The latest U.S. Commercial Law Application for Resolving Trade Disputes

MetaverseLandlord · 2026-02-28T02:14:58+00:00

In the context of global trade tensions, the U.S. is utilizing the rarely activated Section 122 of the 1974 Trade Act to address trade deficits, reflecting a significant shift in its economic strategy. This move emphasizes the need to assess overall payment imbalances, which could lead to legal challenges. China's response will depend on the U.S.'s next steps, influencing the future complexity of trade disputes.

MetaverseLandlord

2026-02-28 02:14:58

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In the context of global trade tensions, the United States has decided to utilize a rarely used legal tool to address accumulated trade deficits. This move, reported by Jin10, marks a significant shift in Washington’s economic strategy as policymakers choose to apply the latest trade laws more aggressively than in previous years.

Section 122: A rarely activated legal tool in history

The tool used by Washington is Section 122 of the Trade Act of 1974, a legal provision that has been seldom invoked in recent decades. This clause is designed to respond to significant imbalances in the international payment structure. Activating this latest trade law reflects deep concerns over bilateral trade conflicts, especially ongoing deficits in key commodity sectors.

Balance of payments: The root of disputes

However, implementing the latest trade law requires a clear identification of a comprehensive imbalance in the country’s overall balance of payments, not just focusing on individual trade deficits. A more holistic assessment includes capital flows and trade in services. Therefore, the temporary tariffs introduced may face legal challenges similar to past cases, particularly if the provisions are applied in unprecedented ways.

Negotiation prospects: China’s response and the future of the latest trade law

According to Cui Fan, a renowned expert in international trade negotiations, the trajectory of the dispute will depend on the next steps taken by the U.S. If Washington decides to halt or ease these measures, China will have the opportunity to reassess and adjust its response accordingly. Conversely, if the U.S. continues to implement the latest trade law through other legal tools or at higher levels of enforcement, Beijing will need to consider whether to respond with corresponding actions. This trade conflict could become prolonged and more complex, depending on how each side adapts in applying these legal tools.

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