S9 Ep56: Decoupling from China after Trump's Trade Wars

In March 2025, Apple chartered cargo flights to deliver 600 tonnes of iPhones from India to the United States. A year earlier, four in five smartphones that imported to the US came from China.

One of the aims of US trade policy has been to decouple the US economy from China. So is the strategy working? Chad Bown (PIIE, CEPR) tells Tim Phillips how he examined the US import data product by product to see how American importers coped with Trump's second trade war. In consumer electronics, many firms quietly built a second supply chain in tariff-exempt countries before 2025, and switched sourcing away from China almost overnight in 2025. But clothing and footwear did not switch, because alternative source countries like Vietnam faced tariffs almost as high. When the US taxes imports from every country, the decoupling strategy gets lost.

The research behind this episode:

Bown, Chad P. 2026. "How Did Trump's 2025 Trade War Affect the Decoupling of US-China Supply Chains?" CEPR Discussion Paper DP21801 (gated). Forthcoming in Asian Economic Policy Review.

To cite this episode:

Phillips, Tim, and Chad P. Bown. 2026. "Decoupling from China after Trump's Trade Wars." VoxTalks Economics (podcast).

About the guest

Chad P. Bown is the Reginald Jones Senior Fellow at the Peterson Institute for International Economics and a Fellow in the International Trade and Regional Economics programme of the Centre for Economic Policy Research. He was chief economist at the US Department of State from January 2024 to January 2025, and senior economist for international trade and investment on President Obama's Council of Economic Advisers. His research spans trade policy, industrial policy, economic security and supply chains. He co-created the Trade Talks podcast with Soumaya Keynes in 2017, and with Keynes he is co-author of How to Win a Trade War (Simon & Schuster, 2026).

Research cited in this episode

The 2018-19 Section 301 tariffs. In Trump's first term the US imposed tariffs on imports from China in stages, on product lists set under Section 301 of the Trade Act of 1974. Lists 1, 2 and 3, mostly intermediate inputs such as auto parts, ended at 25%. List 4A began at 15% and was cut to 7.5% in February 2020 under the Phase One agreement. List 4B, mostly consumer goods such as smartphones, laptops and toys, was delayed "for Christmas season" and never imposed. By the end of the first trade war, roughly two thirds of US imports from China faced new tariffs. Bown's point is