Trump to ramp up trade pres­sure on China

Kuwait Times - - BUSINESS -

Pres­i­dent Don­ald Trump to­day will or­der his top trade ad­viser to de­ter­mine whether to in­ves­ti­gate Chi­nese trade prac­tices that force US firms oper­at­ing in China to turn over in­tel­lec­tual prop­erty, se­nior ad­min­is­tra­tion of­fi­cials said on Satur­day.

The move, which could even­tu­ally lead to steep tar­iffs on Chi­nese goods, comes at a time when Trump has asked China to do more to crack down on North Korea’s nu­clear mis­sile pro­gram as he threat­ens pos­si­ble mil­i­tary ac­tion against Py­ongyang. Trump has said he would be more amenable to going easy on Bei­jing if it were more ag­gres­sive in rein­ing in North Korea.

An ad­min­is­tra­tion of­fi­cial, how­ever, in­sisted diplo­macy over North Korea and the po­ten­tial trade probe were “to­tally un­re­lated,” say­ing the trade ac­tion was not a pres­sure tactic.

“These are two dif­fer­ent things,” the of­fi­cial said, speak­ing to re­porters on a con­fer­ence call. Trump will di­rect US 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,” the of­fi­cial said.

“China’s un­fair trade prac­tices and in­dus­trial poli­cies, in­clud­ing forced tech­nol­ogy trans­fer and in­tel­lec­tual prop­erty theft, harm the US econ­omy and work­ers,” a se­cond of­fi­cial said. “The ac­tion be­ing taken to­day is a re­flec­tion of the pres­i­dent’s firm com­mit­ment to ad­dress­ing this prob­lem in a firm way.” Sen­ate Demo­cratic leader Chuck Schumer took is­sue with that as­sess­ment.

“Pres­i­dent Trump’s pat­tern con­tin­ues: Tough talk on China, but weaker ac­tion than any­one could ever imag­ine,” he said in a state­ment. “To make an an­nounce­ment that they’re going to de­cide whether to have an in­ves­ti­ga­tion on China’s well-doc­u­mented theft of our in­tel­lec­tual prop­erty is an­other sig­nal to China that it is O.K. to keep steal­ing.”

Any in­ves­ti­ga­tion that may be launched could take as long as a year to con­clude, a third of­fi­cial said. He said it would be pre­ma­ture to spec­u­late on ac­tions that could even­tu­ally be taken against China, and added that the is­sue could be re­solved through “ne­go­ti­ated agree­ment.”

Trump, who will in­ter­rupt a 17-day work­ing va­ca­tion to make a day trip to Wash­ing­ton for the trade an­nounce­ment, had been ex­pected to seek a so-called Sec­tion 301 in­ves­ti­ga­tion ear­lier this month, but an an­nounce­ment was post­poned as the White House pressed for China’s co­op­er­a­tion on North Korea.

While China joined in a unan­i­mous UN Se­cu­rity Coun­cil de­ci­sion to tighten eco­nomic sanc­tions on Py­ongyang, Trump has kept up pres­sure on Bei­jing to do more. “We lose hun­dreds of bil­lions of dol­lars a year on trade with China. They know how I feel,” he told re­porters on Thurs­day. “If China helps us, I feel a lot dif­fer­ent to­ward trade.”

Trump and Chi­nese Pres­i­dent Xi Jin­ping spoke by tele­phone on Fri­day and re­it­er­ated their mu­tual com­mit­ment to de­nu­cle­arize the Korean penin­sula, the White House said in a state­ment. It was un­clear whether the is­sue of trade came up.

Sec­tion 301 of the Trade Act of 1974, a pop­u­lar trade tool in the 1980s that has been rarely used in the past decade, al­lows the pres­i­dent to uni­lat­er­ally im­pose tar­iffs or other trade re­stric­tions to pro­tect US in­dus­tries from “un­fair trade prac­tices” of for­eign coun­tries.

The process can by­pass World Trade Or­ga­ni­za­tion pro­ce­dures for ad­ju­di­cat­ing griev­ances. Though widely used world­wide, the WTO process is viewed un­fa­vor­ably by the Trump ad­min­is­tra­tion.

“We’re at the be­gin­ning of this process and no firm de­ci­sions have been made as to how that is going to work in terms of whether we would pur­sue WTO ac­tion or ac­tion out­side the WTO,” the first ad­min­is­tra­tion of­fi­cial said. In ad­di­tion to the United States, the Euro­pean Union, Ja­pan, Ger­many and Canada have all ex­pressed con­cern about Chi­nese theft of in­tel­lec­tual prop­erty. The tech­nol­ogy sec­tor has been es­pe­cially hard-hit in in­tel­lec­tual prop­erty dis­putes.

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