USTR Advocates for International Economic Cooperation Against Chinese Trade Cheating

By Cathalijne Adams
May 29 2024 |
United States Trade Representative Katherine Tai outlines the Biden administration’s 2024 trade agenda before the Senate Finance Committee on April 17, 2024. | Screenshot from the Senate Finance Committee live stream

The world’s market economies have a limited window for action.

In a new Financial Times opinion, United States Trade Representative Katherine Tai subtly calls for international economic cooperation in countering China’s economic manipulations. In her essay, Tai alludes to the Atlantic Charter of 1941 as a “guidepost” for the world’s economies to work toward an “economic policy to serve the interests of working people.” To that aim, Tai has made substantial efforts in the past several weeks.

This past month, the USTR concluded its Section 301 review on Chinese imports with the decision to raise tariffs on $18 billion worth of Chinese products in an array of critical industries, including electric vehicles, solar cells, and semiconductors. And, in April, the USTR launched a Section 301 investigation into China’s shipbuilding practices. Together, these initiatives are key to restoring fair and balanced trade for America. However, as active as the United States has been in pushing back against China’s non-market policies, we cannot go it alone.

International cooperation in countering Chinese overcapacity is a vital step in ensuring that Beijing’s trade cheating finds no safe harbor. This past Saturday, the G7’s finance ministers reiterated their commitment to fair trade and collectively prepared to fight back against overcapacity, and on Tuesday Canadian Finance Minister Chrystia Freeland asserted that “Canada will not be a country through which there can be transshipment.” However, these countries remain one step behind the U.S. in putting necessary new trade barriers in place.

“The stakes are high,” Tai writes in the Financial Times. “As Oxford historian Patricia Clavin has documented, democracies failed to find common ground on international economic issues in the 1930s, with devastating consequences. As we once again confront uncertainty and fear, we must embrace the opportunity to make the world a safer, more equitable place. And we know it is something that we must do together.”

It’s time for U.S. allies to step up. “A tariff wall against Chinese imports and the countries China utilizes to circumvent trade actions is entirely appropriate in this case,” Alliance for American Manufacturing Scott Paul said in a recent statement. “Our allies must understand that this is a challenge the World Trade Organization cannot and will not solve.”

Beijing’s mission to eradicate its competition by dumping its state-subsidized products into open markets is no secret, and it’s far from a new play. We’ve seen the consequences of its trade cheating up close and personal in the United States over the past several decades in the steel industry and other critical manufacturing sectors. The G7 nations have a limited window to follow in America’s footsteps and eschew the “laissez-faire system [that] has allowed short-term profit-driven businesses to maximise their gains, often by partnering with a non-market autocracy to further that goal,” as Tai states.

“American companies are strong, innovative and dynamic. When the playing field is level, they can compete and thrive,” Tai writes. “But whether in digital trade or other sectors, we must be clear-eyed that China is not just a trading partner, but is pursuing global dominance across key economic sectors.”