President Donald Trump has taken a strong – and much needed – step towards curbing China’s abuse of American intellectual property. According to a White House official, the upcoming tariff on foreign aluminum and steel import is just the opening volley, in a campaign to level the playing field and punish China for it’s state-sponsored theft of western intellectual property and technologies.
In a statement, White House policy reps announced, “The next action on the president’s plate will be the Section 301 action which is designed, in a laser beam way, to address the issue of forced technology transfer, theft of intellectual property, and China’s bid through the China 2025 architecture plan to capture the emerging industries of the future.”
As China gears up to take the global lead in futuristic industries such as AI and robotics, the Trump Administration is fighting for America’s long-term economic future. Designating and declaring China as a strategic rival is the only approach that can prevent that from happening. The new National Security Strategy follows this get-tough approach.
“The strategy basically acknowledged that our trade with China was not peaceful engagement, but rather that China was engaged in strategies of economic aggression designed to capture global markets, protect their own market, acquire intellectual property and IP of the world, dominate traditional manufacturing industries, and to a large extent take control of a lot of core natural resources of the world,” the White House official stated.
“The president is certainly committed to addressing that and we will begin to do that with the Section 301 actions when they come,” he added.
China’s policies force US-based companies to transfer their technology as a cost of conducting business with China. Section 103 will punish China for such unfair policies. Despite President’s call for a Section 301 investigation, the official did not provide any information about when section 301 will be implemented.
According to Peter Navarro, the Director of White House National Trade Council, a full policy rollout regarding section 103 action is expected in the next few weeks.
“China is a very bad actor when it comes to trade practices across a lot of things, but nothing’s more important in the near term than addressing the theft of our intellectual property and the forced technology transfer of our technologies,” Navarro said on Fox Business Network.
According to Navarro, “the president is determined to halt the IP theft “we will be releasing shortly to address that head on.”
Only two 301 actions on China have been conducted in the past, in 1991 and 1994. The tariff announced last week would add 25 percent and 10 percent tax on foreign steel and foreign aluminum respectively. Despite the opposition, the tariff will restrict China from flooding the market with cheap metal that has been the reason behind the decline of the American steel and aluminum industries.
“For steel, the relevant issue is we’ve lost about a third of the workforce,” the official said. “We’ve shut down an enormous amount of furnaces, and these tend to be very high paying jobs.”
Criticizing China’s unfair policies and its impact, the official said that China’s overcapacity to produce cheap metal has “basically weaponized in ways that allows them to attack global markets and grab market share.”