Outdated, unilateral US trade tools against China set to hurt both

Trump's wish to relive the glorious days of the Reagan administration ignores how the world has tremendously changed, as the WTO dispute settlement mechanism obviates the need for unilateral actions.

The WTO mechanism has substantially lowered trade war risks and successfully held the conflict dynamics within a rule-based framework. In the words of Carla Hills, the US trade representative in the early 1990s, "without the WTO it would be the law of the jungle."

That's why the US governments have largely refrained from invoking the above-mentioned trade remedies since mid-1990s, in order to avoid undermining the multilateral trade system and tarnishing the US reputation as a guardian of free trade.

Moreover, coercion tactics that might work on Japan in the old days stand to lose today, as the China of today is not the Japan of the 1980s. China is economically stronger, and the China-US economic relations, with bilateral trade totaling 524.3 billion US dollars in 2016, an increase of 209 times than in 1979, are way more important and complicated.

Given the facts of economic co-dependence between them and the huge stakes US companies have piled up in Chinese markets, a trade war between the world's top two economies is doomed to a mutual assured failure, which could lead to severe job losses for both.

David Dollar, a senior fellow at the Brookings Institution and former official at the US Treasury Department, has warned that "a protectionist policy would hurt the US economy as much as the Chinese."

"Given today's complex value chains, a 'Chinese' product has lots of value added from the United States, Japan, South Korea, and other partners," Dollar said, noting some US firms would be hurt and consumer prices rise if Washington imposes unilateral tariffs on Chinese products.

In the aftermath of 2008 financial crisis, China and the United States agreed that the rebalance of economic relations between the two countries is imperative. The key issue is how. Yesterday's tool is not capable of solving future problems. They shall find a new way forward rather than resorting to outdated tools and mindset.