Blog | Widening global current account imbalances are best addressed by simultaneous domestic policy adjustments. Industrial policy and tariffs offer a costly fix with unreliable effects on imbalances. Global current account imbalances are widening again, reversing a decade of steady decline following the global financial crisis. History suggests a clear risk: widening imbalances have often been accompanied by concentrated and lower-quality growth, triggered sectoral dislocations across trading partners, and preceded financial crises or abrupt reversals of capital flows. With the...

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Energy prices, supply chains, and financial markets are the main transmission channels, but the regional effects will vary significantly. The world faces yet another shock. The war in the Middle East is upending lives and livelihoods in the region and beyond. It is also dimming the outlook for many economies that had only just shown signs of a sustained recovery from previous crises. The shock is global, yet asymmetric. Energy importers are more exposed than exporters, poorer countries more than richer...

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Understanding the impact of tariffs on inflation is a complex task as it involves analysing responses along the pricing chain, including those by foreign exporters, distributors, producers and retailers. At different stages of this pricing chain, domestic firms could respond to tariff announcements by building up inventories before tariffs are implemented, shifting the sourcing of their imports from countries facing higher tariffs to countries facing lower tariffs (trade diversion) and adjusting the pricing of their products to accommodate the impact...

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The Council and the Parliament today agreed to overhaul the EU customs framework, giving the Union a more modern toolbox to deal with trends such as huge increases in trade volumes, especially in e-commerce, a fast-growing number of EU standards that must be checked at the border and challenging geopolitical realities. The reform establishes innovative new instruments to facilitate global trade, collect customs duties more efficiently and to tighten controls on non-compliant, dangerous or unsafe goods. Overall, the new system will allow for more robust controls without...

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Suspension clause in case the US introduces new tariffs Sunrise clause: tariff preferences only effective if the US respects its commitments Sunset clause: tariff preferences set to expire by 31 March 2028, unless renewed On Thursday, MEPs adopted their position on two proposals implementing the tariff aspects of the EU-US Turnberry trade deal. The texts, if agreed with EU member states, will eliminate most tariffs on US industrial goods and provide preferential market access for a wide range of US...

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