Adjusting our assumptions toward stronger US tariffs

In the second release of the November baseline, we updated our tariff assumptions, but the impact on GDP, inflation, and interest rates was small.

What you will learn:

• We assume that the US will impose blanket 30% tariffs on Chinese exports in the opening salvo of a renewed trade war next year, and added tariffs on South Korea, Japan, and Vietnam.
• We also brought forward some imports as businesses front-load ahead of the tariffs. These imports will feed into inventories, causing no change in the forecast for GDP next year.