The Biden administration has adopted an aggressive stance against China. According to experts, such a decision may cost the United States hundreds of billions of dollars.
The joint report of the Chamber of Commerce and Rhodium Group reveals that the US economy is likely to lose over $1 trillion and its long-term competitiveness, if the White House pursues a sharp separation from China.
By following policies to protect its national security from Beijing’s growing economic influence, the US risks to undermine both national security and global competitiveness. The report highlights that Washington should change its strategy if it wants to continue its tough rhetoric against China. It should mainly refrain from large-scale actions and pursue "narrowly tailored" ones such as restrictions on exports of specific technology licensing. Otherwise, the US will sustain heavy GDP losses. The county is likely to incur up to $500 billion in GDP losses if it sells half of its direct investment in China.
Tensions between the world’s two largest economies escalated under President Donald Trump. China ignored intellectual property protection rules and this became the last straw for the US. As a result, Washington imposed tariffs and sanctions on Beijing and started thoroughly scrutinizing cross-border financial flows.
