On February 4, President Trump ignited a potential new global trade war by implementing a 10% tariff on imports from China, provoking immediate retaliatory measures from the Chinese government. This escalating tension raises critical questions regarding the future of international trade relations and economic stability as both nations brace for further confrontations.
Recent simulations conducted using the Oxford Economics Global Economic Model project that these additional tariffs will have a measurable impact, contributing between 0.1 to 0.2 percentage points to core inflation by year-end. The likelihood of further economic ripple effects looms large should Trump pursue more aggressive tariff threats.
In light of these developments, we have adjusted our expectations and hastened the timeline for anticipated tariffs in our February baseline forecast. This proactive approach reflects the growing need to stay ahead of a rapidly evolving trade landscape that could alter economic forecasts significantly.
To keep pace with these dynamic changes, our tariff monitor will be updated regularly. This resource will track the specific goods impacted by tariffs, delve into economic implications, and closely analyse the trajectory of the Trump administration’s trade policies against our established forecasts.
President Trump initiated a 10% tariff on Chinese imports, sparking retaliatory actions from China. This move is expected to increase core inflation by 0.1 to 0.2 percentage points by the end of the year. The timeline for future tariffs has been revised, and a tariff monitor will track impacted goods and economic effects as trade policies evolve.
In summary, the recent imposition of tariffs by President Trump marks a critical juncture in global trade dynamics, particularly between the US and China. With the potential for increased inflation and further retaliatory measures, vigilance is essential. As we continue to monitor these developments, understanding their economic implications will be crucial for predicting future trends in the global marketplace.
Original Source: www.oxfordeconomics.com
