The Trump administration’s four years in power were tumultuous and confrontational for US-China trade relations, and have put the Biden administration in a difficult position: It will either have to pick a new direction, or maintain the legacy it was left. US Trade Representative Katherine Tai has begun to lay out her vision for a US trade policy as it relates to China, but so far, it has been more words than actions. It appears that Tai and the administration have decided to stick with Trump’s Phase One agreement as the framework of its China trade policy rather than break from it in a significant way and to publicly put the onus on China to change its trade practices and see how China reacts. The practical result is that the status quo could stay in place for a while. However, the Biden administration may see this as the short- and long-term approach that works best in terms of domestic politics. As a result, although the administration’s statements could suggest tentative first steps on China trade issues, the relationship may end up standing still for a while.

Chapter 7 is dedicated to a more focused discussion of how to tackle China’s state capitalism in the WTO. The first option is utilising existing WTO rules, especially those China-specific provisions, to bring cases against China, which so far has not happened. This is partly due to the perception that WTO litigation does not work against China, an argument which we refute by referring to China’s good compliance record with WTO decisions. At the same time, we do agree that a more strategic approach should be taken in bringing such cases and proceed to suggest the types of cases that should be brought and how the evidentiary burden could be met. The second option is through trade negotiations. While bilateral negotiations such as the US–China Phase One deal do not really work, there is great potential in multilateral negotiations. Here, we caution against those advocating the exclusion of China in such rule-making efforts and argue that China should be engaged to make the negotiation fruitful. To make the discussions more productive, we also suggest certain guidelines to make sure that China will be more constructively engaged.