Tariffs raise uncertainty more than inflation

Key takeaways:

• Tariffs are more likely to create a one off price shock and prolonged uncertainty that delays investment, rather than a sustained inflation cycle on their own.

• Deglobalisation is advancing, but largely through selective decoupling, regional blocs, and rerouted supply chains rather than a clean and complete break.

• The US can absorb external disruption with less damage to living standards due to its scale and resource base, while Europe and much of Asia remain structurally more exposed.

• Electricity demand is the real growth story, with AI accelerating power needs across the US and Asia, even as oil demand slows with weaker momentum in China and India.

• Per capita outcomes matter more as populations age, and AI could lift productivity and stabilise living standards even if headline economic growth remains subdued.