This episode explores the impact of tariffs on the Asian and US economies. Against the backdrop of de-escalating trade tensions, the economists discuss revised growth forecasts, predicting a slowdown in Asia's GDP growth from 4.8% to 3.6% and a similar decline for China. More significantly, the analysis reveals that even with tariff reductions, high uncertainty persists, impacting investment growth. For instance, the weighted average tariff for the region is expected to remain around 32%, significantly higher than the 5% seen in early January. The discussion then pivots to the US economy, characterized as "living on the edge," with the potential for recession depending on the speed of tariff reduction and the impact on consumer and business confidence. In contrast to 2018, current consumer confidence data shows a negative reaction to the tariffs. Finally, the economists discuss the anticipated policy responses from Asian economies (monetary and fiscal easing) and the potential delayed response from the Federal Reserve, contingent on inflation and employment data.
