Photo: STR/AFP
Eurasia
29/03/2025 12:01
Michael B. G. Froman, former U.S. deputy national security adviser for international affairs, argues in a recent Foreign Affairs analysis that the global trade order has been fundamentally reshaped—and it is now China, not the United States, that sets the rules. The liberal, open economic system once championed by Washington has given way to a new model defined by protectionism, industrial policy, and state intervention—principles long practiced and perfected by Beijing.
For decades, U.S. policymakers assumed that integrating China into global trade would encourage it to liberalize. But that vision of convergence failed. “Instead of China coming to resemble the United States,” Froman writes, “the United States is behaving more like China.” Early Chinese reforms under Deng Xiaoping and later Jiang Zemin gave the West hope, but that trajectory changed under Hu Jintao and solidified under Xi Jinping, who “effectively ended the era of ‘reform and opening’” and committed to a model of nationalist state capitalism.
As China became the world’s manufacturing center—growing its share of global manufacturing value added from 9 percent in 2004 to 29 percent in 2023—it relied on aggressive industrial policy, subsidies, and strict controls over foreign investment. The U.S. pushed back, but Beijing didn’t budge. “Washington pressed Beijing to deliver on its reform agenda... But this litany of complaints was largely ignored.”
Having failed to change China, the U.S. began to mirror it. Trump’s first term saw a dramatic rise in tariffs, raising the average rate on imports from China from 3 percent to 19 percent. Biden kept many of those in place and added more, while both administrations adopted sweeping industrial policies. “After decades of berating China for imposing high tariffs and other restrictions on U.S. exports,” Froman observes, “the United States is now putting up the same barriers.”
China’s dominance is particularly evident in electric vehicles and clean energy. Froman notes that Chinese electric vehicles “are as much as 50 percent less expensive than their American equivalents,” and account for nearly 60 percent of global EV sales. As the U.S. and Europe impose tariffs and restrict imports to protect domestic industries, Froman argues that even these defensive measures amount to an admission of defeat. “In the war over who gets to define the rules of the road,” he concludes, “the battle is over, at least for now. And China won.”
What began as an effort to integrate China into a Western-designed order has ended with the West adapting to China’s model. With “protectionism, constraints on foreign investment, subsidies, and industrial policy” now defining U.S. economic strategy, the global trade rulebook looks less like one authored in Washington—and more like one made in Beijing.
