The Global Compliance Dilemma

Abstract

A profound shift in the post-Cold War international order is unfolding, and the U.S. hegemon faces critical challenges on multiple fronts. The rising confrontation between the United States and its rivals has manifested in the multiplication of conflicting laws, giving rise to an intractable compliance dilemma for transnational actors—obeying U.S. laws would necessitate or result in violating the laws of its rival states. How do multinationals react when legally compelled to pick a side in the intensifying geopolitical competition? The compliance dilemma has received scant academic attention. This Article clearly identifies the global compliance dilemma and examines its constitution and key attributes by canvasing the escalating legal rivalry between the United States and China. Next, using a unique dataset, this Article empirically investigates the varying influence of the compliance dilemma on Chinese multinationals in the United States, looking closely at a list of possible explanatory variables such as state ownership and mode of investment. The Article then presents a theoretic model for researching about the dizzying array of multinationals’ coping strategies and elaborates on their impacts on the international legal, economic, and political orders.