Like it or not, rapidly ‘decoupling’ from China might get messy should the United States try it.
The News Lens
By John Lee
The conviction that the interests of the U.S. and China are fundamentally incompatible is gathering weight in Washington, as a consensus for confrontation with Beijing takes hold.
Having progressively raised tariffs against Chinese-made goods, and adopted reports declaring that China’s “economic aggression” threatens both the global economy and the U.S. defense industrial base, the Trump administration is now targeting specific entities in its drive to decouple the two economies.
Last week, Washington banned on national security grounds exports to a strategically importantChinese semiconductor maker. Announcing the firm’s indictment for economic espionage, the U.S. Attorney-General also unveiled a task force to prioritize cases of alleged trade theft by Chinese actors. Calls in the U.S. (and elsewhere) to cut off engagement with China across a widening range of activity are becoming more forceful.
But decoupling, as the new approach is termed, faces obstacles that cast a shadow over its prospects for success. The first is the breadth and depth of U.S. entwinement with China, which goes well beyond the off-shoring of American manufacturing. Despite a general souring of U.S. business attitudes towards China, powerful firms are still partnering with Chinese entities and prioritizing access to Chinese markets, products, and labor.
Over the last month, Apple’s CEO visited China for a personal charm offensive; the U.S. industry partnership for ethics in artificial intelligence admitted one of Beijing’s designated AI champions; Google was outed for developing a search engine to comply with the Chinese state’s censorship requirements; and Qualcomm backed the entry of a Chinese firm into America’s 5G market.