{
  "id": "S18",
  "slug": "great-power-detente",
  "title": "Great-power détente and peace dividend",
  "version": "0.3.0",
  "status": "active",
  "orientation": "upside",
  "family": "B",
  "short_title": "Great-power détente",
  "thematics": [
    "economic-security-supply-chains",
    "resilience-crisis-preparedness",
    "information-integrity-social-cohesion"
  ],
  "likelihood_type": "systemic",
  "likelihood_note": null,
  "scores": {
    "likelihood_2y": {
      "band": 3,
      "rationale": "Washington and Beijing held a state visit in September 2026, extended their trade truce to January 2027 and agreed an AI safety notification mechanism, but left tariffs, rare earths, chips and Taiwan unresolved. Ukraine talks stalled in March 2026."
    },
    "likelihood_10y": {
      "band": 4,
      "rationale": "Long rivalries have ended in negotiated settlements before, usually after a crisis."
    },
    "impact_systemic": {
      "level": 3,
      "rationale": "Level 3 as a gain: the reverse of the trade and energy shocks in S01 and S09, on a slower path."
    },
    "impact_national": {
      "level": 4,
      "rationale": "Level 4 for states whose security or leverage is traded in the settlement."
    },
    "confidence": {
      "level": "low",
      "reason": "Settlements depend on a few leaders and can reverse quickly."
    },
    "priority": 12,
    "tier": "II",
    "source": "ginc-desk-v0.3"
  },
  "scorecard": {
    "onset": "rapid (weeks)",
    "duration": "3 years",
    "warning": "months",
    "scope": "global",
    "origin": "negotiated between great powers",
    "external_support": "full",
    "policy_response": "current plans",
    "recovery_horizon": "years"
  },
  "summary": "The United States and China reach a settlement that rolls back most tariffs and export controls, sets rules for AI and chips and lowers the temperature over Taiwan. A ceasefire in Ukraine becomes a signed agreement with sanctions relief in stages. Trade volumes recover, shipping and insurance costs fall and defence budgets stop rising. The peace dividend is real and uneven: industries built behind tariff walls lose protection, middle powers lose the leverage of being courted, and allies discover which of their interests were bargained away.",
  "distribution": {
    "gains": [
      "Consumers and trade-dependent economies",
      "Shipping, insurance and reconstruction",
      "Treasuries, through lower defence spending",
      "Russia and Ukraine, if the ceasefire holds"
    ],
    "loses": [
      "Industries built behind tariffs and subsidies",
      "Detour economies such as Vietnam and Mexico",
      "Defence contractors",
      "Allies whose interests are bargained away"
    ]
  },
  "narrative": {
    "dateline": "November 2028",
    "text": "The communiqué runs to nine pages and the annexes to four hundred. Tariffs on both sides return to their 2017 levels over three years. The licence regimes for rare earths and for most chips are replaced by a shared list. A hotline between the two militaries is staffed around the clock, and inspectors from each side sit in the other's AI evaluation centres. Three months later the guns stop along a line in eastern Ukraine that neither capital calls a border. Freight rates fall by a third. War-risk premiums in the Black Sea and the Gulf go back to what underwriters call boring. Europe's finance ministers, who had pencilled in defence at 3.5 per cent of GDP, quietly revise the line. The complaints begin at once. A battery plant in Ohio and a chip packaging plant in Penang were financed on tariffs that no longer exist. Vietnam and Mexico, which grew rich as the detour, watch orders go back to the direct route. Taipei, Kyiv and Warsaw study the annexes for what was promised about them without them. The defence contractors guide earnings down. The countries that gain most are the ones that had kept trading with both sides and built nothing that needed the confrontation to survive."
  },
  "anchors": [
    {
      "shock_id": "nixons-visit-to-china-1972",
      "date": "February 1972",
      "event": "Nixon's visit to China",
      "what_happened": "Opened relations after two decades of hostility; the Shanghai Communiqué set the Taiwan question aside",
      "calibrates": "settlement by leaders; allies surprised"
    },
    {
      "shock_id": "inf-treaty-1987",
      "date": "December 1987",
      "event": "INF Treaty",
      "what_happened": "The United States and the Soviet Union eliminated a class of nuclear missiles, with on-site inspection",
      "calibrates": "verification"
    },
    {
      "shock_id": "end-of-the-cold-war-1989",
      "date": "1989–1991",
      "event": "End of the Cold War",
      "what_happened": "US defence spending fell from about 6 per cent of GDP in the late 1980s to about 3 per cent by 2000",
      "calibrates": "scale of a peace dividend"
    },
    {
      "shock_id": "chinas-wto-accession-2001",
      "date": "December 2001",
      "event": "China's WTO accession",
      "what_happened": "Tariff cuts and legal certainty; China's goods exports grew more than fivefold in the following decade",
      "calibrates": "trade response to reopening; adjustment costs for importers"
    },
    {
      "shock_id": "us-china-leaders-meeting-2025",
      "date": "30 October 2025",
      "event": "US–China leaders' meeting",
      "what_happened": "A truce: China's extraterritorial rare earth regime was suspended for a year",
      "calibrates": "first step"
    },
    {
      "shock_id": "xi-state-visit-to-washington-2026",
      "date": "23–25 September 2026",
      "event": "Xi state visit to Washington",
      "what_happened": "Truce extended to 10 January 2027; a Board of Trade to identify tariff cuts; an AI safety notification mechanism; core disputes left unresolved",
      "calibrates": "distance from Standard Severe"
    },
    {
      "shock_id": "ukraine-peace-talks-2026",
      "date": "2026",
      "event": "Ukraine peace talks",
      "what_happened": "US-mediated talks set a June target, then stalled in March as Washington's attention moved to Iran",
      "calibrates": "counter-anchor on likelihood"
    }
  ],
  "parameters": {
    "common": {
      "severity": {
        "major": "major",
        "severe": "severe",
        "extreme": "extreme"
      },
      "duration": {
        "major": null,
        "severe": "3 years",
        "extreme": null
      },
      "onset": {
        "major": null,
        "severe": "rapid (weeks)",
        "extreme": null
      },
      "warning": {
        "major": null,
        "severe": "months",
        "extreme": null
      },
      "scope": {
        "major": null,
        "severe": "global",
        "extreme": null
      },
      "origin": {
        "major": null,
        "severe": "negotiated between great powers",
        "extreme": null
      },
      "external_support": {
        "major": null,
        "severe": "full",
        "extreme": null
      },
      "concurrency": {
        "major": null,
        "severe": "standalone",
        "extreme": null
      },
      "policy_response": {
        "major": null,
        "severe": "current plans",
        "extreme": null
      },
      "recovery_horizon": {
        "major": null,
        "severe": "years",
        "extreme": null
      }
    },
    "specific": [
      {
        "name": "Share of post-2018 tariffs and controls removed",
        "default": "70 per cent",
        "range": "30–100",
        "unit": "per cent",
        "note": null
      },
      {
        "name": "Conflicts settled",
        "default": "1",
        "range": "1–3",
        "unit": null,
        "note": "Ukraine by default"
      },
      {
        "name": "Defence spending path",
        "default": "flat in real terms",
        "range": "options: falling / still rising",
        "unit": null,
        "note": null
      },
      {
        "name": "Sanctions relief",
        "default": "staged",
        "range": "options: none / full",
        "unit": null,
        "note": null
      },
      {
        "name": "Verification regime",
        "default": "inspections on AI and chips",
        "range": "options: declaratory only",
        "unit": null,
        "note": null
      },
      {
        "name": "Durability",
        "default": "one electoral cycle",
        "range": "one to three",
        "unit": null,
        "note": null
      }
    ]
  },
  "transmission": [
    "A leaders' settlement; tariffs and controls are phased out.",
    "Trade volumes and investment recover; freight and insurance costs fall.",
    "Ceasefire and staged sanctions relief reopen energy and grain flows.",
    "Defence budgets plateau; fiscal space is redirected.",
    "Protected industries and detour economies lose their advantage.",
    "Allies and middle powers reprice their security guarantees and leverage.",
    "Domestic opponents contest the settlement; reversal risk persists."
  ],
  "loading": [
    {
      "dimension": "Hard",
      "domain": "defence-security",
      "load": "High",
      "channel": "force posture, alliance guarantees and defence industry reset"
    },
    {
      "dimension": "Hard",
      "domain": "strategic-infrastructure",
      "load": "Low",
      "channel": "ports and corridors rerouted"
    },
    {
      "dimension": "Hard",
      "domain": "critical-technology",
      "load": "High",
      "channel": "chip and AI controls replaced by shared rules; subsidised plants exposed"
    },
    {
      "dimension": "Soft",
      "domain": "government-effectiveness",
      "load": "High",
      "channel": "trade negotiation, sanctions unwinding, budget reallocation"
    },
    {
      "dimension": "Soft",
      "domain": "human-capital",
      "load": "Low",
      "channel": "talent mobility reopens"
    },
    {
      "dimension": "Soft",
      "domain": "influence-cohesion",
      "load": "High",
      "channel": "alliance trust; lost leverage for middle powers; domestic contest"
    },
    {
      "dimension": "Economic",
      "domain": "macro-financial",
      "load": "Medium",
      "channel": "lower inflation and risk premia; defence savings"
    },
    {
      "dimension": "Economic",
      "domain": "industry-trade-supply",
      "load": "High",
      "channel": "trade recovery; protected and detour industries lose"
    },
    {
      "dimension": "Economic",
      "domain": "energy-resources",
      "load": "Medium",
      "channel": "sanctioned energy and grain return to market"
    }
  ],
  "stakeholders": {
    "government": {
      "exposure": "Security guarantees, industrial policy built on rivalry and the terms of any settlement reached over their heads",
      "actions": [
        "Identify which national interests could be traded and seek them in writing",
        "Test industrial subsidies on tariffs at 2017 levels",
        "Plan the use of defence savings before they are spent"
      ],
      "watch": [
        "Leaders' meetings and truce extensions",
        "Tariff schedules",
        "Defence budget guidance"
      ],
      "relevance": 5
    },
    "technology": {
      "exposure": "Export controls and subsidy regimes that shaped where plants were built",
      "actions": [
        "Model plants and supply chains with controls lifted",
        "Prepare for joint evaluation and inspection regimes"
      ],
      "watch": [
        "Control list changes",
        "AI safety notification agreements"
      ],
      "relevance": 3
    },
    "investors": {
      "exposure": "Defence, protected manufacturing and detour economies down; shipping, trade and reconstruction up",
      "actions": [
        "Test portfolios on a trade recovery and flat defence budgets",
        "Review holdings financed on tariff protection"
      ],
      "watch": [
        "War-risk premiums",
        "Sanctions relief schedules",
        "Defence order books"
      ],
      "relevance": 4
    },
    "public": {
      "exposure": "Lower prices; jobs at risk in protected industries",
      "actions": [],
      "watch": [
        "Tariff changes on consumer goods"
      ],
      "relevance": 3
    }
  },
  "regions": [
    {
      "region": "north-america",
      "exposure": "Medium",
      "rationale": "Party to the settlement; consumers gain, protected plants lose"
    },
    {
      "region": "europe",
      "exposure": "High",
      "rationale": "Security settlement on its border; defence build-up and energy policy both reopened"
    },
    {
      "region": "china",
      "exposure": "High",
      "rationale": "Party to the settlement; export access restored"
    },
    {
      "region": "indo-pacific",
      "exposure": "High",
      "rationale": "Taiwan, Vietnam and Malaysia most exposed to the terms and to lost diversion"
    },
    {
      "region": "south-asia",
      "exposure": "Medium",
      "rationale": "India loses some diversion gains and leverage"
    },
    {
      "region": "gulf-middle-east",
      "exposure": "Medium",
      "rationale": "Lower risk premia; less room to play the powers against each other"
    },
    {
      "region": "africa",
      "exposure": "Medium",
      "rationale": "Cheaper food and freight; less competition for its alignment"
    },
    {
      "region": "latin-america",
      "exposure": "Medium",
      "rationale": "Mexico loses nearshoring advantage; commodity demand recovers"
    },
    {
      "region": "russia-eurasia",
      "exposure": "High",
      "rationale": "Sanctions relief in stages; the terms of a Ukraine settlement"
    }
  ],
  "indicators": [
    {
      "name": "Leaders' meetings and truce extensions",
      "source": null,
      "threshold": null,
      "cadence": null
    },
    {
      "name": "Trade-weighted effective tariff rates",
      "source": "WTO",
      "threshold": null,
      "cadence": null
    },
    {
      "name": "Export-control list removals",
      "source": "BIS, MOFCOM",
      "threshold": null,
      "cadence": null
    },
    {
      "name": "War-risk premiums and freight rates",
      "source": null,
      "threshold": null,
      "cadence": null
    },
    {
      "name": "Defence budget plans as a share of GDP",
      "source": "NATO, SIPRI",
      "threshold": null,
      "cadence": null
    },
    {
      "name": "Sanctions designations removed",
      "source": null,
      "threshold": null,
      "cadence": null
    },
    {
      "name": "Ceasefire monitoring reports",
      "source": null,
      "threshold": null,
      "cadence": null
    }
  ],
  "compounds": {
    "triggers": [
      {
        "id": "S07",
        "note": "in states whose interests were traded"
      }
    ],
    "triggered_by": [
      {
        "id": "S05",
        "note": "a crisis that forces a settlement"
      },
      {
        "id": "S03",
        "note": "shared economic distress"
      }
    ],
    "amplified_by": [],
    "triggered_by_other": [],
    "amplifying_trends": [
      "fiscal pressure on defence budgets",
      "war fatigue",
      "supply-chain concentration",
      "leader-level diplomacy"
    ]
  },
  "open_questions": [
    "Whether a settlement that one election can reverse is a scenario or an interlude.",
    "How to rate allies whose security is the price of the bargain.",
    "Whether trade reopening and a peace settlement should be separate scenarios."
  ],
  "commentary": null,
  "overview": {
    "source": "ginc-desk-v0.3",
    "lenses": {
      "political": "The communiqué runs to nine pages. **Taipei, Kyiv and Warsaw** study the annexes for what was promised about them without them.",
      "economic": "Freight rates fall by **a third** and tariffs return to 2017 levels over three years. Plants financed on tariff walls are stranded.",
      "social": "Prices ease. Jobs go in **protected industries** and domestic opponents contest the settlement.",
      "technological": "Licences for rare earths and most chips give way to **a shared list**; inspectors sit in each other's AI evaluation centres.",
      "legal": "Four hundred pages of annexes: **staged sanctions relief**, tariff schedules and a verification regime.",
      "environmental": "Sanctioned **energy and grain** return to market; war-risk premiums in the Black Sea and the Gulf fall."
    },
    "regions": {
      "north-america": "Party to the settlement. Consumers gain; **plants built on tariffs** lose their protection.",
      "europe": "A security settlement on its border. Finance ministers **quietly revise** the defence line.",
      "china": "Party to the settlement: **export access is restored** and controls on its inputs are lifted.",
      "indo-pacific": "**Vietnam and Malaysia** lose the detour trade; Taiwan reads the annexes.",
      "south-asia": "India loses some **diversion gains** and some leverage as the powers stop courting.",
      "gulf-middle-east": "Risk premia fall, with **less room to play the powers** against each other.",
      "africa": "Cheaper food and freight, and **less competition** for its alignment.",
      "latin-america": "**Mexico loses** its nearshoring advantage as orders return to the direct route.",
      "russia-eurasia": "**Sanctions relief in stages**, on the terms of a ceasefire line neither side calls a border."
    }
  },
  "history": [
    {
      "edition": 2027,
      "rank": null,
      "L2y": 3,
      "L10y": 4,
      "impact_systemic": 3,
      "impact_national": 4,
      "confidence": "low"
    }
  ],
  "changelog": [
    {
      "version": "0.3.0",
      "date": "2026-10-03",
      "change": "Entered the Library at v0.3 as an upside scenario, with GINC desk scores."
    }
  ],
  "citation": "GINC (2027). Scenario S18 Great-power détente and peace dividend, Scenario Library v0.3. scenarios.ginc.org/library/great-power-detente"
}