The result has been an epidemic of “decoupling,” “de-risking,” “friend shoring,” or whatever you choose to call it. And the results have been profound. The blogger Noah Smith had a nice post yesterday that laid out some of the dimensions, especially this: China’s share of U.S. imports has nosedived, from around 22% five years ago to close to 15% today. The editors of The Economist recently argued those numbers are misleading, because China is exporting more to its neighbors and Mexico, who in turn are using those exports as parts for reexport to the U.S. But Smith makes a good argument that such redirected exports can only account for some, not all, of the drop-off in China business.

It’s not easy to unwind three decades of using China as the world’s factory floor. And it’s particularly difficult in some critical areas where the Chinese dominate, like solar panels and batteries. And then, of course, there’s the gnarly question of all the high-end semiconductors made in Taiwan, which China claims as its territory. And finally, the ultimate question: If not China, where? The U.S. is short labor for manufacturing. Mexico seems to be first choice for American companies, but it’s far from perfect. India is still hobbled by bureaucracy and infrastructure problems. And many of China’s Asian neighbors bring their own political and geopolitical uncertainties.

But here’s the bottom line: Most Western companies have quietly concluded it is in their interest to reduce their reliance on China—whether to avoid Chinese authoritarianism and aggression or Western tariffs and regulation. And that process is still in its early stages. Expect this to be a global megatrend for some time to come.

Worth noting, of course, that the last few months have seen a steady stream of Biden cabinet members traveling to China to make nice, with Commerce Secretary Gina Raimondo being the latest. That’s a good thing for global peace and prosperity, but it won’t reverse the trend. 

We will be exploring the contours of this new world at our fall events. Members of the CEO Initiative Oct. 3 will dissect the implications with Raimondo, who will report on her China trip, and a panel of experts including Richard Haass, former head of the Council on Foreign Relations. Then in Abu Dhabi Nov. 27-29, we will have our own assembly of global business leaders—including FedEx CEO Raj Subramaniam, whose company helped drive globalization over the last three decades; Bridgewater founder Ray Dalio, whose own analysis has led him to a somewhat apocalyptic view of the trends; Tata Sons chairman Natarajan Chandrasekaran from India; Cassava Technologies founder Strive Masiyiwa from Africa; Yum China CEO Joey Wat; Adecco Group CEO Denis Machuel, and many more. Fortune remains committed to the notion that dialogue among global business leaders can help light the pathway to peace and prosperity.

More news below. Tomorrow’s topic: Business and U.S. politics.

Alan Murray
@alansmurray
alan.murray@fortune.com

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This edition of CEO Daily was curated by Nicholas Gordon.