TRADE BATTLE BREWING
The Trump administration’s decision to go ahead with a formal investigation into China’s large-scale theft of American intellectual property was a major step forward for U.S. businesses that have been savaged for years by systematic Chinese cybereconomic espionage.
The U.S. Trade Representative Office launched the formal probe last month, known as a 301 investigation, after President Trump issued a memorandum on the subject Aug. 14.
A USTR notice states that the probe was launched Aug. 18 and will “determine whether acts, policies and practices of the government of China related to technology transfer, intellectual property, and innovation are actionable.”
The probe is a setback for pro-China officials within the Trump administration and outside of it who have sought to prevent any punitive action from being taken against Beijing. China has threatened a trade war over the probe that could result in sanctions being imposed on China.
Administration sources said Mr. Trump ordered the probe after meeting with technology company chiefs, including the heads of Apple, Amazon, Microsoft, Google and other Silicon Valley firms in June.
The unanimous view of the technology giants was that the United States is hemorrhaging trade and technology secrets to the Chinese. More than $4 trillion in intellectual property has been stolen by Beijing, and Silicon Valley urged taking action.
The USTR office will hold a hearing on the investigation Oct. 10.
The White House memo stated that China has imposed laws, policies and practices and acted in ways that may require the transfer of American technology and intellectual property to Chinese companies. The Chinese practices to be investigated include opaque administrative approval processes, joint venture requirements, foreign equity limitations, procurements and other means to limit U.S. companies in China “in order to require or pressure the transfer of technology and intellectual property to Chinese companies.”
Chinese government officials also are using vague rules that are selectively applied to pressure foreign companies to turn over proprietary technologies.
Beijing also is said to be systematically buying U.S. companies and assets for tech transfers.
The probe also will examine “whether the Chinese government is conducting or supporting unauthorized intrusions into U.S. commercial computer networks or cyber-enabled theft of intellectual property, trade secrets, or confidential business information, and whether this conduct harms U.S. companies or provides competitive advantages to Chinese companies or commercial sectors.”