It’s hard to think of an issue that unites America’s deeply divided political class more than the need to contain China’s growing influence, whether through trade restrictions, tariffs on Chinese electric vehicles (EVs), or banning TikTok. But while the national security argument for such protectionist measures is undoubtedly compelling, it’s not clear whether American political leaders and the American public are prepared for the potential economic consequences. The prevailing view is that the surge of Chinese imports into the US market during the 2000s undermined America’s industrial base, making the kind of accelerated military development that enabled the Allies to win World War II virtually impossible. In Washington policy circles, the “China shock” is often described as a gigantic mistake that devastated cities across the Rust Belt and led to a sharp increase in inequality. As a result, there is widespread agreement among policymakers and analysts that the US must prevent a “China shock 2.0” by imposing significant tariffs and trade restrictions on Asian technologies such as phones, drones, and especially EVs, solar panels, and green energy equipment. President Joe Biden and his predecessor, Donald Trump, disagree on most issues. When it comes to the relationship with China, however, the two appear to be vying for the title of most protectionist president. Yet the narrative of China’s impact underpinning current US economic policy is deeply flawed. While competition with Chinese producers has adversely affected some manufacturing jobs, free trade has undoubtedly created more winners than losers. Similarly, the country’s low-income consumers have been among those who have benefited most from low-cost Chinese imports. Policymakers who believe that disrupting trade with China will not result in price increases and a significant political blowback are in for an unpleasant surprise. To be sure, the economic impact of U.S. trade restrictions could be minimized by rerouting Chinese imports through suppliers in other countries, allowing Americans to buy solar panels made in China as if they were produced in India, albeit at a higher price. But while this tariff scenario may be popular with voters, it is hard to see how this would improve national security any more than rerouting Chinese fentanyl to the U.S. through Mexico helped solve the opioid crisis. Moreover, it would take years for friendly countries to develop their own industrial bases that can compete with China’s, especially at the low prices offered by Chinese producers. In some sectors, such as EVs, China’s production capacity has allowed it to exert an almost insurmountable advantage over Western countries. Faced with this reality, the auto workers union’s goal of getting Americans to buy electric cars produced in unionized, well-paid American facilities will be extremely difficult to achieve. A better-laid strategy would distinguish between trade involving sensitive military technologies and other products, but doing so is more complicated than many seem to think. The convergence of military and civilian technologies has become evident in the war in Ukraine, with low-cost drones originally intended to carry packages later repurposed as bomb launchers and private mobile networks playing a critical role in major battles. And, as the pandemic has shown, the U.S. and its allies are dependent on Chinese medical supplies. For those of us who believe that multilateral cooperation is necessary to address the world’s most pressing problems, from climate change to regulating artificial intelligence, the growing rivalry between the two major powers is deeply troubling. From the US perspective, China’s authoritarian government undermines the foundational liberal values that underpin the global economic and political order. China’s relentless cyberattacks continue to pose an immediate threat to the US economy and American businesses, and a potential Chinese blockade or invasion of Taiwan would have far-reaching global consequences. From China’s perspective, the US and its allies are cynically attempting to uphold a world order established through centuries of imperialism. Much to the chagrin of US diplomats, many other countries appear to share this sentiment, as made clear by the widespread disregard among developing and emerging economies for Western sanctions against Russia. Some may hope that China’s economic slowdown will curb its geopolitical ambitions. But its current struggles are just as likely to push China toward confrontation with the US as they are to foster cooperation. Still, despite what many in the US may think, economic decoupling is not a viable option. While the Biden administration's trade restrictions and bellicose rhetoric are a response to Chinese provocations, both countries must find a way to reach an agreement if they are to achieve stable, inclusive, and sustainable economic growth. Kenneth Rogoff is a former chief economist at the IMF and a professor at Harvard. Translation by Estaban Flamini. ©Project Syndicate, 2024. Follow all the information on Economy and Business on Facebook and Twitter. Xor in our weekly newsletter