Introduction and Summary

The Information Technology and Innovation Foundation (ITIF) is pleased to submit comments to the Office of the United States Trade Representative (USTR) regarding the development of negotiations with China aimed at optimizing bilateral trade in non-sensitive products in order to promote reciprocity and balance in the U.S.-China trade relationship. ITIF is a U.S.-based nonprofit, nonpartisan public policy think tank committed to articulating and advancing pro-productivity, pro-innovation, and pro-technology policy agendas worldwide to spur growth, prosperity, and progress.

USTR’s request for comments includes a proposed U.S.-China Board of Trade, a government-to-government mechanism to optimize bilateral trade in non-sensitive products. The Board would monitor trade flows over time, reassess product coverage, and support data-sharing to manage the arrangement. 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.

China Repeatedly Fails to Meet Its Trade Commitments

The United States should focus its trade actions and priorities on the techno-economic competition with the People’s Republic of China (PRC). As ITIF stated in its seminal work on national power industries—which are the industries that serve as wellsprings of national power and security in the 21st century, including defense production, dual-use industries, and “enabling” industries that support the country’s industrial commons—“unlike any competitor in American history, China combines the continental scale of a 1.4-billion-person economy with a political system explicitly committed to achieving techno-economic supremacy over the Western democratic world.”[1] China has embarked on a highly effective, multidecade strategic campaign to displace U.S. industrial capabilities and fundamentally reshape global trade.[2] No country alone has the capabilities to counter Chinese techno-economic aggression—not even the United States.

The PRC is a power trader—it creates or induces trade dependencies to gain a competitive advantage for its advanced industries, all in an effort to limit the development or advancement of its adversaries.[3] The weaponization of economic relations lies at the core of China’s strategy to dominate globally in advanced industries, as it allows China to leverage its market size and lack of internal opposition to impose costs on trade partners. Under this view, it is easy to understand why, for example, China allows European automakers and telecom equipment manufacturers to have a relatively small market share in its economy, despite generally not needing foreign knowledge and technologies in those industries; it allows China to have a direct way to pressure European incumbents in case of eventual trade disputes.[4]

Instead of engaging in the U.S.-China Board of Trade, the United States should insist that the PRC abide by its previously stated commitments. The U.S.-China Board of Trade would represent one of many instances in which China engages in non-binding dialogues to mitigate the impact of potential trade escalation, yet with no real intention of making substantive changes to its mercantilist approach. Indeed, it’s just one more example of China delaying and trying to stall for time and kick the can down the road, instead of doing what it needs to do and what the United States should insist upon: China’s coming into full, comprehensive, and immediate compliance with the commitments it has already made to the United States, both as part of World Trade Organization (WTO) membership and as part of other trade commitments China has made, such as the Phase One agreement or its agreement with the Obama administration to cease government-sponsored or -enabled theft of foreign intellectual property (IP).

China’s unfair trade and economic practices affect both sensitive and non-sensitive industries. There are many examples of Chinese economic coercion that do not include sensitive, strategic goods or industries. For example, in 2025, Chinese tourism to Japan declined after Prime Minister Sanae Takaichi stated that an eventual Chinese attack on Taiwan could trigger a Japanese military response through direct action by the PRC—advising Chinese citizens not to travel to Japan.[5] In 2020, the PRC boycotted the consumption and subsequently imposed tariffs on Australian wine and beef following Australia's call for a COVID-19 origin inquiry.[6] A 2022 report by the Mercator Institute for China Studies identified 123 cases from 2010 to 2022 and found that China frequently used economic coercion, including consumer and agricultural goods.[7] More broadly, a recent book by Victor Cha, Ellen Kim, and Andy Lim—China’s Weaponization of Trade—outlines more than 600 cases of China’s economic coercion, demonstrating that trade in non-strategic goods does not preclude the PRC from using trade as a potential instrument of economic aggression.[8]

In addition, China has an extensive track record of failing to fulfill its commitments. A January 2018 USTR report states clearly:

Since China’s accession to the WTO, the United States has repeatedly attempted to work with China in a cooperative and constructive manner. Using intensive, high-level bilateral dialogues, the United States has sought to resolve significant trade irritants and also to encourage China to pursue market-oriented policies and become a more responsible member of the WTO. These bilateral efforts largely have been unsuccessful—not because of failures by U.S. policymakers, but because Chinese policymakers were not interested in moving toward a true market economy.[9]

Indeed, ITIF has repeatedly demonstrated how China has consistently failed to meet numerous commitments made upon its accession to the WTO, including those related to industrial subsidies, the protection of foreign IP, forced joint ventures and technology transfer, and market access in service industries.[10]

China will likely take the same approach as it did during the first Trump administration—engaging in bilateral dialogues, making vague commitments, and failing to meet them. Other instances, similar to the proposed U.S.-China Board of Trade, have also failed. The U.S.-China Joint Commission on Commerce and Trade (JCCT), an effort to address bilateral trade, was created in 1983. The JCCT was discontinued after 2016, when the Trump administration replaced the prior dialogue architecture with the U.S.-China Comprehensive Economic Dialogue (CED) and then declined to continue the process after concluding it would not produce fundamental changes in China’s state-led trade regime.[11] In 2014, the U.S. Government Accountability Office (GAO) identified 184 JCCT commitments since 2004, most of which were vague—for example, only 17 percent had established timeframes.[12]

The first meeting of the newly created CED in 2017, according to the USTR, achieved “no outcome.”[13] Later, in August 2017, the U.S. government instructed USTR to begin the Section 301 process in response to unfair Chinese practices.[14] After bilateral engagement during the first year and a half of the first Trump administration, USTR Robert Lighthizer concluded:

For over a year, the Trump Administration has patiently urged China to stop its unfair practices, open its market, and engage in true market competition. We have been very clear and detailed regarding the specific changes China should undertake. Unfortunately, China has not changed its behavior.[15]

In January 2020, the Trump administration negotiated a settlement with China to its Section 301 investigation—the U.S.-China Phase One Agreement (POA).[16] ITIF has reported how China has failed to meet its POA commitments.[17] The POA sought to address long-standing U.S. concerns about China’s predatory practices by pairing existing tariffs with commitments from the PRC on IP and technology transfer, foreign investment, and currency practices, and included a two-year, $200 billion purchase pledge. Lamentably, China has failed to reduce its trade imbalance with the United States as a result of the promised purchases, has failed to implement and enforce stronger IP protection mechanisms, has not lived up to its commitments not to impose forced technology transfer, continues to subsidize predatory outbound investments, and provides limited transparency regarding how it treats its currency.[18]

The U.S. Government Should Use All Its Available Tools to Urge China to Comply With Trade Rules

The U.S. government should not reward China with a bespoke bilateral Board arrangement that turns persistent rule-breaking into trade leverage with the United States. Instead, the United States should insist that China play by the rules it accepted when it joined the WTO, rather than normalize a separate bilateral framework that manages structural unfair trade practices while leaving the underlying Chinese mercantilist system intact. Any negotiation with China should be subordinate to enforceable disciplines, verifiable compliance, and measurable changes in Chinese trade policy. The goal should be to guide China, for the first time in its history, toward a fair-competition approach.

The United States should use every available tool to enforce fair competition. This means—among others—Section 301 actions when Chinese practices burden U.S. commerce; antidumping and countervailing duty laws when Chinese subsidies and dumping injure U.S. producers; export controls and investment screening when trade implicates national security; customs enforcement against transshipment and forced-labor violations; and coordinated action with allies to prevent China from playing economies against each other.[19] In addition, ITIF has recently published more than 100 actionable recommendations for the U.S. government and Congress to slow the PRC’s progress toward global dominance, focusing on five categories: limiting Chinese knowledge acquisition, limiting Chinese imports, reducing the impact of Chinese innovation mercantilism, limiting financing for Chinese firms, and contesting Chinese firms in third-party markets.[20]

Conclusion

The proposed U.S.-China Board of Trade would not solve the central problem in the bilateral economic relationship: China’s persistent refusal to compete on market terms. The United States has decades of experience with bilateral dialogues, action plans, working groups, and negotiated commitments with China. That record shows that the PRC offers limited concessions to reduce immediate pressure while preserving the state-directed practices that advantage Chinese firms, weaken foreign competitors, and distort global markets. A new Board focused on “non-sensitive” trade would waste time and risk repeating this path, especially because China has repeatedly weaponized trade in ordinary goods and services when doing so advances its strategic interests.

U.S. policy should therefore focus less on managing trade flows and more on enforcing fair competition. This requires a whole-of-government strategy that uses Section 301, trade remedies, customs enforcement, export controls, investment screening, procurement restrictions, and allied coordination to impose costs on China’s mercantilist practices.

Thank you for your consideration.

Endnotes