The Weekly Briefing from Capital Economics

One deal down. Many, many more to go. Except there was less to that much-touted US-UK trade deal than either government is suggesting and far tougher US talks with China and the EU are still to come.In this week’s episode of The Weekly Briefing from Capital Economics, Group Chief Economist Neil Shearing and Head of China Economics Julian Evans-Pritchard unpack what was actually agreed between the US and UK, and look ahead to this weekend’s pivotal US-China negotiations in Switzerland.Julian discusses the outlook for China’s exports following their remarkable post-pandemic surge and considers what further stimulus measures might be on the cards. Neil assesses the broader state of global trade ahead of the looming expiration of Donald Trump’s 90-day reciprocal tariff pause.Neil also offers a preview of our major upcoming series on the future of Europe – an in-depth project that cuts through the recent optimism to deliver clear-headed analysis, robust data, and compelling presentations.Events and analysis referenced in this episodeThe Future of EuropeData: Tariff Impact ModelData: China Labour Market Indicator

If you’re looking for evidence of the negative hit from Donald Trump’s tariffs, you’ll struggle to find it in the hard data. Group Chief Economist Neil Shearing is on The Weekly Briefing from Capital Economics minutes after the release of the US employment report for April to talk about how economies have been holding up in the weeks since the ‘Liberation Day’ announcement. In his conversation with David Wilder, he addresses the key issues of the moment, including:What Q1 US GDP data and port data aren’t telling us about the negative hit to impact on economies from tariffs;Whether markets have become too complacent about the tariffs impact;How the tariffs threat will influence the Federal Reserve and Bank of England at their meetings in the coming week.Plus, ahead of a key OPEC+ meeting on Monday, David Oxley and Olivia Cross from our Commodities & Climate desk talk about what recent signals from Saudi officials could mean for already-weak oil prices. Events and analysis referenced in this episode:Global Drop-In: The Fed, Bank of England and ECB – Making sense of the latest rate decisionsData: Central Bank HubDrop-In: Which economies could gain if the US turns away from China?Read: Will Asia benefit from China's plunging US exports?Drop-In: The future of OPEC+, oil prices and the Gulf

Another rollercoaster week in Trumpland wound down with markets buoyant on reports of more White House softening in its approach to tariffs and China taking steps to ease restrictions on some US imports. But are things really looking up? And, if so, why hasn't the dollar bounced with equities?Group Chief Economist Neil Shearing and Jonas Goltermann, our Deputy Chief Markets Economist, are on The Weekly Briefing from Capital Economics to assess whether there has been a fundamental improvement in the outlook, or if this is a case of investors smoking too much “hopium”. In a wide ranging chat, they discuss:What the latest economic data suggest about the impact of higher tariffs;The chances that the US and China engage enough to get a deal done;Whether King Dollar could be overthrown – and the risks of a dollar crash. Events and analysis referenced in this episodeRecording: Is the dollar’s global dominance a casualty of tariff chaos?https://www.capitaleconomics.com/events/drop-dollars-global-dominance-casualty-tariff-chaosANZ Drop-In: Australia’s election, RBA easing and the economic outlookhttps://www.capitaleconomics.com/events/anz-drop-australias-election-rba-easing-and-economic-outlookDrop-In: 100 Days In – The economic impact of Trump’s second term so farhttps://www.capitaleconomics.com/events/drop-100-days-economic-impact-trumps-second-term-so-far

Neil Shearing has been in back-to-back meetings with global institutions who – like everyone – are trying to make sense of Trump’s chaotic trade policy roll-out, not least the recent decision to pause "reciprocal" tariffs for 90 days. The Group Chief Economist at Capital Economics joins the latest episode of The Weekly Briefing to address some of the questions that have kept coming up in those sit-downs with clients, including:What the global trading picture might look like when the 90-day tariffs “pause” endsWhy we think US growth risks have risen but we still don’t expect a recession How the Federal Reserve will play slower growth with higher inflationWhat curbs on Nvidia chips tells us about decision-making amid Trumpian uncertainty If there’s a US-China trade deal to be doneAnalysis referenced in this episode:Read: Will tariffs drive a flood of Chinese exports elsewhere?https://www.capitaleconomics.com/publications/global-economics-focus/will-tariffs-drive-flood-chinese-exports-elsewhereRead: Is China offloading its dollar assets?https://www.capitaleconomics.com/publications/china-economics-focus/china-offloading-its-dollar-assetsData: Tariff Impact Model (TIM)https://www.capitaleconomics.com/data-and-charts/tariff-impact-modelRead: US Outlook - Scaled-back tariffs not an existential threathttps://www.capitaleconomics.com/publications/us-economic-outlook/scaled-back-tariffs-not-existential-threatRead: ECB Policy Announcement (April 2025)https://www.capitaleconomics.com/publications/europe-rapid-response/ecb-policy-announcement-april-2025

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 scenariosMapping out trade war scenarios | Capital EconomicsRead: China and US still in an escalatory loopChina and US still in an escalatory loop | Capital EconomicsMeet: TIM - the Capital Economics Tariff Impact Model Tariff Impact Model | Capital EconomicsWatch: The escalating trade war and its economic and market effectsDrop-In: The escalating trade war and its economic and market effects | Capital Economics

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 responsehttps://www.capitaleconomics.com/events/drop-trumps-reciprocal-tariffs-china-retaliates-and-markets-responseRead: China hits back, hardhttps://www.capitaleconomics.com/publications/china-economics-update/china-hits-back-hardRead: Answering your questions about Liberation Day tariffshttps://www.capitaleconomics.com/publications/global-economics-update/answering-your-questions-about-liberation-day-tariffs

There’s a “whiff of stagflation” around the US economy – and that’s even before Donald Trump rolls out his reciprocal tariffs plan. Group Chief Economist Neil Shearing hops off a plane from New York and onto The Weekly Briefing from Capital Economics to give his take on the latest US consumption and price data, to preview March payrolls and to talk about what this all means for the US and global macro outlook. He’s joined by Jonas Goltermann, our Deputy Chief Markets Economist, who explains what all of this means for US markets exceptionalism.Also on this week’s episode, our China Activity Proxy is our long-running proprietary read of what’s really happening with Chinese economic activity. Leah Fahy from our China team is on to discuss what the latest read of this widely followed indicator says about the trajectory for Chinese growth in 2025. Analysis referenced in this episodeThe beginning of the end of US exceptionalism?https://www.capitaleconomics.com/publications/asset-allocation-update/beginning-end-us-exceptionalismGlobal Economic Outlook: Trade war to dampen, not derail, global growthhttps://www.capitaleconomics.com/publications/global-economic-outlook/global-economic-outlook-trade-war-dampen-not-derail-globalData: China Activity Proxyhttps://www.capitaleconomics.com/data-and-charts/china-activity-proxyCAP: Weak start to the year for China’s economyhttps://www.capitaleconomics.com/publications/china-activity-monitor/cap-weak-start-year-chinas-economy

Could a ‘Mar-a-Lago Accord’ fix what ails the US balance of payments? Group Chief Economist Neil Shearing is on the show this week to tackle the various ideas around what the Trump administration could do to address long-standing global imbalances. He also warns that uncertainty around the Trump trade agenda may not dissipate with the release of the reciprocal tariffs plan on 2nd April and explains how this is all feeding into central bank uncertainty about the policy path ahead. Also on the show, Deputy Chief UK Economist Ruth Gregory talks about what to expect from Rachel Reeves’ upcoming fiscal statement, but also discusses the Chancellor’s spending challenges in a more dangerous world that demands a forceful UK security posture. And Senior EM Economist Liam Peach explains resurgent risks around Turkey’s economy and markets after the arrest of President Erdogan’s key political rival plunged the country back into crisis.  Analysis and events referenced in this episode:Europe Outlook: Zeitenwende!https://www.capitaleconomics.com/publications/europe-economic-outlook/europe-outlook-zeitenwendeGlobal Drop-In: The Fed, ECB and Bank of England March meetingshttps://www.capitaleconomics.com/events/global-drop-fed-ecb-and-bank-england-march-meetingsUK Drop-In: Spring Fiscal Forecast reaction – Macro and market implications of Reeves’ statementhttps://www.capitaleconomics.com/events/uk-drop-spring-fiscal-forecast-reaction-macro-and-market-implications-reeves-statementData: UK Employment Indicatorhttps://www.capitaleconomics.com/data-and-charts/uk-employment-indicatorEmerging Europe Weekly: Turkey fallout, Polish rate outlookhttps://www.capitaleconomics.com/publications/emerging-europe-economics-weekly/emerging-europe-weekly-turkey-fallout-polish-rate

Group Chief Economist Neil Shearing discusses what the latest signals from the US economy say about recession risk. He talks about what the coming week’s retail sales data might say, and how they might swing the debate around a downturn. Neil also previews the coming week’s Fed decision, a haul of start-of-the-year China data and explains why talk of increased defence spending won’t mean an automatic boost for economies.Also on the show, Senior Global Economist Ariane Curtis talks about why we don’t think Donald Trump’s policy agenda will have an impact on the global economy over the long term. She talks about how the ranking of the top 10 biggest economies could change between now and 2050 and which are set to benefit most from the rollout of AI. Analysis and events referenced in this episode:Event: Drop-In - The Fed, ECB and Bank of England March meetingshttps://www.capitaleconomics.com/events/global-drop-fed-ecb-and-bank-england-march-meetingsData: China Activity Proxyhttps://www.capitaleconomics.com/data-and-charts/china-activity-proxyRead: Will defence spending turbocharge economic growth?https://www.capitaleconomics.com/publications/global-economics-focus/will-defence-spending-turbocharge-economic-growthDrop-In: Is US equities exceptionalism dead?https://www.capitaleconomics.com/events/drop-us-equities-exceptionalism-deadRead: Global megatrends will outweigh Trump disruptionhttps://www.capitaleconomics.com/publications/long-run-economic-outlook/global-megatrends-will-outweigh-trump-disruption

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 global trade war. He also discusses what’s coming next and whether signs of US economic weakness could prompt a shift in the White House's trade strategy.China Economics Head Julian Evans-Pritchard, Deputy Chief North America Economist Stephen Brown and Chief EM Economist William Jackson are also on the show to talk about the economic implications for China, Canada and Mexico, and how their governments might respond. Events referenced in this episode:Global Drop-In: Trump tariffs hit China, Mexico and Canada – Macro and market implicationshttps://www.capitaleconomics.com/events/global-drop-trump-tariffs-hit-china-mexico-and-canada-macro-and-market-implicationsChina Drop-In: 2025 NPC – Setting policy goals in a trickier global environmenthttps://www.capitaleconomics.com/events/china-drop-2025-npc-setting-policy-goals-trickier-global-environment