President Donald Trump is likely to unveil sanctions against China on Friday, the White House indicated today, as the officials from the US Trade Representatives (USTR) said the US has strong evidence of Beijing violating its commitments on intellectual property and technology transfers.
“Tomorrow the president will announce the actions he has decided to take based on USTR’s 301 investigations into China’s state-led, market-distorting efforts to force, pressure and steal US technologies and intellectual property,” White House Principal Deputy Press Secretary Raj Shah said today.
Officials, however, refrained from giving any further details even as USTR submitted its Section 301 report on its investigation into “unfair” Chinese trade practices to the president.
Tariffs and a potential WTO case are certainly on the table, a USTR official told reporters during a briefing on Section 301 investigation report.
The administration, according to the official, is not satisfied with the type of responses the United States has been getting from China.
“We have strong evidence against China. These are deeply concerning to the administration and raise severe questions about China and its commitment to market-oriented practices that they promised to engage in,” said the official, who spoke on condition of anonymity.
The USTR looked into four types of allegations: charges that China is putting pressure on companies to enter into joint ventures where they would transfer their technology to a Chinese company; US companies do not have the same ability to license their IP as a Chinese company; whether or not china is using state funds to purchase IP in the US; concerns that China was involved in intruding into US commercial networks for commercial gains.
Responding to a question, the official said not every bad trade action violates the WTO.
“It’s difficult to use the WTO that involves the informal pressure stakeholders have complained about. The idea that you can take this to the WTO isn’t practical. To the extent we can get at these things at the WTO, we will do so. We’re pursuing a number of cases against them right now. We’ll use it where we can but we can’t use it to address everything,” the official said.
The administration does not think that China’s commitments have been fulfilled.
Noting that the US has tried dialogue with China, the official said the administration hasn’t turned its back on these conversations.
“All of us need to be aware of the history. It does raise a question about the history of the dialogue. That is something policymakers will have to take into account. The administration has been clear that China presents unique challenges. The principles recognise the gravity of the situation,” the official said.
Tariffs are a potential legal option, the official said, adding that a potential WTO case is another outcome.
The administration is investigating whether China is using State funds to get into the US market and buying IP.
The US has a massive $500 billion trade deficit with China.
From the very beginning of his presidential campaign and now as the president, Trump has been seeking to reduce this trade deficit, which he thinks is against America’s national security interest, killing jobs in the US and hurting its economy.