Everyday items to be unaffordable for Americans if U.S.-China decoupling goes ahead: British expert

LONDON, May 10 (Xinhua) -- Everyday items could become unaffordable for Americans if China-U.S. trade relations were to hit rock bottom, a leading British scholar has warned in a recent exclusive interview with Xinhua.

Zeno Leoni, a lecturer in defense studies at King's College London (KCL), said the United States "sees China as its main threat" and is trying to "decouple with China."

Leoni, also an affiliate at the Lau China Institute at KCL, added that the scale and type of decoupling will determine the outcome.

Leoni elaborated on two potential scenarios of "decoupling". The first is about strategic competition, whereby restrictions would only affect areas such as telecommunication technologies and semiconductors, but there would be no impact on investment, movement of people, and goods, he said.

"The other scenario is total decoupling. And that would lead to restrictions on goods from Chinese companies in the United States, and U.S. companies in China; data and other more basic technologies, and chips," he said.

Leoni said the first one would have a limited impact on the two countries and the rest of the world. However, substantial, structural decoupling would lead to more dramatic consequences, he added.

"Ordinary goods that we are nowadays able to find for a relatively cheap price might become unaffordable. The U.S. might not even have the capacity to produce those items inside the country, which is the case with the iPhone," he said.

Total decoupling would also affect many U.S. allies, he added, since it would take some time before those countries would be able to restore production, and reopen industries and manufacturing plants that were shut down a few decades ago.

"If a total decoupling scenario were to happen, we would also see the global gross domestic product (GDP) being affected by several percentage points," he warned.

Total decoupling would harm citizens on both sides of the Pacific, Leoni said. However, he added: "The cost of decoupling would be felt more by U.S. citizens. When it comes to consumer goods that are easily accessible, that we tend to use in our everyday life, the U.S. is more dependent on imports from China rather than the other way around."

The current relationship between the two countries is extremely politicized, Leoni said. This is negative for many countries around the world.

"Both the U.S. and China and their consumers will feel an impact," he said, adding that "the global economy will suffer from it."