The Economics-Security Nexus in the US-China Trade Conflict decoupling dilemmas

Abstract

For more than two decades, China was enmeshed in transnational trade and investment networks. The complex interdependence that characterised the relationship between the United States and China is now threatened by policies that incentivise decoupling, including the partial unwinding of multinational supply chains. Since 2018 the ‘trade war’ between the US and China has taken on elements of a ‘tech war’, in which national security concerns replace economic logic. The area for win–win gains is reduced, as both countries pursue policies of greater technological autonomy. The bilateral rift creates challenges for companies and third parties who have no wish to take sides and complicates APEC’s goal to promote growth and accelerate regional economic integration.