Why Does the U.S. Still Refer to Itself as a "Market Economy"?
The U.S. economic system has undergone significant changes over the past five years, transitioning from an "atypical market economy" to a "non-market economy" currently. This shift is reflected in its domestic and international economic and diplomatic policies, which have strayed from essential market principles.
TroibNews 
Editor's note: Liu Zhiqin is a senior researcher at Chongyang Institute for Financial Studies, Renmin University of China. The article reflects the author's opinions and not necessarily the views of CN. It has been translated from Chinese and edited for brevity and clarity.
In 2019, I penned an opinion piece entitled "The U.S. Is an 'Atypical Market Economy,'" which generated considerable discussion among peers. Many colleagues from both China and abroad expressed agreement with my views. Now, nearly half a decade later, one might ask: has the U.S. improved or reformed in meaningful ways?
Unfortunately, the U.S has not made the anticipated positive changes nor has it effectively enhanced its market economy. On the global stage, it continues to act as both an "economic policeman" and a "market villain," disrupting its own economic stability as well as that of the worldwide market.
Currently, the U.S. has moved from being an "atypical market economy" to a "non-market economy." Its domestic and international economic and diplomatic strategies have deviated significantly from the essential principles of market supply and demand, leading to a market imbalance. The U.S. now heavily indulges in non-market strategies to secure illicit, unchecked profits using underhanded methods, including conspiracies, blackmail, defamation, coercion, bribery, and unfair competition. The pursuit of wealth has been corrupted by certain U.S. politicians, occasionally without an ounce of integrity.
These observations are based on concrete examples reflecting the non-market practices adopted by U.S. politicians, which have increasingly burdened the global community.
A main criterion for defining a market economy is market openness. Years ago, the U.S. denied China's status as a market economy for political reasons, raising the question of how the U.S. itself qualifies as a market economy under similar standards.
Despite common perception, compared to China, the U.S. market is considerably less open. If China is not recognized as a market economy, then the credibility of other nations claiming this status is questionable, especially as many are influenced by the U.S. to "close" their markets, showing reduced openness.
Market openness can be analyzed in numerous areas, including goods, finance, technology, and more. American politicians, citing "national security," have imposed strict limitations across these sectors, especially targeting Chinese companies and hindering their activities in the U.S.
Despite targeted American policies that seem exclusive to China, these actions also affect U.S. allies, particularly through measures like the CHIPS Act and other restrictive legislations. These actions do not solely impact bilateral relations but also reveal a broader tendency of the U.S. to distrust and shut out even its allies in many domains.
Beyond market openness, the handling of economic disparities and trade disagreements is another standard for judging market economies. The U.S. frequently resolves these issues by prioritizing domestic laws over international laws and norms, often employing sanctions to exert pressure and achieve its objectives. These approaches are contrary to typical market-driven strategies and reflect more coercive tactics than those of a free market.
Moreover, tariffs and trade policies further illustrate the U.S.'s retreat from market principles. Excessive tariffs on foreign goods, particularly from China, restrict their entry into the U.S. market, protecting domestic industries under false pretenses of "overcapacity." The case of imposing a 100 percent tariff on Chinese new energy vehicles, even before they enter the U.S. market, starkly exemplifies extreme protectionism.
All these factors portray a U.S. market that has strayed far from being open, inclusive, and cooperative. It has transformed into a restrictive, self-interested economy that no longer adheres to the principles of fair competition and mutual benefit typically associated with a genuine market economy.
The U.S. might continue to claim it maintains a market economy, but these assertions no longer align with reality. The original ethos of its market has been significantly compromised.In light of these developments, it is vital to recognize the implications of the U.S.'s shift away from genuine market practices. The impact of its actions extends beyond mere economic statistics; it reverberates across international relations, global supply chains, and the overall perception of its commitment to free market principles.
The increasing reliance on protectionist measures not only undermines the U.S.'s own economic competitiveness but also sends a troubling message to allied nations and emerging economies alike. Countries observing the U.S. embrace of non-market practices may feel compelled to adopt similar strategies, fearing competition more than collaborating for mutual growth. This environment fosters uncertainty and can stifle innovation and economic development on a global scale.
Furthermore, as the U.S. continues to enact policies that favor domestic entities at the expense of international partners, it risks alienating itself from strategic allies. The perception that the U.S. operates under a double standard—demanding adherence to free trade from others while imposing restrictions at home—erodes trust and cooperation among nations. Over time, this could fragment long-standing alliances and create rifts in collective efforts to address global challenges, from climate change to economic recovery post-pandemic.
Equally concerning is the message these practices send to emerging powers and economies. When the U.S.—a nation that has long positioned itself as a champion of free markets—resorts to these tactics, it challenges the very foundations of global trade norms. Emerging economies may conclude that aligning with the principles of an open market is unnecessary and that protectionism is a viable, if not preferable, alternative.
Moreover, this behavior could lead to the entrenchment of economic blocs where countries band together to resist what they perceive as aggressive U.S. policies. Such fragmentation of the global economy could lead to a decline in overall welfare and increase tensions between blocs, further complicating international trade and diplomatic efforts.
To counteract these trends, the U.S. would benefit from recommitting to its original market principles by embracing a more open and equitable economic approach. Instead of viewing trade solely through the lens of competition, U.S. policymakers could focus on fostering collaboration that allows for shared growth and creates win-win scenarios in international trade. This involves re-evaluating restrictive tariffs and regulations and pursuing more inclusive policies that recognize the interconnected nature of today's global economy.
Additionally, the U.S. should work towards rebuilding trust with allies by demonstrating a willingness to share technology, knowledge, and market access. Engaging in multilateral trade agreements with genuine intentions can restore the U.S.'s standing as a leader in promoting free-market ideals and cooperative economic relationships.
In conclusion, the path forward for the U.S. necessitates a fundamental shift back towards the principles that once defined its market economy. Recognizing the importance of open markets not only for economic prosperity but also for global stability is crucial. By prioritizing fairness, collaboration, and mutual respect, the U.S. can work towards reclaiming its position as a champion of a truly competitive and inclusive world economy. Without this shift, the U.S. will likely continue to stray further from the market principles it espouses, undermining both its own economic potential and the health of the global marketplace.
Alejandro Jose Martinez for TROIB News
In 2019, I penned an opinion piece entitled "The U.S. Is an 'Atypical Market Economy,'" which generated considerable discussion among peers. Many colleagues from both China and abroad expressed agreement with my views. Now, nearly half a decade later, one might ask: has the U.S. improved or reformed in meaningful ways?
Unfortunately, the U.S has not made the anticipated positive changes nor has it effectively enhanced its market economy. On the global stage, it continues to act as both an "economic policeman" and a "market villain," disrupting its own economic stability as well as that of the worldwide market.
Currently, the U.S. has moved from being an "atypical market economy" to a "non-market economy." Its domestic and international economic and diplomatic strategies have deviated significantly from the essential principles of market supply and demand, leading to a market imbalance. The U.S. now heavily indulges in non-market strategies to secure illicit, unchecked profits using underhanded methods, including conspiracies, blackmail, defamation, coercion, bribery, and unfair competition. The pursuit of wealth has been corrupted by certain U.S. politicians, occasionally without an ounce of integrity.
These observations are based on concrete examples reflecting the non-market practices adopted by U.S. politicians, which have increasingly burdened the global community.
A main criterion for defining a market economy is market openness. Years ago, the U.S. denied China's status as a market economy for political reasons, raising the question of how the U.S. itself qualifies as a market economy under similar standards.
Despite common perception, compared to China, the U.S. market is considerably less open. If China is not recognized as a market economy, then the credibility of other nations claiming this status is questionable, especially as many are influenced by the U.S. to "close" their markets, showing reduced openness.
Market openness can be analyzed in numerous areas, including goods, finance, technology, and more. American politicians, citing "national security," have imposed strict limitations across these sectors, especially targeting Chinese companies and hindering their activities in the U.S.
Despite targeted American policies that seem exclusive to China, these actions also affect U.S. allies, particularly through measures like the CHIPS Act and other restrictive legislations. These actions do not solely impact bilateral relations but also reveal a broader tendency of the U.S. to distrust and shut out even its allies in many domains.
Beyond market openness, the handling of economic disparities and trade disagreements is another standard for judging market economies. The U.S. frequently resolves these issues by prioritizing domestic laws over international laws and norms, often employing sanctions to exert pressure and achieve its objectives. These approaches are contrary to typical market-driven strategies and reflect more coercive tactics than those of a free market.
Moreover, tariffs and trade policies further illustrate the U.S.'s retreat from market principles. Excessive tariffs on foreign goods, particularly from China, restrict their entry into the U.S. market, protecting domestic industries under false pretenses of "overcapacity." The case of imposing a 100 percent tariff on Chinese new energy vehicles, even before they enter the U.S. market, starkly exemplifies extreme protectionism.
All these factors portray a U.S. market that has strayed far from being open, inclusive, and cooperative. It has transformed into a restrictive, self-interested economy that no longer adheres to the principles of fair competition and mutual benefit typically associated with a genuine market economy.
The U.S. might continue to claim it maintains a market economy, but these assertions no longer align with reality. The original ethos of its market has been significantly compromised.In light of these developments, it is vital to recognize the implications of the U.S.'s shift away from genuine market practices. The impact of its actions extends beyond mere economic statistics; it reverberates across international relations, global supply chains, and the overall perception of its commitment to free market principles.
The increasing reliance on protectionist measures not only undermines the U.S.'s own economic competitiveness but also sends a troubling message to allied nations and emerging economies alike. Countries observing the U.S. embrace of non-market practices may feel compelled to adopt similar strategies, fearing competition more than collaborating for mutual growth. This environment fosters uncertainty and can stifle innovation and economic development on a global scale.
Furthermore, as the U.S. continues to enact policies that favor domestic entities at the expense of international partners, it risks alienating itself from strategic allies. The perception that the U.S. operates under a double standard—demanding adherence to free trade from others while imposing restrictions at home—erodes trust and cooperation among nations. Over time, this could fragment long-standing alliances and create rifts in collective efforts to address global challenges, from climate change to economic recovery post-pandemic.
Equally concerning is the message these practices send to emerging powers and economies. When the U.S.—a nation that has long positioned itself as a champion of free markets—resorts to these tactics, it challenges the very foundations of global trade norms. Emerging economies may conclude that aligning with the principles of an open market is unnecessary and that protectionism is a viable, if not preferable, alternative.
Moreover, this behavior could lead to the entrenchment of economic blocs where countries band together to resist what they perceive as aggressive U.S. policies. Such fragmentation of the global economy could lead to a decline in overall welfare and increase tensions between blocs, further complicating international trade and diplomatic efforts.
To counteract these trends, the U.S. would benefit from recommitting to its original market principles by embracing a more open and equitable economic approach. Instead of viewing trade solely through the lens of competition, U.S. policymakers could focus on fostering collaboration that allows for shared growth and creates win-win scenarios in international trade. This involves re-evaluating restrictive tariffs and regulations and pursuing more inclusive policies that recognize the interconnected nature of today's global economy.
Additionally, the U.S. should work towards rebuilding trust with allies by demonstrating a willingness to share technology, knowledge, and market access. Engaging in multilateral trade agreements with genuine intentions can restore the U.S.'s standing as a leader in promoting free-market ideals and cooperative economic relationships.
In conclusion, the path forward for the U.S. necessitates a fundamental shift back towards the principles that once defined its market economy. Recognizing the importance of open markets not only for economic prosperity but also for global stability is crucial. By prioritizing fairness, collaboration, and mutual respect, the U.S. can work towards reclaiming its position as a champion of a truly competitive and inclusive world economy. Without this shift, the U.S. will likely continue to stray further from the market principles it espouses, undermining both its own economic potential and the health of the global marketplace.
Alejandro Jose Martinez for TROIB News
