The Peterson Institute for International Economics has published a new analysis, "Made with China: Global supply chains and the limits of US decoupling," and its core argument is blunt: Washington's effort to pull supply chains out of China is running into the stubborn arithmetic of how global production actually works.

The study's framing matters for freight. If decoupling were proceeding as advertised, we would expect to see trade lanes rewiring at scale — volume shifting from transpacific services into Vietnam, India, Mexico and beyond. Instead, the PIIE analysis contends that much of what looks like diversification is, in practice, Chinese inputs and Chinese-owned production repositioned one link downstream. The label changes. The sourcing map doesn't.

That distinction is the whole story for shippers and forwarders. Goods assembled in a third country but built on Chinese components still tie cargo flows, and tariff exposure, back to China. "Made with China," as the institute puts it, remains the default setting of global manufacturing.

What does this change for shippers?

For cargo owners, the practical question is straightforward: does relocating final assembly actually reduce supply chain risk, or does it just relocate the paperwork? The PIIE analysis suggests the latter is common. Chinese content moves through intermediaries, so a company that thinks it has diversified may have simply lengthened its route.

That has consequences for landed cost. Longer, multi-leg routings mean more transshipment, more handling and more chances for disruption — without the risk reduction that justified the move. Forwarders, meanwhile, keep earning on the complexity. Nobody said decoupling would be cheap. It is, however, turning out to be more cosmetic than billed.

Carriers face a rerouting that isn't quite one

Ocean carriers have spent years adjusting networks around the pretense of a structural shift away from China. Volumes to ASEAN gateways and Indian subcontinent ports have grown, and services have followed. But if, as the institute argues, Chinese inputs underpin much of that growth, the diversification narrative starts to look like a relay race where the same runner keeps the baton.

The routing changes are real in nautical miles. They are less real in dependency terms.

For US shippers, the policy stakes are obvious. Tariff regimes are built on origin rules, and origin rules are built on where value is added. A supply chain that is Chinese in substance but Vietnamese on the bill of lading sits precisely where trade enforcement and commercial planning collide.

The verdict

PIIE's contribution here is not to declare decoupling dead, but to price its limits. Global supply chains have absorbed enormous policy pressure and rerouted at the edges, yet the center of gravity — Chinese manufacturing capacity, Chinese inputs, Chinese logistics — has not moved. The report's title is the finding.

What comes next depends less on boardrooms than on Washington. If policymakers accept that reshoring and re-routing deliver thinner gains than promised, expect pressure for tougher rules-of-origin enforcement rather than new tariffs alone. That would put origin documentation, not just freight rates, at the center of every US-bound booking conversation.

By Amara Osei