Filtered by Topic: Geoeconomics Use setting Geoeconomics
Leadership signals policy flexibility in the face of trade uncertainty The Politburo has just concluded its April meeting which, as usual, focused on economic affairs. The communique signalled that monetary policy easing is still on its way and that …
25th April 2025
Gulf reins in oil overproducers Recent moves to hike OPEC+ oil output quotas but make overproducers cut production suggests that the Gulf economies are taking a firmer line on regaining global oil market share. But fresh falls in oil prices could scupper …
17th April 2025
The Spring Meetings of the World Bank and IMF take place next week under the cloud not just of US trade protectionism but also the Trump administration’s seeming hostility towards multilateral institutions – and the threat of US withdrawal. An end to (or …
Punitive tariffs have the potential to cause a substantial fall in US imports from China – a 60% tariff, for example, could cut imports from China by about a third over the next two years, with further falls after that. Some countries that face lower US …
15th April 2025
Available data don’t give a definitive answer to whether sales by Chinese institutions contributed to the recent volatility in the US bond market. But China’s state managers of foreign assets still appear to have more than half of their portfolios …
14th April 2025
Nobody knows where US tariff policy will ultimately land but one thing is starting to become clear: the Trump administration has China in its sights. The exemptions for various electronic goods, including smartphones and laptops, announced over the …
President Trump’s trade war has created material downside risks for the global economy. Our forecasts assume that tariffs on most countries outside China will stay at 10% and retaliation by other governments will be moderate. In this scenario, global GDP …
10th 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 …
Unless they are rolled back, the latest US tariff hikes mean that China’s shipments to the US will more than halve over the coming years, even assuming the renminbi weakens to 8.00/$. This will reduce China’s GDP by somewhere between 1.0-1.5% depending on …
9th April 2025
Direct hit from Trump tariffs to be limited African economies will, for the most part, be relatively unaffected by US President Trump’s tariff announcement this week, at least directly. But it may cause indirect harm through lower commodity prices. And …
4th April 2025
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 …
3rd April 2025
Mexico got off lightly from the tariffs announced by President Trump yesterday and the overall hit to the economy from US trade measures may be a bit smaller than we’d initially thought. Even so, we think growth will be very modest this year, perhaps just …
We’d already assumed substantial US tariffs on China in our forecasts. But the latest hikes take them even higher than we had anticipated. The economic hit to China will range between 0.5-1.0% of GDP depending on what happens to the exchange rate. China …
Whilst buying gold may reduce central banks’ overall exposure to the dollar, we don’t think that the surge in central bank gold demand reflects a severe loss of confidence in the greenback. Instead, the perception of gold itself as a safe haven is …
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 …
Motor vehicle tariffs to boost inflation The Trump administration’s 25% tariffs on most motor vehicle and some parts imports is an upside risk to our inflation forecasts. As a reminder, our forecasts have long been based on the assumption that Trump would …
28th March 2025
Autos now in the crosshairs The Trump administration’s announcement of a 25% import tariff on autos and some auto parts will have a particularly large impact on Hungary and Slovakia. Our detailed response on Thursday to the tariff news can be found here . …
Exports will take a hit soon The US vehicle tariffs announced this week will do little damage to China as its auto exports to the US account for less than 0.05% of GDP. But the “ reciprocal tariffs ” that President Trump is due to announce on Wednesday …
In this Update, we answer several key questions about how the announced 25% tariffs on US imports of autos and parts might affect the global economy and the US itself. Mexico, Slovakia and Korea are most exposed with up to 1.6% of GDP at risk. But the …
27th 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
Because the concept of ‘reciprocal tariffs’ is merely a cover for the White House to impose whatever tariffs it likes, they pose a potentially considerable threat to world trade. This Update provides answers to ten questions regarding what we know, as …
Could a ‘Mar-a-Lago Accord’ fix what ails the US balance of payments? Group Chief Economist Neil Shearing is on the show this week to tackle the various ideas around what the Trump administration could do to address long-standing global imbalances. He …
21st March 2025
Erdogan alarms investors The arrest of a leading opposition politician in Turkey on Wednesday triggered a major sell-off in the country’s stock market and currency. Events are in flux at the moment, but there are three takeaways. The first is that the …
The Trump administration’s efforts to end to the war in Ukraine have raised the prospect of sanctions relief for Russia. This Focus outlines the main sanctions in place and the macroeconomic impact lifting them could have. While US sanctions relief …
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
Ceasefire proposal met with resistance by Putin The US proposal for a 30-day ceasefire in Ukraine has been met with a mixed response in Russia, with President Putin saying that he “supports the idea” but that it needs “serious reworking”. The ceasefire …
14th March 2025
The rise in defence spending that looks likely in many countries over the next few years will boost demand and output, albeit by less than the headline-grabbing figures might suggest. Meanwhile, higher defence spending could give a significant boost to …
13th March 2025
The US tariff exemption for USMCA-compliant goods still leaves considerable uncertainty for the economy because less than 40% of exports to the US last year were formally USMCA compliant. The share that could be quickly declared USMCA-compliant is likely …
7th March 2025
The agreement reached this week by the German government’s likely next coalition parties to reform the national fiscal rule suggest they will implement a significant fiscal stimulus over the next two years, which we think could lift German GDP growth by …
An immersive, interactive guide to the most pressing issue facing the global economic outlook. Click below to start exploring and learn which economies are most exposed to higher tariffs, which are most vulnerable to them, and the steps that could be …
OPEC+’s plan to increase oil output by 2.2m barrels per day over the next 18 months or so risks saturating the global market and highlights the downside risks to our already below-consensus oil price forecasts. Despite ongoing tensions within OPEC+ about …
4th 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 …
The events of the past two weeks have called into question whether the US is severing ties not just with adversaries such as China but also allies, including Canada, Mexico and the European Union. This would radically alter the shape of the fractured …
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 …
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
President Putin this week described Moscow’s initial contact with the Trump administration as “inspiring a certain degree of hope”, and we think that the recent thawing in US-Russia relations has increased the probability of the war in Ukraine coming to …
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 …
An end to the war in Ukraine would fundamentally change the economic outlook for Russia and Ukraine, but a lot would depend on the nature of any peace agreement. A deal that involves large-scale sanctions relief for Russia would be the most positive for …
27th February 2025
President Trump’s attempts to reset relations with Russia have led some to suggest that he may be attempting to break apart the Sino-Russian alliance as Nixon did in the early 1970s (although in Nixon’s case, by reaching out to China). But while this may …
Could uncertainty weigh on the global economy? Instead of clearing up the uncertainty about the direction of US economic policy, Donald Trump’s victory in last November’s presidential election has only magnified it, with threats of massive punitive …
This Update answers some key questions on the recently agreed US-Ukraine minerals deal. In short, estimates of Ukraine’s mineral wealth seem to be overblown and the deal suggests that US support for Ukraine under Trump is likely to come with strings …
26th February 2025
There’s no shortage of proposals for fixing global trade imbalances – not least a ‘Mar-a-Lago Accord’ suggested by the new head of Donald Trump’s Council of Economic Advisers. But what exactly needs fixing and to what extent would it be resolved by …
This year’s National People’s Congress (NPC) is taking place against a difficult backdrop for China’s economy; stimulus efforts have so far had only a fleeting impact on activity, even as the Trump administration has started raising barriers further to …
25th February 2025
President Trump has signalled that he is open to the possibility of a new trade deal with China, though probably not before tensions rachet up further. This would likely involve China committing to more purchases of US goods, particularly energy, …
While some Russian pipeline gas flows into the EU could resume as part of any Ukraine-Russia peace deal, at most such supplies would probably only recover to about a quarter of pre-invasion levels. From an energy price perspective, the looming ramp-up …
24th February 2025
Following yesterday’s federal election in Germany, this Update answers questions raised by clients in our on-line briefing (which can be viewed here ). What are the key takeaways from the election itself? The CDU’s leader, Friedrich Merz will be the next …
Ernest Hemingway’s line about bankruptcy happening “gradually, then suddenly” can apply to the geopolitical mood too. The head-spinning recent turn of events around Trump and Putin, the war in Ukraine and the future of European security has seen …
Europe scrambles amid warming US-Russia ties The plans announced by the US and Russia to improve relations and seek an end to the war in Ukraine have sent shockwaves across Europe and caught many off guard. The possibility that a peace deal is negotiated …
21st February 2025
Euro-zone exports have performed poorly for several years and the outlook is poor even if the EU does not get into a trade war with the US. We suspect that US tariffs will be only a small additional drag, but there is a lot of uncertainty and the hit …
OPEC+ confusion highlights risks of another delay Another week, another chapter in the book of the ongoing drama around when and whether OPEC+ will start to unwind its voluntary output cuts. Reports early this week suggested that the group was considering …
