U.S.-China trade defies talk of decoupling

Trade between the U.S. and China is on track to break records, a signal of resilient links between the world’s top economies amid the heated national security rhetoric in Washington and fears of “decoupling.”

U.S. government data through November suggest that imports and exports in 2022 will add up to an alltime high, or at least come very close, when the final report comes out Feb. 7. Beijing just published its own fullyear figures that show record trade of around $760 billion.

There are some caveats. Trade slowed toward the end of the year, as U.S. import demand cooled and China struggled to manage its COVID-19 restrictions. And the trade data isn’t adjusted for inflation, which means higher dollar figures may not translate to more goods shipped.

Still, they’re striking numbers in an era when tough-on-China is the closest thing there is to bipartisan consensus in Washington. They illustrate how deeply entwined the two economies remain — even as the U.S. aims to hold back China’s advance and Beijing seeks to counter Washington’s global influence.

There have been positive signs recently, including the first face-to-face meeting in November between presidents Joe Biden and Xi Jinping, and plans for more highlevel connections, including a visit to China this year by Secretary of State Antony Blinken. But it’s unlikely the two will easily resolve their differences, including Beijing’s stance on Taiwan and the South China Sea, as well as Washington’s aggressive drive to restrict Beijing’s access to key semiconductor technology.

“Can we have this tech war and still have a very robust trading relationship in everything else? My instinct is ‘Yes,’ ” said David Dollar, senior fellow in foreign policy at the Brookings Institution. “It’s based on economic efficiency, it’s what companies want, it enables them to deliver goods and services to consumers.”

Liu, who was his country’s chief trade negotiator with President Donald Trump’s administration, is set to meet Janet Yellen in Zurich on Wednesday, after the U.S. treasury secretary announced a surprise change to her schedule.

U.S.-China trade has largely survived the tariffs imposed under Trump and their continuation during the Biden administration, which has introduced a raft of its own measures aimed at slowing China’s ability to develop advanced semiconductors. Congress also passed legislation to target what lawmakers say are Chinese human rights abuses, and to bolster U.S. chip manufacturing.