The U.S. and China want to 'decouple' their economies. Is it possible?

As tensions rise, there is growing talk of a split. But there will be difficulties.

U.S.' flag and China's flag.
(Image credit: Illustrated | Gettyimages)

Tensions are rising between the United States and China, and there is talk of "decoupling" the two countries' economies. But is that a good idea? Christine Lagarde, president of the European Central Bank, doesn't think so. A U.S.-China split, she said Sunday on CBS's Face the Nation, "would lead to less economic growth, less prosperity in the world, more poverty across the world. So I think that this is something that should be by all means avoided."

That decoupling may already be underway, however. Bloomberg reports that while U.S.-China trade hit a record $690 billion in 2022, there are signs "that both the U.S. and China have meaningfully reduced the share of their imports coming from each other." The dollar numbers are large, but Chinese goods made up just 16.6 percent of imports in 2022 — down five percent from 2017. The share of American exports going to China also fell.

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