Last week’s most important development in the U.S. was President Donald Trump’s announcement on Friday that Washington had approved to impose tariffs worth $50 billion on China -- a move that escalates trade tensions between the world's two largest economies. The tariffs were initially announced in April.
The U.S. will implement a 25 percent tariff on goods worth $50 billion from China that "contain industrially significant technologies," according to a statement by the White House.
The new tariffs come "in light of China’s theft of intellectual property and technology and its other unfair trade practices," it added.
The administration, in addition, could impose additional tariffs if China engages in retaliatory measures, the White House said. Those could come if China would impose new tariffs on U.S. goods, services, agricultural products, or raise non-tariff barriers, and take actions against American or companies operating in China, according to the statement.
After the announcement, the U.S. stock market opened with heavy losses on Friday, with the Dow Jones going down more than 200 points, or 0.8 percent, at 1500GMT.
Back in March, Trump imposed tariffs of 25 percent on steel and 10 percent on aluminum imports, igniting a possible trade war. In return, China said it would impose $3 billion worth of tariffs between 15 to 25 percent on 128 American goods.
In April, Washington said it would impose 25 percent tariffs on 1,300 Chinese goods worth $50 billion. Beijing immediately said it would place 25 percent tariffs on 106 American goods worth the same amount.
The U.S.' trade deficit with China was $347 billion in 2016.
-Fed raises interest rates
The Federal Reserve increased its benchmark interest rate as widely expected, the Federal Market Open Committee (FOMC) announced Wednesday at the conclusion of a two-day meeting.
The Committee members voted unanimously to raise the federal funds rate by 25 basis points to a target range of 1.75 percent to 2 percent.
This marked the second rate hike for the year and the seventh since December 2015. The central bank made three rate hikes last year and one in December 2016.
The Committee said in a statement that it expected gradual increases in the rate that would be consistent with sustained economic activity, strong labor market conditions and inflation near the Fed's 2 percent target in the medium term. "Risks to the economic outlook appear roughly balanced," it added.
The FOMC also increased growth projections of the U.S. economy for this year to 2.8 percent, from the previous estimate of 2.7 percent in March.
Economic forecast for 2019 and 2020 was kept unchanged at 2.4 percent and 2 percent, respectively.
The unemployment rate projections were also lowered to 3.6 percent for 2018 (down from 3.8), and 3.5 percent for 2019, down from 3.6.
The FOMC will hold its next meeting July 31-Aug.1.
-Global energy consumption up 2.2 percent in 2017
Global energy consumption grew 2.2 percent last year, and marked the fastest growth since 2013, according to British Petroleum's (BP) Statistical Review of World Energy 2018 report released on Wednesday.
Energy consumption in China rose by 3.1 percent year-on-year; and the country also became the largest growth market for energy for the 17th consecutive year.
"By fuel, natural gas accounted for the largest increment in energy consumption, followed by renewables and then oil," the report said.
Natural gas consumption rose by 3 percent last year compared to 2016, marking the fastest rate since 2010. Consumption growth in natural gas was driven by China, followed by the Middle East and Europe. The U.S.' natural gas consumption fell by 1.2 percent year-on-year.
Global production of natural gas on the other hand rose by 4 percent on an annual basis, with the highest growth coming from Russia, followed by Iran.
Coal consumption increased by 1 percent in 2017, marking the first annual growth since 2013. The growth was driven largely by India. China came next.
Coal production in the world also grew by 3.2 percent last year -- the fastest rate of growth since 2011. However, "Coal’s share in primary energy fell to 27.6 percent, the lowest since 2004," the report said.
-US leads world oil production, consumption in 2017
The U.S. led world oil production and consumption yet again last year, according to BP’s report.
With recovering crude oil prices last year, total oil production in the U.S. rose 5.6 percent from the year before and increased to average 13.06 million barrels per day (mbpd) in 2017, the report said. This placed the U.S. on top of global oil production for the fourth consecutive year in 2017.
As Saudi Arabia and Russia began trimming their output levels in January 2017 to lower the glut of supply in the global oil market in line with an OPEC production cut deal, both countries saw decline in their production levels last year.
Saudi Arabia's total oil production fell 3.6 percent from the previous year to average 11.95 million barrels in 2017, according to the report.
Total oil production of Russia, on the other hand, was down 0.1 percent from 2016 to average 11.26 million barrels last year, ranking the country in third place in this respect.
While the U.S.' oil production represented 14.1 percent of global oil output last year, the country continued to be the top oil consumer in the world. Oil consumption in the U.S. rose 1 percent from the previous year to 19.88 mbpd in 2017, the report said.
Thus, the country's share in global oil consumption last year was 20.2 percent, acccording to the report. The U.S. has also been the top oil consumer since 1965 -- the year that BP oil data became available.
-Oil prices fall almost 4 percent
Crude oil prices fell almost 4 percent on Friday with worries over that oversupply in the global market could emerge once again if Saudi Arabia and Russia agreed to increase their output after an OPEC meeting this week.
OPEC will hold its next semiannual meeting on Friday, June 22, in which the cartel's heavyweight Saudi Arabia could push a move to increase its oil production level. If such a move is supported by Russia, it could once again increase the oversupply in the global market and create a downward pressure on crude prices.
The Saudi-led OPEC and ten non-OPEC countries led by Russia had agreed in late 2016 to cut their output a total of 1.8 million barrels per day to trim the glut of oil supply in the market. The countries began trimming their production levels at the beginning of January 2017, while the agreement is set to expire at the end of this year.
-What to expect from this week?
OPEC will announce its decision regarding oil production levels following its semiannual meeting on Friday.
On Wednesday, the U.S.' weekly change in crude oil production and inventories will be out. Change in the U.S.' oil rig count will be announced on Friday.
On Monday, Atlanta Fed President Raphael Bostic, New York Fed President William Dudley and San Francisco Fed President John Williams will speak.
On Tuesday, St. Louis Fed President James Bullard and Fed President Jerome Powell will make speeches.
On Tuesday, housing starts and building permits for May will be announced, and on Wednesday existing home sales for May will be out.
Manufacturing and Services PMI for June will be released on Friday.