Decoupling from China: an economic analysis of the impact on the U.S. economy of a permanent tariff on Chinese imports

America’s pursuit of low-cost overseas production and China’s thirst for export markets have resulted in industrial decline in the U.S. and raised serious questions about national security. An economic decoupling from China is now actively discussed in Washington. We model the economic impact of a permanent 25% across-the-board tariff on imports from China to study its macroeconomic effects. We find significant gains in GDP and employment and a large reorientation of U.S. supply chains. © 2019, National Association for Business Economics.