Date
23 August 2017
A provision in the Trade Act of 1974 allows the US  president to impose tariffs to protect US industry from foreign countries’ unfair trading practices. Photo: Xinhua
A provision in the Trade Act of 1974 allows the US president to impose tariffs to protect US industry from foreign countries’ unfair trading practices. Photo: Xinhua

US set to probe China on IP theft, eyes punitive tariffs

US President Donald Trump’s administration plans to investigate China over what it perceives to be violations of intellectual property, Bloomberg reports, citing an unnamed government official.

The administration is considering having the US Trade Representative’s office investigate the matter under Section 301 of the Trade Act of 1974, the New York Times said.

The provision allows the president to impose tariffs to protect US industry from foreign countries’ unfair trading practices.

The US has launched other investigations that could impact trade ties between the world’s two biggest economies.

The Commerce Department is probing whether steel imports from China and other foreign producers threaten national security under another seldom used legal provision, Section 232 of the 1962 Trade Expansion Act.

Trump recently backed away from threats to slap tariffs on foreign steel, after he took heat from G20 nations and US businesses that said the move would raise costs.

Trump has said the reason he stood down from labeling a China currency manipulator was because of a promise of cooperation from Chinese officials to help rein in North Korea.

The US sometimes uses Section 301 to launch trade complaints against other countries through the World Trade Organization.

But the law also gives the administration broad authority to impose punitive tariffs without going to the WTO, said Warren Maruyama, a former USTR general counsel and trade partner at Hogan Lovells in Washington.

The US has seldom used that part of the law since the 1990s. China could challenge any action at the WTO and would probably win, but it may simply retaliate against the US, just as it has done in the past, Maruyama said.

– Contact us at english@hkej.com

CG

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