The Rules of the United States in Global Trade: The Law of the Jungle

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Note: The following is an edited translation of a commentary from the Chinese-language “Commentaries on International Affairs.”

White House economic adviser Larry Kudlow recently said in a television interview that the U.S.-China trade dispute hadn’t been resolved because China doesn’t want to make a deal. As far as he is concerned, the ball is in China’s court. This approach, from no less than a senior White House official, shows that the United States has no regard for the rules of the World Trade Organization (WTO) – an organization it helped to create.

U.S. President Donald Trump delivers a speech during the 48th annual meeting of the World Economic Forum in Davos, Switzerland, on Jan. 26, 2018. [File photo: Xinhua/Xu Jinquan]

The global multilateral trading system has been cast aside by the United States under the Trump administration’s “America first” principle. The Trump administration believes that the United States has suffered economic losses because its trading partners have taken advantage of it. President Trump has said that the European Union is “one of the biggest foes of the U.S.” when it comes to trade. And he went so far as to describe China’s trade surplus as a “rape” of the United States.

The global multilateral trading system is centered on the World Trade Organization (WTO). It was formulated by the Western countries with the United States playing the leading role. Its rules, naturally, are in line with the interests of their creators. According to these rules, disputes between WTO members are dealt with under the WTO Disputes Settlement Body, and WTO members can appeal its decisions with the WTO’s “Supreme Court” – the Appellate Body. Today, the United States is purposefully letting this “Supreme Court” wither.

The Appellate Body has seven permanent judges, but currently there are only four judges left and two of them are serving overtime. As of July this year, the United States has blocked the WTO’s selection process for the appointment of new judges for 10 consecutive months. This is the open and aboveboard forum the United States should be using to resolve its disputes. But one of the main reasons why the United States is dissatisfied with the WTO is that it cannot use the WTO to curb the rapid development of China, a country that the Trump administration considers to be a rival.

In addition to obstructing the global multilateral trading system, the United States is using its domestic laws as a tool to attack its trading partners. Tariffs on steel and aluminum products imported from Canada, the European Union, Mexico, India, Russia, and China as well as tariffs on a range of other exports from China, are examples of these attacks.

Not long ago, American current affairs commentator Robert Kagan wrote that the United States, as a “rogue superpower”, was using its power to make the world bend to its will. Larry Kudlow, however, turned a blind eye to what the United States did, and instead made accusations against China. In his view, the fault lies entirely on the Chinese side, and it is up to China to meet all of Washington’s demands in order to resolve their disputes. Based on Kagan’s theory, this is the kind of behavior we should come to expect from the United States as a hegemonic “rogue superpower”.

At the recent G20 meeting, French Finance Minister Bruno Le Maire said the Trump administration’s unilateralist tariff policy is based on the “law of the jungle”: “The survival of the fittest cannot be the future of global trade relations,” said Le Maire. “The law of the jungle will only produce losers, it will weaken growth and threaten the most fragile countries, and have disastrous political consequences.” In a world governed by the law of the jungle, the strongest country will pick and choose the rules it wants to follow. If the rules accord with its interests, it will follow them. If they don’t, then the rules will be cast aside.

The United States is the most powerful country in the world today. And it is one that has shown itself willing to flout international rules and norms at its convenience. It has scrapped the Iran nuclear deal and withdrawn from the Paris climate agreement in the blind pursuit of its own interests. This behavior will perhaps be how historians will see this period of American history when they write about the rules of “Trumpism.”