Filtered by Topic: Trump's second term Use setting Trump's second term
The extraordinary tariff chaos over the past week and associated fallout in the financial markets (see our coverage here ) have increased the chances that the damage to the UK from the US trade war will be larger and that inflation and interest rates will …
11th April 2025
At some point a partial rollback in tariffs is likely… The effective US tariff rate on China started the year at 11% (based on 2024 weights). It is now at 145%. Earlier this week we noted that tariff rates above 100% would cause Chinese exports to the US …
Opportunities for India amid tariff chaos All of our analysis of the latest twists and turns in the trade war – notably President Trump’s decision to postpone reciprocal tariffs (bar China) for 90 days – can be found here . Of course, things are subject …
The US-China trade war and OPEC+’s surprise oil output hike has sent oil prices tumbling and are now below breakeven fiscal and external levels for the many Gulf oil producers, notably Saudi Arabia. If oil prices stay low or even fall further, governments …
10th April 2025
Despite President Trump’s latest decision to pause the US’s “reciprocal” tariff regime for 90 days, there is still a real risk that the second-order effects of higher US tariffs on the UK economy are bigger and that UK inflation and interest rates fall …
The direct trade impact of US import tariffs on Africa is likely to be limited, but there could be more harmful indirect effects via weaker growth in other key trading partners, lower commodity prices and/or a more challenging external financing …
Although President Donald Trump was able to resist the stock market sell-off, once the bond market began to weaken too, it was only a matter of time before he folded on his eye-wateringly high tariffs. Trump has announced an immediate 90-day pause, during …
9th April 2025
Enter your own universal and specific tariff scenarios and see the impact on the effective tariff rate, inflation and GDP. If you have subscriber access to the data underlying this dashboard, you can download it via the menu options in the top right of …
President Trump’s reciprocal tariffs are particularly high on some of the lowest-income EMs, which are also among the most vulnerable to the suspension of US aid flows. That raises the risk of balance of payments strains, and also provides an opening for …
8th April 2025
Vietnam is pulling out all of the stops to secure concessions from Donald Trump. If the tariffs remain in place, the hit to Vietnam’s economy would be severe and would prompt a sharp cut to our GDP growth and interest rate forecasts for this year. Not …
The tariff storm is far from over. President Trump and some of his key officials used the weekend to dig in their heels on his ‘Liberation day’ tariffs, and European and Asian markets have fallen heavily again on Monday while S&P 500 futures point to …
7th April 2025
Clinton adviser James Carville famously quipped that he would like to be reincarnated as the bond market but, as President Donald Trump is now finding out, the equity market can be pretty intimidating too, with the S&P 500 down by more than 10% since his …
6th April 2025
Republicans need to get with the recycling program President Donald Trump’s big “Liberation Day” announcement went down badly in the markets, as fears mounted that the bigger-than-expected reciprocal tariffs would trigger a recession. The surge in March …
4th April 2025
A weaker renminbi, just not against the dollar China’s response today to President Trump’s 34% “reciprocal tariff” on China was more aggressive than we had anticipated . (Initial thoughts on Trump’s tariff on China can be found here .) The moves take the …
Asian economies were hit with some of the highest “reciprocal” tariffs by the US. (See Chart 1.) Our initial response is here , and more of our coverage can be found on this page . Chart 1: “Reciprocal” Tariffs Sources : White House, Capital Economics …
China has responded to US tariffs with an additional 34% tariff on all US goods, the most sweeping it has ever imposed. Some US companies have also been added to China’s unreliable entities list and export controls have been expanded. This is an …
Tankan consistent with further tightening Compared to other Asian economies, the 24% US tariff on imports from Japan announced this week looks rather modest. Nonetheless, the chances that the Bank of Japan will hike rates in May as we’re forecasting have …
The exemptions granted to many commodities from reciprocal tariffs suggests that the Trump administration is reticent to drive a further wedge between US and international metals prices and/or risk boosting gasoline prices. More generally, against the …
3rd April 2025
We hosted two online Drop-In sessions on 3 rd April to discuss the fallout from President Trump’s Liberation Day tariff announcement. (See a recording here .) This Update contains answers to some of the questions that we received and links to several more …
MENA can’t escape Trump’s trade war The Executive Order signed by US President Trump yesterday brought a flat 10% tariff on all countries’ exports to the US with an additional reciprocal rate for some economies. While the Middle East may be less …
If the 20% US tariff on the EU is sustained it is likely to reduce economic activity in the euro-zone by more than the 0.1-0.2% of GDP we had previously assumed. The impact on inflation should be small but risks to growth and confidence cement the case …
President Donald Trump’s country-specific reciprocal tariffs turned out to be bigger than expected, with our calculations pointing to an import-weighted average tariff of 15.0%. If, as the Executive Order suggests, the 25% product-specific tariffs already …
2nd April 2025
Our scenarios of how different rates of US tariffs on UK exports could influence the UK are designed to provide clients with some real-time context when President Trump announces tariffs tonight. These are rough rules of thumb for blanket tariffs on all …
Ahead of reciprocal tariffs being announced on April 2 nd , dubbed “liberation day”, this Update addresses to what extent US commodities trade could be caught in the crossfire. The most exposed commodities are generally industrial metals, especially …
31st March 2025
The US would have to exert a lot of pressure to coerce most major countries into putting large tariffs on goods from China . Curtailing trade with China would have an economic cost and even countries that have closer economic ties with the US would still …
The President is calling it “Liberation Day”, but nobody knows exactly what the White House will come up with when the long-awaited reciprocal tariffs plan is finally unveiled on 2nd April – including, it seems, the administration itself. Initial …
Trump imposes 25% tariff on auto imports Following media reports at the start of this week that product-specific tariffs would be deferred, President Donald Trump has changed tack once again and announced that all finished motor vehicle imports will be …
26th March 2025
It is becoming clear that President Trump’s actions are driven by both his fixation on reducing the US trade deficit and his transactional approach to dealing with other countries. So, even though the Trump administration’s ideas to transform the entire …
25th March 2025
How to fix the global economy? I explained last week why global trade imbalances matter and outlined a framework for thinking about a ‘grand bargain’ to reform the global trade system. The core challenge is reducing trade imbalances while keeping the …
24th March 2025
Overview – Mexico is one of the most vulnerable countries to US import tariffs and, at best, the economy will just about eke out positive growth this year. More sweeping tariffs than we have embedded in our forecasts could easily tip the economy into …
20th March 2025
China’s presence in Latin America is increasingly seen as a strategic threat by the US. This Focus uses interactive charts to map out economic, financial and institutional linkages between China and Latin America. While ties have expanded dramatically …
19th March 2025
The US president’s approach to trade policy may be – putting it charitably – inconsistent, but Donald Trump has at least been consistent in how he views the US balance of payments. As far back as the late 1980s, Trump was publicly complaining about how …
17th March 2025
Tariff flip-flop amplifies confusion Markets reacted badly this week when President Donald Trump first imposed 25% tariffs on all imports from Canada and Mexico, with the only partial exemption for Canadian energy. The next day, under pressure from the …
7th March 2025
Taiwan vulnerable to semiconductor tariffs China, Mexico and Canada have so far been the focus of Trump’s tariff measures. But it seems likely other countries will soon enter the firing line. Given its large trade surplus with the US, Taiwan is an …
Weak global demand a risk to OPEC+ plans The recent confirmation from OPEC+ that it intends to go ahead with the plans to gradually increase oil production from April has coincided with ongoing signs of weakness in global oil demand. Although OPEC+ has …
6th March 2025
Stay on top of the global macro impact of tariffs with these interactive dashboards. If you have subscriber access to the data underlying this dashboard, you can download it via the menu options in the top right of each chart or table. If you would like …
Vietnam has seen a surge in exports to the US in recent years and arguably emerged as the biggest winner of Trump’s first trade war with China. However, Vietnam’s huge bilateral trade surplus with the US makes it a likely target for penal tariffs in …
President Donald Trump's decision to grant a one-month exemption to the Big Three Automakers (Ford, GM & Stellantis) is something of a disappointment given the earlier heavy hints from his Commerce Secretary Howard Lutnick that more widespread relief was …
5th March 2025
The 25% tariff on all US imports from Mexico that came into force today will, if it stays in place, knock Mexico’s economy into recession in the coming quarters. A contraction in GDP this year of 1% would be plausible. And unlike Canada and China (also …
4th March 2025
If the US tariffs remain in place, Canada will undoubtedly fall into recession. The limited decline in the loonie so far suggests markets are still pricing in a quick U-turn from the Trump administration. But even if the tariffs are soon lifted, their …
In light of Donald Trump's decision to push the button on tariffs on China, Mexico and Canada, Group Chief Economist Neil Shearing joins a special episode of the Weekly Briefing from Capital Economics to talk about whether this signals the start of a …
Our senior economists hosted this special online briefing all about the latest tariff announcements from the White House, their macro and market implications, and what comes next. During this 20-minute briefing, the team answered questions from the …
Japanese firms will suffer some collateral damage from the 25% US tariff on imports from Canada and Mexico. And if Trump presses ahead with tariffs on imports from Japan, carmakers would be most affected. Nonetheless, we suspect that the sales of Japanese …
President Donald Trump’s has claimed that there is “no room left’ for Canada and Mexico to avoid the imposition of 25% across-the-board tariffs at midnight tonight and he has reportedly signed a separate Executive Order raising the tariff rate on Chinese …
3rd March 2025
Things change quickly with Trump as President. Only two weeks ago, the title of our UK Economics Weekly was “Trump’s tariffs tirade becomes more troubling for the UK” as it looked as though the UK’s goods exports to the US would be hit with a 25% …
28th February 2025
With US tariffs now escalating, the key question is whether the People’s Bank (PBOC) will allow the exchange rate to adjust in response. We think it ultimately will, just as it did during the first trade war. But if we’re wrong and the PBOC attempts to …
