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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
Trump tariff push descends into farce 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. …
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
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 …
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 …
Notwithstanding recent setbacks, we continue to think that this year will see a major rally in US equity markets, higher Treasury yields, and a stronger dollar. Many of the key trends in financial markets in the run-up to and immediate aftermath of the US …
27th February 2025
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 …
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
Pills, chips and automobiles After last week’s focus on reciprocal tariffs, President Trump shifted his attention this week to product-specific tariffs targeting motor vehicles, semiconductors, and pharmaceuticals. Speaking to reporters on Tuesday, he …
21st February 2025
It's been an extraordinary week in geopolitics, with direct US-Russia talks, a war of words between Washington and Kyiv and Europe swept by fears about the end of the US security backstop. But how much has really changed? Group Chief Economist Neil …
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 …
We doubt that Donald Trump’s reciprocal tariff threat, nor his broader protectionist agenda, are priced in markets fully. We expect US Treasury yields and the dollar to edge up as these tariffs come into effect. In our view, this, alongside continued …
18th February 2025
Bank of Canada navigating without tariff roadmap The Summary of Deliberations from the Bank of Canada’s January policy meeting confirmed that tariff uncertainty had a hand to play in its decision to cut interest rates by 25bp. In particular, members of …
14th February 2025
Reciprocal tariffs will be a big deal January inflation bad, but could have been worse After a hot CPI report this week and a not-so-hot PPI report (at least not in the components that count) we estimate that the Fed’s preferred core PCE price measure …
US President Donald Trump’s announcement that he will pursue imposing reciprocal tariffs triggered rallies in bond and equity markets, but we would be surprised if investors were really enthusiastic about the idea. Our assumption is that broad-based …
Why did markets greet the latest White House tariffs announcement so warmly? Deputy Chief Markets Economist Jonas Goltermann is on The Weekly Briefing from Capital Economics to talk about the influence of Donald Trump’s reciprocal tariffs plan on investor …
India most vulnerable to reciprocal tariff President Trump looks to have abandoned the idea of imposing a flat universal tariff of 10%-20% on all imports to the US, and now appears to be favouring new reciprocal tariffs that will be imposed on a …
China is among a minority of countries that apply lower tariff rates on the US than vice versa, so it is not as obviously exposed to reciprocal tariffs as many others. But President Trump’s latest announcement underscores just how serious he is about …
Reciprocal tariffs a bigger deal than universal tariff President Trump appears to have abandoned the idea of imposing a flat universal tariff of 10% or 20% on imports from all other countries. But the broad criteria that will be used to assess his new …
13th February 2025
Gaza will remain key sticking point for MENA President Donald Trump’s doubling down on the future takeover of Gaza and displacement of the Palestinian population has continued to spark backlash from governments across the Middle East and could derail …
If the Trump administration pursues a reciprocal tariff strategy rather than a 10% universal tariff, then it could result in a smaller rise in the overall effective tariff rate than we have assumed. But while most DMs would come out relatively unscathed, …
China added five critical minerals to its export control list last week but stopped short of banning their sale. The move was intended as a warning to the Trump administration and to increase China’s leverage during future negotiations. If the US …
12th February 2025
Due to the relatively small size of the federal workforce and the large number of exempt positions, the federal government hiring freeze should have only a modest impact on payroll employment. More pain would be felt if the President follows through on …
11th February 2025
The Trump administration’s 25% tariffs on steel and aluminum come at a time when domestic capacity utilisation and import intensity are low, implying they will have less of an impact on overall prices than was the case during Trump’s first term. The …
10th February 2025
Trump’s curveballs have limited sway in oil markets With oil prices back to where they were at the start of the year, the oil market has offered a collective shrug to the geopolitical curveballs thrown its way. Although Canada and Mexico have been granted …
Less than a month into the new Trump administration and already it feels as though enough has been written about trade, tariffs and US foreign relations to last four years. With events moving quickly – the president’s latest comments suggest steel and …
It’s been a drama-filled week in Trumpland and Group Chief Economist Neil Shearing is on The Weekly Briefing from Capital Economics to take stock of what happened, what didn’t happen, and the implications for macro and markets. As well as discussing the …
7th February 2025
Do not write off tariffs President Donald Trump’s U-turn on 25% tariffs for Canada and Mexico this week, seemingly in exchange for a few trivial concessions from both countries, has reignited speculation he is using the threat of trade barriers as a bluff …
Note: Join us as we discuss how Donald Trump's moves to build out his policy agenda will affect energy, soft commodities, and metals markets in a Drop-in on Thursday 13th February 15:00 GMT/10:00 EST . Register here for the 20-minute online briefing. …
Tariffs on energy suppliers. Tariffs on metals suppliers. A push to end the Ukraine war. A National Energy Emergency. Less than one month in. Donald Trump has roiled commodities markets with a slew of orders in the opening phase of his administration. …
Imagine a world after Donald Trump. The returned president’s rapidly unfolding policy agenda will have bearing on the US and global economies in the near-term. But could forces like shifting demographics and AI play a greater role in shaping long-term …
We’d previously argued that President Trump was likely to try to bring the MENA region into the US’s sphere of influence, but controversial statements on the future of Gaza have brought that into question. In a joint press conference with Israeli Prime …
6th February 2025
