China-US economic interactions should uphold core values of multilateral trading system

Editor's note: Ying Pinguang is Dean and Professor at the School of Global Governance of Shanghai University of International Business and Economics. The article reflects the author's opinions and not necessarily the views of CGTN. It has been translated from Chinese and edited for brevity and clarity.

From May 10 to 11, He Lifeng, the Chinese lead person for China-US economic and trade affairs and Vice Premier of the State Council, held a high-level meeting on economic and trade affairs in Geneva, Switzerland, with his US counterparts, Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer. 

The two sides engaged in candid, in-depth, and constructive exchanges and arrived at a series of important understandings on trade and economic matters. 

On May 12 local time, the two countries released the joint statement on China-US Economic and Trade Meeting in Geneva. China's decision to engage in talks with the US not only reaffirms its firm commitment to multilateralism but also presents a fresh opportunity to reform and improve the global governance system.

The US's abuse of tariffs undermines the multilateral trading system

The multilateral trading system was established after World War II, with the World Trade Organization (WTO) at its core, calling on its members to resolve trade issues, lower tariff barriers, and promote trade liberalization and facilitation through equal consultation, multilateral negotiations, and dispute settlement. 

However, in recent years, the US has frequently resorted to unilateral tariffs, export controls, and long-arm jurisdiction, citing "national security" and the "America First" principle. These actions have significantly weakened the effectiveness of the WTO's dispute settlement mechanism and multilateral rules. In particular, the US government's imposition of so-called "reciprocal tariffs" represents a willful distortion and misappropriation of the concept of reciprocity in international trade. More than that, these measures blatantly disregard the WTO's unconditional most-favored-nation principle and tariff-binding commitments, placing narrow self-interest above international rules and the common interests of people around the world. The resulting confrontation and retaliation have further eroded the authority of the multilateral trading system and obstructed the progress toward global trade liberalization and facilitation. As tariff weapons replace rule-based dialogue and zero-sum thinking overrides mutually beneficial cooperation, the multilateral trading system is undergoing the most severe legitimacy crisis since the WTO's founding.

China acts responsibly to defend national interest and uphold international trade rules

In response to unilateral tariffs imposed by the US, China has consistently responded in accordance with established rules, demonstrating the responsibility expected of a major power. From the perspective of domestic law, China has launched legitimate countermeasures against the US's tariff bullying under laws such as the Foreign Trade Law, Tariff Law, and Customs Law, aiming to defend national interests and safeguard fairness in international trade. From the standpoint of international law, China's countermeasures are consistent with WTO rules and the fundamental principles of international law. Meanwhile, China has repeatedly brought cases against the US for tariff violations under the WTO's dispute settlement mechanism, firmly upholding the authority and effectiveness of the multilateral trading system. Since joining the WTO in 2001, China has reduced its average tariff rate from 15.3 percent to 7.3 percent and opened nearly 120 service sectors, exceeding its accession commitments. In recent years, China has actively promoted WTO reform and engaged in negotiations on new international trade rules, underscoring its support for the multilateral trading system. Through its ongoing efforts to advance high-standard institutional opening up, China has injected strong momentum into global economic development with a model of "shared opening up", standing in stark contrast to the US's "club-style rules".  

China-US economic and trade interactions represent a boon for the multilateral trading system

China-US economic and trade interactions should be grounded in the core principles and rules of the WTO. The US's abuse of tariffs has constituted a serious breach of WTO principles and rules and has gravely undermined the organization's credibility and effectiveness. It is essential to reduce confrontation through dialogue and urge the US to return to the multilateral framework. As the world's two largest economies, even limited consensus between China and the US on issues related to the WTO and multilateralism could set a powerful example. History has shown that the 1999 China-US bilateral agreement regarding China's accession to the WTO played a key role in advancing the global multilateral trading system. Today, if China and the US can, through equal consultation, identify the broadest possible common ground that aligns with their respective interests, it could once again serve as a catalyst for reinvigorating the multilateral trading system.

As two major global powers, China-US coordination also helps curb the global wave of protectionism. In recent years, trade restrictions have continued to mount worldwide. At a time when the global trading system is facing a crisis of trust, dialogue between China and the US sends a positive signal in support of multilateralism and opposition to unilateralism. More importantly, if China-US economic and trade frictions can be resolved through dialogue rather than confrontation, it would set a constructive precedent for other countries to deal with similar disputes, thereby lowering systemic risks to the global trading system. This demonstration effect would help contain the spread of protectionist tendencies and restore confidence in multilateral trade among countries.

Moreover, China-US interaction in economic and trade affairs also serves as a "ballast stone" for the stability of global supply chains. The economic and trade relations between the two countries directly affect the resilience and stability of global supply chains. "Decoupling and cutting off industrial and supply chains" between China and the US would not only impact both countries but also have profound negative consequences for the global market landscape. For example, in the semiconductor sector, even amid competition, China and the US must establish a mechanism for "competitive coexistence" to prevent excessive confrontation from further aggravating the global chip crisis. Pragmatic cooperation between China and the US is a concrete embodiment of the collaborative spirit advocated by the multilateral trading system.

The influence of constructive China-US interaction on the global governance landscape

With China-US economic and trade relations on the brink of escalating out of control, the decision by both sides to resume dialogue carries significance far beyond the bilateral level. It has become a key variable shaping the future of the multilateral trading system and the global governance landscape.

In recent years, global governance mechanisms have been increasingly influenced by geopolitical factors, with a marked trend toward the securitization of economic issues and the politicization of trade tools. The China-US meeting on economic and trade affairs is conducive to reasserting the importance of economic logic in global governance and preventing geopolitical rivalry from completely dominating the economic agenda. Particularly in the process of supply chain restructuring, how the two countries strike a balance between security concerns and economic efficiency will have a direct bearing on the future trajectory of global governance. China's emphasis on "opposing the politicization of economic and trade issues", if echoed by the US, could foster conditions for global governance to return to a more professional track.

The international community hopes that both countries will translate this process into sustainable institutional outcomes with wisdom and a sense of responsibility, thus reinvigorating the multilateral trading system and opening up new pathways for global governance. Ultimately, such efforts will contribute to the economic well-being and shared development of all nations.