President Trump to launch investigation into China trade violations

Claudine Rigal
Августа 14, 2017

According to Trump advisors, on Monday, the president plans to sign an executive memorandum, which is a step below an executive order, directing trade officials to investigate China's "acts, policies or practices" that violate global protections for American intellectual property, innovations and technology.

In addition to the United States, the EU, Japan, Germany and Canada have all expressed concern about China's behavior on intellectual property theft.

Trump's call with Xi and his potential plans to open the broad trade investigation come against the backdrop of rising tensions over North Korea's nuclear and ballistic missile programs.

President Trump on Monday will start a process that could lead to action against China, which has been accused of stealing American businesses' intellectual property, even as he seeks Beijing's help against nuclear threats from North Korea. If an investigation begins, the USA government could seek remedies either through the World Trade Organization or outside of it.

While there's no evidence that the Trump administration is willing to engage constructively with the WTO, Bown recommends the United States and China resolving their trade disputes through the Geneva-based worldwide trade body.

On Saturday, administration officials said the new trade measure was "totally unrelated" to events involving North Korea.

Gordon Sun (孫明德), director of the Economic Forecasting Center under the Taiwan Institute of Economic Research, warned that if the US eventually imposes trade sanctions against China, "Taiwan should not take pleasure in (China's) misfortune".

The second are products that are similar to those China exports in large quantities to the US, such as steel or petrochemical products, Sun said.

However, Bown was anxious that the Trump administration "hasn't really yet identified a strategy to engage China on the long-term systemic sort of talks" as they seemed much focused on "getting quick wins".

"If Americans continue to have their best technology and intellectual property stolen, or forcibly transferred offshore, the United States will find it hard to maintain its current technology-leadership position and to remain one of the world's most innovative economies. Those activities haven't abated; they've accelerated as China seeks to become self-sufficient in new technologies and dominate world markets", he said.

The Trump administration is already investigating Chinese commercial practices on several fronts, notably whether steel and aluminum imports were jeopardizing national security.

Trump made addressing the US trade deficit with China a centerpiece of his campaign previous year and has suggested raising tariffs on goods from China.

"I do think the United States and China need to sit down and negotiate a new trade deal, probably not a bilateral deal, but through some kind of multilateral forum to really address the heart of the problems that the two countries have with each other", he said.

At the end of March, Trump asked the Commerce Department to prepare a report on the causes of the trade deficit, country by country and product by product, in 90 days.

Trump was reported to direct U.S. Trade Representative Robert Lighthizer to determine if an investigation is warranted of "any of China's laws, policies, practices or actions that may be unreasonable or discriminatory, and that may be harming American intellectual property, innovation and technology". Instead, he is leading the administration in dusting off a variety of powerful and unilateral measures under USA trade law, many of which the United States stopped using after the creation of the WTO, which has its own mechanisms to settle trade disputes.

Trump, however, also informed Xi about the pending probe into China's trade practices, according to two United States officials with knowledge of the conversation.

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