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Trump to Request Possible Probe of China Trade Practices
14 August 2017, 01:41 | Kara Nash
At the same time, it could alienate China's leadership, which is urging the Trump administration to limit its confrontational language as it faces off against the regime in Pyongyang.
President Donald Trump is slated to take a break from his New Jersey vacation to return to Washington on Monday to announce an executive action that could lead to an investigation over alleged violations of US intellectual property rights.
Trump and Chinese President Xi Jinping spoke by phone on Friday night.
A Section 301 investigation normally lasts one year.
Trump's action amounts to a request that his trade representative determine whether an investigation is needed under the Trade Act of 1974.
But trade and national security experts widely noted that the announcement appeared to have been delayed until after China joined the United States in voting for sanctions against North Korea at a United Nations Security Council session on August 5. However, the US pledged in the mid-1990s to settle disputes through the World Trade Organization dispute settlement system rather than by taking unilateral action. Pyongyang this week threatened to fire missiles near the US territory of Guam during an exchange of bellicose rhetoric with Trump.
Fearing that Taiwan could be hit by retaliatory actions by Washington if it finds forced technology transfers or intellectual property theft by China, Bureau of Foreign Trade Director-General Yang Jen-ni (楊珍妮) said Sunday the agency will carefully assess the situation as soon as U.S. President Donald Trump orders the probe.
It wasn't immediately clear how China would react to the move. "An important question going forward will be whether US companies and trade associations who have highlighted the problem will actually come forward and assist our government in the investigation or whether they 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".
Trump, in the past, has tied trade policy to national security. "The results are there for all to see".
Trump, now on a 17-day working summer vacation at his golf resort in New Jersey, is returning to the White House for a day on Monday to sign this executive order directing the US Trade Representative to probe the matter.
Officials rebutted suggestions the move was meant to pressure China to do more to rein in North Korea, its main trading partner. "They know how I feel", he told reporters on Thursday.
But, the official added: "I don't think we're headed toward a period of greater conflict".
The investigation, which one US official said could take as long as a year, may prove to be a source of leverage to push China to do more to help contain a rising security threat from North Korea, which counts Beijing as its only powerful ally.
The trade investigation is expected to be only one part of a multi-pronged push by the Trump administration to counter perceived Chinese trade abuses, which Trump frequently railed against as a candidate. The move delays for as long as a year any decision on actions that could stem from a probe, such as US tariff increases or other punishing unilateral actions.
Mr. Trump, who will interrupt a 17-day working vacation to make a day trip to Washington for the trade announcement, had been expected to seek a so-called Section 301 investigation earlier this month, but an announcement was postponed as the White House pressed for China's co-operation on North Korea.
"Protection measures against some specific items, such as steel and aluminum, may gain political favors, but are not likely to be of much help to rebalance trade", economists at the Institute of International Finance wrote in a research note this week.
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