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Will US-China decoupling be inflationary?

China’s integration into the global economy contributed to the low inflation environment of recent decades. But it was not the major driver and, in any case, China’s integration peaked several years ago. Decoupling may be inflationary, but as long as it happened gradually, the impact would be small. Abrupt decoupling in key sectors would be a different story, sending prices soaring until new supply chains could be formed.

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