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The Myth of Global Decoupling

The possibility of a protracted conflict between the world’s two largest economies, whatever its cause, should not be taken lightly. Nevertheless, even assuming a permanent fracture between the US and China, the $87 trillion global economy is unlikely to split into two blocs in 2020 and beyond.

NEW HAVEN – Talk of decoupling – a profound and lasting split in the world order – entered public debate in 2019, an alarming manifestation of the mounting conflict between the United States and China. Escalating tit-for-tat tariffs are only the tip of the iceberg. Geostrategic security concerns, early skirmishes in a “tech war,” the related fear of two parallel Internets, a nationalistic US president with an overt distaste for “globalism,” and a history of military clashes between rising and incumbent powers all raise the specter of a new Iron Curtain reminiscent of the Cold War.