Reshoring still more myth than reality Although it has been a priority for the last three administrations, the reshoring of lost manufacturing jobs remains more myth than reality. There has been a significant boom in the construction of hi-tech …
12th March 2024
The green transition will deal a significant blow to EM oil producers that have failed to save their windfalls (Nigeria, Colombia, Angola), but boost the export revenues of economies such as Chile and South Africa that are endowed with the raw materials …
4th March 2024
Donald Trump’s previous tariffs did surprisingly little damage to China’s economy, but China may find it harder to shrug off the damage in a rematch. Mr Trump is threatening larger tariff increases if he is elected again. And the factors that cushioned …
23rd February 2024
Trump’s new tariffs would accelerate global fracturing If he wins this year’s presidential election, Donald Trump’s plans for a universal 10% tariff on all imports and tariffs of up to 60% on imports from China specifically would subtract up to 1.5% from …
31st January 2024
The optimism about Mexico’s economic prospects from the “nearshoring” of supply chains looks overdone in our view. Sectors where Mexico is already well established, such as autos and some electronics products, stand to benefit. But without major reforms …
8th January 2024
During the past decade, the global economy has transitioned out of an era in which globalisation was the key driver of economic and financial relationships into one shaped by geopolitics. Previously, most governments had believed that closer economic …
16th November 2023
The past few years have seen Saudi Arabia continue to move away from the US orbit and, as part of our work on global fracturing, we no longer consider Saudi to be unaligned between the US and China. Instead, we now think that it leans more towards …
7th November 2023
The war between Hamas and Israel – and the potential for escalation to the wider region – has increased the uncertainty around the economic and financial market outlook, but in most scenarios is unlikely to generate a sustained hit to major asset markets. …
26th October 2023
The fracturing of strategic supply chains into US and China trade blocs threatens Australia’s existing significant trade with China but also presents Australia with an opportunity to align its trade relationships with its existing security …
15th March 2023
The shocks caused by the pandemic, the war in Ukraine and US-China tensions will have a lasting impact on the world economy, reversing decades of global integration in some areas while strengthening ties in others. In this series of reports we map out …
6th October 2022
The trend towards ever more “financial globalisation” has already decelerated and will probably slow further as the global economy fractures and policymakers favour resilience over efficiency. While a disorderly rupture of financial relations remains …
China’s dominance in the supply of some key materials needed for the green transition means that US-aligned governments will continue efforts to secure supplies from “friendly” sources, which could add to the cost of greening economies in the short …
China’s leadership has options other than invasion to coerce Taiwan to submit to its political control. The immediate economic and financial ramifications would differ in each case. But any scenario that upset the existing cross-Strait balance would come …
2nd August 2022
In adapting to the threat of having its foreign exchange reserves frozen, the People’s Bank is likely to shift more of its portfolio into unconventional alternatives, including EM sovereign debt and real assets. But as long as the PBOC wants to continuing …
1st April 2022
China and countries that align more closely with it than with the US together account for around half of the world’s population. But the China bloc is far smaller economically than the US bloc and far more dependent on the rival bloc as a source both of …
17th September 2021
The trade deal between the US and China marks an end to the first phase of the trade war. China’s pledges on imports from the US are unlikely to be met but that may not matter to the deal’s long-term success. It removes the downside risk of imminent …
15th January 2020
The rift that has widened between China and the US was caused by China’s emergence as a geopolitical competitor to the US, rather than the personality of Donald Trump. Decoupling will continue whether or not the two reach a deal on tariffs. This may spur …
17th October 2019
China is left with few good options to hit back at the US in ways that wouldn’t be self-defeating. Rather than direct retaliation, officials are therefore likely to focus their efforts on broader measures to offset the drag from US tariffs, including …
5th August 2019
China’s low-key response to last week’s tariff announcement by President Trump reflects in part a desire not to exacerbate tensions further. But Chinese officials will also be aware that, while they have a number of options for retaliation, restrictions …
28th March 2018
