Why does the US hold an economic advantage over China and how it might be strategically deployed?
Professor Stephen G. Brooks of Dartmouth University explored this at a seminar organised by the RSIS’ China Programme on 5 March 2025. In his book, Command of Commerce, Prof Brooks challenges the conventional belief that China is rapidly closing its economic gap with the US, arguing that America retains a significant advantage. Furthermore, the US has powerful economic leverage over China to deter the latter’s potential invasion of Taiwan. While East Asian countries would experience greater economic pain than the US in a scenario with the American economic blockade of China, the long-term impact would be asymmetrical – the US and its allies would eventually recover, whereas China’s economic trajectory would be permanently damaged.
However, Prof Brooks warns against unilateral decoupling from China in peacetime, as it would harm the US’ economy and alienate allies who may be unwilling to participate. Moreover, an aggressive decoupling could provoke a hostile Chinese response. Nonetheless, inaction in the event of a Taiwan crisis would also be costly, potentially triggering a US recession due to Taiwan’s critical role in supplying complex products.
Prof Brooks argues that China’s economic power is overstated, due to manipulated data, structural economic differences, and miscalculations regarding globalisation. He concluded the seminar with the following policy recommendations for the US government: The US should avoid unilateral or peacetime decoupling from China, as it would be economically damaging and strain alliances. Instead, it should build economic stockpiles of critical raw materials, incentivise alternatives, and plan for industries that would suffer from a potential Chinese cutoff. Strengthening partnerships with European and Asian allies through an “economic alliance” would enhance collective resilience. Additionally, the US Navy must prioritise blockade planning and logistics, while the government should update its economic security strategies to address emerging threats. Finally, maintaining a strong NATO commitment remains essential for broader geopolitical stability.
