High cost of US decoupling from China:
The economic relationship between the US and China has entered a new and more dangerous phase. What began as a trade war has hardened into deliberate separation. Washington insists that decoupling is necessary to protect national security and reduce dependence on Beijing. Yet the evidence now suggests that this strategy is inflicting greater damage on American industry than on China’s economy.
The second Trump administration has intensified tariffs and restrictions, presenting them as a patriotic defence of American jobs. But the reality is more complex. The decoupling has exposed structural weaknesses in US industry, while China has adapted with surprising speed. The result is a widening gap between political rhetoric and economic outcomes.
China’s decision in October to require government approval for exports of products containing more than 0.1 percent rare earth content was a turning point. Rare earths are critical for defence manufacturing, renewable energy and consumer electronics. American firms suddenly faced higher costs and uncertainty in sectors that Washington had hoped to shield from Chinese influence.
The policy was not a dramatic embargo. It was a subtle but effective reminder of China’s leverage. Beijing showed that it could weaponise its dominance in rare earths without resorting to outright bans. For US companies, the impact was immediate. Defence contractors reported delays, while renewable energy firms warned of rising costs. The American push to build domestic rare earth capacity remains years away from maturity. In the meantime, China retains the upper hand.
The renewed tariff regime has also backfired. Tariffs were meant to punish Chinese exporters and encourage American manufacturing. Instead, they have raised prices for US consumers and squeezed American firms that rely on Chinese inputs. Inflationary pressures have been exacerbated by supply chain disruptions.
The administration argues that these short-term costs are necessary for long-term independence. Yet the political consequences are already visible. Farmers in the Midwest complain that retaliatory tariffs have cut their access to Chinese markets. Manufacturers in the South and Midwest face higher input costs, eroding competitiveness. The promise of reshoring has not materialised at scale. Instead, companies are caught between political directives and economic realities.
China has not stood still. Far from collapsing under the weight of American pressure, Beijing has diversified its trade relationships. It has deepened ties with Southeast Asia, the Middle East and Latin America. The Regional Comprehensive Economic Partnership has given China a platform to expand trade within Asia. Meanwhile, Chinese firms have accelerated investment in Africa and South America, securing new markets and resources.
This adaptation has blunted the impact of US tariffs. Chinese exports to the United States have declined but overall trade volumes have remained resilient. More importantly, China has strengthened its position in industries that Washington hoped to dominate, such as electric vehicles and renewable energy.
The irony is striking: while Washington talks of decoupling, Beijing is embedding itself more deeply in global supply chains.
Recent research highlights another dimension of the problem. Decoupling is only effective when American firms can shift production to countries that are both economically viable and politically aligned with the United States. Simply having alternative suppliers is not enough. Without political alignment, companies hesitate to move production.
This finding explains why decoupling has been uneven. In sectors where allies such as Japan or South Korea can provide alternatives, US firms have reduced reliance on China. But in industries where alternatives are limited or politically uncertain, dependence on China persists. The result is a patchwork decoupling that leaves American industry exposed.
The domestic consequences are becoming harder to ignore. American industry is bearing the brunt of higher costs, disrupted supply chains and lost markets. The rhetoric of protectionism has not translated into a revival of manufacturing. Instead, it has produced frustration among business leaders and workers alike.
The political narrative emphasises sovereignty and security. Yet the economic reality is one of diminished competitiveness. American firms are struggling to match the scale and efficiency of Chinese production. The promise of independence has turned into a burden of higher costs and reduced access to global markets.
The decoupling also carries global consequences. International trade flows have been destabilised. Inflationary pressures have spread beyond the United States. Financial markets have absorbed the shock of uncertainty, with investors wary of escalating tensions. Allies are caught in the middle, pressured to align with Washington while maintaining economic ties with Beijing.
The broader risk is that decoupling undermines the stability of the global economy. The integration of US and Chinese markets was a cornerstone of globalisation. Its unraveling threatens to fragment the international system. For countries outside the US-China rivalry, the consequences are unpredictable and potentially severe.
The evidence points to a failing strategy. Protectionism has not delivered the promised benefits. Decoupling has hurt American industry more than Beijing’s. China has adapted, diversified and strengthened its position. The United States has absorbed higher costs and lost competitiveness.
The political appeal of decoupling is clear. It offers a narrative of strength and independence. But the economic reality is stark. American industry is paying the price for a strategy that prioritises political symbolism over economic pragmatism.
The path forward is uncertain. Washington is unlikely to abandon decoupling, given its political resonance. Yet the pressure from industry and consumers will grow. The challenge is to reconcile national security concerns with economic realities. A more nuanced approach may be necessary, one that balances strategic independence with economic integration.
For now, the lesson is clear. Protectionism is failing. The attempt to decouple from China has hurt the United States more than Beijing. The rhetoric of independence has collided with the reality of interdependence. The cost is being borne not by Beijing but by American industry and consumers.
Tariffs were meant to punish Chinese exporters and encourage American manufacturing; instead, they have raised prices for US consumers.
Dr Imran Khalid is a freelance columnist on international affairs based in Karachi, Pakistan. He qualified as a physician from Dow Medical University in 1991 and has a master’s degree in international relations from Karachi University.
In November 2025, the R50 million Funda Uphumelele National Survey (FUNS) delivered the first comprehensive measurement of early-grade reading in all official languages.
The findings confirmed what researchers suspected: only 31% of Grade 1 learners can identify 40 letter-sounds per minute — the minimum threshold for reading readiness. By Grade 3, 15% cannot read a single word.
Yet we have ample evidence showing what interventions work: structured phonics instruction, high-quality materials, teacher coaching, classroom libraries and time on task.
In Makhanda, interventions by education NGOs such as GADRA, Funda Wande and the Lebone Centre, with support from Rhodes University, have helped 41% of public school Grade 4 learners read for meaning — more than twice the national average.
In Sobral, Brazil, a a poor city transformed from worst to first in national literacy rankings through sustained reform. If we know the problem and the solutions, why does the crisis persist? The answer is not just pedagogical. It is political.
Three models of change
Three distinct approaches to literacy reform can be identified, each with different assumptions about how change occurs.
1. The Sobral model: state-led transformation: In 1997, nearly half of Sobral’s second-graders were unable to read simple words. Twenty years later, the Brazilian municipality ranked first among 5 570 for basic education.
The transformation didn’t require massive new funding. It required political will. When diagnostic assessments revealed the crisis, the mayor announced the results on the radio to all citizens: despite renovated buildings, children were not learning. Schools displayed performance targets on banners.
Teachers who met targets received salary increases; those who persistently failed were retrained or dismissed. The reforms were institutionalised in municipal law to protect them from political cycles.
In November 2025, Almaret du Toit, the chief education specialist at the Western Cape Education Department (WCED) and Portia October, who leads the education NGO Funda Wande’s Western Cape intervention, visited Sobral. They concluded that infrastructure and resources alone don’t drive improvement — it is about teacher practice, attitude, pedagogy and accountability.
2. The Western Cape model: government-civil society cooperation: The Western Cape is attempting Sobral-style reform through partnership. Unlike provinces where NGOs work around dysfunctional education departments, the WCED and Funda Wande are collaborating, studying the same evidence and implementing coordinated reforms.
Research describes the WCED as a professional, rule-bound bureaucracy low leadership turnover and sophisticated management systems, making it possible for a state-NGO partnership to roll out coaching networks, build leadership capacity and develop term-by-term benchmarks.
“If they can do it [in Sobral], without extraordinary resources but with passion and a holistic approach, then so can we. They showed what is possible when you put children first and keep your principles beyond the office walls,” Du Toit says.
The goal is government-owned capacity that persists beyond project funding cycles. “After Sobral, the momentum exploded — we realised that we could do it,” October says.
Annual systemic testing provides data on how the programme is working, enabling further funding — “a snowball effect that starts with good governance”, says du Toit.
“Our provincial minister has regular on-the-ground meetings with us. When we started our reading intervention, the minister went to the Treasury to get R30 million, because while reading is a national mandate, there was no budget provided to provinces.”
The Western Cape is embedding functional vertical accountability from the Treasury to province to district to school to classroom, with support and consequences at each level.
3. The Right to Read model: legal pressure from civil society: In provinces where cooperation is less possible, a different strategy is emerging. The Right to Read campaign, launched in August 2023 by Section27, Equal Education, the Legal Resources Centre (LRC) and the Centre for Child Law, is preparing to compel the establishment of binding literacy regulations through litigation.
Cameron McConnachie from the LRC in Makhanda articulates the problem: “South Africa has had lots of plans, policies, guidelines and strategies over the last 20 to 30 years and a lot of them are really good. However, they are just policies. They’re not funded. Often they’re not consistent; they come and they go.”
The National Reading Plan, which aimed to support provincial education efforts between 2019/20 and 2023/24, exemplified this pattern. It encompassed classroom libraries, teacher training, and other activities, yet offered scant detail on implementation, funding or accountability. Subsequent reporting found limited planning, uncoordinated reading initiatives across provinces and haphazard monitoring.
The Right to Read coalition is demanding binding literacy regulations within 24 months. The proposed “4Ts” framework would mandate specific instruction hours (time), minimum classroom materials (texts), accredited teacher support (training) and quarterly assessments against benchmarks (tests).
The FUNS data shows that teachers require in-class coaching and structured materials. Coaching is expensive — R730 to R2 500 per learner annually — and millions of graded readers must be developed for African languages.
However, the campaign’s cost analyses demonstrate that binding regulations would require redirecting funds, rather than making massive new investments. As McConnachie puts it: “We’re not asking for that much more money.”
If the government refuses, litigation will follow. The constitutional argument is straightforward: Section 29 guarantees the right to basic education and reading for meaning is fundamental to that right.
When the state is both essential and broken
The legal strategy makes sense in contexts like the Eastern Cape, where governance researchers such as Brian Levy describe a bureaucracy characterised by divergent regional interests, patronage ties and competing factions that consistently defy centralised control. Leadership instability has contributed to chronic weaknesses in financial and personnel management.
The evidence of mismanagement is stark. Since 2020, the Eastern Cape Department of Education has withheld about R5 billion intended for no-fee schools, retaining it for “centralised procurement” with no clear breakdown of how funds were used.
In KwaZulu-Natal, the situation is worse — an estimated R9.2bn has been held back since 2015. A recent audit revealed thousands of “ghost employees” drawing salaries. KZN MEC for Finance Francois Rodgers says R1bn annually could be recovered from this source alone.
When pressed for meaningful action to improve literacy, national and provincial education departments often cite budget constraints. But money is hiding in plain sight. The withheld funds could have been used to target graded African language readers, provide structured teaching materials, establish classroom libraries, and offer substantial literacy coaching.
There is some hope. The Eastern Cape Department of Education faces a court challenge in March 2026. Following the revelation of the ghost teachers, a nationwide audit is being coordinated by the National Treasury and the Education Labour Relations Council.
At national level, Minister of Education Siviwe Gwarube has signalled a shift in emphasis. In August 2025, she operationalised the long-dormant National Education and Training Council (NETC). Among its first four priorities: “expanding access to quality foundational learning by determining a minimum integrated package of support for schools offering Grades R-3 in all provinces”. However, the NETC is advisory, not decision-making — whether this represents genuine reform momentum or another layer of planning remains to be seen.
A political choice
The three models are not competing ideologies. They are responses to different governance conditions. Where the state is capable and reform-minded, as in Sobral, the government can drive transformation through political will and transparency.
FUNS provides the accountability infrastructure South Africa has lacked – benchmarks, baseline data, and the commitment to measure progress in 2029 and beyond. The question is whether political leaders like Gwarube will get support to operationalise it at scale.
Where the bureaucracy is professional but change requires external expertise, as in the Western Cape, civil society and government should partner. Where the bureaucracy is captured by patronage, as in the Eastern Cape, legal pressure through the Right to Read campaign will be a key lever of change.
McConnachie frames it: “South Africa is at a crossroads. We can continue with fragmented, underfunded efforts that go nowhere, or we can choose a different path — one where every child has the right to read, and therefore, the right to learn.”
In Sobral, school posters track each child’s journey. Every teacher, parent, and community member can see whether the system is working. That transparency transformed a poor Brazilian municipality into a model for the world.
South Africa now has the data to do the same. Civil society can help, but only the state has the reach and resources to drive significant change at a national scale.
The evidence is in and the path forward is clear. What remains is the hardest part: the politics.
This feature was made possible by the Henry Nxumalo Foundation which funded the Between the Lines series
Celebrating 21 years of impact: DUT’s vision for innovation and excellence:
This year, the Durban University of Technology (DUT) proudly celebrates 21 years as a dynamic force in South African higher education.
Since its formation in 2002, through the merger of ML Sultan Technikon and Technikon Natal, DUT has grown into a trailblazer in research, innovation and teaching-with seven campuses across Durban and Pietermaritzburg.
DUT offers diverse programmes across six faculties: Accounting and Informatics, Applied Sciences, Arts and Design, Engineering and the Built Environment, Health Sciences, and Management Sciences. The DUT Business School, part of the Faculty of Management Sciences, is accredited by the Council for Higher Education (CHE) and is a member of the South African Business School Association (SABSA). Its applied curriculum is designed to produce socially responsive business leaders.
At the heart of DUT’s mission is a deep commitment to innovation and cutting-edge research. With 20 dedicated research focus areas, from biotechnology to energy sustainability, the university continues to earn national and global recognition, including the prestigious Focused Research Advancement Award from the National Research Foundation (NRF).
Guided by the strategic framework ENVISION2030, launched in 2020, DUT is shaping a creative, entrepreneurial and globally responsive academic community. The strategy outlines a bold vision for transforming lives and livelihoods through education, innovation and community engagement.
The university’s tagline “Creative. Distinctive. Impactful.” reflects its holistic approach to education. Through platforms like the innobiz Centre for Entrepreneurship and Innovation, students receive both theoretical and hands-on training, equipping them to become change-makers in their fields.
DUT’s pursuit of excellence continues to gain international traction. In 2024, the institution was ranked 11th in the Times Higher Education (THE) Sub-Saharan Africa University Rankings, securing its place as South Africa’s top university of technology and fifth overall in the country.
As part of its 21st year celebration, DUT is inviting applications for its 2026 Masters and Doctoral programmes, with full scholarships available for qualifying candidates on its website: https://www.dut.ac.za/research-ps/research_capacity_development/postgraduate-enquiries/
Undergraduate students wishing to apply for 2026 can do so via the Central Applications Office. For more details on all DUT offerings, visit www.dut.ac.za
DUT ENVISION2030. CREATIVE. DISTINCTIVE. IMPACTFUL.
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