Trump opens door to investigating China's "theft" of USA intellectual property

Andrew Cummings
August 13, 2017

At the same time, it could alienate China's leadership, which is urging the Trump administration to limit its confrontational language as it faces off against Pyongyang.

U.S. President Donald Trump will call on Monday for his chief trade adviser to investigate China's intellectual property practices, website Politico reported, citing an unnamed administration official.

In a phone call Friday, Trump praised Chinese President Xi Jinping for backing the recent United Nations vote to impose tougher sanctions on North Korea, and the leaders reaffirmed their commitment to a nuclear-free Korean Peninsula.

A USA senior official explained that USTR will seek counsel with the appropriate advisors, and sought to play down the potential that such an investigation would damage relations with Beijing.

Officials at the White House and U.S. Trade Representative's office were not immediately available for comment.

If the investigation finds China is harming USA companies, the Trump administration could respond by imposing tariffs, negotiating an agreement with China or other measures, the officials said.

Trump plans to direct U.S. Trade Representative Robert Lighthizer to launch an investigation into Chinese violations of the U.S. trade, including forced intellectual property transfers and patent thefts, CNN quoted senior administration officials as saying.


Trump has been trying for months to get China to exert more pressure on North Korea, but has recently expressed frustration with the lack of progress.

The Chinese Ministry of Commerce has also urged US authorities to abide by WTO rules in its trade measures and resolve differences with China through dialogue and consultation. Pyongyang this week threatened to fire missiles near the US territory of Guam during an exchange of bellicose rhetoric with Trump.

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

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".

"A decision to trigger Section 301 today is problematic because it would provide additional fuel to the already simmering argument that the Trump administration is undoing the American commitment to rules-based trade and decades of work to establish worldwide cooperation", he said. "The results are there for all to see".

Trump, now on a 17-day working summer vacation at his golf resort in New Jersey, is returning to the White House for a day on Monday to sign this executive order directing the US Trade Representative to probe the matter.

The decision will not only take action against alleged Chinese violations of US companies' intellectual property rights, but could also be perceived as an attempt by the USA government to crank up the pressure on Beijing to rein in North Korea. "They know how I feel", he told reporters on Thursday.


But, the official added: "I don't think we're headed toward a period of greater conflict".

Sun said there were two kinds of Taiwanese products that could be hurt by possible trade sanctions, the most obvious being goods assembled in China before they are shipped to the U.S.

The trade investigation is expected to be only one part of a multi-pronged push by the Trump administration to counter perceived Chinese trade abuses, which Trump frequently railed against as a candidate.

"It's not easy and it can't be done quickly, but it requires serious effort and continual engagement", said Bown, referring to major issues including trade disputes plaguing U.S.

Apple, which has a turnover of more than $30 billion a year in China, is now subject to several measures taken by Beijing that hinder its activities in the country.

"Protection measures against some specific items, such as steel and aluminum, may gain political favors, but are not likely to be of much help to rebalance trade", economists at the Institute of International Finance wrote in a research note this week.


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