The economic order is etched into every iPhone – the US explains why the anti-China campaign is doomed

The Chinese threat is becoming one of the key themes of the US election campaign.

Both Donald Trump and his opponent Joe Biden are threatening to cut the link between the world’s two largest economies. It will not be possible to create a new iron curtain alone.

Isabella Weber, Associate Professor of Economics at the University of Massachusetts, spoke about this in a publication for The Guardian.

Whenever a new Cold War is being discussed everywhere, it is important to understand the difference between the US-Soviet and US-China conflicts. The USSR and the USA created two competing systems, dividing the world into separate economic blocks. China and the United States are a chimeric of the “global workshop” and the “technology headquarters of the world”.

“Today’s global economic order is still written on the back of every iPhone: designed in California, assembled in China”, – the article says.

“Disengagement has become the new buzzword for describing the prospect of economic collapse between the United States and China. Trump also recently added it to his rhetorical arsenal. The decoupling gives the impression that the disintegration of the world’s two largest economies can be accomplished in one simple step — for example, uncoupling a coupler between two train cars. This is far from the truth”.

As long as China depends on American technology, the whole world depends on China’s manufacturing infrastructure. As a result of the trade war, China’s share in the global supply chains for computers and tablets has declined by about 4 percentage points.

However, China produces 45% of global exports to this sector and 54% of all phones in the world. For furniture, clothing and household electrical goods, the shares are 34%, 28% and 42%, respectively.

Back in 2012, Barack Obama asked Steve Jobs if the iPhone could be made in the US. Jobs replied with a categorical “no”. Since then, nothing has changed. Chinese government agencies, local businesses, and multinational corporations have been building supply chains from China since the late 1980s. When it comes to decoupling, one should mean a complete reorganization of a significant part of world production.

In the midst of the presidential race, even Biden “contracted” Trump’s nationalism. Flirting with his opponent’s electorate, the Democrat responsible for de-industrializing America promises to return production to the United States. However, such plans should be looked at not only from a political but also from an economic point of view. The cost of the anti-China adventure will be on companies, and the burden will be enormous. Therefore, the business community is skeptical about the calls of politicians to leave China.

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