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Trump authorises probe into China's trade practices

شعار Al Jazeera Al Jazeera 14/08/2017
Trump constantly criticised China's trade practices on the campaign trail [File: Feng Li/Getty] © Provided by Al Jazeera Trump constantly criticised China's trade practices on the campaign trail [File: Feng Li/Getty]

US President Donald Trump has signed a presidential memorandum authorising an investigation into China's alleged theft of American intellectual property, declaring it "one big move".

The order directs Robert Lighthizer, the US trade representative, to determine whether to investigate Chinese trade practices that force US companies operating in China to turn over intellectual property, in order to gain access to the world's second-largest economy.

"Ambassador Lighthizer you are empowered to consider all available options at your disposal," Trump said before he signed the memo on Monday.

"This is just the beginning."

Trump had been expected to seek a so-called Section 301 investigation earlier this month, but an announcement was postponed as the White House sought help from China to curb North Korea's development of nuclear weapons.

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Although Trump constantly criticised China's trade practices on the campaign trail, his administration has not taken direct action against the country.

It declined to name China a currency manipulator and has delayed broader national security probes into imports of foreign steel and aluminum that could indirectly affect China.

Al Jazeera's Kimberly Halkett, reporting from Washington, DC, said that Monday's move to investigate China was significant because it indicates Trump's disappoint with China and its perceived failure to use its leverage with North Korea.

"As a result, now we see the president delivering on that campaign promise to target China and those trade practices that he says are hurting the American worker," she said.

Section 301 of the Trade Act of 1974, a popular trade tool in the 1980s that has been rarely used in the past decade, allows the president to unilaterally impose tariffs or other trade restrictions to protect US industries from "unfair trade practices" of foreign countries.

The investigation could take up to a year, according to administration officials, opening the door to a settlement before a possible investigation is launched.

Al Jazeera's Kimberly Halkett said that Trump's move was not getting the big headlines it would on any other day, coming in the middle of the fallout over violence at a white supremacist rally in Charlottesville, Virginia at the weekend.

Trump has come under criticism for his reponse to the violence, including his failure to swiftly condemn racism and white supremacy.

"Given the violence that occured in Charlottesville, that is what is dominating the conversation," our correspondent said.

"While the president has tried to come out and perhaps even divert attention to a major campaign promise that he is delivering on, the fact of the matter is what people are really talking about right now is the division that exists in America over race."

Chinese warning

China has given warning that both sides would lose out if Trump begins a trade war between the world's two largest economies.

In an editorial on Monday, the state-run newspaper China Daily said the investigation will "poison" relations and warned the Trump administration not to make a rash decision it could regret.

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Matthew Goodman, a senior adviser for Asian economics at the Washington-based Center for Strategic and International Studies, told Reuters news agency that Beijing would likely resist negotiating under the threat of trade sanctions but could be amenable to a backdoor deal.

"I'm sure they will formally reject this if an investigation is launched and there is an implication this is going to require negotiation to resolve it," Goodman said. "But will they quietly be willing to talk about some of the underlying concerns?"

Jonathan Fenby, an analyst at the TS Lombard consultancy, told Reuters that China was not interested in a short-term trade fix with the US and will resist "attempts to tie it down".

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