U.S. trade policy toward China under the Trump Administration is heavily focused on addressing the perceived unfairness and competitive disadvantages created by China’s industrial policies, chief among them, Made in China 2025. Here’s your Essential graphic on the policy’s core components.
Made in China 2025 calls for achieving “self-sufficiency” through technology substitution while becoming a “manufacturing superpower” that dominates the global market in critical high-tech industries. That could be a problem for countries that rely on exporting high-tech products or the global supply chain for high-tech components.
The United States has a long history of advancing the rules-based order and, as a practical matter, has never lost a dispute arising from one of its many investment agreements. But investor-state dispute settlement procedures may not have a future.
While President Trump believes China’s large trade surplus shifts the balance of power in a tariff war to the United States, China can respond by punishing U.S. affiliates, who are sitting ducks in a trade war.
With over 2,500 international investment agreements in force and only a total of 817 known investor-state dispute settlement arbitrations, it’s safe to say that the majority of these agreements have operated without a single dispute.
International investment agreements have been a remarkably successful policy innovation: today, there are over 3,000 of them in force worldwide.
Trade rules typically cover a category of goods or services and affect all firms engaged in trade. Investment disputes, on the other hand, are usually about a state’s treatment of an individual enterprise.
Countries that have hosted the Olympics — and even those that bid and lose — enjoy a permanent increase in national exports of around 30 percent. That’s potentially more impactful than entering into trade agreements.
Every January, the global automobile industry gathers in the Motor City for the North American International Auto Show (NAIAS). In a celebration of ingenuity, companies display futuristic concept cars, present cutting-edge technologies, and promote their latest offerings.
Protectionism is making a comeback. Governments aren’t just trying to protect traditional sectors such as agriculture,chemicals, and machinery out of concern for lost jobs or domestic economic interests. They’re also intervening in the digital economy and innovation-intensive industries as critical components of national competitiveness.