De-Risking, Not Decoupling: US Shifts Strategy on China Trade

The United States is shifting its approach to trade with China, moving away from the concept of complete decoupling and instead focusing on 'de-risking'. This strategy aims to reduce the nation's reliance on China for essential goods and services, a move prompted by concerns over supply chain vulnerabilities highlighted during the COVID-19 pandemic. Secretary of the Treasury Scott Bessent, in a recent interview, explained that the goal is not to sever ties entirely but to create a more resilient and diversified trading system. "We do not want to decouple," Bessent stated, "but we do need to de-risk." This approach involves diversifying supply chains and exploring alternative sources for crucial products like semiconductors and medicines. The administration believes that this measured approach will protect the US economy while still allowing for beneficial trade relationships with China. The long-term impact of this strategy remains to be seen, but it represents a significant shift in US policy toward China.