At the end of one of Lenin’s “weeks when decades happen”, senior economists from Capital Economics briefed clients on the implications of the news that China is retaliating aggressively to Donald Trump's reciprocal tariffs plan, including whether Europe could follow suit and how much more pain is in store for markets.

In this edited extract from that briefing, Neil Shearing, Mark Williams, Andrew Kenningham and Jonas Goltermann tackle everything from what China has just done to why the dollar has been acting strangely to what could push Brussels to fight back hard against the White House's reciprocal tariffs.

Events and analysis referenced in this podcast:

Watch: Trump’s reciprocal tariffs – China retaliates and the market’s response
https://www.capitaleconomics.com/events/drop-trumps-reciprocal-tariffs-china-retaliates-and-markets-response

Read: China hits back, hard
https://www.capitaleconomics.com/publications/china-economics-update/china-hits-back-hard

Read: Answering your questions about Liberation Day tariffs
https://www.capitaleconomics.com/publications/global-economics-update/answering-your-questions-about-liberation-day-tariffs

Special: Trump's reciprocal tariffs, China strikes back and a hellish week for markets