By Dhaval Joshi of BCA Research,
Global macro shocks have occurred with an uncanny regularity this century. So far, we have had the global financial crisis (GFC) in 2008, the euro debt crisis in 2012, and the pandemic in 2020. Now in 2025, a potential new shock is the upending of the global trade order.
The GFC and euro debt crisis shocks were ultimately deflationary, while the pandemic shock was ultimately inflationary. What makes the upending of global trade so unusual is that it is simultaneously inflationary and deflationary. As I explained in A Chinese Deflationary Tsunami Is Headed For Europe | BCA Research, Trump’s tariffs are inflationary for the US, but they are deflationary for the rest of the world.
