'Courageous' Donald Trump will soon get options to crack down on China's IP theft, trade adviser Peter Navarro says
US President Donald Trump will soon "crack down" on China after receiving recommendations about the country's trade and intellectual property rules, White House trade adviser Peter Navarro said.
"In the coming weeks, President Trump is going to have on his desk some recommendations on [US Trade Representative] Robert Lighthizer's … investigation into China's theft and forced transfer of intellectual property," Navarro said in an interview on CNBC.
"This will be one of the many steps the president is courageously going to take in order to address unfair trade practices.
"I don't think there's anybody on Wall Street that will oppose cracking down on China's theft of our intellectual property," he said.
In August, Lighthizer launched an investigation under section 301 of the US Trade Act of 1974 into Chinese regulations that force US companies operating in the country to transfer technology and intellectual property rights to local business partners.
Soon afterward, Lighthizer's office began taking testimony from US companies, seeking verification that the Chinese government uses unfair tactics on US companies' operations in China "to require or pressure the transfer of technologies and intellectual property to Chinese companies", according to USTR documents.
Trump's punitive measures against China include tariffs on at least an annual US$30 billion of Chinese imports, to end rules that force IP transfers, The Wall Street Journal reported, citing a White House official and people briefed on administration deliberations.
Navarro's comments come less than a week since Trump announced he would soon levy punitive tariffs on imports of steel and aluminum. That move came with the caveat that some allies, including Canada and Mexico, would receive exemptions, and singled out China as a source of state-subsidised oversupply of the metals.
US lawmakers, including speaker of the Republican-controlled House of Representatives Paul Ryan and Senator Orrin Hatch, the second-highest ranking congressional Republican, have been pressuring Trump in recent weeks to direct his punitive trade initiatives at China.
Condemnation of China's trade practices has become a bipartisan exercise in Washington.
"China has taken terrible advantage of America over the past decade or two, and they don't play fair," Senate minority leader Chuck Schumer said ahead of last week's announcement on metal tariffs, urging the Trump administration to "make sure what they do is focus on China. They are our number one trade problem; not Canada, not Europe".
Restrictions on foreign investment in sectors including finance, media and telecommunications and car manufacturing have been in place as part of the terms of China's accession to the World Trade Organisation.
These rules force foreign companies to partner with local entities, effectively ceding to them proprietary technology.
"China entering the WTO in 2001 was a fundamental shock," Navarro told CNBC. "China came in saying they'd play by the rules and since that time they've basically broken every rule in the book. And basically they've destabilised the world trading system."
The US trade deficit with China reached a record US$276 billion (HK$2.16 trillion) last year, putting more pressure on Trump, who campaigned for president in 2016 on a promise that he would address the trade imbalance.
This article originally appeared on the South China Morning Post (SCMP).
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