The Great Economic Reordering: What’s Next for Global Markets?
Mar 20, 2025
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Dr. Alexis Crow, Partner and Chief Economist at PwC US and former London School of Economics instructor, joins Doug McHoney for an insightful discussion. They analyze the impact of recent tariffs on global trade and the strains on U.S. consumers and businesses amid rising inflation. The conversation explores China’s economic resilience and India's manufacturing growth, alongside shifts in Europe and Latin America. They emphasize how multinationals should prepare for changes in tax policy and the broader economic landscape.
The podcast emphasizes the importance of international tax policies in shaping global economic strategies amidst high debt and trade tensions.
A significant focus is placed on the challenges of inflation in the U.S. and its impact on consumer spending and economic sustainability.
Deep dives
Impact of International Taxation on Macroeconomics
The podcast discusses the intersection of international taxation and broader macroeconomic trends, highlighting the fiscal challenges faced by G7 governments amidst high debt levels. The discussion emphasizes the growing significance of taxation in geopolitical debates around funding government initiatives. With international tax becoming a focal point in global discussions, understanding the implications of frameworks like Pillar 2 becomes crucial. The evolution of these frameworks has added complexity to government fiscal strategies as they seek to address funding gaps in the context of increased global trade tensions.
Inflation and Consumer Impact
The conversation touches on the challenges surrounding inflation, particularly in the U.S., where rising prices impact household finances significantly. Policymakers struggle to communicate the nuances of inflation to electorates, which exacerbates public frustration, especially for lower-income households facing increased costs of living. The reliance on consumer spending, which constitutes a large portion of U.S. GDP growth, raises concerns about economic sustainability as inflation persists. Efforts to navigate this landscape reveal that the friction between pricing strategies and consumer tolerance is reaching a critical point.
Geopolitical Trade Dynamics
The podcast highlights ongoing trade tensions, particularly between the U.S. and China, emphasizing the evolving global landscape marked by escalating tariffs and restrictive measures. While the U.S. enters a new phase of trade policy under Trump 2.0, the podcast discusses how these dynamics shape opportunities for international businesses in emerging markets like Vietnam and India. By recognizing the implications of these trade tensions, companies can strategize effectively to navigate challenges and identify potential growth markets. Additionally, the increased focus on regional trade agreements offers new avenues for businesses to engage outside traditional frameworks.
Sector-specific insights suggest that companies must adapt to rapidly changing economic environments shaped by policy shifts and global events. In the technology sector, for example, the reliance on international revenues may expose firms to the risks posed by foreign tariffs, necessitating a reevaluation of business strategies. Similarly, the energy sector's push for secure, sustainable practices is driven by heightened demand for data and energy security. For consumer markets, understanding consumer sentiment and income disparities becomes essential as retailers seek to navigate the current economic landscape effectively.
Doug McHoney (PwC’s International Tax Services Global Leader) is joined by Dr. Alexis Crow, Partner and Chief Economist at PwC US. Before joining PwC, Dr. Crow taught at the London School of Economics. Doug and Alexis discuss the intersection of global macroeconomics, geopolitics, and international tax policy in a shifting global landscape. They break down the impact of the Trump administration’s latest tariffs on Canada and Mexico, inflationary pressures, interest rates, and the fiscal cliff facing the US.
Doug and Alexis explore how the geopolitical climate is shaping international trade, the potential winners and losers of increased tariffs, and the broader economic implications of Trump 2.0. They also analyze regional macroeconomic trends, from China’s economic resilience and India's manufacturing rise to Europe's fiscal strategies and Latin America’s economic experiments. Lastly, they discuss how businesses—particularly multinationals—should be preparing for upcoming policy shifts and economic disruptions.
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