US trade shifts on Covid and China tensions, but no 'decoupling' yet
Diversification, not decoupling For now, US government figures through to November show total US-China trade could approach or hit a high in 2022. "Going forward, you're going to see more diversification," as opposed to a complete cut-off of shipments from China, said Sweet.
Auto manufacturers, for example, experienced supply chain problems during the pandemic. Increasing climate-related disruptions are also "raising the risks of overconcentrated supply chains in one firm or one geographic area," said Robert Koopman, a lecturer at American University and a former World Trade Organization chief economist.
Meanwhile, the US is trying to be more self-reliant in specific sectors like semiconductors. "The recent (Inflation Reduction Act) and Chips Act, and related sanctions are clear indicators of the Biden administration's efforts to decouple from China" in these areas, said Koopman.
Emily Benson, senior fellow at the Center for Strategic and International Studies (CSIS), added: "As companies reassess risk and review the current state of their supply chains, one consistent outcome is movement...
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