From Chimerica to decoupling: US-China trade war and failed neoliberalism

The 2018 US-China trade war marked the beginning of the US-China decoupling. This policy shift provides a good test for the theory of neoliberalism. The chapter asks three main questions. First, what are the factors that have driven US-China relations from close economic ties to today's decoupling? Second, why did the US firms which have great economic interest at stake fail to constrain the escalation of trade war? Third, in what ways and to what extent can neoliberalism cope with and accommodate increasing variety in economic systems among the major global players? This chapter questions the bifurcated view that the global trade must either deepen integration and convergence or decouple, and posits a middle course—a hybrid approach for the Western capitalist economies to accommodate the participation of non-Western players in global economy while updating rules of the game and making them more enforceable.