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Trump May Roll Out Probe Into China and Intellectual Property Theft

14 August 2017

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.

USA businesses are often forced to create joint ventures with a Chinese partner and turn over valuable technology assets, a practice the White House claims stymies U.S. economic growth.The latest review will be conducted by the United States trade representative under the Trade Act of 1974.

US President Donald Trump will sign a memorandum Monday that could lead to sanctions against China over its intellectual property practices, administration officials said Saturday.

"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.

That step is expected Monday, but won't come as a surprise to the Beijing government. Trump has responded in bellicose terms over the progress of North Korea's nuclear missile program and threats to launch an attack on the US territory of Guam, where the USA has a military installation.

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.

"These are totally unrelated events", a senior administration official told reporters.

They added that the trade measure would be carried out under the rules of global law and would not trigger greater conflict with China.

But as the North Korea crisis began to dominate headlines earlier this week, Trump fueled the impression that how hard he pressures Beijing on trade depends on its cooperation on the North Korea question.

Trump, however, also informed Xi about the pending probe into China's trade practices, according to two U.S. officials with knowledge of the conversation. If an investigation begins, the USA government could seek remedies either through the World Trade Organization or outside of it. That effort passed by a 15-0 vote.

"China's been engaged in the theft and forced transfer of USA technologies and intellectual property for years. This is simply business between two countries".

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Similarly, PML-N leader Musaddiq Malik expressed sorrow over the child's death and sent his condolences to the family. The polling for the election will be held on September 17.

President Trump plans to get tougher on trade with China. "What they may not know is that China is also forcing and coercing American companies that operate in China to turn over their technologies". "Innovation in the US economy should not be put at risk by policies that force companies to turn over their proprietary technologies and intellectual property".

When reports of the potential trade investigation first emerged more than a week ago, China's Commerce Ministry stressed the importance of U.S. "China is widely recognized to be the biggest source of the problem", the official added.

Trump's threat to investigate China's intellectual property and trade practices is valid, but his administration might not be up to the delicate task of carrying out a new China probe without sparking a damaging trade war, United States business lobbyists said last week.

Trump was reported to direct U.S. Trade Representative Robert Lighthizer to determine if an investigation is warranted of "any of China's laws, policies, practices or actions that may be unreasonable or discriminatory, and that may be harming American intellectual property, innovation and technology". Such an investigation could easily last a year.

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.

"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. 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.

"These are two different things", the official said, speaking to reporters on a conference call.

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

Depending on the results, the USA could either seek remedies through the World Trade Organization or outside of it.

"An important question going forward will be whether USA companies and trade associations who have highlighted the problem will actually come forward and assist our government in the investigation", said Michael Wessel, a member of the U.S. -China Economic and Security Review Commission, called the measure "a critical action, and long overdue".

It is possible that affected USA companies "will hide the facts, fearful that our government won't follow through, that the Chinese will retaliate against their interests or that they'll have to admit what's happened to their critical assets", Wessel added.

Trump May Roll Out Probe Into China and Intellectual Property Theft