Tensions between the US and China worsen

After Nancy Pelosi toured Asia, China introduced sanctions on trade with Taiwan, which signalled an acceleration of the decoupling between the US and China. Such a decoupling could damage China’s economy because Chinese markets have underperformed during past bouts of trade tensions with the US. In the longer term, tension between the world’s two largest economies could cause less efficient supply chains, and this is likely to negatively impact the global economy.