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Trump ups ante with China, orders inquiry over trade ties as Beijing protests

AFP-JIJI, AP

President Donald Trump ratcheted up trade tensions with China on Monday, ordering an investigation into Beijing’s practices on intellectual property at a time when relations are already strained over North Korea.

Trump signed a memorandum directing U.S. Trade Representative Robert Lighthizer to determine whether Chinese policies hurt American investors or companies — with retaliatory measures a possible outcome.

“We will stand up to any country that unlawfully forces American companies to transfer their valuable technology as a condition of market access. We will combat the counterfeiting and piracy that destroys American jobs,” Trump said.

“We will safeguard the copyrights, patents, trademarks, trade secrets and other intellectual property that is so vital to our security and to our prosperity.

“Washington will turn a blind eye no longer,” Trump insisted.

Trump said the U.S. would no longer tolerate Beijing’s “theft” of U.S. industrial secrets, long a concern of major foreign corporations seeking a share of the huge Chinese market.

“We will engage in a thorough investigation and, if needed, take action to preserve the future of U.S. industry,” Lighthizer said.

China criticized Trump’s order for a possible U.S. trade investigation of Beijing’s technology policies as a violation of global rules and said Tuesday it will “resolutely safeguard” Chinese interests.

Trade groups for technology companies welcomed Trump’s order Monday but the Chinese Commerce Ministry said it violated the spirit of international trade and Washington’s World Trade Organization commitments. The ministry said Beijing will take “all appropriate measures” if Chinese companies are hurt but gave no details.

Beijing requires automakers and other foreign firms in China to work through joint ventures, usually with state-owned partners. They often are required to give technology to partners that might become competitors.

More than 20 percent of 100 American companies that responded to a survey by the U.S.-China Business Council, an industry group, said they were asked to transfer technology within the past three years as a condition of market access, according to Jake Parker, the group’s vice president for China operations.

“We don’t believe market access should be contingent on transferring technology,” said Parker. “It goes counter to China’s WTO commitments.”

Foreign business groups complain companies are being squeezed out of promising Chinese markets or pressured to hand over technology for electric cars and other emerging industries.

Trump said in April he was setting aside trade disputes while Washington and Beijing worked together to persuade North Korea to give up nuclear weapons development. But American officials have resumed criticizing Chinese policy in recent weeks.

“The White House is right to make clear all options are on the table,” said Robert D. Atkinson, president of the Information Technology and Innovation Foundation, an industry group in Washington, in a statement.

The Commerce Ministry said Trump’s order was “strong unilateralism” that violated the spirit of multinational trade agreements.

“We believe the U.S. side should strictly adhere to commitments and should not become the destroyer of multilateral rules,” said the statement.

Ahead of Monday’s order, the Chinese foreign ministry appealed to Trump to avoid a “trade war.” A state newspaper, the China Daily, said an investigation could “intensify tensions,” especially over intellectual property.

The United States is China’s second-largest trading partner after the European Union, but Washington and Beijing have seen their relations grow increasingly fraught since a promising summit between Trump and China’s Xi Jinping in April.

The new intellectual property inquiry joins numerous investigations launched by Washington into Chinese trade practices, notably those concerning steel and aluminum and their national security consequences, which the Trump administration began earlier this year.

However, the start of a U.S. inquiry will not immediately result in open confrontation.

Lighthizer will first need to reach a preliminary finding of unfair practices by China before opening a formal investigation, which could take as much as a year, administration officials said.

Since launching his successful run for the White House and then taking office, Trump has frequently accused China of undermining the U.S. economy.

The U.S. trade deficit with China approached $350 billion in 2016, and Trump has repeatedly blamed Chinese imports for gutting employment in U.S. sectors such as steel.

Last week, Washington announced preliminary sanctions against Chinese imports of aluminum foil. So far, the U.S. has not imposed heavier trade measures on Chinese goods.

On Thursday, Trump reiterated the suggestion that he could soften his position on trade if Beijing were to do more to help rein in nuclear-armed North Korea.

“If China helps us, I feel a lot differently toward trade,” he said.

China said it would halt iron, iron ore and seafood imports from North Korea starting Tuesday, in accordance with new U.N. sanctions that Beijing voted to approve.

U.S. administration officials, however, have denied any link between the latest trade action and Pyongyang’s nuclear ambitions.

Beijing echoed this view Monday, with the foreign ministry saying the two matters were “totally different.”

Trump has so far refrained from making good on threats of retaliatory trade measures against China.