Trump administration to punish China for intellectual property theft

BY TRACY MATHESON / MARCH 12, 2018 /

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While President Donald Trump’s impending tariffs on foreign steel and aluminum imports are the initial step in addressing China’s unfair trade practices, the next phase involves punishing Beijing for illicit intellectual property theft and seeking legislation to impose greater reciprocity in trade.

“The next action on the president’s plate will be the Section 301 action which is designed, in a laser beam way, to address the issue of forced technology transfer, theft of intellectual property, and China’s bid through the China 2025 architecture plan to capture the emerging industries of the future,” said a senior White House trade official.

The same official also noted that the Trump administration’s trade team is concerned that if China seizes control of industries such as robotics and artificial intelligence, “America will not have a future, at least economically. So that’s where we’re going next.”

The new White House National Security Strategy made the tough approach possible by designating China as a strategic rival of the United States.

“The strategy basically acknowledged that our trade with China was not peaceful engagement, but rather that China was engaged in strategies of economic aggression designed to capture global markets, protect their own market, acquire intellectual property and IP of the world, dominate traditional manufacturing industries, and to a large extent take control of a lot of core natural resources of the world,” the senior official said.

According to The Washington Free Beacon, “China is engaged in a systematic effort to advance their economic interests at the expense of the United States and other nations.”

The senior White House trade official said that Trump is “certainly committed to addressing that and we will begin to do that with the Section 301 actions when they come.”

In August, Trump ordered U.S. Trade Representative Robert Lighthizer to conduct the Section 301 investigation, a provision of the 1974 Trade Act that allows the president broad authority to penalize foreign governments for technology theft and other practices that harm American businesses.

In a Sunday appearance on Fox Business Network, White House National Trade Council Director Peter Navarro indicated that action on China’s intellectual property theft would come soon.

“China is a very bad actor when it comes to trade practices across a lot of things, but nothing’s more important in the near term than addressing the theft of our intellectual property and the forced technology transfer of our technologies,” Navarro said.

Navarro said that Trump is committed to terminating the IP theft and Lighthizer is preparing a plan that “we will be releasing shortly to address that head on.”

The 301 action is expected to penalize China for its policies that force American companies to transfer valuable technology as the cost of doing business with China.

Punishments being considered include the imposition of sanctions or tariffs on more than 100 Chinese products and restrictions which would prevent China from buying or making large investments in U.S. businesses.

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