“China’s state capitalism has eroded the [WTO’s] credibility and authority; Trump’s unilateralism has bruised and battered it….The system’s fate is heavily dependent on the decisions of two men — Trump and Xi.”
In Schism: China, America and the Fracturing of the Global Trading System, journalist and CIGI Senior Fellow Paul Blustein traces the roots of the current trade war between the United States and China. Named as a book of the year by both The Economist and the Financial Times, Blustein’s book is replete with backroom anecdotes and interviews with key players that illustrate how China insinuated itself into the workings of the WTO.
Blustein writes that China was initially hailed for joining the rules-based trading system through the WTO. But he demonstrates that China used its membership to boost its economy enormously with the help of a cheap currency and heavy-handed state intervention to disadvantage foreign competitors. Nevertheless, in a CNNMoney interview during a major launch event at the WTO headquarters in Geneva, he said that the Trump administration poses a bigger threat to the system with its decision to “flagrantly violate” WTO rules.