-limited, told the country in a New Year’s Day address that he would not seek re-election. Businesswoman Halla Tómasdóttir won the June 1 election, beating a crowded field of candidates where the top three finishers were all women. Tómasdóttir, who ran as an outsider to politics, captured 34.1 percent of the vote running ahead of former prime minister Katrín Jakobsdóttir who placed second with 25.2 percent of the vote.
The impact
While the post of president is largely ceremonial it acts as a uniting figure for the country. Tómasdóttir had campaigned on issues such as the role of the tourist industry and improving youth mental health.
What Else Matters
Biden drops out
The latest twist in the U.S. presidential race came on Sunday, when incumbent Joe Biden announced he was ending his campaign for a second term and backing Vice President Kamala Harris for the Democratic nomination. Biden’s decision came after weeks of hand-wringing among Democrats following an underwhelming debate performance and lagging poll numbers that showed him losing ground against former President Donald Trump. Meanwhile, Harris has quickly consolidated support within the party, clinching the support of enough delegates to win the nomination while posting record-fundraising numbers in the 24 hours following Biden’s announcement.
Watch for: Trump said Tuesday he is willing to debate Harris multiple times, while polling conducted since Biden’s announcement has shown a tight race. With the Democratic National Convention in Chicago now less than a month away, it remains to be seen how Harris intends to build a winning coalition in November, whether it involves appealing to disaffected conservatives who backed former UN ambassador Nikki Haley in the Republican primary, or relies on boosting turnout among young voters.
Israel-Yemen tensions
Officials from the Houthi-controlled north of Yemen said that at least six people were killed and more than 80 others injured after Israel struck an oil depot and several other targets in the city of Hodeidah on July 20. The Israeli army said it was in retaliation for a drone strike the day prior in central Tel Aviv, which left one person dead and several others hurt. Tensions have been simmering between Israel and the Houthi government since the Iran-backed group vowed to target any ships traveling along its coasts with links to Israel in the wake of Oct. 7, resulting in dozens of attacks significantly disrupting maritime traffic in the Red Sea.
Watch for: Although the Houthis have attempted to target Israeli cities with drones in the past, the attack on Hodeidah marked the first time that Israel responded directly. Officials in the Sanaa-based government have vowed an “effective response” to the airstrikes, with analysts fearing yet another active front will expand further in the region as more parties vow to continue targeting Israel as it continues its assault in Gaza after more than nine months.
Extended Outlook
What’s on our radar in the coming weeks…
July 26-Aug. 2
July 26
- 2024 Summer Olympics begin in Paris
July 28
- Venezuela presidential elections
- U.S. and Japan to hold security talks
July 30
- U.S., Philippines foreign and defense chiefs to meet
- Spanish PM to testify in graft probe case against wife
Aug. 1
- Iceland president takes office
- U.S. says tariff increases on Chinese EVs, batteries and chips to start
- Ukraine payment moratoriums expire
- Italy’s Albanian migrant center to open up
Aug. 3-9
Aug. 4
- Sydney’s mega metro rail line opens under harbour
Aug. 7
- Bangladesh Supreme Court to publish full verdict on government job quota system
Aug. 10-16
Aug. 13
- U.S. vice presidential debate
Aug. 17-23
Aug. 17
- Nusantara will officially be inaugurated as the capital of Indonesia, replacing Jakarta
Aug. 19
- Democratic National Convention begins in Chicago
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Top photo: Nicolas Maduro campaigns in 2013 in Caracas, Venezuela. (Photo: Joka Madruga / Wikimedia Commons)
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