First, for all of the talk about “strategic decoupling,” trade ties remain strong between the United States and China. Over the last five years, policymakers in Washington and Beijing have erected large trade barriers between the two countries: tariffs and reprisals have gone back and forth; heavy‐​handed industrial policies in the United States and China aimed at boosting domestic production of “strategic” goods ostensibly to lessen reliance on the other; new export controls imposed by Washington on semiconductors and related products. Likewise, Beijing’s strict COVID‐​Zero policies shuttered large swaths of the Chinese economy in 2022. Despite these moves, data on two‐​way goods trade between the United States and China reached $643.8 billion in 2022, in real terms.1 While this number is slightly lower than the total real value of U.S.-China trade in 2021, it is a far cry from what one would expect were a broad “decoupling” between the two economies be occurring.

Indeed, that two‐​way trade continues at such high volumes is a reminder that trade takes place between people and not governments. And people in the United States and China are showing that they do not necessarily agree with their governments’ attempts to force autarky or decoupling upon them. As former Assistant United States Trade Representative Ed Gresser told Politico, “The decisions of consumers so far have been more powerful than governments.”

[Normally, that would be a good development. In this case, we have significant risks in keeping so much of our supply chain — especially in critical goods like pharmaceuticals — in China. While I prefer that private choices inform markets, the hostility of Beijing to that concept as well as to the US calls for a more significant effort for decoupling. And in China, it’s tough to separate the government from “consumers” or “producers,” neither of which operate solely or even mainly on the basis of personal or commercial choice. — Ed]