Decoupling Defined: Four Theories and Four Illustrations from the Sino-American Trade War

Abstract: This article seeks to bring clarity to a much used, yet ill-defined, term “decoupling.” The article explores the theory and practice of “decoupling” in the context of the Sino-American Trade War, which, launched in March 2018, shows no sign of a ceasefire. As to theory, this article argues that conceptually, “decoupling” takes (at least) four forms. There is efficiency, jurisprudential, security, and values decoupling. As to practice, this article shows these four theoretical typologies of decoupling are obvious today.

This theory and practice are illustrated (respectively) with respect to labor-intensive industries, commercial transactions in rule-of-man jurisdictions or with military-related firms, or which undermine freedom of conscience. Amidst the present Trade War, the article counsels for an expectation of more four-pronged based decoupling.