The Korea Times
SINGAPORE – Every new restriction on trade between the United States and China is supposed to pull the two economies apart — or so we are told. But the global economy refuses to cooperate with the conventional wisdom. In fact, each round of tariffs, export controls, and investment screening has been accompanied by more of the investments that cement the Sino-American economic relationship. Until policymakers recognize this paradox, talk of “decoupling” will describe a world that does not exist. The pattern that does exist can be understood as “capital realism.” Today’s geopolitical rivalry has become a permanent condition, but because full economic separation remains prohibitively costly, capital flows do not cease; they adapt to the constraints. Tariffs, export controls, and geopolitical shocks are not interruptions to a stable system. Whenever politics fragments the map, capital redraws the fastest routes. The evidence for this process is unambiguous. U.S.-China trade remains substantial despite escalating restrictions, still exceeding hundreds of billions of dollars an
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