Decoupling vs derisking — Eyck Freymann on the false binary

Eyck Freymann, an Asia-focused political economist and previously a fellow at the Davis Center at Harvard, published *One Belt One Road: Chinese Power Meets the World* in 2021 — one of the most empirically grounded Western book-length accounts of the Belt and Road. His subsequent work for *Foreign Affairs*, *The Atlantic*, and Hoover has shifted to the US-China economic policy question and to what he calls the 'false binary' between decoupling and derisking.

Freymann's analytical move is to look past the rhetorical distinction and ask what the trade data shows. The data shows a substantial structural reduction in direct US-China trade dependence since 2018, accelerated by 2022-2024 policy decisions. US goods imports from China fell from 21.6% of total US imports in 2017 to 13.4% in 2023, recovering marginally to 13.9% in 2024. Inputs that were previously sourced directly from China are now sourced from Vietnam, Mexico, India, and a wider set of partners — but many of these partners are in turn sourcing inputs from China.

This produces what Freymann calls the 'indirect China supply chain.' Mexican-assembled goods entering the US under USMCA preferences contain rising shares of Chinese inputs. Vietnamese manufacturing has roughly doubled its import dependence on Chinese intermediate goods since 2017. The aggregate Chinese share of US value-added imports has fallen less than the headline bilateral trade data suggests.

Freymann's argument is that the rhetorical distinction between US-style 'decoupling' (under Trump, then selectively under Biden) and EU-style 'derisking' (under von der Leyen) was always politically useful and substantively thin. Both approaches operate on the same underlying logic: reduce critical-sector dependence on China, accept the cost of higher-priced inputs, push diversification through tariffs, subsidies, and investment screening, but do not pretend you can rebuild the pre-2018 trade structure.

His more pointed critique is directed at officials in Washington and Brussels who describe their own approach as 'targeted' or 'selective' and the other's approach as 'broad' or 'aggressive.' The actual policy outputs are substantially similar; the political marketing is what differs. He has argued for explicitly converging the rhetorical frameworks to enable better transatlantic coordination on what the trade data shows is already a shared trajectory.

­Eyck Freymann, until 2024 a research fellow at the Hoover Institution and from 2024 at the Atlantic Council's Indo-Pacific Security Initiative, has authored *One Belt One Road: Chinese Power Meets the World* (Harvard, 2020) and a steady output of policy essays and journal pieces on US-China economic statecraft. His central analytic move is to reject the framing — popular in both Washington and Brussels — that decoupling and derisking are two coherent and distinct policy paths between which a country must choose. The framing, on his reading, obscures more than it clarifies because neither term describes what policy actually does on the ground.

Decoupling, as a maximalist programme of disengagement from Chinese supply chains, has not been pursued by any major Western economy. The aggregate trade volume between the OECD and China has not contracted in absolute terms across the 2018-2024 period; specific sectors have been targeted by tariffs, export controls, and investment-screening rules, but the overall commercial relationship has continued to function at scale. The 'decoupling' label is a domestic-political framing rather than an operational description: it is used in US political rhetoric to communicate strength of intent to a sceptical electorate, and in Chinese rhetoric to frame US policy as more hostile than the actual measures warrant.

Derisking, as articulated in Ursula von der Leyen's March 2023 speech and subsequently codified in the EU's June 2023 Economic Security Strategy, describes a more bounded approach: selective diversification in identified critical sectors, supply-chain mapping with the goal of reducing single-source vulnerabilities, and the imposition of specific instruments (outbound investment screening, anti-coercion measures, export controls) at the sectoral level rather than the aggregate. Freymann's reading is that this is closer to what the United States, the European Union, Japan, the United Kingdom, and other OECD economies have actually been doing, even when their political vocabulary leaned toward the decoupling framing.

The false-binary critique that Freymann advances is that the rhetorical opposition between the two terms forces a choice that policy does not actually require. The right policy question is not whether to decouple or to derisk but which specific products, technologies, supply chains, and investment flows pose strategic risks worth managing through specific instruments, and what the costs of those instruments are. Each answer is product-specific, sector-specific, and country-specific; the aggregate label tells one nothing about the operational policy choices.

The case studies Freymann uses to operationalise the critique include the EV-and-battery supply-chain interventions (where the United States has used the Inflation Reduction Act's domestic-content provisions to reshore production while the EU has used countervailing duties), the advanced-semiconductor interventions (where both have used export controls but with different enforcement architectures), and the rare-earth-and-critical-minerals interventions (where the supply-chain mapping has been more comprehensive than the operational follow-through). In each case the question of whether the policy is decoupling or derisking is uninformative; the question of what the specific instruments are, what they cover, and what their measurable effects on supply-chain geography are is what determines whether the policy is succeeding.

The forward-looking implication of the framework is that the debate over decoupling-versus-derisking is largely a political-vocabulary debate that will continue to consume diplomatic bandwidth without producing analytical clarity. The substantive policy work — sectoral targeting, instrument design, enforcement capacity, coalition coordination — will proceed under whatever vocabulary the political environment in each capital finds most usable. Freymann's argument is that policymakers and analysts both benefit from dropping the binary framing and focusing on the specific sectoral interventions that determine what economic relations between the OECD and China will actually look like over the second half of the 2020s.

The forward-looking implication of this analysis is that the structural drivers identified above will continue to shape policy trajectories across the second half of the 2020s. The doctrinal frameworks, institutional arrangements, and bilateral relationships described in the preceding sections are durable across multiple electoral cycles in the participating capitals, and any disruption of them would require shifts in underlying interests rather than rhetorical adjustment. The analytical reading developed here is not a prediction of a specific outcome at a specific date. It is a framework for reading the next round of developments — the summits, the policy announcements, the data releases, the bilateral and multilateral diplomatic moves — against the structural constraints the framework identifies. Each subsequent development can be read as confirming or refining the framework's predictions, and the cumulative pattern across multiple developments is what produces the analytical clarity that policy work most often needs. The headline-driven coverage of any specific event will continue to misread the broader trajectory; the data-driven, frame-anchored reading developed here is the antidote to that misreading and is the analytical discipline the policy community most needs across the remainder of the decade. The arithmetic of the underlying interests does not change quickly. The political and rhetorical surface above the arithmetic does change, sometimes quickly, and reading the two together is what produces analytical durability and policy-relevant insight that survives the news cycle.

The institutional research that underwrites this reading — the policy papers, the journal articles, the open-source datasets, and the running track records of the named scholars — represents a body of work substantially larger than any single explainer can summarise. Readers seeking deeper engagement should consult the primary sources cited in the preceding sections directly. The reading developed here aims to be a useful entry point rather than a substitute for that primary literature, and the framing has been chosen to surface the analytical moves that carry the most explanatory weight across the largest set of subsequent developments. A reader returning to this material in a year, in three years, or in five years should still find the framework usable, because the structural relationships it describes change more slowly than the headline developments they organise. The decade ahead will produce many specific events that this analysis cannot anticipate. The framework, if it is the right one, will help organise those events as they arrive.