Decoupling

When President Trump placed import taxes on Chinese goods, he started what has become known as decoupling. It is a move by the west to move away from dependence on Chinese manufacturing and to begin the process of bring things back home called onshoring. China for many years used the unfair practice of subsidizing industry to run the competition out of business. The one area that is currently causing the most concern is what are called API's (Active Pharmaceutical Ingredients). China produces more than 2,000 API molecules and has more than 1,000 manufacturing facilities. China is the source of 40% of the Global API's. Another area where the US has thwarted China is in 5G. China's company Huawei was going to install their version of 5G across the world but Trump intervened and convinced the west to stay away from Huawei based on security reasons. Adding pressure to decoupling is China's recent moves toward Russia and their threats to Taiwan. This movement will be slow but as concern for fragile supply chains and possible shortages of critical materials rise the move will quicken. The current US policy toward China is called containment but they avoid using that word as it is used by China to indicate that the US has an aggressive plan to undermine the Chinese economy whereas the truth is that the US merely wants to reduced its dependence on Chines imports which will in fact hurt the Chinese economy. It is the difference in motivation that causes the misunderstanding of what containment means. For 40 years the US relationship with China was economic but today it is a national security issue.