How self-Interest is reshaping global economic policy: One year on

In April 2025, when President Donald Trump had been in office for roughly 100 days, we identified a shift in global economic policy shaped by narrow national self-interest, fraying multilateralism, and the repricing of decades of globalisation. Twelve months later, the key elements remain intact and have evolved in ways that reinforce our view that this change is structural, with lasting implications for economies and markets.

What you will learn:

• Trade is fracturing, but more slowly and chaotically than we anticipated.
• Tariffs haven’t solved imbalances, and pressure on surplus countries is intensifying. Pressure on surplus countries, such as Germany, Japan, and especially China, will persist.
• Fiscal policy has become a defining economic force, but with some surprises. The salience of fiscal and related industrial policies has risen as governments seek growth and security.
• The supply of safe assets is rising, pushing up bond risk premia. This trend will continue.
• The repricing of risk premia still has further to go. The dollar’s sharp decline in H1 2025 and the underperformance of US equities are important changes, but the new global environment in our view demands further repricing.