Entering 2018, our outlook was uniformly upbeat. Fiscal stimulus in the United States, heightened momentum in Europe and sustained expansion in China provided a strong foundation for global growth. The numeric forecast presented here differs little from our edition of three months ago. But risks in the environment have increased.

Trade frictions are escalating on three key fronts. China and the United States have announced new tariffs against one another; the initial volleys were strategically designed, but modestly scaled. Escalation may precede negotiation.

We are less than a year from Brexit. Both sides would like to show strength while preserving productive commerce. Even if negotiations with the European Union can be successfully completed, the United Kingdom still faces the challenge of negotiating a large number of trade pacts with other parts of the world. Time is short, and the degree of difficulty is high.

And the North American Free Trade Agreement is being renegotiated amid heightened rhetoric and the approach of Mexican and American elections.

Tax reductions and spending increases approved by the U.S. Congress will provide considerable short-term stimulus. But long-run debt sustainability has become an issue. Global interest rates are rising, making leverage a little less comfortable; the U.S. (among other nations) will be challenged to keep borrowing costs under control.

Uncertainty around these situations may give pause to consumers and businesses, which won’t be helpful to economic performance. The renewed volatility in financial markets reflects this. Worst-case outcomes are by no means assured: policy makers still have opportunities to keep the global expansion on track. But achieving ideal results will require renewed dedication to productive, bilateral consultation.