The new reciprocal tariffs turned out to be bigger than expected, agreed Neil Shearing, group chief economist at consultancy Capital Economics.
Canada and Mexico got off lightly and will be subject to 25% tariffs but only on things not covered by the United States-Mexico-Canada Agreement. "Other winners include Australia, Brazil and the UK, who will only incur the minimum 10% tariff," Shearing wrote. "In broad terms, China and other countries in Asia have been hit relatively hard."
According to early calculations by Capital Economics, if the tariffs are kept in place, they could reduce GDP in China by around 0.5% relative to the pre-tariff baseline. For the euro zone and Japan, it could mean a hit of around 0.2% of GDP.
