China Weaponizes the WTO Against America

A billboard promotes China's membership to the World Trade Organization (WTO) along a street in Beijing on July 17, 2001. (Goh Chai Hin/AFP/Getty Images)

Commentary

China just beat the United States at the World Trade Organization (WTO) on steel tariffs and is trying to do it a second time on computer chip export controls.

On Dec. 12, China’s Ministry of Commerce filed a new WTO complaint against the controls. Beijing claims they are trade protectionism, when it should be obvious that they contribute to developing U.S. defenses against the Chinese regime’s military aggression.

And the supposed division between economic protection and military defense is now too muddled to act upon, given the developing cold war with China. As former President Donald Trump’s economic team recognized as early as 2018, economic security is national security.

The U.S. government thus rightly argues that computer chips are a national security issue, which exempts them from WTO jurisdiction. They need not prove their military relevance to do so, but that adds heft to the argument.

The next revolution in military technology is using supercomputers for militarized artificial intelligence (AI) and weapons modeling, for example, hypersonic missiles and nuclear explosions. The latest super-fast miniaturized chips—ideal for everything from AI to tiny drones—are produced by cutting-edge American, Japanese, and Dutch technologies. If the Chinese Communist Party (CCP) acquires them, the tech could destroy the existing American-led international security system.

National security arguments also apply to Trump’s 2018 tariffs that protect what’s left of American steel and aluminum production. They have protected $22 billion of new steel investment since their introduction, which, together with aluminum and rare earth elements (REE), should be used to help fund and build a next-generation U.S. Army, Navy, and Air Force.

China wiped out U.S. dominance of metals production in the 2010s through dumping, subsidies, and flooding of global markets. The Chinese regime and Russia continue to seek opportunities to stab us and our allies in the back, as proven by Beijing’s economic sanctions against Australia, the Philippines, Lithuania, and Taiwan, and Russia’s attempts to leverage Europe’s reliance on its liquified natural gas.

The United States and Europe, entranced by free trade fundamentalism, were slow to perceive the threat, react, and adjust long-term economic strategies. Then, Trump broke the spell with his China tariffs. Europe is still kicking and screaming over them rather than creating a united front against Beijing’s genocidal totalitarianism.

To beat the CCP, democracies must have an independent, if not dominant technological and industrial ecosystem, including the full manufacturing spectrum from heavy industry and metals to AI-optimized chip design and biotechnologies. The minimum is a reliable supply chain resilient to emergencies, like wars and pandemics, across all industries that feed democratic economies.

US Hardball at the WTO

Thankfully, and due to Trump’s refusal to appoint judges to the WTO Appellate “Body” (read: Supreme Court), that court is currently defunct. The United States can now stymie China’s WTO cases by appealing them to a court that cannot take action.

The Biden administration is also not pulling out of the WTO, which would hand even more of its power to Beijing. Neither is President Joe Biden appointing a new WTO judge who would revive it from limbo. Good for him.

This strategy must be maintained despite complaints from Beijing, Brussels, free trade fundamentalists, and economists who tend to ignore national security arguments. They apparently can’t see the economic threat of the CCP abusing international institutions to proceed toward its ultimately illiberal goal of global hegemony.

Once countries like China and Russia cease to be national security threats, most optimistically by democratizing, we can safely return to the elegant economies and peacetime luxuries of unmitigated free trade. Meanwhile, our hardball must get harder.

Chinese leader Xi Jinping and Russian President Vladimir Putin pose for photos on the sidelines of the Shanghai Cooperation Organization (SCO) leaders' summit in Samarkand, Uzbekistan, on Sept. 15, 2022. (Alexandr Demyanchuk/Sputnik/AFP via Getty Images)

Eject China From WTO

We should kick China out of the WTO and other international organizations to reform the international system away from autocratic influence, and to better protect the economic and national security of democracies. This may seem a bridge too far, but the CCP’s rapidly growing power makes it imperative.

China was admitted to the WTO and other international institutions on the explicit assumption that it would play fair and progress its political system toward democracy, improved human rights, and away from territorial aggression. Instead, Beijing stole our technology, took our money, invaded neighboring territories, appointed Xi Jinping dictator-for-life, innovated a technological gulag for its own citizens, and continued genocide against the Tibetans, Falun Gong adherents, and most recently, the Uyghurs. The CCP has failed on all counts.

As Sen. Tom Cotton (R-Ark.) wrote on Dec. 8: “We should return to the pre-WTO status quo that recognized China as a non-market, communist country, to which I would add now committing genocide against its own people. If we do this, we can begin to fix the historic mistake that our leaders made 20 years ago, when they welcomed China into the WTO with open arms and open wallets—and unleashed that dragon upon the world.”

Most political leaders are taking too long to realize this and respond with the toughest of economic actions against communist China. Delay could be fatal. Let’s pick up the pace.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.