President Donald Trump is set to sign an executive order directing the US Trade Representative to investigate into China’s “unfair” trade practices that harm American businesses and have an impact on its intellectual properties, a senior official said today.
Trump, currently 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. He will also address a press conference.
Trump’s latest move does not mean any immediate sanctions on China as is being reported by some media outlets, but might lead to one at the end of the investigation which could take as long as a year.
“The President would sign an executive memorandum that directs the US Trade Representatives (USTR) Robert Lighthizer to determine if it is consistent whether to investigate any of China’s laws, policies, practices or actions that make unreasonable or discriminatory or may be harming American intellectual property, innovation of technology,” a senior administration official told reporters.
The official said Trump informed Chinese President Xi Jinping about his executive order during their phone call last night.
The investigation is being ordered under US Trade Act of 1974, which officials said permits the USTR to investigate acts, policies or practices of a foreign country to determine whether they are indeed unreasonable or discriminatory that burden or otherwise restrict US commerce.
“China’s unfair trade practices and industrial policies including forced technology transfer and intellectual property theft harm the US economy and its workers,” a second administration official said.
The Chinese policies of an American company to enter into a join venture with a Chinese company to do business is “not fair”, the official said. In addition to this joint venture they are asked to turn over intellectual property or other propriety information.
“This is simply not fair,” said the official who spoke on condition of anonymity.
American companies “should not be forced or coerced to turn over the fruits of their labour,” the official said, adding that the cost of intellectual theft on US economy is estimated to be as high as USD 600 billion a year.
“China is widely recognised as the biggest source of the problem,” he said.
Such thefts not only damage American companies, but also pose a threat to the US national security, the second official said.
“President Trump is committed to protect America’s intellectual property and national security,” the official said.
According to a third senior administration official, these investigations could take as much as a year before the US Trade Representative could come out with its determination. The process among other things include hearing and giving the Chinese an opportunity to present their point of view.
“Most Americans feel that China is stealing our intellectual property. But they may not know that China is forcing and coercing American companies that operate in China to turn over their technology. China’s forced technology transfer is highly institutionalised,” the official said. Responding to a question, a senior administration official said many other countries are facing similar problem with respect to China.