The principle of peaceful settlement of international disputes has long been a foundational element of international law. It reflects the aspiration of the international community to replace force with dialogue, and conflict with cooperation. Rooted in the UN Charter and reinforced by customary international law, it obliges states to seek non-violent means of dispute resolution—such as negotiation, mediation, arbitration, or judicial adjudication—in the interest of maintaining global peace and security.
Yet, in practice, the commitment to these ideals has often been tested by realpolitik. One of the most prominent examples in recent times is the US-China trade war, which began in earnest in 2018 and sent shockwaves through the global economic system. It challenges the effectiveness, consistency, and even the sufficiency of existing international legal frameworks in handling complex, multi-dimensional economic conflicts between major powers.
This analysis seeks to examine how the US-China trade war fits within, and in some ways departs from, the principles of peaceful settlement and cooperation that international law aims to uphold.
The Normative Framework of Peaceful Settlement
International law is clear on the obligation of states to resolve disputes peacefully. Article 2(3) and Article 33(1) of the UN Charter mandate states to settle their disputes “by peaceful means” and list a variety of methods, including negotiation, enquiry, mediation, conciliation, arbitration, judicial settlement, and resort to regional agencies.
The 1970 Declaration on Principles of International Law concerning Friendly Relations and Cooperation among States further reinforces this obligation, asserting that states must refrain from the threat or use of force and must resolve disputes in a manner consistent with the principles of justice and international law.
In economic contexts, the World Trade Organization (WTO) provides a rules-based system with a well-developed Dispute Settlement Understanding (DSU), offering a legal forum for member states to challenge trade practices they consider unfair or illegal under WTO rules.
The US-China Trade War: A Challenge to Legal Norms
The US-China trade conflict—characterized by reciprocal tariff impositions, export bans, sanctions, and public accusations of intellectual property theft—presents a case where traditional legal pathways were marginalized in favor of unilateral economic coercion.
Rather than initiating formal proceedings under the WTO’s dispute settlement system at the outset, the United States under the Trump administration opted for unilateral tariffs under Section 301 of the Trade Act of 1974, citing unfair Chinese trade practices, forced technology transfers, and intellectual property violations.
China, in turn, responded with its own retaliatory tariffs, while also framing the US actions as violations of WTO principles. Though both countries eventually brought complaints to the WTO, these actions were largely reactive and strategic, rather than reflective of a genuine commitment to legal adjudication.
This shift away from multilateral legal mechanisms to power-based negotiation and economic retaliation raises significant questions:
- Has peaceful settlement through international law been sidelined by power politics?
- Can cooperative and rule-based mechanisms survive when leading powers bypass them?
- What does this mean for smaller states reliant on international legal forums?
The Erosion of Multilateralism and Legal Institutions
One of the most profound consequences of the US-China trade war has been the weakening of multilateral institutions, particularly the WTO. The US refusal to allow appointments to the WTO Appellate Body, effectively paralyzing the dispute resolution mechanism, undermines not only the WTO’s authority but also the principle of peaceful legal settlement itself.
Moreover, the US’s use of national security justifications for economic measures (e.g., on Huawei or TikTok) introduces a degree of subjectivity that is difficult to challenge through legal processes. This trend blurs the line between legitimate regulatory concerns and protectionist behavior, further complicating efforts to resolve disputes through law and diplomacy.
Such behavior, when emulated by other countries, risks normalizing economic unilateralism, where power rather than principle dictates outcomes. This represents a stark departure from the cooperative ideals enshrined in international law and threatens to reduce international dispute resolution to a bargaining game among major powers, marginalizing smaller states and less powerful actors.
Diplomacy and Ad-Hoc Negotiations: A Limited Return to Cooperation
While the trade war began with confrontation, it eventually transitioned toward negotiation and partial settlement, exemplified by the Phase One Trade Agreement in January 2020. This agreement addressed some of the US concerns over trade imbalances, intellectual property protections, and technology transfer.
However, the process leading to this outcome was largely bilateral, ad-hoc, and opaque, lacking the transparency and accountability associated with formal legal mechanisms. It did little to strengthen multilateral dispute resolution or to reaffirm global norms. Instead, it reinforced the perception that large powers can settle disputes on their own terms, setting a problematic precedent.
Reaffirming the Role of International Law
Despite these challenges, the principles of peaceful settlement through international law remain essential. They provide not just legal remedies, but also a legitimacy framework that enhances predictability and mutual respect in international relations.
The challenge lies in revitalizing trust in multilateral institutions. Reforming the WTO dispute mechanism, enhancing the enforceability of decisions, and depoliticizing appointments to legal bodies are critical steps. Additionally, there is a growing need to adapt legal tools to complex modern disputes, especially those involving digital trade, cybersecurity, and state-subsidized enterprises.
Furthermore, regional mechanisms and plurilateral agreements may serve as supplementary forums for legal cooperation. For example, ASEAN’s mechanisms for economic dispute resolution, or the EU’s proposal for a multilateral investment court, offer alternative avenues for rule-based engagement.
Conclusion: A Fork in the Road
The US-China trade war represents more than an economic skirmish—it is a test case for the resilience of international law in an era of strategic rivalry. While outright violence was avoided, the failure to initially resort to peaceful legal settlement mechanisms weakens the global rules-based order and sets a concerning precedent.
If the international community does not reaffirm and reform its legal frameworks, future disputes may increasingly be resolved through economic coercion, not cooperative law. The peaceful settlement of international disputes, as a principle of friendly relations and cooperation, must not be allowed to become a hollow ideal. Instead, it must be actively defended, adapted, and revitalized to meet the demands of a multipolar world.
Only then can international law continue to serve as the stabilizing force it was always intended to be.