Trump Pressures China On Trade; Executive Action Expected Monday

Elias Hubbard
August 13, 2017

Trump and Chinese President Xi Jinping spoke by phone on Friday night. "If China helps us, I feel a lot differently toward trade".

Since the World Trade Organization (WTO) was established in 1995, the US has not imposed any trade investigations or sanctions based on Section 301 because that kind of unilateral action violates WTO rules requiring trade disputes among its members to be addressed on the WTO platform.

USA senior administration officials have said Trump will sign an administrative memorandum on Monday ordering the Office of the United States Trade Representative to start a Section 301 investigation into China's trade practices, including alleged intellectual property theft.

While administration officials said Saturday that it's too early to discuss specific actions against China, such an investigation could eventually pave the way for Trump to impose tariffs on Chinese goods. "And I think China will do a lot more".

Trump has accused China of failing to rein in the nuclear ambitions of its ally North Korea, even as he makes ever sharper threats against Pyongyang.

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. "This is why the president has chosen to act now and to act boldly", one 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".

But Trump also told Xi about the move toward a possible inquiry into China's trade practices, according to two USA officials familiar with that conversation. But they may not know that China is forcing and coercing American companies that operate in China to turn over their technology.

When reports of the potential trade investigation first emerged more than a week ago, China's Commerce Ministry stressed the importance of U.S.

The president's trade action will be a long way from any punitive move against China, despite his and his advisors' open talk of Chinese "theft" and "stealing" of US companies' intellectual property, which broadly includes technological innovations, film and other artistic products, industrial designs and military secrets. "There could be tariffs, there could be some sort of negotiated settlement, there could be a number of other things that are out there - and, obviously, we haven't made any decision on that at this point", a third administration official said.

Meanwhile, "the legal timeline of the process under Section 301" doesn't work well with the rules of the WTO, said Bown, who previously worked as a senior economist for worldwide trade and investment in the White House Council of Economic Advisers and the World Bank.

A Section 301 investigation normally lasts one year.

"It wasn't just the Obama administration, the Bush administration, the Clinton administration tended to do that as well", said Bown, adding that previous US administrations have successfully used the WTO to get other countries to change their policies that were breaking the rules. It was not immediately clear whether he was talking about trade was the subject. "China's forced technology transfer is highly institutionalised", the official said.

However, if the Trump administration moves away from resolving trade disputes through the WTO and instead starts taking unilateral actions, the United States could face retaliation by other trading partners, warned Froman.

Other reports by Click Lancashire

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