The list lengthens as President Trump reiterated his intent for India to join the likes of Canada and Mexico, with plans to raise US tariffs by 2 April. India has traditionally been more of a closed economy and maintained tariff rates above global norms, imposing a mean average 14.36% rate in 2022 — much higher than the average tariff imposed by the US of 2.7%. Mr Trump aims to address this imbalance. Refresh this chart in your browser | Edit the chart in Datastream India is forecast, by the IMF, to become the world’s third largest economy by 2028 (when measured at

Economists will often borrow theories and techniques, devised by other disciplines, to better advance their understanding of the world. One clear example of this is the so-called ‘gravity model of trade’. As physicists will tell you, Newton’s law of universal gravitation states that the gravitational pull exerted between two objects is proportional to the mass of each object, and it is inversely proportional to the distance between them. In turns out that something similar is true regarding the flow of global trade — the larger two economies are, and the shorter the distance between them, the more they tend to

Markets in countries at risk of US tariffs may have been pricing in risks for some time — equities in China, Mexico and Canada have all underperformed MSCI World since before the election. However, the performance of these countries’ equities last week suggests that investors are starting to become a little less worried. US president Donald Trump last week said he might impose a 10% tariff on China, starting in February — much less than the 60% Mr Trump threatened during his election campaign. At the same time the US president also said he was minded to impose a 25%

As part of his re-election campaign, Donald Trump proposed a 60 per cent tariff on all Chinese goods. Whether he implements it or not, the US President-elect’s threat may be intended to bring Beijing to the negotiating table. But even if he succeeds in striking an agreement, it seems less clear that such a deal will lead to an increase in US exports to China. A study from the Peterson institute on the ‘Phase One’ deal between the US and China, agreed at the end of Trump’s last term, shows that China has bought none of the extra $200 billion

In 2018, President Donald Trump imposed additional tariffs on the import of steel and aluminium from almost all countries into the US. Since then, imports of the two products have been falling as the US government had hoped. However, a White House statement recently announced the imposition of further tariffs on products such as nails, drawing pins, and staples. The reason given was that “imports of certain derivatives of aluminum articles and imports of certain derivatives of steel articles have significantly increased”. This is the difficulty with tariffs as active trade policy. Tariffs that may be seen to be in

Last week, Donald Trump announced via Twitter the restoration of tariffs on Brazilian and Argentinian steel and aluminium imports. The commodities were subject to one of his early rounds of blanket tariffs, but Brazil and Argentina received an exemption. Now that the two countries have been “presiding over a massive devaluation of their currencies”, they are being restored. However, there is little evidence that they have been actively devaluing. In August, the Argentinean peso depreciated by around 30% following a poor result in the primary presidential elections for the pro-business incumbent, Mauricio Macri. In Brazil, the central bank has been

This week, in a working paper, the IMF released its latest take on China’s efforts to rebalance, confirming our view, and the finding of our proprietary China Growth Strategy measure (CGS), that China threw in the towel on rebalancing in 2017. In recent months, this return to ‘old-model’ tactics has helped arrest the slowdown in China’s economic growth, which began late in 2017 and extended to July this year, with the latest reading from our China Momentum Indicator (CMI) unchanged from August’s 6.6%. Refresh the chart in your browser | Edit chart in Datastream Just four out of the CMI’s ten subcomponents

Before Donald Trump’s election victory in 2016, we set out two economic scenarios for the global economy: Trump Lite and Donald Dark. With fiscal stimulus implemented, business confidence close to record highs, GDP growth strong and some radical proposals canned, we are in a Trump Lite world. But with Sino-US trade tensions moving beyond the threat phase and continuing to escalate, we have taken a step towards our Donald Dark scenario. We have previously likened the trade negotiations to a game of chicken, which we expected the US to win; our China Exposure Index (CEI) suggests that, until recently, investors held