How the US is adopting Beijing's rules China’s economic dominance

Mike Froman’s recent opinion piece on Council on Foreign Relations examines the growing influence of China on the international economic system and the United States' shifting response to it. Froman highlights a significant turning point in global economic policy, where the U.S. is increasingly adopting policies similar to China's, moving away from the market-oriented system that dominated post-World War II economic relations.

Froman notes that for decades, Washington warned Beijing that its predatory economic policies would ultimately destabilize the environment upon which China’s growth depended. However, Beijing largely disregarded these warnings and persisted in its approach. Now, as the U.S. confronts the consequences of China’s rise, it is following China’s lead in adopting protectionist measures, including tariffs, restrictions on investments, and industrial policy. Froman describes this shift as a form of nationalist state capitalism, where the U.S. attempts to level the playing field by employing tactics previously associated with China.

This transition is particularly evident under President Donald Trump, whose administration placed significant emphasis on tariffs as a means of incentivizing domestic production, moving away from industrial policy in favor of economic isolationism. Trump’s tariffs on automobiles and other goods underscore this shift, as the administration prepares to unveil further changes to the global tariff regime. Froman suggests that while these policies might protect certain industries, they come at the cost of broader economic harm, particularly for American consumers and workers.

Froman also touches on a critical concern: the uncertainty and uneven distribution of the costs and benefits of protectionism. While globalization once allowed for a broadly shared economic benefit, Trump’s protectionist measures risk concentrating advantages in a few sectors while spreading the economic pain across the broader population. The long-term effectiveness of such policies remains uncertain, particularly when it comes to incentivizing companies to move their production back to the U.S.

In the article, Froman argues that the battle over setting the rules of international competition is largely decided—China has emerged as the dominant force. The U.S. may now attempt to imitate Chinese economic strategies, but China has already secured its place in rewriting the global economic order. The essay underscores a shift in global power dynamics, with China now firmly in control of setting the terms of economic engagement.

By Vugar Khalilov