{"id":57918,"date":"2025-11-05T18:13:26","date_gmt":"2025-11-05T17:13:26","guid":{"rendered":"https:\/\/www.accuracy.com\/?p=57918"},"modified":"2025-11-06T09:13:30","modified_gmt":"2025-11-06T08:13:30","slug":"economic-brief-tariffs-tech-and-the-trouble-ahead","status":"publish","type":"post","link":"https:\/\/www.accuracy.com\/en_gb\/economic-brief-tariffs-tech-and-the-trouble-ahead\/","title":{"rendered":"Economic Brief \u2013 Tariffs, tech and the trouble ahead?"},"content":{"rendered":"<div data-elementor-type=\"wp-post\" data-elementor-id=\"57918\" class=\"elementor elementor-57918\" data-elementor-post-type=\"post\">\n\t\t\t\t<div class=\"elementor-element elementor-element-67e2f73f e-flex e-con-boxed e-con e-parent\" data-id=\"67e2f73f\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-70a6104f elementor-widget elementor-widget-text-editor\" data-id=\"70a6104f\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p><span class=\"a_GcMg font-feature-liga-off font-feature-clig-off font-feature-calt-off text-decoration-none text-strikethrough-none\">In this edition of the Economic Brief, we explore three major themes shaping the global economic landscape: the uncertain impact of US trade policy, the productivity puzzle in the age of AI and the growing disconnect between financial markets and economic fundamentals. Let\u2019s take a look.<\/span><\/p><h4><span class=\"a_GcMg font-feature-liga-off font-feature-clig-off font-feature-calt-off text-decoration-none text-strikethrough-none\">US trade policy: who\u2019s really paying the price?<\/span><\/h4><p class=\"cvGsUA direction-ltr align-justify para-style-body\"><span class=\"a_GcMg font-feature-liga-off font-feature-clig-off font-feature-calt-off text-decoration-none text-strikethrough-none\">Six months after the so-called \u2018Liberation Day\u2019, US trade policy remains in flux. Despite repeated threats, including a recent proposal to impose 100% tariffs on pharmaceutical imports, the tariff regime is still far from settled.<\/span><\/p><p class=\"cvGsUA direction-ltr align-justify para-style-body\"><span class=\"a_GcMg font-feature-liga-off font-feature-clig-off font-feature-calt-off text-decoration-none text-strikethrough-none\">While the average tariff rate has climbed to around 18%, consumer prices for goods (excluding energy and food) have only risen by about 1% since the start of the year.\u00a0<\/span>Interestingly, the price of imported goods has increased less than that of many domestically produced items (e.g. electricity \u2013 a major contributor to current inflation).<\/p><p style=\"text-align: center;\"><strong>Cumulative variation over the year in prices paid to foreign exporters<\/strong><\/p><p><img fetchpriority=\"high\" decoding=\"async\" class=\"aligncenter wp-image-57926 size-large\" src=\"https:\/\/www.accuracy.com\/wp-content\/uploads\/2025\/11\/Economic-Brief-Nov-graph-1-1024x469.png\" alt=\"\" width=\"1024\" height=\"469\" srcset=\"https:\/\/www.accuracy.com\/wp-content\/uploads\/2025\/11\/Economic-Brief-Nov-graph-1-1024x469.png 1024w, https:\/\/www.accuracy.com\/wp-content\/uploads\/2025\/11\/Economic-Brief-Nov-graph-1-300x137.png 300w, https:\/\/www.accuracy.com\/wp-content\/uploads\/2025\/11\/Economic-Brief-Nov-graph-1-768x352.png 768w, https:\/\/www.accuracy.com\/wp-content\/uploads\/2025\/11\/Economic-Brief-Nov-graph-1-18x8.png 18w, https:\/\/www.accuracy.com\/wp-content\/uploads\/2025\/11\/Economic-Brief-Nov-graph-1.png 1195w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/p><p style=\"text-align: center;\"><em><span class=\"a_GcMg font-feature-liga-off font-feature-clig-off font-feature-calt-off text-decoration-none text-strikethrough-none\">Sources: BEA, Accuracy<\/span><\/em><\/p><p class=\"cvGsUA direction-ltr align-justify para-style-body\"><span class=\"a_GcMg font-feature-liga-off font-feature-clig-off font-feature-calt-off text-decoration-none text-strikethrough-none\">So, who\u2019s footing the bill? Contrary to President Trump\u2019s claims that foreign exporters are absorbing the cost, the data suggests otherwise: export prices have not significantly declined, and consumer prices have remained relatively stable. Thus, the burden appears to fall on US importers, who are absorbing the cost through margin compression.<\/span><\/p><p class=\"cvGsUA direction-ltr align-justify para-style-body\"><span class=\"a_GcMg font-feature-liga-off font-feature-clig-off font-feature-calt-off text-decoration-none text-strikethrough-none\">In effect, tariffs are functioning as a new tax on American businesses. While the inflationary impact remains limited for now, the long-term sustainability of this margin squeeze is questionable. Over time, importers may pass on the costs to consumers, spreading the burden more widely.<\/span><\/p><h4><span class=\"a_GcMg font-feature-liga-off font-feature-clig-off font-feature-calt-off text-decoration-none text-strikethrough-none\">Productivity and AI: a promise yet to materialise<\/span><\/h4><p><span class=\"a_GcMg font-feature-liga-off font-feature-clig-off font-feature-calt-off text-decoration-none text-strikethrough-none\">The OECD\u2019s latest report on global productivity paints a sobering picture. In 2023, labour productivity (measured as GDP per hour worked) grew by just 0.6% across OECD countries. The US posted a respectable 1.64%, but France stagnated at 0%, and the Eurozone declined by 1%, with Italy and Estonia seeing drops of -4.17% and -6% respectively.<\/span><\/p><p><span class=\"a_GcMg font-feature-liga-off font-feature-clig-off font-feature-calt-off text-decoration-none text-strikethrough-none\">The culprits? Weak capital deepening and stagnant workforce quality in Europe, both of which remain mildly positive in the US.<\/span><\/p><p style=\"text-align: center;\"><strong><span class=\"a_GcMg font-feature-liga-off font-feature-clig-off font-feature-calt-off text-decoration-none text-strikethrough-none\">Development of productivity<\/span><\/strong><\/p><p style=\"text-align: center;\"><img decoding=\"async\" class=\"aligncenter wp-image-57925 size-large\" src=\"https:\/\/www.accuracy.com\/wp-content\/uploads\/2025\/11\/Economic-Brief-Nov-graph-2-1024x465.png\" alt=\"\" width=\"1024\" height=\"465\" srcset=\"https:\/\/www.accuracy.com\/wp-content\/uploads\/2025\/11\/Economic-Brief-Nov-graph-2-1024x465.png 1024w, https:\/\/www.accuracy.com\/wp-content\/uploads\/2025\/11\/Economic-Brief-Nov-graph-2-300x136.png 300w, https:\/\/www.accuracy.com\/wp-content\/uploads\/2025\/11\/Economic-Brief-Nov-graph-2-768x349.png 768w, https:\/\/www.accuracy.com\/wp-content\/uploads\/2025\/11\/Economic-Brief-Nov-graph-2-18x8.png 18w, https:\/\/www.accuracy.com\/wp-content\/uploads\/2025\/11\/Economic-Brief-Nov-graph-2.png 1051w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/p><p style=\"text-align: center;\"><em><span class=\"a_GcMg font-feature-liga-off font-feature-clig-off font-feature-calt-off text-decoration-none text-strikethrough-none\">Sources: OECD, Accuracy<\/span><\/em><\/p><p class=\"cvGsUA direction-ltr align-justify para-style-body\"><span class=\"a_GcMg font-feature-liga-off font-feature-clig-off font-feature-calt-off text-decoration-none text-strikethrough-none\">In this relatively bleak landscape, artificial intelligence is often hailed as the next big productivity driver. Yet, despite rapid adoption \u2013 23% of employees in the US were reportedly using AI tools by the end of 2024 \u2013 tangible productivity gains remain elusive. There are a couple of reasons for this: AI adoption requires time for learning and integration; and gains are likely to be gradual, not immediate.<\/span><\/p><p class=\"cvGsUA direction-ltr align-justify para-style-body\"><span class=\"a_GcMg font-feature-liga-off font-feature-clig-off font-feature-calt-off text-decoration-none text-strikethrough-none\">Moreover, early research from the St. Louis Fed suggests a positive correlation between AI exposure and rising unemployment, particularly in sectors like IT, engineering and mathematics. While these findings are preliminary and may reflect broader economic conditions, they raise important questions about the labour market risks of rapid technological change.<\/span><\/p><h4><span class=\"a_GcMg font-feature-liga-off font-feature-clig-off font-feature-calt-off text-decoration-none text-strikethrough-none\">Financial markets and AI: rational investment or bubble brewing<\/span><\/h4><p class=\"cvGsUA direction-ltr align-justify para-style-body\"><span class=\"a_GcMg font-feature-liga-off font-feature-clig-off font-feature-calt-off text-decoration-none text-strikethrough-none\">While real-world productivity gains from AI remain modest, financial markets are already pricing in massive returns. In the first half of 2025, tech investment, which was largely AI-driven, accounted for the bulk of US GDP growth contributions.<\/span><\/p><p class=\"cvGsUA direction-ltr align-justify para-style-body\"><span class=\"a_GcMg font-feature-liga-off font-feature-clig-off font-feature-calt-off text-decoration-none text-strikethrough-none\">Big Tech has made bold promises: Apple and Nvidia alone have pledged over $500 billion in AI-related investments. But the scale of these commitments raises concerns about overvaluation. The surge in the market capitalisation of the \u2018Magnificent 7\u2019 (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla) echoes the exuberance of the early 2000s dotcom bubble.<\/span><\/p><p style=\"text-align: center;\"><strong><span class=\"a_GcMg font-feature-liga-off font-feature-clig-off font-feature-calt-off text-decoration-none text-strikethrough-none\">Magnificent 7 and S&amp;P493 (Base 100 = 2021)<\/span><\/strong><\/p><p><img decoding=\"async\" class=\"aligncenter wp-image-57924 size-large\" src=\"https:\/\/www.accuracy.com\/wp-content\/uploads\/2025\/11\/Economic-Brief-Nov-graph-3-1024x454.png\" alt=\"\" width=\"1024\" height=\"454\" srcset=\"https:\/\/www.accuracy.com\/wp-content\/uploads\/2025\/11\/Economic-Brief-Nov-graph-3-1024x454.png 1024w, https:\/\/www.accuracy.com\/wp-content\/uploads\/2025\/11\/Economic-Brief-Nov-graph-3-300x133.png 300w, https:\/\/www.accuracy.com\/wp-content\/uploads\/2025\/11\/Economic-Brief-Nov-graph-3-768x341.png 768w, https:\/\/www.accuracy.com\/wp-content\/uploads\/2025\/11\/Economic-Brief-Nov-graph-3-18x8.png 18w, https:\/\/www.accuracy.com\/wp-content\/uploads\/2025\/11\/Economic-Brief-Nov-graph-3.png 1105w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/p><p style=\"text-align: center;\"><em><span class=\"a_GcMg font-feature-liga-off font-feature-clig-off font-feature-calt-off text-decoration-none text-strikethrough-none\">Sources: Bloomberg, Accuracy<\/span><\/em><\/p><p class=\"cvGsUA direction-ltr align-justify para-style-body\"><span class=\"a_GcMg font-feature-liga-off font-feature-clig-off font-feature-calt-off text-decoration-none text-strikethrough-none\">Should this bubble burst, the consequences could be severe, with estimated losses of $20 trillion for US households and up to $15 trillion for foreign investors (according to Gita Gopinath, former IMF Deputy Managing Director).<\/span><\/p><p class=\"cvGsUA direction-ltr align-justify para-style-body\"><span class=\"a_GcMg font-feature-liga-off font-feature-clig-off font-feature-calt-off text-decoration-none text-strikethrough-none\">In short, a significant portion of global \u2013 and especially American \u2013 financial stability now rests on fragile foundations. Caution is warranted.<\/span><\/p><p style=\"text-align: center;\"><a href=\"https:\/\/www.accuracy.com\/wp-content\/uploads\/2025\/11\/Nov2025-Economic-brief.pdf\" target=\"_blank\" rel=\"noopener\">Download PDF &gt;<\/a><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>","protected":false},"excerpt":{"rendered":"<p>In this edition of the Economic Brief, we explore three major themes shaping the global economic landscape: the uncertain impact of US trade policy, the productivity puzzle in the age of AI and the growing disconnect between financial markets and economic fundamentals. Let\u2019s take a look. US trade policy: who\u2019s really paying the price? Six [&hellip;]<\/p>\n","protected":false},"author":42,"featured_media":57920,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[142],"tags":[175],"class_list":["post-57918","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economic-brief","tag-economic-brief"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.5 (Yoast SEO v27.5) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Economic Brief \u2013 Tariffs, tech and the trouble ahead? - Accuracy<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.accuracy.com\/en_gb\/economic-brief-tariffs-tech-and-the-trouble-ahead\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Economic Brief \u2013 Tariffs, tech and the trouble ahead?\" \/>\n<meta property=\"og:description\" content=\"In this edition of the Economic Brief, we explore three major themes shaping the global economic landscape: the uncertain impact of US trade policy, the productivity puzzle in the age of AI and the growing disconnect between financial markets and economic fundamentals. 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Six [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.accuracy.com\/en_gb\/economic-brief-tariffs-tech-and-the-trouble-ahead\/\" \/>\n<meta property=\"og:site_name\" content=\"Accuracy\" \/>\n<meta property=\"article:published_time\" content=\"2025-11-05T17:13:26+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-11-06T08:13:30+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.accuracy.com\/wp-content\/uploads\/2025\/11\/shutterstock_435135229.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1000\" \/>\n\t<meta property=\"og:image:height\" content=\"667\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Van Nguyen\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Van Nguyen\" \/>\n\t<meta name=\"twitter:label2\" content=\"Estimated reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.accuracy.com\\\/en_gb\\\/economic-brief-tariffs-tech-and-the-trouble-ahead\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.accuracy.com\\\/en_gb\\\/economic-brief-tariffs-tech-and-the-trouble-ahead\\\/\"},\"author\":{\"name\":\"Van Nguyen\",\"@id\":\"https:\\\/\\\/www.accuracy.com\\\/#\\\/schema\\\/person\\\/11632b97ec903a99c3d7ea899eb532f0\"},\"headline\":\"Economic Brief \u2013 Tariffs, tech and the trouble ahead?\",\"datePublished\":\"2025-11-05T17:13:26+00:00\",\"dateModified\":\"2025-11-06T08:13:30+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.accuracy.com\\\/en_gb\\\/economic-brief-tariffs-tech-and-the-trouble-ahead\\\/\"},\"wordCount\":625,\"publisher\":{\"@id\":\"https:\\\/\\\/www.accuracy.com\\\/#organization\"},\"image\":{\"@id\":\"https:\\\/\\\/www.accuracy.com\\\/en_gb\\\/economic-brief-tariffs-tech-and-the-trouble-ahead\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.accuracy.com\\\/wp-content\\\/uploads\\\/2025\\\/11\\\/shutterstock_435135229.jpg\",\"keywords\":[\"Economic brief\"],\"articleSection\":[\"Economic brief\"],\"inLanguage\":\"en-GB\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.accuracy.com\\\/en_gb\\\/economic-brief-tariffs-tech-and-the-trouble-ahead\\\/\",\"url\":\"https:\\\/\\\/www.accuracy.com\\\/en_gb\\\/economic-brief-tariffs-tech-and-the-trouble-ahead\\\/\",\"name\":\"Economic Brief \u2013 Tariffs, tech and the trouble ahead? 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Let\u2019s take a look. US trade policy: who\u2019s really paying the price? 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