Speed Reads

Trump v China

Trump is reportedly preparing trade measures, possible sanctions, against China over intellectual property

The Trump administration is preparing to launch a wide-ranging investigation into Chinese trade practices, especially involving intellectual property theft and market-access requirements, in what could be a first step toward unilateral sanctions on Chinese exporters, The Wall Street Journal and The New York Times reported late Tuesday, citing people familiar with the details of President Trump's plans. Trump was a harsh critic of Chinese trade and currency practices during the campaign, but has shifted as president to a more conciliatory stance after meeting Chinese President Xi Jinping. More recently, Trump has expressed irritation at China for failing to rein in North Korea's nuclear ambitions.

The inquiry into the alleged unfair trade practices, conducted by the Office of the U.S. Trade Representative, could last as little as a few months, and after its conclusion, the Trump administration is considering taking unilateral punitive measures using Section 301 of the 1974 Trade Act. The actions could include tariffs on Chinese imports, pulling the licenses of Chinese firms that do business in the U.S., or otherwise tamping down the transfer of advanced technologies to Chinese companies or joint U.S.-China ventures.

The Reagan and George H.W. Bush administrations used Section 301 actions liberally, but since the World Trade Organization was launched in 1995, subsequent presidents have steered most international trade disputes through the WTO's international mediators.

U.S. companies have been complaining in recent years about China's increasing shift to bolster and protect 10 industries, including microchips and self-driving cars, and they are especially concerned about a recent cybersecurity law that might require them to move data centers to China and transfer technology to ventures they are required to form with a Chinese partner. At the same time, China is a lucrative market for U.S. tech companies, farmers, and automakers.