America's Economic Decoupling from China: A Long Overdue Necessity
For decades, America's relationship with China has been defined by economic entanglement that has steadily eroded our manufacturing base, compromised our national security, and undermined American workers. The current administration's decisive move toward economic decoupling—with tariffs now reaching 145% on Chinese goods—represents not merely a policy shift but a necessary correction to decades of strategic negligence.
The Myth of "Free Trade" with China
The narrative of inevitable globalization that pushed manufacturing jobs to China was never based on natural economic forces but rather on a series of policy choices made under multiple administrations. What Peter Navarro aptly titled "Death by China" has been facilitated by our own leaders' unwillingness to confront China's systematic abuse of the international trading system.
China's trade surplus reached a staggering $1 trillion last year, with $525 billion in goods shipped to the U.S. alone. This imbalance has doubled over the past five years, despite previous tariff attempts. Such figures demonstrate the profound asymmetry in our economic relationship.
China's Unfair Trade Arsenal
Navarro outlined how China has deployed a comprehensive strategy to dominate global manufacturing and trade:
Massive illegal export subsidies, including free land, subsidized energy, and virtually unlimited low-interest loans
Currency manipulation providing Chinese exporters with an artificial 40% discount when selling to American consumers
Intellectual property theft that has pillaged America's innovation economy
Environmental degradation as a cost-cutting measure, sacrificing global ecosystems for competitive advantage
Dangerous worker conditions far below international standards
Strategic control of raw materials from antimony to zinc, restricting exports to gain leverage over global heavy industry
Predatory pricing and dumping to eliminate foreign competition
Protectionist barriers preventing American firms from accessing Chinese markets
The results speak for themselves. China now manufactures almost a third of all goods worldwide—more than the U.S., Japan, Germany, and South Korea combined. Chinese companies have strategically acquired controlling interests in critical mineral resources, including cobalt, nickel, and lithium mines essential for modern technology. Once the world's leading producer of rare earth materials, America now accounts for just 12% of global production, while China controls 62%.
The Devastating Impact on American Manufacturing
In his book No Trade is Free, Robert Lighthizer laid out how the consequences for American industry have been catastrophic. Today, 73% of all furniture sold in America is imported. Auto imports exploded from $40 billion in 1990 to over $180 billion by 2020. For the first time in our history, less than half the cars sold in America are assembled here.
Between 2000 and 2010 alone—following China's admission to the WTO and receipt of permanent most-favored-nation trading status—the U.S. economy generated 10 million fewer jobs than historical growth rates would have predicted.
The Path Forward: Strategic Decoupling
The current policy of economic decoupling is not merely justified—it's long overdue. A comprehensive approach, as outlined by former Trade Representative Lighthizer, requires
Ending China’s Most Favored Nation Status not only makes sense from a bi-lateral trade perspective but could speed the demise of the WTO
Targeted tariffs structured to achieve balanced trade and encourage domestic manufacturing
Streamlined unfair trade cases against Chinese competition
Reduced strategic dependencies on Chinese supply chains
Investment restrictions in both directions, especially in sensitive sectors
Strong export controls on technology with security implications
Technology independence in critical and dual-use sectors
Reciprocal market access across all industries
Legal protections against Chinese political influence operations
This isn't about economic isolationism—it's about balanced relationships that respect American interests. China's options for retaliation are limited precisely because our relationship is so unbalanced. They need our markets far more than we need their products.
A Matter of National Security
Beyond economics, this is fundamentally a national security imperative. Our dependence on Chinese manufacturing has created vulnerabilities that extend to our military readiness, critical infrastructure, and technological sovereignty. A country that cannot produce what it needs to defend itself cannot remain secure or independent.
The architects of this new approach—figures like Lighthizer and Navarro, who have advocated for trade realism since the 1990s—deserve credit for recognizing what so many refused to see. Their prescription of strategic decoupling—balancing trade, limiting sensitive technology transfers, controlling cross-border investments, and developing sector-specific technology policies—offers a path toward restored American industrial capacity.
After decades of allowing China to write the rules of our economic relationship, America is finally reasserting control over its economic destiny. This recalibration isn't just about fair trade—it's about whether the United States will remain a manufacturing power capable of determining its own future. The current policy of decoupling isn't merely justified by the evidence—it's demanded by it.