Originally published at: Faceoff in Manhattan: Should US ‘decouple’ supply chains from China? - FreightWaves
A debate in New York City took on the question of whether the U.S. should “decouple” its supply chains from China.
Fascinating article. Would love to have been there, watching too. I see Isaac Fish’s POV as correct; and long term thinking; which is what we, the US have been bad at; we think short term and suffer for it. For Ben Steil to claim employment in US will be lower, long term, via decoupling is absurd. The goods we consume here are hardly at all “made in USA,” and highly “made in China.” The goods our OEM’s produce and sell abroad are also hardly made here; take Apple or Nike; so to think decoupling would make US jobs decline, long term; is nonsense. Then the Dollar. The dollar has only gotten weaker via China’s relative strength. BRICS would not be possible without the US allowing China to grow so much; via (stupid WTO) “most favored partner” status. The only way to reverse this is to reverse the wealth transfer. Yes, we can… When Susan Shirk says China has diversified it’s exports; to the point that decoupling won’t hurt China, this ignores the fact that China makes much higher net profit selling to US consumers. Try selling to India, Myanmar, Guatemala, etc for anywhere near the profit they make selling here. Not gonna happen. Also, to think we can “de risk” instead of decouple makes little sense. If we only curtail the “national security” related trade? We keep transfering $Trillions of dollars of wealth. We must have balanced trade; if not decoupling; but these are same meaning. De-risk = China owns us, eventually. As to who can outlast longest, in this trade war (of attrition); I think we can. Think of all the recent articles of idled Chinese factories; already. And now, thanks to Trump letting other countries know that if China trans-ships via these into US mkt? These 3rd party countries will be smacked hard with same 50%+ tariffs. So Trump has closed the door to China keeping it’s factories running via trans shipping. IMO this was Trump’s strategy all along , when he first imposed 50% or so tariffs vs Vietnam, Thailand, etc. Trump let them know that if trade balance with these increases (due to trans shipping); the cost will not be worth the gain, net. These countries would hurt thier own exports into the US if they allow China goods to flow via them. Very smart on Trump’s part; he is definitely playing chess; though many claim Trump is illiterate as to how economy works. They forget: Trump had the best US economy in decades; until Covid wrecked it.
John Kingston, are you keeping eye (or are you there in person!) CFR C.Peter McColough & Lighthizer. THIS would be better vs a music concert IMO; would love to watch this dialog. I’m huge admirer of Robert Lighthizer. Event goes live soon today (4-28-25), https://www.youtube.com/live/qLpUSMIN_vw?si=KZ7yfFWZdpVAmmn2
Trump has all the cards; due to massive imbalance. Our shoppers find alt products / services; to larger degree. China closes its factories; they can’t sell in China or most of abroad for nearly the net margin they get, when selling to US.