U.S. and Europe Need $23.6 Trillion to Cut China Reliance Over 25 Years
Updated
Updated · 매일경제 · Jul 13
U.S. and Europe Need $23.6 Trillion to Cut China Reliance Over 25 Years
3 articles · Updated · 매일경제 · Jul 13
Summary
$23.6 trillion in extra investment would be needed over 25 years for the U.S., eurozone and UK to build domestic infrastructure, R&D, software, manufacturing and supply chains now tied to China, EY-Partenon estimated.
$13.7 trillion of that would fall on the U.S., $9.1 trillion on the eurozone and $800 billion on the UK, with the annual U.S. burden alone put at $550 billion—roughly matching last year's big-tech data-center spending.
EY-Partenon said the spending is theoretically affordable at about $940 billion a year, but warned it would come on top of existing investment and grow harder as China expands and Western governments try to avoid burdening taxpayers and consumers.
145% U.S. tariffs on Chinese goods last year exposed that vulnerability when China curbed rare-earth exports and auto production neared disruption before a tariff truce.
20% to 100% cheaper Chinese factory-gate prices mean deeper decoupling would likely lift manufacturing costs, consumer prices and inflation, reinforcing EY-Partenon's view that partial decoupling in strategic sectors is more realistic than a full break.
As the West rebuilds supply chains, are consumers facing a future of permanently more expensive cars and electronics?
Is the West's $24 trillion plan to ditch China a wise security investment or an impossible economic burden?
Can innovations like mineral recycling slash the staggering $24 trillion cost of the West's economic pivot from China?
The $23.6 Trillion Challenge: The True Cost and Consequences of Reducing Western Dependence on China by 2050
Overview
As of mid-2026, the Western world faces a massive financial challenge in reducing its economic reliance on China. According to a recent EY-Parthenon analysis, the United States, Eurozone, and United Kingdom would need to invest $23.6 trillion by 2050 to address this issue. This staggering figure highlights a major policy shift—from viewing China as a strategic competitor to recognizing it as a structural vulnerability in global supply chains. The report notes that while earlier assessments identified many dependencies on China, this is among the first efforts to estimate the total cost of tackling all these vulnerabilities together.