US-China Interdependence: Implications for Switzerland

At a time of intense rivalry between the United States and China, the high level of interdependence between the two countries creates a range of economic and strategic challenges for both. US-China interdependence generates mutual economic benefits, but it also has negative security implications. As their interdependence grew over the past few decades, the United States and China came to share an interest in international economic stability. At the same time, they grew increasingly concerned about the effects of interdependence on their respective positions in the intensifying security competition between them.

The challenges arising from US-China interdependence also have profound implications for Europe, including Switzerland. Confronted with US-China rivalry and interdependence, European governments often disagree, at times profoundly, as to how they should position themselves. They understand that US-China interdependence and rivalry have an impact on European security and welfare, generating both economic and security risks. They have grappled with uncertainties over the future trajectory of US-China interdependence, the effects on European welfare and security, and the strategic options available to them.

These issues are of special concern to Switzerland, given its status as a neutral country that has vital economic interests at stake in its relations with both the US and China. This study aims to shed light on the overall implications of US-China interdependence, especially for Switzerland. It proceeds from the macro level, focusing on the overall economic and strategic implications of US-China interdependence and rivalry, to the micro level, analyzing the effects of interdependence in high-tech sectors, including semiconductors and rare earth elements. The study attempts to trace the implications of interdependence for the US-China rivalry, for Europe, and especially for Switzerland.