5 Future Outcomes of a US-China "Recoupling"

A strange scenario that leaders must prepare for

Aug 27, 2025

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Before diving into a (potential) US-China recoupling, a separate big ticket item requires the spotlight for a moment: the increased US tariffs on India, which took effect today (August 27), further disrupting one of the most strategic relationships of the 21st century.

The US has increased the levy on Indian imports from 25% to up to 50%, depending on the goods. Around 66% of India's exports to the US, valued at $60 billion, could face the highest rate (50%).

This is part of America’s new strategy of going after Russia’s key trade partners to pressure the Kremlin into ending the war in Ukraine. Of course, the situation is not so “black and white.” Countries like China, or those buying energy through the Russian shadow fleet, are being spared, while India is being called out. The situation has derailed US-India relations to the point where New Delhi is now eyeing a “reset” with China. A recent report in German media signals the extent of the fallout between the US and India: over the past few weeks, Indian Prime Minister Narendra Modi has rejected Trump’s calls on four separate occasions.

The new state of US-India relations is a profound shift that global leaders must pay close attention to, as it “moves” the global economy onto new ground. The video below is a starting point to understand what’s at stake - and what’s coming.

Now, back to a US-China recoupling…

Over the past few months, the US-China fight has intensified in historic ways.

One of the most astonishing developments that largely went unnoticed was when Beijing accused US chip companies of shipping products with backdoors and “kill switches” that the US government could activate. Distrust and volatility have been spreading, and US Treasury Secretary Scott Bessent’s remarks that US and Chinese trade officials would “meet in months” only increase doubts that any substantial deal can be achieved.

However, the world stage is highly fluid. Friends are foes and foes are friends in the blink of an eye. Now, there are indicators that America is pursuing an unofficial “recoupling” with China. This is not a stated strategy of Washington - but it is the outcome if certain agreements are struck. The window of opportunity for a recoupling, which would be part of a broader US-China reset, is fast closing—and nothing guarantees that even if a recoupling does take place, it can remain intact in the long term.

There are 5 key future outcomes to be aware of if a US-China recoupling occurs.