US-China recoupling in an age of decoupling

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“Love will find a way”The US and China are like two forbidden lovers, desperate to be together, but increasingly pulled apart by geopolitical forces. For decades, growing trade, investment, and people flows between the two countries were driven by natural complementarities between their two economies. American companies like Apple and Nike leveraged China’s nimble, low-cost manufacturing base to become global giants. Chinese students flocked to American universities. Silicon Valley VCs bet big on China’s booming tech scene. Chinese firms like Alibaba and Baidu rushed to list on the New York Stock Exchange and NASDAQ.Alibaba founder Jack Ma ringing the opening bell for the NYSE in 2014. Image: Business InsiderBut now, political leaders in both countries are trying to cut back ties through tariffs, sanctions, export controls, and a drive for self-reliance. The US has cut off access to advanced AI chips while China has throttled rare earth exports. Chinese policymakers are pressuring state firms to swap out any American tech through the “Delete A” campaign while the US prepares to ban DJI drones. The US has effectively shut out Chinese EVs through 100% tariffs while the list of US websites blocked in China from Google to ChatGPT continues to grow.Yet, despite the best efforts of their political leaders, people and companies in the US and China are still trying to reach each other: by smuggling Nvidia chips, by rerouting trade through third countries, through VPNs and regulatory loopholes and requests for tariff exemptions.Now, even as the US and China push to decouple, new tie…