As the dust settles after another of week of dramatic policy shifts, the picture that has emerged is a familiar one from Trump's first term: China is the main target after all. China isn't taking Trump's tariffs lying down. Instead, it has hit back tariff for tariff so that both sides are now applying tariffs to each others' goods of well above 100%.

In this week's episode, Group Chief Economist Neil Shearing asks Mark Williams, our Chief Asia Economist, why China is adopting a more combative approach to Donald Trump than other countries and what that suggests about the future of the relationship. Chief Global Economist Jennifer McKeown offers some scenarios for what might happen next with tariffs and their impact on growth across the global economy. And the team cast their eyes further ahead to discuss whether the tumult of the last couple of weeks may end up accelerating the fracturing of the global economy into US and China-aligned blocs or instead drive more former US allies closer to China.

Events and analysis referenced in this podcast:

Read: Mapping out trade war scenarios

Mapping out trade war scenarios | Capital Economics

Read: China and US still in an escalatory loop

China and US still in an escalatory loop | Capital Economics

Meet: TIM - the Capital Economics Tariff Impact Model

Tariff Impact Model | Capital Economics

Watch: The escalating trade war and its economic and market effects

Drop-In: The escalating trade war and its economic and market effects | Capital Economics

It's a US-China trade war, after all