President Trump’s first 100 days in office have brought substantial shifts in US policy. The next 100 will start to reveal whether his presidency is causing a realignment of the global economy. There are two key questions: will most countries be able to strike deals with the US that leave tariffs at historically-high but tolerable levels? And will China get a respite too or will Washington sharpen its recent focus on containing China over other countries? Our base case is that the global economy slows but avoids recession, that China remains in the firing line and that, while America’s traditional allies will seek greater independence in areas such as defence and security, a fundamental geo-economic realignment will be avoided.
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