Despite their differences, U.S. President Joe Biden has continued his predecessor’s hard line toward Beijing. Biden, like former U.S. President Dona

Can the United States Really Decouple From China?

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2022-01-12 20:00:06

Despite their differences, U.S. President Joe Biden has continued his predecessor’s hard line toward Beijing. Biden, like former U.S. President Donald Trump, believes the United States must “decouple” from China by reducing U.S. dependence on Chinese products and supply chains—for both economic and national security reasons. Biden is not alone in this conviction. Much to the disappointment of those who favor more U.S.-Chinese trade and investment, moves to put distance between the two economies are gaining support among Democrats and Republicans alike.

Yet despite bipartisan support, economic decoupling is a tall order. If the Biden administration wants to succeed, the United States will not only have to reorder large parts of its own globalized economy but also ensure the participation of other countries that are big trade partners of—and investors in—China. Both objectives will be harder to achieve than many in Washington expect.

So far, Biden has built on the Trump administration’s decoupling efforts—albeit with softer rhetoric. Last June, the White House outlined a comprehensive plan for boosting production at home to reduce Washington’s dependence on fragile global supply chains, especially those originating in China. It focused mostly on critical industries like semiconductors, where the United States has seen a sharp decline in its market share over recent decades, and rare earth minerals, where it depends on China for around 80 percent of its needs. Meanwhile, Biden has retained the tariff hikes Trump imposed on imports from China and taken steps to ban U.S. companies’ investments in 59 Chinese firms that have ties to the Chinese military or produce surveillance equipment. Some were already on Trump’s blacklist, including telecommunications giant Huawei.