For me, the key takeaway of the Japanese experience is "never say never." One may have thought that, after three decades of (close to) zero inflation and low wage increases, this had become a structural feature of Japan’s economy. Not so. In the U.S., the incoming Trump administration is likely to increase import tariffs on Asian economies, especially China. Indeed, we incorporated a rise in U.S. import tariffs into our baseline forecast in November 2024. Other economies may also raise tariffs, especially on China. Such tariffs will naturally hit China’s economy via lower exports and investment and spill over onto consumption.