No strait answers: Energy shocks, AI stocks, and trade talks: PwC

No strait answers: Energy shocks, AI stocks, and trade talks

Doug McHoney (PwC’s International Tax Services Global Leader) is joined by Dr. Alexis Crow, partner and Chief Economist for PwC US. Prior to joining PwC, Alexis taught at the London School of Economics. Doug and Alexis discuss the macroeconomic and geopolitical implications of the Iran conflict, including energy-market scarring, oil-price scenarios, fiscal supports, inflation pressures, and central-bank constraints. They also examine the durability of US growth, AI-driven investment, consumer demand, and private credit risk; then move through global trade developments and regional dynamics across Asia-Pacific, Latin America, Europe, and North America. The conversation closes with the “re-industrial era,” energy addition, automation, workforce skills, and financial-stability risks that may be underappreciated.

[00:06] – Introduction to Cross-Border Tax Talks and the episode’s macroeconomic focus; welcoming Dr. Alexis Crow
[01:35] – The war in Iran; the geopolitical backdrop and the US perspective
[02:55] – Why the current conflict is not just another 1970s-style oil shock; downstream impacts not just on the energy sector; getting back to the pre-war level
[04:00] – How global equity markets are responding; inflation pressures
[06:10] – How are business leaders considering scenario planning?
[09:15] – US economic outlook, strong GDP numbers, equities, and AI-linked growth
[12:50] – What is private credit? Could it lead to another financial crisis?
[16:55] – Global trade, deglobalization, onshoring, and protectionist policy trends, continued US imports, and semiconductor dependency, competitive advantage
[19:10] – US services strength, hyperscaler revenues, and continued trade dealmaking; correlation between trade and growth
[20:55] – Global Trade, starting with the Asia-Pacific – China’s EVs, currency swaps; countries in the energy and input shock
[22:55] – Global Trade in Latin America: Brazil, commodity exports, inflation, currencies, and Argentina
[24:05] – Global Trade in Europe: deregulation, competitiveness, defense spending, and resource dependency; labor strength and Europe’s savings and investment union; energy costs, inflation expectations, rate hikes, and central-bank pressure
[26:30] – Global Trade in North America: Canada’s tech assets, sovereign wealth fund, energy, and trade diplomacy;
[27:30] – Sector-specific dynamics and the “re-industrial era” - digitization, urbanization, and data centers still increase energy demand; energy addition, national security, industrial policy, and resilience
[29:50] – The automation journey with GenAI, agentic AI, productivity, and workforce judgment; college graduate unemployment, interpersonal skills, and what AI cannot automate
[32:00] – Under-discussed risks: financial stability, strong medicine, and strong side effects
[32:45] – US financial deregulation, bank capital, dry powder, and runnable scenarios