Trump Is Right to Battle China on Trade, But Now Comes the Hard Part

Salvatore Babones

Economics, Asia

For many different reasons, now is the time for Washington to use certain advantages to level of the playing field.

On November 10, 2001, after fifteen years of tortuous negotiations, China joined the World Trade Organization. The WTO describes itself as a rules-based club whose “overriding purpose is to help trade flow as freely as possible.” If only that were true when it comes to China, then the Trump administration's so-called “trade war” would have been over before it started.

China was only allowed to join the WTO after making several commitments to free trade, the most important of which was to “provide non-discriminatory treatment to all WTO Members.” Specifically, China promised that foreign companies would “be accorded treatment no less favorable than that accorded to enterprises in China” when doing business in the country.

Tell that to Google, Facebook, Uber, and all the other American companies that have been forced out of the Chinese market.

Eighteen years after joining the WTO and China still has not honored the most basic commitment it made upon joining. In fact, it has slid backward. Yet for all that time, China has reaped the benefits of WTO membership: low tariffs on its exports, access to WTO dispute resolution mechanisms, a voice on future global trade rules, and a free pass for its companies to operate in the United States.