The Weekly Briefing from Capital Economics

Things are looking up after the US and China de-escalated their trade war, but is the global economy off the hook? In the latest episode of The Weekly Briefing from Capital Economics, Group Chief Economist Neil Shearing tells David Wilder why the tariff situation is looking brighter, but also identifies the key flashpoints to watch in the coming weeks.  John Higgins, our Chief Markets Economist, is also on the show to talk about the financial markets angle to this turnaround in global sentiment. He sees more upside for US equities, even after the notable gains of recent weeks, and isn’t convinced that investors have set themselves up for a fall.  Plus, following the launch of our ‘Future of Europe’ series, Franziska Palmas discuss how Germany’s economic outlook is looking a bit more optimistic, but also why the bloc’s biggest economy will continue to struggle – and what that means for boosters of the idea of the EU becoming a third geo-economic pillar alongside the US and China. Analysis and events referenced in this episode: Global Trade Stress Monitor [https://www.capitaleconomics.com/publications/global-economics-update/global-trade-stress-monitor] Capital Daily: US big tech is back … but not at China’s expense [https://www.capitaleconomics.com/publications/capital-daily/us-big-tech-back-not-chinas-expense] Capital Daily: Back to the future? [https://www.capitaleconomics.com/publications/capital-daily/back-future] Capital Economics Events [https://www.capitaleconomics.com/events] Data: Global Markets Forecasts [https://www.capitaleconomics.com/data-and-charts/global-markets-forecasts] The Future of Europe [https://www.capitaleconomics.com/key-issues/future-europe]

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 episode The Future of Europe [https://www.capitaleconomics.com/key-issues/future-europe] Data: Tariff Impact Model [https://www.capitaleconomics.com/data-and-charts/tariff-impact-model] Data: China Labour Market Indicator [https://www.capitaleconomics.com/data-and-charts/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 decisions [https://www.capitaleconomics.com/events/global-drop-fed-bank-england-and-ecb-making-sense-latest-rate-decisions] Data: Central Bank Hub [https://www.capitaleconomics.com/data-and-charts/central-bank-hub] Drop-In: Which economies could gain if the US turns away from China? [https://www.capitaleconomics.com/events/drop-which-economies-could-gain-if-us-turns-away-china] Read: Will Asia benefit from China's plunging US exports? [https://www.capitaleconomics.com/publications/asia-economics-focus/will-asia-benefit-chinas-plunging-us-exports] Drop-In: The future of OPEC+, oil prices and the Gulf [https://www.capitaleconomics.com/events/drop-future-opec-oil-prices-and-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 episode Recording: Is the dollar’s global dominance a casualty of tariff chaos? https://www.capitaleconomics.com/events/drop-dollars-global-dominance-casualty-tariff-chaos ANZ Drop-In: Australia’s election, RBA easing and the economic outlook https://www.capitaleconomics.com/events/anz-drop-australias-election-rba-easing-and-economic-outlook Drop-In: 100 Days In – The economic impact of Trump’s second term so far https://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” ends * Why 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 inflation * What curbs on Nvidia chips tells us about decision-making amid Trumpian uncertainty  * If there’s a US-China trade deal to be done Analysis 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-elsewhere Read: Is China offloading its dollar assets? https://www.capitaleconomics.com/publications/china-economics-focus/china-offloading-its-dollar-assets Data: Tariff Impact Model (TIM) https://www.capitaleconomics.com/data-and-charts/tariff-impact-model Read: US Outlook - Scaled-back tariffs not an existential threat https://www.capitaleconomics.com/publications/us-economic-outlook/scaled-back-tariffs-not-existential-threat Read: ECB Policy Announcement (April 2025) https://www.capitaleconomics.com/publications/europe-rapid-response/ecb-policy-announcement-april-2025