The US Unanticipated Costs of Decoupling from China

Jun Zhang and Shuo Shi

China & World Economy, 2020, vol. 28, issue 6, 1-27

Abstract: The decoupling policies enforced by the Trump Administration aim to break the US economic relationship with China. Those policies, however, are escalating strategic costs for the US in at least three unanticipated ways: the decoupling policies are losing the endorsement of US multinational corporations, undermining the solidarity of the US and its allies, and making supply chains more likely to disengage from the US than to disengage from China. We argue that the ongoing decoupling policies are costing more than the US can bear and will end in vain. If the Trump Administration enforces further decoupling policies without considering those implicit costs, it will only set the US up for a more expensive failure.

Date: 2020
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