Trade War Goes on

President Donald Trump’s unexpected decision to escalate the trade war is casting a darker pall over the world economy.

The back and forth between China and the U.S. will likely continue this week as economists seek to work out what another 10% tariff on a further $300 billion in Chinese imports will mean for global growth.

Bloomberg Economics reckons that tariffs at the current level are enough to inflict a drag on U.S. and Chinese gross domestic product of about 0.2% and 0.4% respectively with the cost peaking in 2021. Additional U.S. levies and a response from China would lift those numbers to 0.4% and 0.6%, according to chief economist Tom Orlik.

“If all-out trade war hammers business and market confidence we’d anticipate a further 75 basis points in rate cuts by the Fed by year-end, with the People’s Bank of China moving in the same direction,” said Orlik.

Here’s our weekly rundown of other key economic events and click here for more from Bloomberg Economics:

U.S. and Canada

Markets will still be reverberating not just to the trade war, but to last week’s payrolls report and to the Fed’s decision to cut interest rates. Monday’s index on services will provide insight into whether that sector is being infected by the slowdown in manufacturing. Factory gate inflation data on Thursday will do the same and may show how much scope the central bank has to keep easing monetary policy. Canada releases jobs data on Friday too.

Asia

Central banks in Australia, New Zealand, India, Thailand and the Philippines will set interest rates and assess the global monetary outlook in the wake of the Fed’s rate reduction. All except Thailand have already cut rates at least once this year, with India, New Zealand and the Philippines seen as likely to act again this week.

Australia’s central bank Governor Philip Lowe will expand on his thinking on Friday, when he’ll be queried by lawmakers and release his latest statement on monetary policy. On the data front, gross domestic product releases from Indonesia, the Philippines and Japan will be closely watched, as will trade and inflation numbers from China.

Japan GDP Tracker Versus Real GDP

Europe, Middle East and Africa

German Weakness Spread Across Categories

In the U.K., Bloomberg Economics is predicting the economy likely shrank in the second quarter although it will probably rebound in the subsequent three months. Romania and Serbia set interest rates but aren’t expected to shift.

In Turkey, Monday’s inflation reading will help determine how quickly and how deeply the central bank will continue to reduce interest rates after a record 425 basis-point cut on July 25. Russia’s economy probably grew 0.8% in the second quarter, according to the median estimate in a Bloomberg survey of economists ahead of data to be released as early as Friday. Bloomberg Economics expects the downturn this year to be brief, with a rebound in 2020 as consumers adjust to higher prices and a fiscal boost is backed by stimulus from monetary easing.

Turkey Inflation and Rates

Latin America

Following a decisive 50 basis-point cut to Brazil’s rate on July 31, investors on Tuesday will scour the minutes of the country’s central bank for guidance on the length and depth of its monetary easing cycle. In Mexico, economists expect July inflation to further slow in data to be released Thursday, supporting the case for lower rates in coming months.

Mexico Consumer Price Inflation

Chile’s central bank may also find another reasons to lower its key rate in September when activity data for June is released on Monday, likely showing a weakening economy.