This report argues that the growing use of economic coercion by both China and the United States is an emerging risk for business and undermines the world trading system.

Australian businesses that have in good faith taken up the opportunities offered by the China-Australia Free Trade Agreement, signed in 2015, now find themselves facing the potential loss of market access as the Chinese administration retaliates over Australian government policies on a coronavirus inquiry and the next generation internet network.

Australian businesses are not the targets of US sanctions, but US extra-territorial reach means they are at risk of serious collateral damage if they even inadvertently transact with any individual or organisation that is.

The report  traces the growing use of trade as an economic weapon, particularly over the last three years as the global trade environment has become increasingly fractious amid rising protectionism.

The World Trade Organisation has successfully been used in the past to push back against economic coercion and the report argues the Australian government should be ready to use the disputes mechanism of the World Trade Organisation to tackle Chinese trade barriers. Multilateral forums, including APEC, the G20, the OECD and the WTO should recognise the growing threat which economic coercion represents to the freedom of commerce.