First shockwaves of Trump's tariffs are about to hit world economy

Tariffs, and the risk they pose to both the economy and inflation, have been on the mind of survey respondents in recent months. Three weeks after US President Donald Trump effectively declared a trade war with the whole world, new economic forecasts and surveys will point to the initial fallout. A few blocks from the White House, the International Monetary Fund is set to lower its outlook for economic growth in new projections released on Tuesday.

The following day, purchasing manager indexes from Japan to Europe to the US will offer the first coordinated glimpse of manufacturing and services activity since Trump's global tariffs-now partly on hold-were unleashed on April 2. Business surveys from major economies are also on the calendar.

The combined picture is set to offer finance ministers and central bankers assembled in Washington a chance to make initial damage assessments on Trump's attempt to rewire the global trade system.

"Our new growth projections will include notable markdowns, but not recession," IMF managing director Kristalina Georgieva said on Thursday. "We will also see markups to the inflation forecasts for some countries. We will caution that protracted high uncertainty raises the risk of financial-market stress."

Those clouds shrouding the global economy are unlikely to lift for a while. Federal Reserve Chair Jerome Powell said on Wednesday that the US central bank is is "well positioned to wait for greater clarity" before considering changes to monetary policy while European Central Bank chief Christine Lagarde couldn't say whether uncertainty has peaked.

In the meantime, Georgieva is hoping the coming days, which also feature a meeting of Group of 20 finance chiefs, might lower the temperature in global trade relations.

US and Canada
In the US, investors will watch for any additional deterioration in consumer sentiment and inflation expectations when the University of Michigan issues revised data April data on Friday. Tariffs, and the risk they pose to both the economy and inflation, have been on the mind of survey respondents in recent months.

On Wednesday, the Fed's Beige Book will offer anecdotes of regional economic conditions and provide a glimpse into how much government policy and uncertainty are affecting business decisions.

Earlier that day, the government is expected to report a marginal increase in March new home sales. With mortgage interest rates largely stuck above 6.5% since October, builders have been trying incentives to get buyers off the sidelines. Home resales data will be issued on Thursday.

A report on March durable goods orders the same day will help provide clues on business demand for equipment.

Further north, the Canadian election campaign enters its final week, with polls suggesting that Prime Minister Mark Carney's Liberals are about five points ahead-putting them within reach of a majority government amid a volatile trade war with the US.

A key architect of Canada's response to the US tariffs, trade negotiator Steve Verheul, is set to speak at a conference in Toronto. Retail data for February and a flash estimate for March will reveal whether Canadian consumers pared back their spending for a third straight month amid the trade uncertainty.

Asia
In Asia, the week kicks off with China reporting loan prime rates on Monday; economists predict a steady outcome. Recent data showed growth beating forecasts.

On Friday, Japan reveals Tokyo CPI as well as department store sales while Singapore will see private home prices for the first quarter and industrial production for March.

During the week, India and Thailand also report foreign exchange reserves.

Europe, Middle East, Africa
With a holiday on Monday in most of Europe and central bankers gathering for the IMF meetings, most attention will be focused stateside. Numerous policymakers feature on the calendar, including a speech by Bank of England governor Andrew Bailey on Wednesday.

The main focus in the euro zone will be survey reports. Consumer confidence in the region is released on Tuesday, and the ECB publishes its survey of professional forecasters the same day. Its wage tracker due on Wednesday is pointing to slower pay growth, Lagarde said last week after cutting rates.

Investors may pay most attention to the PMIs out then too, offering the first glimpse of activity in manufacturing and services since the US tariff onslaught intensified at the start of April.