Rodrigo Balbontin

The era of free trade globalization is over. To replace it, the United States should lead a new class of binding deals with allies, with a dual objective of strengthening allied national economic power industries and weakening China’s.

The USMCA’s digital trade rules set the global standard. Now, policymakers should modernize them for the age of AI, close loopholes that enable data localization and discriminatory taxes, and build a more secure, competitive North American digital economy.

The USMCA is the operating system for North American production, investment, talent, and digital commerce. Canada, Mexico, and the United States should renew the agreement and explore ways to update it to preserve certainty, deepen regional supply chains and innovation capabilities, and strengthen the continent’s ability to compete with China.

The U.S. government does not need to create a Board to manage trade with China—it needs to use all its available tools to urge China to conduct economic relations in accordance with established trade rules, commitments which China has already clearly and unequivocally made to the United States and to other global trade partners.

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.

Watch now for a panel discussion featuring experts from the Macdonald-Laurier Institute in Canada and Fundación IDEA in Mexico, who reviewed a new report on the importance of North America’s trade agreement for all three economies and discussed the priorities Canada and Mexico bring to the review process, opportunities to deepen production and technology cooperation, and how the agreement can be updated to support regional competitiveness in the decade ahead.

Rodrigo Balbontin speaks about digital trade and digital services.

The event featured remarks from policymakers, legal experts, and industry leaders who assessed the scope of the threat and the legal and technical frameworks that can help address foreign online piracy.

Rodrigo Balbontin outlines the decline of U.S. manufacturing, the strategic response to China's rise, and implications of the U.S.'s current trade policy, particularly under a possible second Trump administration at an event hosted by the Philippine Institute for Development Studies (PIDS) and the Bangko Sentral ng Pilipinas (BSP), titled Seizing the Shift: Navigating Trump’s Reciprocal Tariffs.