The US just fired the first shot in a trade war with China
19
August, 2017
The
US has initiated an investigation into China’s theft of US
intellectual property (IP) using Section 301 US Trade Act of 1974.
That
may sound like a bunch of jargon, but what it boils down to is that
the US just fired the first shot in a trade war with China.
“On
Monday, President Trump instructed me to look into Chinese laws,
policies, and practices which may be harming American intellectual
property rights, innovation, or technology development,” said
Ambassador Robert Lighthizer in a statement on the US Trade
Representative website.
“After
consulting with stakeholders and other government agencies, I have
determined that these critical issues merit a thorough investigation.
I notified the President that today I am beginning an investigation
under Section 301 of the Trade Act of 1974.”
China
sees the use of Section 301 as an act of aggression because it allows
the president of the United States to act against the Chinese economy
without consulting the World Trade Organisation. China has been a
member of the WTO since 2001. The use of Section 301 fell out of
fashion around the same time. US leaders didn’t see the point of
using it anymore because the WTO’s framework had more legitimacy,
and even allies were complaining about its use.
China
has been warning the Trump administration against bypassing the WTO
since January. Earlier this week Chinese state media was alive with
condemnation for even the thought of activating section 301.
“We
urge the US side to respect the facts and act prudently. If US
ignores the facts and disrespects multilateral trade rules, thus
jeopardizing the two nations’ trading ties, China will not sit on
its hands and will take all appropriate measures to protect its own
legitimate rights,” said a spokesperson for China’s Ministry of
Commerce on Tuesday.
More
on this to come…
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