Experts fear that the world may soon face another trade war. Despite such difficulties as disruption to supply chains, higher transportation costs, and the spread of the new Delta strain, the threat of a trade war is still relevant. China may become the catalyst of the next trade conflict. Last Thursday, September 16, the Chinese government applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This agreement was created to replace the original Trans-Pacific Partnership (TPP). At the moment, the CPTPP countries account for around 14% of the world’s GDP. Notably, the US is not a member of this partnership. Earlier, Joe Biden’s administration said it considered launching an investigation into China’s use of industrial subsidies under Section 301 of the Trade Act of 1974. This, in turn, could lead to new trading restrictions and an escalation of trade tensions between the two countries. At the moment, the US government is reconsidering previously imposed tariffs in order to change or cancel some of them. A large-scale dispute within the World Trade Organization is also likely to change Beijing's stance on a number of issues. One of them is an ongoing discussion about the system of WTO’s appeal court that raises objections among different countries. In case the US takes action against China, the latter will surely respond to this move. Raising trade tariffs may be one of such measures taken by the US. However, the stand-alone status of the US that is not going to join the CPTPP may raise discontent among other countries, including China. Yet, some analysts hold the view that this is the most effective way to limit China’s growing influence in the Asian region. However, Beijing's bid for the CPTPP membership may well be rejected due to strained relations with its key members such as Japan and Australia. In addition, the CPTPP prohibits state-owned enterprises from receiving subsidies. Notably, China’s leading state companies do not meet this criterion. Given a wide gap between China’s state and private enterprises, some CPTPP countries may be reluctant to approve the new member. This fact is likely to decrease Beijing's chances to join the pact as the countries with free economies doubt the viability of China joining the CPTPP. At the same time, the US gets the room for maneuver and has the time to choose an effective approach to cooperation with China. It seems, though, that the two parties are not ready to find a compromise which makes the possibility of a new trade war more real, experts note.
