U.S. plans to probe China trade policies
Trump administration weighs crackdown on Beijing for such things as forcing U.S. firms to share technology.
Frustrated by China’s inability to pressure North Korea over its nuclear program, the Trump administration is weighing plans to punish China for failing to crack down on intellectual property thefts and forcing U.S. and foreign companies to share their technology in return for access to the vast Chinese market.
That’s according to two people familiar with the discussion, who spoke on condition of anonymity because the plans have not been made public.
The administration is considering invoking the rarely used Section 301 of the Trade Act of 1974, which empowers Washington to investigate Chinese trade practices and impose sanctions — including tariffs — within months, according to one of those people.
The investigation would focus on China’s alleged forced technology transfer policies and practices, one of the people said, adding that the Trump administration could move to launch such a probe this week. The second person cautioned that no decisions or timelines had been finalized yet.
U.S. and other Western governments and business groups accuse Beijing of unfairly nurturing Chinese competitors — in such fields as medical equipment, renewable energy and electric cars — by requiring foreign firms to hand over proprietary technologies in exchange for being allowed to operate in China.
American companies have long complained that Chinese competitors steal their technology and use it to compete against them. Being forced to hand over technology to gain access to the Chinese market adds to the risk.
China’s Ministry of Commerce did not immediately respond to a faxed request for comment.
These deliberations come as the administration has signaled a harsher stance on trade with China than it took in the first six months of Trump’s presidency.
President Trump temporarily set aside complaints about market access and currency when he met with Chinese President Xi Jinping in April in hopes Beijing would help pressure North Korea to end its nuclear weapons development. But tensions bubbled up last month at a U.S.-Chinese dialogue where U.S. Treasury Secretary Steve Mnuchin blamed China’s $347-billion trade surplus with the United States last year on “government intervention in its economy.”
Trump has also grown increasingly frustrated by what he says is China’s reluctance to rein in North Korea.
“I am very disappointed in China. Our foolish past leaders have allowed them to make hundreds of billions of dollars a year in trade,” he tweeted recently, “yet they do NOTHING for us with North Korea, just talk.”
“We will no longer allow this to continue,” he added. “China could easily solve this problem!”
The Wall Street Journal and New York Times also reported that U.S. trade officials are discussing ways to counter piracy of copyrights and patents and other intellectual property in China.
Last year, the U.S. ran a $347-billion trade deficit in goods with China. Despite Trump’s pledge to narrow the deficit, the gap has grown this year — to $138.1 billion in January through May, up from $131.2 billion in the first five months of 2016.