Although President Donald Trump appears to have changed his tune on China from all-out accusatory on the campaign trail to grumbling in the Oval Office, U.S.-China economic relations are at their most precarious in years. The issue of trade is a major stumbling block between the two nations.

The United States, European Union and Japan vowed on Tuesday to work together to fight market-distorting trade practices and policies that have fueled excess production capacity, naming several key features of China’s economic system.

Late last month, the Trump administration “self-initiated” antidumping and countervailing duty investigations of imports of aluminum sheet from China. Reactions from media, social media, and the Chinese government seem to suggest these measures are especially provocative, pushing Washington and Beijing even closer to the brink of a trade war. But there is a less dire interpretation to consider.

Recently, the Trump administration notified the World Trade Organization (WTO) that the United States opposes granting China market economy status at the WTO, an opinion also supported by the European Union. Under the World Trade Organization (WTO) terms, China should have graduated last year to market-economy status.

In warfare one seeks surrender, but in world affairs one seeks solutions.

Donald Trump's administration has put its main programme for bolstering economic relations with China on ice.

The Trump administration has lambasted China’s bid for recognition as a market economy in the World Trade Organization, citing decades of legal precedent and what it sees as signs that China is moving in the opposite direction under Xi Jinping.

For more than a decade, China and the United States have been engaged in a game of tit-for-tat technology protectionism, which now threatens to escalate into a wider high-tech trade war. But protectionism need not be met with protectionism. There is another route to deescalate this conflict: via the World Trade Organization.

The WTO is the proper forum for resolving US-China disputes on IP. The alternative is trade war.

Could Trump like Richard Nixon “echo like thunder” by unilaterally announcing a high tariff regime to balance U.S. trade deficit and break the WTO system? While some of Trump’s advisors would wave their heads affirmatively, the institutional and commercial leverage of the U.S today is much inferior from Nixon’s America that bended Europeans to follow her unilateral demands.