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U.S. President Donald Trump and Chinese President Xi Jinping meet on the sidelines of the G-20 summit in Hamburg, Germany, on July 8.   © Reuters
Politics

US poised to turn up pressure on China over trade

Preliminary probe aimed at forcing Beijing's hand on Pyongyang

TAKESHI KAWANAMI, Nikkei staff writer | China

WASHINGTON -- U.S. President Donald Trump is expected to order his trade office Monday to look into alleged unfair trade practices by China, seeking to push Beijing to take tougher action against North Korea as tensions mount over Pyongyang's nuclear and missile development.

Trump will direct U.S. Trade Representative Robert Lighthizer to determine whether to conduct a probe based on Section 301 of the 1974 Trade Act, a senior White House official said Saturday. Section 301 gives the president broad powers to retaliate against trade practices deemed unfair, such as by raising tariffs, if the issue cannot be resolved through negotiation with the country in question.

The investigation will focus on perceived violations of intellectual property rights. American companies that form joint ventures with Chinese partners -- a common requirement to do business in the country -- are sometimes forced to hand over technology.

Trump has already informed Chinese President Xi Jinping that he intends to consider moving forward with a probe, according to American media.

Recent North Korean provocations, including missile tests, have riled the Trump administration. Though the United Nations Security Council and others have ratcheted up sanctions as punishment, Washington hopes that pressuring China, which has major sway with Pyongyang, could lead to a breakthrough.

Washington is also growing increasingly concerned about steel dumping by China. These two factors have the Trump administration considering import restrictions for national security reasons.

For all its power, Section 301 has been invoked only rarely since the 1995 formation of the World Trade Organization. WTO rules forbid members from imposing unilateral trade barriers, which is precisely what Section 301 permits. Actually doing so would almost certainly provoke an outcry from U.S. trading partners.

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