In terms of law, both national and international, what issues are driving the actions that have resulted in trade tensions rising to such a high level?
The Trump administration has resorted to tariffs as a means to impose costs on China for behaviors that the USA has long been unsatisfied with. Chinese laws and policies which have contributed to this feeling that the USA has been unfairly treated by China include:
- Restricted Market access for USA and foreign firms in various industries;
- Forced Joint Ventures for foreign companies;
- Forced Intellectual Property transfer -if you are lucky;
- Intellectual Property theft, cyber and otherwise, if you are not lucky;
- Institutionalized non-tariff barriers on the China side which make it impossible for foreign companies to do business in China.
While the WTO ostensibly provides a forum to resolve trade disputes, many of the barriers to foreign participation in it’s economy that China utilizes are not well managed by the WTO system. Even where WTO proceedings are utilized, China often does not meet commitments.
In 2012, the WTO ruled that China had unfairly restricted market access for USA credit card companies. It is now 2018 and China is just now discussing liberalizing access for foreign credit card companies.
In general, China fails on many conditions of it’s entrance into the WTO.