Date
20 September 2017
President Donald Trump ordered the probe at a time of heightened tensions between Washington and Beijing over North Korea's nuclear ambitions. Photo: Reuters
President Donald Trump ordered the probe at a time of heightened tensions between Washington and Beijing over North Korea's nuclear ambitions. Photo: Reuters

Trump orders probe into China’s IP practices

President Donald Trump has authorized an inquiry into China’s alleged theft of intellectual property in the first direct trade measure by his administration against Beijing, but one that is unlikely to prompt near-term change, Reuters reports.

Trump broke from his 17-day vacation in New Jersey to sign the memo in the White House at a time of heightened tensions between Washington and Beijing over North Korea’s nuclear ambitions.

The investigation is likely to cast a shadow over relations with China, the largest U.S. trading partner, just as Trump is asking Beijing to step up pressure against Pyongyang.

US Trade Representative Robert Lighthizer will have a year to look into whether to launch a formal investigation of China’s trade policies on intellectual property, which the White House and US industry lobby groups say are harming US businesses and jobs.

Trump called the inquiry “a very big move”.

Trump administration officials have estimated that theft of intellectual property by China could be as high as US$600 billion.

Experts on China trade policy said the long lead time could allow Beijing to discuss some of the issues raised by Washington without being seen to cave to pressure under the threat of reprisals.

Although Trump repeatedly criticized China’s trade practices on the campaign trail, his administration has not taken any significant action. Despite threats to do so, it has declined to name China a currency manipulator and delayed broader national security probes into imports of foreign steel and aluminum that could indirectly affect China.

China repeatedly rebuffed attempts by previous US administrations to take action on its IP practices.

The Information Technology Industry Council, the main trade group for US technology giants such as Microsoft, Apple and Google, said it hoped China would take the administration’s announcement seriously.

“Both the United States and China should use the coming months to address the issues causing friction in the bilateral trade relationship before Presidents Trump and Xi have their anticipated meeting ahead of the November APEC leaders meeting,” ITI President Dean Garfield said in a statement.

In an editorial on Monday, the state-run China Daily newspaper said the investigation will “poison” relations and warned the Trump administration not to make a rash decision it could regret.

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RC/RA

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