Forecast Tracker: 2019 Year-End Review

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(click to enlarge) Scale: Hit, Partial Hit, Inconclusive, Partial Miss, Miss A Cycle Ends The U.S. and China will reach a deal on trade, but it won’t end the trade war. Hit China and the U.S. were seemingly inches from a deal for nearly the entire year, but they repeatedly struggled to push negotiations across the finish line, with the U.S. escalating tariff pressure on China multiple times instead. This illustrated the stark limitations of U.S. tariffs as a tool with which to force Beijing to agree to any major concessions, as well as the limits of mechanisms to ensure that the Chinese government would fully implement whatever concessions it could stomach. It also illustrated the tight political and economic constraints restricting Beijing’s room for maneuver, with the nationalist fervor playing a role in scuppering a potential deal in April and, more problematic, China’s internal economic problems making major structural concessions a nonstarter. Finally, in the second week of December, we got the deal we forecast. Put simply, it doesn’t deal with the major points of contention between China and the U.S., and heavy tariffs remain in place as a result. The trade war is far from over. A decline […]

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