Resilience and Reform: U.S.-China Relations and the Global Economic Order

Center for Strategic and International Studies | Scott Kennedy, Ryan Featherston, Yves Tiberghien, Mary E. Lovely, Xu Qiyuan, Ye Yu, Su Qingyi

The Center for Strategic and International Studies track-two dialogue conducted expert surveys across Washington, Shanghai, and Geneva between May 2025 and July 2026 to evaluate bilateral economic friction. The October 2025 trade rapprochement between Washington and Beijing temporarily stabilized commercial relations following the severe April 2025 Liberation Day tariffs.

Disagreements persist over structural trade imbalances and governance. The U.S. Supreme Court subsequently restricted executive authority under the International Emergency Economic Powers Act. Consequently, the White House pivoted toward Section 122 and Section 301 investigations. Trade disruptions forced redirected Chinese industrial exports into European markets, escalating multilateral trade tensions. Survey data revealed sharp structural divergences over remedies, with 84.6 percent of Chinese experts demanding expanded access for outbound investment, whereas 58.8 percent of international respondents prioritized Chinese domestic economic rebalancing. Both cohorts acknowledged deep operational friction within the World Trade Organization.

Comment

Judicial restriction of executive authority under the International Emergency Economic Powers Act exposes structural limits in unilateral statecraft. Statutory constraints inside Section 122 of the Trade Act of 1974 cap temporary import surcharges at 150 days. That restricted duration limits executive leverage during extended bilateral trade negotiations.

Consequently, federal statutory reliance pivots toward Section 301 investigations, which demand formal agency reviews and public hearing schedules prior to implementation. This regulatory friction delays executive trade enforcement, granting Chinese export sectors prolonged windows to adjust supply lines through European hubs.

Strategic Question for Discussion

Which factor imposes a greater constraint on trade enforcement — the 150-day statutory cap under Section 122 of the Trade Act of 1974 or the administrative timelines required by Section 301 investigations, and how does that gap alter foreign export adaptation?

The 150-day limitation under Section 122 presents a sharper immediate operational constraint, as target economies can easily absorb short-term surcharges. Conversely, the extended timeline of Section 301 investigations grants foreign industrial sectors sufficient structural buffer to permanently reroute commercial flows through third countries. The trajectory indicates that regulatory lead times inherently undermine the deterrent effect of unilateral statutory tariffs.

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