Publications: Rodrigo Balbontin

Canadian, Mexican, and U.S. trade negotiators should view the USMCA renewal process as an opportunity to move beyond the old free-trade model and build a strategic North American economic bloc capable of producing, innovating, and competing at the scale required by the China challenge.

The EU has an array of discriminatory policies that target major U.S. tech firms, a legitimate basis for action under Section 301 of the Trade Act of 1974. U.S. policymakers should favor amicably negotiated solutions, but this tool is available as a last resort if necessary.

Country cases show that the Trump administration’s tariffs have had a paradoxical effect. They have given Washington short-term leverage in some bilateral negotiations, especially with countries seeking improved access to the U.S. market or deeper security and technology ties. But they have also accelerated a global search for optionality.

In the postwar era, the national interest inherent in US trade policy pushed for globalization, first to compete with the Soviet Union, then to extend America’s “unipolar moment.” The rise of China changed this trajectory. But as the traditional FTA falls by the wayside, a new alternative template to redesign trade deals for the 21st century might be the "strategic techno-economic agreement."

When U.S. technology companies compete in China, they capture revenue, learn technologies and trends from a critical market, and extend U.S.-built ecosystems. Forcing them out of China would weaken U.S. global competitiveness and give Chinese firms greater scale to shape technology ecosystems.

This Section 301 investigation rightly focuses on structural excess capacity. But its scope encompasses 16 economies rather than narrowly addressing the core cause of global trade upheaval—China’s mercantilism—thereby risking dilution of the blame for the country responsible for causing the need to recalibrate the global system.

China should come into full and immediate compliance with its WTO commitments; otherwise, as a last resort, the U.S. government should revoke China’s PNTR status. But policymakers should mitigate second-order effects, particularly on national power industries.

Countries in the Global South are key markets for Chinese and U.S.-allied national power industries, which require scale economies to flourish. U.S. policymakers should stop viewing them as a “backyard” and recognize that they are a key battlefield in an industrial war.

Boosting U.S. competitiveness in national power industries is necessary, but not sufficient to avoid losing to China. America also must take measures to slow the PRC’s progress toward global dominance. This report provides more than 100 actionable recommendations for the administration and Congress. Western allies should take many of the same steps.

MC14 exposed the WTO’s deepening dysfunction on digital trade and reform, underscoring why the United States needs a more strategic approach to global trade.