Trump 'to call for China IP trade probe tomorrow'

Lucy Hill
August 14, 2017

"They know how I feel", Trump told reporters on Thursday.

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.

Additional evidence of a connection between the trade action and the North Korea crisis comes from the fact the executive memorandum Trump will sign on Monday was originally expected more than a week ago.

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. That effort passed by a 15-0 vote.

"China's unfair trade practices and industrial policies, including forced technology transfer and intellectual-property theft, harm the USA economy and workers", a second official said.

China, because of this view, will only do a few things to try and talk North Korea into coming around to a more reasonable posture. "This is simply business between two countries".

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 the regime in Pyongyang.

American companies "should not be forced or coerced to turn over the fruits of their labor", a second administration official said. "Innovation in the USA economy should not be put at risk by policies that force companies to turn over their proprietary technologies and intellectual property".

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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". "China is widely recognized to be the biggest source of the problem", the official added.

Mr Trump's threat to investigate China's IP and trade practices is valid, but his administration may not be up to the delicate task of carrying out a new China probe without sparking a damaging trade war, USA business lobbyists said.

Should Lighthizer decide to launch such an investigation, "he will have at his discretion broad powers to use all applicable measures, including, but not limited to, Section 301 of the Trade Act of 1974, which provides a basis for addressing technology transfer practices that may be harming the US economy, exports and American jobs", an administration official said. Such an investigation could easily last a year.

Like the president, Lighthizer has criticized multilateral venues such as the World Trade Organization for failing to provide adequate tools to address China's economic violations.

The officials said that matter, and the trade issue, are not linked.

The officials, who spoke on condition of anonymity, bluntly accused China of "stealing our intellectual property" - long a concern of Western companies seeking a share of the enormous Chinese market. That initiative sets forth a long-term plan for China's dominance in a wide variety of high-tech industries, including electric vehicles, advanced medical products and robotics. Officials, speaking to reporters on the Saturday conference call, said their intention was not to punish Beijing but to negotiate an agreement that clawed back some of the estimated $600 billion in intellectual property theft officials estimate is perpetuated by China.

The process Lighthizer will initiate, under Article 302b of the US Commercial Code, could take as long as a year to yield its findings.

Other reports by TheDailyFarc

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