China, the United States and the Rules of Trade

Abstract

The administration of President Donald Trump has made altering the international commercial practices of Chinese firms, state-owned enterprises and various levels of government the centrepiece of its trade policy agenda. It expects China to meet its perceived standards for the conduct of international commerce. It takes no account of China’s experience with the unequal treaties imposed on China by the United States and other powers in the 19th and early 20th centuries – and as a result has unrealistic expectations regarding China’s international trade practices. The existing rules of trade have little to say regarding the complaints of the United States pertaining to China’s conduct of international commerce. The rules of trade agreed at the WTO, however, constrain the ability of the Trump administration to induce China to change its trade practices. As a result, the Trump administration is attempting to have the constraints removed or is choosing to ignore them. This puts the rules-based system of international trade at risk.