<Research>M Stanley Lists 4 Scenarios for CN-US Econ & Trade Relations (Table)Base case prediction: Scenario 1 assumes verbal escalation between China and the US, resetting expectations.
The US doesn't slap a 100% tariff while China formally but selectively enforces certain rare earth control measures, to ensure overall supply chain stability.
--------------------------------------
Scenarios 2-4 are hypothetical scenarios not belonging to Morgan Stanley's base case prediction:
Scenario 2 assumes temporary tactical escalation.
Both China and the US implement proposed policies but eventually return to the status quo "equilibrium" after finding the economic costs too high.
--------------------------------------
Scenario 3 assumes persistent escalation and pushing toward decoupling.
The US levies the 100% tariff and/ or further 232 tariffs, while China responds by further tightening rare earth controls.
--------------------------------------
Scenario 4 assumes verbal escalation but a way for an agreement to be paved.
The tough rhetoric becomes a catalyst for restarting negotiations, prompting China and the US to announce a framework agreement that covers various non-tariff-related issues.
Source: AAStocks Financial News
http://www.aastocks.com/en/stocks/news/ ... -news/AAFN
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
