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US mulls trade action against China

As a candidate for the White House, Donald Trump had railed against China, accusing it of cheating the US on trade

world Updated: Aug 02, 2017 20:58 IST
Yashwant Raj
Yashwant Raj
Hindustan Times, Washington
Donald Trump,China,intellectual property rights
US President Donald Trump and Chinese President Xi Jinping meet on the sidelines of the G20 Summit in Hamburg on July 8, 2017.(AP)

The Donald Trump administration is expected to launch an investigation into China’s intellectual property rights regime and related market access requirements that could potentially trigger punitive trade measures, which in turn, is bound to escalate tensions between the world’s two largest economies.

An announcement was expected this week but could be delayed because of continuing discussions about what will be the administration’s first trade action against China, marking a major shift for Trump, who has sought engagement in sharp contrast to his campaign rhetoric.

Trump indicated last week he might have reached the end of his patience with China with regards to its help in reining in North Korea, and complained in a tweet that China makes “hundreds of billions of dollars a year in trade, yet they do NOTHING for us with North Korea, just talk”.

The trade action being considered — as first reported by Axios news site — was an investigation by the US trade representative under Section 301 of the Trade Act for alleged violation of the US intellectual property rights and for forcing foreign companies to transfer technology to their local partners and subsidiaries as a condition for entering China.

It is a little known trade tool — rarely used since the setting up of the World Trade Organization to resolve trade disputes — that allows the administration to slap duties on imports from countries deemed by the United States to have deployed unfair trade practices.

As a candidate for the White House, Trump had railed against China, accusing it of cheating the US on trade — he went so far as to say it was “raping” the US — and had vowed tough actions against it if elected, including declaring it currency manipulator.

Once elected, however, he displayed a willingness to engage with Beijing and seemed to indicate he was willing to dial down his concerns on trade for cooperation on North Korea, and he had seemed content with Beijing’s response, conceding it had tried though without any success.

First Published: Aug 02, 2017 20:58 IST