Can the US and China really decouple, and what do economists say?
Firms moved 244 factories out of China between 2018 and 2023, but only 38 of those moves brought production back to the US.
Economists disagree about whether the United States and China can , and the evidence so far points to partial change rather than a clean break. Decoupling means separating two economies that have grown tied together. One famous description of the tie is Chimerica, a term coined in late 2006 by historian Niall Ferguson and economist Moritz Schularick, who argued that saving by the Chinese and overspending by Americans led to a period of wealth creation that contributed to the 2008 financial crisis.
Some argue the tie makes a split costly. The Chimerica argument is that the economic symbiosis between the two countries suggests separation would harm both countries and be disastrous for the global economy. A November 2019 United Nations analysis reported that the US tariffs on China are economically hurting both countries. Others stress risk instead of cost: in June 2023 US Secretary of State Antony Blinken said the US is for and diversifying, not for containing China economically, while Chinese Foreign Ministry official Yang Tao said the US was simply repackaging decoupling as de-risking.
What has actually happened is mixed. Academic work tracking firm disclosures found 244 relocation decisions by 141 manufacturers during 2018 to 2023, and 66.4% were multi-country China-plus-many strategies, with Vietnam the largest beneficiary. True accounted for only 38 of the 244 moves, or 15.6%. China grew its overall by 20% from 2024 to a record $1.19 trillion in 2025, though as of July 2026 its exports of rare earth magnets to the US were 20% below the 2022 to 2024 average.
Reduce dependence
- Blinken: and diversifying, not containment
- : keep access, reduce geopolitical risk
Keep the ties
- Chimerica argument: separation harms both
- UN analysis (2019): tariffs hurt both countries
- IMF: costs growth, up to 6% for some countries
Different goods are moving at different speeds, and the economists and officials quoted here weigh the costs and risks of separating differently.
Where 244 factory moves went, 2018–2023 study
% of moves
| Share of moves (%) | |
|---|---|
| China-plus-many (multi-country) | 66.4 % of moves |
| True reshoring | 15.6 % of moves |
Quiz me
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Recap
The evidence so far shows partial shifts, not a clean break, and both sides can point to numbers.
💡 A trick to remember it · Not a clean cut but a slow fraying: some threads loosen, others pull tighter, and every choice has a price.
Surprising fact · In one study of 244 factory relocations, only 38 were true reshoring.
Connects to
- 🇨🇳 How is China responding to chip restrictions? Made in China 2025 and its own chips
- 🧲 What are rare earths, and why do China's export limits matter?
- 🚫 What are US export controls on advanced chips, and what did the October 2022 rules do?
- 🧾 Who really pays a tariff?
- 🍷 Why should a country buy things it could make better itself?
- Friendshoring
- Chimerica
Sources (4)
No source, no claim. Every fact in this lesson (15 claims) cites at least one of these.