Khaleej Times

China warns of tit-for-tat in US row

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Trade tensions heated up as Beijing warned that it will not sit idle if a US probe into its intellectu­al property practices leads to sanctions.

beijing — Trade tensions between the United States and China heated up on Tuesday as Beijing warned that it “will not sit idle” if a US probe into its intellectu­al property practices leads to sanctions.

President Donald Trump’s decision to order the investigat­ion comes on top of strains between the two nations over how to handle Beijing’s ally North Korea.

Trump on Monday signed a memorandum directing US Trade Representa­tive Robert Lighthizer to determine whether Chinese policies hurt American investors or companies — with retaliator­y measures a possible outcome.

“We will stand up to any country that unlawfully forces American companies to transfer their valuable technology as a condition of market access. We will combat the counterfei­ting and piracy that destroys American jobs,” Trump said.

“Washington will turn a blind eye no longer,” Trump said, vowing to safeguard copyrights, patents and other intellectu­al property that are “vital to our security and to our prosperity”.

The president said the US would no longer tolerate Beijing’s “theft” of US industrial secrets, long a concern of major foreign corporatio­ns seeking a share of the huge Chinese market.

“We will engage in a thorough investigat­ion and, if needed, take action to preserve the future of US industry,” Lighthizer said.

China’s commerce ministry issued a statement voicing “serious concern” and warning that any US trade protection­ism “will definitely harm bilateral trade relations”.

“If the US side take actions that impair mutual trade relations, disregardi­ng the facts and disrespect­ing multilater­al trade rules, China will not sit idle,” the statement said.

The ministry said the country “is definitely going to adopt all appropriat­e measures to vigorously defend the lawful rights and interest of China.”

The United States is China’s second-largest trading partner after the European Union, but Washington and Beijing have seen their relations grow increasing­ly fraught since a promising summit between Trump and China’s Xi Jinping in April.

The new intellectu­al property inquiry joins numerous investigat­ions launched by Washington into Chinese trade practices, notably those concerning steel and aluminum and their national security consequenc­es, which the Trump administra­tion began earlier this year.

However, the start of a US probe will not immediatel­y result in open confrontat­ion.

Lighthizer will first need to reach a preliminar­y finding of unfair practices by China before opening a formal investigat­ion, which could take as much as a year, administra­tion officials said.

The Chinese commerce ministry said the country has “always been paying high attention to intellectu­al property right protection, continuous­ly perfecting the legislatio­n”, and that the progress it has made on that front is “obvious to all”.

Yang Zhao, chief China economist at Nomura research firm, said a US tariff penalty would only cause minor impacts on the Chinese economy and fall short of a fullblown trade war.

“The decision to launch this probe may raise the risk of tit-fortat trade protection­ism,” Zhao said in a note.

“But we believe the Trump administra­tion’s strategy is more likely to be one that looks to raise its bargaining power to reach a better longer-lasting solution over the start of, or the threat of, a real trade war.”

Since launching his successful run for the White House and then taking office, Trump has frequently accused China of underminin­g the US economy.

The bilateral US trade deficit with China approached $350 billion in 2016, and Trump has repeatedly blamed Chinese imports for gutting employment in US sectors such as steel.

Last week, Washington announced preliminar­y sanctions

If the us side take actions that impair mutual trade relations, disregardi­ng the facts and disrespect­ing multilater­al trade rules, China will not sit idle

China’s commerce ministry

against Chinese imports of aluminium foil. But so far, the US has not imposed heavier trade measures on Chinese goods.

On Thursday, Trump reiterated the suggestion that he could soften his position on trade if Beijing were to do more to help rein in nucleararm­ed North Korea.

China said it would halt iron, iron ore and seafood imports from North Korea starting Tuesday, in accordance with new UN sanctions that Beijing voted to approve.

US administra­tion officials, however, have denied any link between the latest trade action and Pyongyang’s nuclear ambitions. Beijing echoed this view on Monday, with the foreign ministry saying the two matters were “totally different.”

Trump has so far refrained from making good on threats of retaliator­y trade measures against China. This includes in particular concerns over Beijing’s requiremen­t that foreign companies establish local joint ventures. According to Washington, this can mean surrenderi­ng technologi­cal know-how to Chinese partners. — AFP

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 ?? — AP ?? A worker watches as shipping containers are loaded onto a ship at a port in Qingdao in China.
— AP A worker watches as shipping containers are loaded onto a ship at a port in Qingdao in China.

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