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| Donald Trump soft pedals after earlier threats of trade war with China | Donald Trump soft pedals after earlier threats of trade war with China |
| (5 months later) | |
| With Beijing warning of ‘aggressive response’ US president asks officials to consider investigation into potential intellectual property violations | |
| Tom Phillips | |
| Tue 15 Aug 2017 03.10 BST | |
| Last modified on Tue 15 Aug 2017 05.04 BST | |
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| Donald Trump claimed he was making “a very big move” against alleged Chinese trade abuses on Monday as he ordered trade officials to consider opening an investigation into potential intellectual property violations. | Donald Trump claimed he was making “a very big move” against alleged Chinese trade abuses on Monday as he ordered trade officials to consider opening an investigation into potential intellectual property violations. |
| The US president billed the step - which was considerably less severe than had initially been floated by White House officials - as the start of a major push-back against unfair trade trade practices. | The US president billed the step - which was considerably less severe than had initially been floated by White House officials - as the start of a major push-back against unfair trade trade practices. |
| “This is just the beginning, I want to tell you that. This is just the beginning,” Trump told reporters, after signing an executive memorandum giving his trade representative, Robert Lighthizer, the power to explore ways to challenge China’s alleged theft of intellectual property and forced transfer of technology. | “This is just the beginning, I want to tell you that. This is just the beginning,” Trump told reporters, after signing an executive memorandum giving his trade representative, Robert Lighthizer, the power to explore ways to challenge China’s alleged theft of intellectual property and forced transfer of technology. |
| “We will uphold our values, we will defend our workers and we will protect the innovations, creations and inventions that power our magnificent country,” Trump added. | “We will uphold our values, we will defend our workers and we will protect the innovations, creations and inventions that power our magnificent country,” Trump added. |
| Lighthizer said his department would “engage in a thorough investigation and, if needed, take action to preserve the future of US industry”. | Lighthizer said his department would “engage in a thorough investigation and, if needed, take action to preserve the future of US industry”. |
| In an article in the Financial Times timed to coincide with the announcement, Trump’s commerce secretary, Wilbur Ross, accused Beijing of being a “primary culprit” for the theft, piracy and espionage of US intellectual property. | In an article in the Financial Times timed to coincide with the announcement, Trump’s commerce secretary, Wilbur Ross, accused Beijing of being a “primary culprit” for the theft, piracy and espionage of US intellectual property. |
| Ross claimed China’s government and companies were deliberately targeting US companies pioneering technologies that China lacked as part of a plan known as “Made in China 2025”. “[Trump] is the first president to take any meaningful steps toward dealing with this hugely important issue,” Ross wrote. | Ross claimed China’s government and companies were deliberately targeting US companies pioneering technologies that China lacked as part of a plan known as “Made in China 2025”. “[Trump] is the first president to take any meaningful steps toward dealing with this hugely important issue,” Ross wrote. |
| However, critics immediately accused Trump of not going far enough. “Unfortunately, the failure to move robustly is another White House mistake in its already long history of troubled dealings with Beijing,” Gordon Chang, a notorious China hawk known for his book The Coming Collapse of China, wrote in the Daily Beast. “From a trade point of view alone, Trump’s action, despite his calling it ‘a very big move,’ looks exceedingly weak.” | However, critics immediately accused Trump of not going far enough. “Unfortunately, the failure to move robustly is another White House mistake in its already long history of troubled dealings with Beijing,” Gordon Chang, a notorious China hawk known for his book The Coming Collapse of China, wrote in the Daily Beast. “From a trade point of view alone, Trump’s action, despite his calling it ‘a very big move,’ looks exceedingly weak.” |
| Until last week Trump had been expected to announce a so-called ‘section 301’ case against China, which he accused of “raping” the US economy during his presidential campaign. This would have allowed the US to impose tariffs or other trade restrictions on China under the 1974 trade act. | Until last week Trump had been expected to announce a so-called ‘section 301’ case against China, which he accused of “raping” the US economy during his presidential campaign. This would have allowed the US to impose tariffs or other trade restrictions on China under the 1974 trade act. |
| Experts had predicted such a move could draw a “very aggressive” response from Beijing and might even cause a full-blown trade war with potentially huge global ramifications. | Experts had predicted such a move could draw a “very aggressive” response from Beijing and might even cause a full-blown trade war with potentially huge global ramifications. |
| Instead, Trump has asked Lighthizer to consider whether this kind of move is necessary, a process officials say could take up to a year. | Instead, Trump has asked Lighthizer to consider whether this kind of move is necessary, a process officials say could take up to a year. |
| Trump’s decision to land a far softer blow on China than expected means a trade war between the world’s top two economies now appears not to be imminent. However, the relationship does appear increasingly fraught with US secretary of state, Rex Tillerson, warning earlier this month that ties were at a historic “pivot point” . | Trump’s decision to land a far softer blow on China than expected means a trade war between the world’s top two economies now appears not to be imminent. However, the relationship does appear increasingly fraught with US secretary of state, Rex Tillerson, warning earlier this month that ties were at a historic “pivot point” . |
| In a recent interview with the Guardian, Bill Clinton’s top trade official, Charlene Barshefsky, said growing discontent with Chinese trade practices was not “simply Trump administration perception”. She called on the European Union and Japan to join the US push for action. | In a recent interview with the Guardian, Bill Clinton’s top trade official, Charlene Barshefsky, said growing discontent with Chinese trade practices was not “simply Trump administration perception”. She called on the European Union and Japan to join the US push for action. |
| “I know there is always the view: ‘Well, we don’t want to gang up against China’. [But] my view is there is a fundamental problem that threatens the global system and if it isn’t addressed by the parties who have benefited most from the global system then we put at risk the global system and that would be entirely tragic and devastating economically. So China needs to feel pressure not just from the US but from its other major trading partners on whose markets China also relies,” Barshefsky said. | “I know there is always the view: ‘Well, we don’t want to gang up against China’. [But] my view is there is a fundamental problem that threatens the global system and if it isn’t addressed by the parties who have benefited most from the global system then we put at risk the global system and that would be entirely tragic and devastating economically. So China needs to feel pressure not just from the US but from its other major trading partners on whose markets China also relies,” Barshefsky said. |
| China’s reaction to the Trump move came via a statement from the ministry of commerce carried in the Global Times. | China’s reaction to the Trump move came via a statement from the ministry of commerce carried in the Global Times. |
| “We want the US trade representative to respect the facts and act cautiously,” it read. “If the US takes measures to hurt the two countries’ trade and economic relations with no respect to multilateral trading rules, China would definitely not sit back, but would take necessary measures to safeguard our legitimate rights.” | “We want the US trade representative to respect the facts and act cautiously,” it read. “If the US takes measures to hurt the two countries’ trade and economic relations with no respect to multilateral trading rules, China would definitely not sit back, but would take necessary measures to safeguard our legitimate rights.” |
| On the eve of the announcement another state-run newspaper had warned the move would “poison the overall US-China relationship”. On Monday a spokesperson for China’s foreign ministry said there would be “only losers in a trade war”. Hua Chunying said relations between the US and China needed to be “mutually-beneficial and win-win in essence”. | On the eve of the announcement another state-run newspaper had warned the move would “poison the overall US-China relationship”. On Monday a spokesperson for China’s foreign ministry said there would be “only losers in a trade war”. Hua Chunying said relations between the US and China needed to be “mutually-beneficial and win-win in essence”. |
| Speaking in the days before Monday’s announcement Trump administration officials claimed there was no link between the president’s treatment of China on trade and his bid to convince Chinese president Xi Jinping to help him rein in the North Korean dictator Kim Jong-un. | Speaking in the days before Monday’s announcement Trump administration officials claimed there was no link between the president’s treatment of China on trade and his bid to convince Chinese president Xi Jinping to help him rein in the North Korean dictator Kim Jong-un. |
| However, Trump himself has repeatedly admitted he sees the two issues as connected. “Would I want to start heavy, heavy trade or currency manipulation statements against somebody that is out there right not trying to stop what could be a very bad situation [in North Korea]?” he said after an April summit with Xi. | However, Trump himself has repeatedly admitted he sees the two issues as connected. “Would I want to start heavy, heavy trade or currency manipulation statements against somebody that is out there right not trying to stop what could be a very bad situation [in North Korea]?” he said after an April summit with Xi. |
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