The ongoing tensions between the U.S. and China aren’t getting any better and the President’s move to finally prevent China from abusing the World Trade system won’t help either… at least it won’t help China. With the forceful measures being used by the Chinese government in Hong Kong and as reports are coming out of that area mentioning the American flag being used as a rallying symbol, there’s tension. As China and the U.S. butt heads trying to come up with a trade agreement that works for each nation, and while the word tariff has been used, there’s tension.
Most recently, President Trump has decided to put his foot down and say enough with how China has been abusing the WTO (World Trade Organization). What is really interesting is that no other country, leader or president has said anything about this, until now. Although the WTO has appointed leadership and defined roles with its organizational framework, there are many areas where they operate almost upon a “good faith” practice. It is much like you and your buddies out on the golf course where you each have some level of trust about a number of shots, scores, and an honor system of sorts.
This is a very honorable concept and it is solid as well, provided there are those willing to blow the whistle when there is a foul. Provided those buddies on the course with you aren’t enemies or unwanted playing partners! That isn’t saying China is an enemy or an unwanted playing partner (at least not yet), it merely means the President demands fair play. I know, the nerve of this man, right? Based on one recent story, this is what unfolded.
China is classified as a “Developing Country” under the now 25-year-old World Trade organization. To be fair, China isn’t the United States but to list them as a developing country? How is that even possible?
Remember that honor system, that good faith practice mentioned earlier? That’s how.
Come to find out, that when a country joins the WTO, they get to choose how they classify themselves. Right. As you have already figured out by now there are many more advantages and benefits afforded those with a developing country status under the WTO system. As it should be. But China? This is exactly what has the President scratching his head. Donald Trump, however, isn’t a man who is prone to sit back and do nothing when he sees something wrong.
In fact, this is what he said via a tweet:
“The WTO is BROKEN when the world’s RICHEST countries claim to be developing countries to avoid WTO rules and get special treatment. NO more!!! Today I directed the U.S. Trade Representative to take action so that countries stop CHEATING the system at the expense of the USA!”
He isn’t wrong either, actually, he is spot on. That aforementioned article also noted that nearly two-thirds of the 168 countries that make up the WTO claim this status. Of course, it was China he specifically mentioned. Don’t be surprised if the Chinese government retaliates but it is understandable why Trump singled China out. Arguably, of all the countries that are part of the WTO, are there any who have taken greater advantage of the system? Sure, there may have been some other motives but the facts are still the facts.
Now, was that a five or six you scored on that last par 4? In golf terms, that might look a lot more like an 8, 9, or 10 on the scorecard, if not worse. Yes, countries are cheating the system. Yes, China is arguably the biggest cheat of them all and oh yes, you better believe the President has our nation’s back.
Yes, there is already tension between the U.S. and China and no, this won’t help ease those tensions. What it will do though, is make China play fair (at least under the WTO rules) and prevent the U.S. from being taken advantage of, after all, 25 years is long enough right?