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S&P Economist: Global Narrative Turns to Capex Upside as Tariff Damage Proves Smaller

Paul Gruenwald cites lower effective US tariffs with limited retaliation as reasons the shock eased.

Overview

  • Gruenwald says the US is viewed as a less reliable partner, prompting countries to diversify trade and investment exposure.
  • The final US tariff rate settled near 17% after higher early signals, while actual collections are estimated closer to 10%.
  • Most costs have been absorbed by importers, wholesalers and retailers, with slower pass-through to consumers and no broad reshoring.
  • A 12‑month extension in the USChina understanding has helped cap further escalation for now.
  • India stands out as the fastest‑growing major emerging market with relatively low US dependence, and unresolved US tariff issues with India and Brazil may be resolved soon.