President Donald Trump is ready to launch a new trade crackdown on China next week, an administration official confirmed.
Trump on Monday will call for an investigation into China over allegations that the nation violated U.S. intellectual property rights and forced technology transfers, the official said. While it’s unclear how much detail Trump will get into in the announcement, administration officials expect U.S. Trade Representative Robert Lighthizer to open an investigation against China under Section 301 of the Trade Act of 1974.
The pending announcement comes amid heightened tension between the United States and China, even after the Trump administration scored a victory in persuading Beijing to sign onto new United Nations sanctions on North Korea.
It is not clear whether China has the motivation to close off the spigot entirely with North Korea. China is North Korea’s main trading partner, and it is not interested in seeing the economic collapse of the regime, which could send a flood of refugees into China and destabilize its northern provinces.
The ordering of the investigation will not immediately impose sanctions but could lead to steep tariffs on Chinese goods. Trump has expressed frustration in recent months over what he sees as China’s unfair trade policies.
The closely watched announcement appears to have bipartisan support, although Democrats have accused Trump of not being tough enough on trade.
Trump suggested in comments to reporters on Thursday that he might be more lenient on China if officials take more aggressive action to stop North Korea from developing a nuclear weapon that could strike the United States. But it appears his longstanding frustration with China has remained.
Trump told reporters in New Jersey that he would call Chinese President Xi Jinping on Friday night to discuss North Korea. “We have been working very closely with China and with other countries,” he said.
The president was slated to announce the China trade action last week. But the announcement was delayed amid sensitive negotiations with China over the UN sanctions.
Still, Trump has delayed trade action before, amid pressure from business groups and major trading partners.
Two Commerce Department reports examining whether to restrict steel and aluminum imports on national security grounds were expected by the end of June but have been bottled up in an internal review. Trading partners raised threats of retaliation and domestic steel users complained of being hurt by price increases and restricted supply.
There also has been no sign of a third pending report, examining the causes of significant bilateral trade deficits, which was also due by the end of June,
Business groups, however, may welcome Section 301 action, because companies have complained they are often forced to share valuable technology with Chinese counterparts as a condition of doing business in the country.
Section 301 allows the U.S. to take unilateral action against countries that impose barriers to U.S. exports. That could take the form of increased import duties, but that would likely violate WTO rules. So the administration could look for some other form of retaliation, like restricting Chinese investment in the United States.
By ANDREW RESTUCCIA