BEIJING -- No one wins in a trade war. Yet U.S. President Donald Trump seems determined to pursue one with China, which he accuses of causing America's trade deficit, violating World Trade Organization rules, and using unfair practices to acquire foreign technology. While most economists marvel at Trump's ignorance of how trade balances work, many broadly agree with his charges regarding intellectual property (IP). But the evidence supporting these claims is also weak, at best.
The so-called Section 301 trade investigation launched by Trump's administration last year accused China of acquiring foreign technologies using discriminatory licensing restrictions, unfair technology-transfer agreements, targeted outbound investment, unauthorized intrusions into U.S. commercial computer networks, and cyber-enabled IP theft. "The weight of the evidence," the report concludes, shows that China uses foreign-ownership restrictions to force U.S. companies to provide their technologies to Chinese entities.
