US is trying to stop China from having market economy status in the World Trade Organization

It isn’t big news that the US is opposed to China and its trade policies in the World Trade Organization (WTO). But this past week the US sent a formal message about its view that China should not be able to have official “market economy” status in the WTO. The European Union (EU) is also on the side of the US in this: they both officially argue that the Chinese government or state still plays a big role in China’s economy.

But the real and more specific reason for this opposition to China gaining market economy status in the WTO is predictable-the US is against China’s exporting low cost products into the US that make it difficult for our own companies that produce similar goods to compete with these prices. The EU has similar concerns. The US and EU member countries impose tariffs on these cheap Chinese imports to try to help their domestic businesses remain competitive and able to sell their goods domestically.

Of course, these policies may be useful to the US and EU companies who find it hard to compete with Chinese companies’ cheap goods. But it may not necessarily be a good outcome for the consumers who buy those goods in the US and the EU. Arguably the consumer should have a choice to buy the cheaper Chinese goods—even if they are made by state-owned companies subsidized by China’s government. Those subsidies don’t hurt the US and EU taxpayers, so it doesn’t seem to be a valid argument.  It just seems as thought the US is actually jealous of China’s trade surplus with the US.

Tensions over trade are being made worse with the US government beginning an investigation into whether China is dumping -- or exporting overly cheap aluminum exports—to the US. All of this is leading to speculation that the US and China could be headed to a big trade war. This is a big change from a few weeks ago when Trump signed $250 billion worth of trade deals with the Chinese leader.

https://www.reuters.com/article/us-usa-china-trade-wto/u-s-formally-opposes-china-market-economy-status-at-wto-idUSKBN1DU2VH?il=0\

http://www.scmp.com/news/china/diplomacy-defence/article/2122506/us-ramps-pressure-china-rejecting-market-economy-status