WASHINGTON—The new partial trade deal with Beijing fails to address Chinese subsidies, one of the top concerns of the Trump administration and the impetus for starting a trade war, and it will be difficult to ease U.S.–China tensions if the issue of state subsidies remains unresolved, according to experts.
Unfair and trade-distortive government subsidies have become a major problem in the world trading system. And the World Trade Organization (WTO) rules on subsidies have plenty of shortcomings, particularly in responding to the Chinese economic model, according to Chad Bown, senior fellow at the Peterson Institute for International Economics, and Jennifer Hillman, senior fellow for trade and international political economy at the Council on Foreign Relations.
