The US-China relationship is a pacesetter for change. It is no longer simply about tariffs or reducing America’s trade deficit. It is a multifront effort to unwind the economic, technological, financial, and even social ties that once bound the world’s two largest economies, and, in the process, sustained an era of globalization.
Donald Trump’s first term launched this rupture with sweeping tariffs and a crackdown on Chinese firms — the most prominent being telecoms giant Huawei — followed by a politically charged campaign to ban the social media platform TikTok.
Joe Biden, despite signaling a return to multilateral diplomacy, expanded the decoupling through high-stakes industrial policy, including the CHIPS and Science Act and the Inflation Reduction Act that aimed to bring home critical supply chains and outcompete China in semiconductors, clean energy and emerging technologies.
Now, Trump is back in the political spotlight with a renewed “America First” agenda. Trump 2.0 includes a 10 percent blanket tariff on all imports, framed as a sweeping “Liberation Day” reset of US trade policy.
This tariff applies universally, with individual countries expected to negotiate adjusted terms. The universally applied baseline tariff signals a shift from targeted tariffs to a default protectionist baseline, marking a new phase of economic nationalism.
In the end, the world may not be divided cleanly into rival camps. The future is likely to be multipolar, messy, and contested. Structural decoupling won’t reverse globalization, but it will reshape it — rerouting trade flows, rewriting norms, and forcing nations to adapt to a more volatile, less US-centric environment
What’s striking is not just the return of economic nationalism but the normalization of conflict as a method of governance. Other countries are expected to yield to US pressure.
China is the leading target, facing higher tariffs, port fees on China-linked ships, sanctions, and, more recently, visa restrictions for Chinese students on national security grounds.
Yet structural decoupling is no longer just trade policy. It reflects a broader transformation in how the US governs itself. Trumpism, in its second incarnation, is not merely about tariffs — it is about remaking the institutional fabric of the country.
Long-standing norms such as judicial independence, the rule of law, and academic autonomy are now contested terrain. The tools once reserved for foreign adversaries, such as sanctions, visa denials, and politicized investigations, are now applied domestically.
Two emblematic examples illustrate this shift.
In May, the US Court of International Trade ruled that Trump’s tariffs were unlawful, finding that the International Emergency Economic Powers Act does not grant the president authority to impose such sweeping trade measures without congressional approval. The White House has since appealed the decision, and the case is now likely headed to the Supreme Court, setting up a high-stakes legal battle over the constitutional limits of presidential power in trade.
Meanwhile, the Trump administration has intensified its campaign against elite universities, with Harvard University in the front row. The Department of Homeland Security revoked Harvard’s certification to enroll international students, citing regulatory violations. The administration claimed this would open more places for American students. Harvard challenged the move, and a federal judge issued a preliminary injunction that allowed continued enrollment while the case proceeds.
At the same time, Trump has ordered a review of federal contracts with Harvard and questioned its tax-exempt status, accusing the university of violating federal priorities. The administration’s broader aim is to defund and discipline institutions it sees as liberal strongholds.
This push reflects a larger effort to reshape higher education by using federal levers — funding, immigration, and taxation — as tools to enforce conformity and reduce the influence of independent-minded academic institutions.
In this light, the US-China rivalry has become inseparable from America’s internal fragmentation. The MAGA (“Make America Great Again”) movement seeks not only to decouple from China but to decouple the federal government from its own postwar liberal consensus.
The foundational pillars of US democracy — checks and balances and separation of powers — are being undermined alongside its international relationships.
Beijing, for its part, has taken careful notes since 2016. The escalation of punitive policies under both Trump 1.0 and Biden convinced China’s leadership that containment is bipartisan and here to stay.
The 2018 arrest of Huawei’s Chief Financial Officer Meng Wanzhou in Canada, done at the request of the US Department of Justice, was a wake-up call. It was followed by a cascade of sanctions and export controls: bans on advanced chip exports, restrictions on US equipment and software sales, and targeted curbs on artificial intelligence, quantum computing, and supercomputers.
These actions shattered any remaining faith in a return to business as usual. In response, China has developed a dual strategy of defense and offense.
Domestically, it is accelerating self-reliance in many types of technologies and products. Globally, it is diversifying risk through bilateral trade deals, regional partnerships, and strategic expansion of the BRICS bloc.
China is also leading efforts in de-dollarization, settling energy trades in renminbi, building alternative payment systems, and reducing reliance on American technology and markets. For example, China has banned US-made chips and devices from government use, signaling a growing push to avoid American-origin goods altogether; and China will import fewer American agricultural and energy products.
Meanwhile, much of the world is quietly adjusting to this new reality. Allies and nonaligned states alike have grown used to the Trumpian style of US governance. The first shock may have faded. Many now hedge, advancing bilateral or multilateral agreements without US involvement, particularly in trade, digital infrastructure, and energy transition.
This is not a wholesale rejection of the US, but a pragmatic recalibration. As Washington turns inward, consumed by ideological battles and hyperpartisan policymaking, other states are increasingly willing to pursue their interests independently. In this sense, structural decoupling is not only about the US and China. It is about the fragmentation of the US-led global order itself.
The question now is whether the US is, to borrow Trump’s own language, “running out of cards”. Tariffs and tech controls have been deployed. Sanctions fatigue is spreading. There’s only so much reshoring American industry can absorb. China, despite its economic challenges, continues to expand its options — investing in research and development, negotiating new supply chains, and deepening influence in the Global South.
In the end, the world may not be divided cleanly into rival camps. The future is likely to be multipolar, messy, and contested. Structural decoupling won’t reverse globalization, but it will reshape it — rerouting trade flows, rewriting norms, and forcing nations to adapt to a more volatile, less US-centric environment.
The lesson is clear: This is not just a US-China rivalry. It is a transformation of governance, legitimacy, and power.
The US — its system, its values, and its leadership — now faces scrutiny not only from its rivals, but from its allies. The global order that emerges from this rupture will not be built on 20th-century assumptions. It is being reassembled in real time.
The author is chief development strategist at the Hong Kong University of Science and Technology’s Institute for the Environment.
The views do not necessarily reflect those of China Daily.
