In a significant shift in its trade policy, China announced it will no longer seek Special and Differential (S&D) Treatment in current and future WTO negotiations, addressing a long-standing point of contention with the U.S. and other WTO Members. We dive into the details on the factors behind the decision and what it means in practice.

On China-U.S. relations, after two groups of delegation from the U.S. visited China over the past week, China’s Ministry of Commerce (MOFCOM) signaled cautious optimism for greater U.S.-China economic engagement, but downplayed expectations for major new purchases of American soybeans or airplanes.

MOFCOM also sanctioned six U.S. companies, subjecting them to export controls and other trade and investment restrictions. Most of these firms, however, were already subject to other sanctions.

Also in bilateral relations, MOFCOM initiated a trade and investment barrier investigation against Mexico's "restrictive measures" including the most recent tariff proposal, claiming that they "seriously damage the trade and investment interests of Chinese companies." This is the most recent attempt by China to pressure third parties and prevent them from severing trade ties in an effort to gain favor with the U.S.

Turning to the U.S., there were two actions related to labor rights. In a new action related to forced labor concerns, the Trump administration blocked imports from Giant, a Taiwanese bicycle manufacturer. Giant's response indicates that it will contest the findings. And leaders of the Congressional-Executive Commission on China are continuing their push to restrict Chinese seafood imports, releasing a letter sent to the Trump administration in July in which they argue for a number of actions against these imports due to forced labor concerns.

Also in the U.S., the Chinese government submitted its views to the Department of Commerce in a recently initiated Section 232 national security investigation on imports of wind turbines and their parts and components.

On China-EU relations, at last week's press conference, the spokesperson for MOFCOM defended its recent anti-dumping duties on European pork and other products, accused the EU of misusing trade remedies against Chinese goods, while simultaneously calling for dialogue and cooperation with the European Union.

At a meeting of the European Parliament's Committee on International Trade, Sabine Weyand, the Director-General at DG Trade of the European Commission, testified on various EU-China trade issues, including reviewing the recent exchanges at the EU-China Summit, progress and concerns over export controls, and trade remedy measures.

Shifting to actions within China, in a move to reinforce state control over its critical minerals sector, the Chinese government published new interim rules that broaden its oversight of the rare earth industry. 

A fireworks show staged by Canadian outdoor brand Arc’teryx and a Chinese artist in Tibet sparked a wave of criticism over its potential environmental impact, underscoring the risks faced by global brands when operating in China, where legal obligations, corporate decisions, local government decisions, and public opinion can collide.

At the WTO, in response to a recent WTO dispute ruling on various aspects of its IP enforcement, China has told WTO Members that, despite having concerns with the ruling, it is now in compliance.