....So what happened with decoupling?
There is no policy change in the US or Europe. If anything, both are doubling down on the decoupling rhetoric and actions.
What happened is something more mundane called “market” and “economics”.
China’s supply chain dominance
Dell did set up factories outside China. But it’s only the final assembly.
It remains heavily dependent on China for upstream components and raw materials. Just like most global electronics manufacturers.
China dominates the early and middle stages of the PC supply chain including mechanical parts and casing, specialized tooling and injection-molding, printed circuit boards (PCBs), semiconductors, batteries and power components, and display panels.
Basically, everything that goes into the PC.
In each category, Chinese suppliers control the bulk of global production. For example, China controls roughly 60% global PCB production, over 30% mature chip nodes, nearly 50% PC batteries, and 70% LCD display panels.
A brand like Dell merely assembles the parts and components made by Chinese suppliers that go into the PC and sticks its label on top.
To replace Chinese electronics supply chain, trillions of dollars will be needed in CAPEX and decades of time. As well as hundreds of thousands of skilled engineers and technicians.
I haven’t even touched on the upstream critical minerals for electronics where Chinese dominance is nearly complete.
For example, rare earth elements, gallium, germanium, and battery-grade graphite used in magnets, semiconductors, and thermal paste.
China’s global market share in these inputs is often above 90%.
Furthermore, basic electronic building blocks—such as multilayer ceramic capacitors (MLCCs), resistors, inductors, cables, and USB/power connectors—are overwhelmingly produced or packaged in China.....
Sitting in the center of the US industrial policy and supply chain decoupling from China is an uncomfortable fact – immediate, guaranteed economic damage versus theoretical long-term gains that has not materialized.
The gains are quite likely never to materialize.
- The scale and ecosystem gap is too wide: China’s manufacturing dominance is not about cheap labor—it is about an unmatched concentration of hundreds of thousands of specialized tier-2 and tier-3 suppliers, massive domestic demand, and decades of infrastructure investment.
Neither the US nor fragmented Southeast Asian hubs can replicate that depth of ecosystem within a realistic political or corporate timeframe.
- Subsidy fatigue and political whiplash: rebuilding complex supply chains requires 10 to 20 years of consistent policy and capital.
However, Western policy shifts every two to four years with election cycles. Businesses hesitate to commit irreversible capital to long-term domestic or “friend-shored” factories when tariffs, tax credits, or industrial mandates could be altered or repealed by a future administration.
- Lasting labor and cost realities: Even if factories are built in the West or allied nations, structural bottlenecks remain.
The West faces severe shortages of skilled technicians, tool-and-die makers, and electrical engineers, while emerging hubs like Vietnam and India have much smaller qualified workforces than China while facing rapid wage inflation.
Dell’s shifting final assembly to countries like Vietnam or Mexico gives the “illusion of decoupling”.
The brutal reality is that it just adds a middleman without actually reducing reliance on China.
Because upstream materials, sub-components, and factory machinery still come from China, the US ends up paying higher prices for the exact same underlying dependencies—getting all of the inflationary pain with almost none of the promised security.
I guess this is what people mean when they say, “caught between a rock and a hard place”.