President Trump has released his directions to the United
States Trade Representative concerning China.
In the Presidential Memorandum on the Actions by the United States related to the 301 Investigation, the President states:
First, China uses foreign ownership restrictions, including
joint venture requirements, equity limitations, and other investment
restrictions, to require or pressure technology transfer from U.S. companies to
Chinese entities. China also uses administrative review and licensing
procedures to require or pressure technology transfer, which, inter alia,
undermines the value of U.S. investments and technology and weakens the global
competitiveness of U.S. firms.
Second, China imposes substantial restrictions on, and
intervenes in, U.S. firms’ investments and activities, including through
restrictions on technology licensing terms. These restrictions deprive
U.S. technology owners of the ability to bargain and set market-based terms for
technology transfer. As a result, U.S. companies seeking to license
technologies must do so on terms that unfairly favor Chinese recipients.
Third, China directs and facilitates the systematic
investment in, and acquisition of, U.S. companies and assets by Chinese
companies to obtain cutting-edge technologies and intellectual property and to
generate large-scale technology transfer in industries deemed important by
Chinese government industrial plans.
Fourth, China conducts and supports unauthorized intrusions
into, and theft from, the computer networks of U.S. companies. These
actions provide the Chinese government with unauthorized access to intellectual
property, trade secrets, or confidential business information, including technical
data, negotiating positions, and sensitive and proprietary internal business
communications, and they also support China’s strategic development goals,
including its science and technology advancement, military modernization, and
economic development.
It is hereby directed as follows:
Section 1. Tariffs. (a) The Trade
Representative should take all appropriate action under section 301 of the
Act (19 U.S.C. 2411) to address the acts, policies, and practices of China that
are unreasonable or discriminatory and that burden or restrict U.S.
commerce. The Trade Representative shall consider whether such action
should include increased tariffs on goods from China.
(b) To advance the purposes of subsection (a) of this
section, the Trade Representative shall publish a proposed list of products and
any intended tariff increases within 15 days of the date of this
memorandum. After a period of notice and comment in accordance with
section 304(b) of the Act (19 U.S.C. 2414(b)), and after consultation with appropriate
agencies and committees, the Trade Representative shall, as appropriate and
consistent with law, publish a final list of products and tariff increases, if
any, and implement any such tariffs.
Sec. 2. WTO Dispute Settlement. (a) The
Trade Representative shall, as appropriate and consistent with law, pursue
dispute settlement in the World Trade Organization (WTO) to address China’s
discriminatory licensing practices. Where appropriate and consistent with
law, the Trade Representative should pursue this action in cooperation with
other WTO members to address China’s unfair trade practices.
(b) Within 60 days of the date of this memorandum, the
Trade Representative shall report to me his progress under subsection (a) of
this section.
Sec. 3. Investment Restrictions. (a) The
Secretary of the Treasury (Secretary), in consultation with other senior
executive branch officials the Secretary deems appropriate, shall propose
executive branch action, as appropriate and consistent with law, and using any available
statutory authority, to address concerns about investment in the
United States directed or facilitated by China in industries
or technologies deemed important to the United States.
(b) Within 60 days of the date of this memorandum, the
Secretary shall report to me his progress under subsection (a) of this section.
News agencies are reporting that tariffs will be assessed on around $50 billion of Chinese imports, here and here. CNN reports that the U.S. companies that
stand to lose in a U.S./China trade war include Intel, 3M, Boeing, Apple and
others. However, there is the question
of how much those companies are losing because of intellectual property theft
that may be supporting competitors based on stolen intellectual property in markets outside of China.
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