Trump says ‘decoupling’ from China on the table
President Trump on Thursday said options to “decouple” the U.S. economy from China were on the table.
Decoupling refers to a process of separating the two countries’ intertwined economies and supply chains, which would amount to a major economic realignment.
“It was not Ambassador Lighthizer’s fault (yesterday in Committee) in that perhaps I didn’t make myself clear, but the U.S. certainly does maintain a policy option, under various conditions, of a complete decoupling from China. Thank you!” Trump tweeted Thursday afternoon.
It was not Ambassador Lighthizer’s fault (yesterday in Committee) in that perhaps I didn’t make myself clear, but the U.S. certainly does maintain a policy option, under various conditions, of a complete decoupling from China. Thank you!
— Donald J. Trump (@realDonaldTrump) June 18, 2020
Trump appeared to have sent the tweet during a White House event on reopening the economy from coronavirus-related shutdowns with Nebraska Gov. Pete Ricketts (R) and Oklahoma Gov. Kevin Stitt (R).
On Wednesday, U.S. Trade Representative Robert Lighthizer testified before the House Ways and Means Committee that he didn’t think a full decoupling was possible, though he favored moves to bring supply chains back to the United States.
“Do I think that you can sit down and decouple the United States economy from the Chinese economy? No. I think that was a policy option years ago. I don’t think it’s a policy, a reasonable policy option at this point,” he said in response to a question from Rep. Darin LaHood (R-Ill.)
The issue of decoupling has resurged in foreign policy circles as the U.S.-China relationship has become increasingly combative. The trade war, followed by the hunt for key health supplies during the COVID-19 pandemic, put a spotlight on the idea of reducing dependence on foreign suppliers for certain goods.
Similar issues have come up in the field of telecommunications, with officials raising flags that parts manufactured by Chinese giant Huawei could give China a backdoor into U.S. communications if they were used in key infrastructure, such as building 5G networks.
But outside of supplies with public health or national security implications, some economists warn that decoupling would amount to building giant trade barriers between the world’s two largest economies, which could send the cost of goods up, reduce economic growth and set the table for an economic cold war.
It would also reduce the financial and economic influence the two powers have on each other, which some scholars worry could lead to more active confrontations on security matters.
China is one of the central foreign policy issues that has arisen in the presidential campaign. Trump has sought to portray Democratic rival Joe Biden as weak on China, while Biden has countered that Trump has been ineffective and kowtowed to Chinese President Xi Jinping.
Brett Samuels contributed.