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Decoupling, and its impact on growth

The rift that has widened between China and the US was caused by China’s emergence as a geopolitical competitor to the US, rather than the personality of Donald Trump. Decoupling will continue whether or not the two reach a deal on tariffs. This may spur technological advances in some areas, but the net impact is likely to be slower productivity growth, and a more antagonistic relationship that could steer the two sides towards wholesale disengagement.

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