Decoupling and the New Cold War: US-China Strategic Competition in the Global Supply Chain

Abstract

The intensifying strategic competition between the United States and China has fundamentally altered global supply chain dynamics, marking a shift from economic interdependence to selective decoupling across critical sectors. This paper examines the mechanisms, implications, and consequences of US-China supply chain competition, analyzing how national security concerns have increasingly overshadowed economic efficiency considerations. Through examination of trade policies, technological restrictions, and industrial strategies implemented since 2018, this study reveals that while complete decoupling remains economically unfeasible, strategic decoupling in semiconductors, critical minerals, and advanced technologies has accelerated. The findings suggest that this "new Cold War" dynamic is reshaping global trade patterns, forcing multinational corporations to reconfigure supply chains, and compelling other nations to navigate between the world's two largest economies. The research concludes that this competition represents a fundamental transition from globalization toward a more fragmented, bloc-based international economic system with significant implications for global economic stability and growth.