Despite the recent attention on Section 232 tariffs, some expect the effects of the Section 301 investigation started last year (see 1708210024) to eclipse the steel and aluminum import restrictions, panelists said at a Washington International Trade Association event March 13. Wendy Cutler, a former acting deputy U.S. trade representative, said once the White House announces what it's doing to respond to China's intellectual property transgressions, "we won't be talking about steel and aluminum."
Senate Majority Leader Mitch McConnell broke his silence on steel and aluminum tariffs, which have sparked strong reactions from Republicans in both chambers since the surprise announcement last week (see 1803010029). "There is a lot of concern among Republican senators that this could metastasize into a larger trade war, and many of our members are discussing with the administration just how broad, how sweeping this might be," he said at a news conference March 6. He noted that President Donald Trump has suggested an exemption for Canada and Mexico might be tied to concessions in NAFTA renegotiations. "From a Kentucky point of view, NAFTA's been a big one, we've benefited from it in every way," the senator from Kentucky added. McConnell said that if the tariffs create disruption, "it could send our economy in the wrong direction."
The Office of the U.S. Trade Representative on Jan. 12 released the results of its Section 301 review of notorious markets, it said in a press release. The report lists “25 online markets and 18 physical markets around the world that are reported to be engaging in and facilitating substantial copyright piracy and trademark counterfeiting,” USTR said. The list “maintains its special focus on the distribution of pirated content and counterfeit goods online. This year, the report highlights illicit streaming devices as an emerging piracy model of growing concern,” it said. “The report also calls on several e-commerce platforms to improve takedown procedures, proactive measures, and cooperation with right holders -- particularly small and medium-sized businesses -- to decrease the volume and prevalence of counterfeit and pirated goods on their platforms.”
Speaking alongside Chinese President Xi Jinping, President Donald Trump during at least three different occasions in Beijing on Nov. 9 suggested the U.S. has an unfair trade relationship with China and pledged to make it more reciprocal. “Both the United States and China will have a more prosperous future if we can achieve a level economic playing field. Right now, unfortunately, it is a very one-sided and unfair one. But I don't blame China,” Trump said during a business event with Xi, drawing applause from the crowd, according to a White House transcript of the speech. “After all, who can blame a country for being able to take advantage of another country for the benefit of its citizens? I give China great credit.” Before an expanded bilateral meeting with Xi, Trump said he has “great respect” for China getting ahead of the U.S. on trade, “because you’re representing China,” but added that it’s “too bad” past U.S. administrations “allowed it to get so far out of kilter.”
The World Trade Organization is “not equipped” to mitigate the economic effects spawned by the large, mercantilist Chinese economy, which poses unprecedented challenges for international commerce, U.S. Trade Representative Robert Lighthizer said during an address Sept. 18 at the Center for International and Strategic Studies. “I believe that there is one challenge on the current scene that is substantially more difficult than those faced in the past, and that is China,” Lighthizer said. “The sheer scale of their coordinated efforts to develop their economy, to subsidize, to create national champions, to force technology transfer, and to distort markets in China and throughout the world is a threat to the world trading system that is unprecedented.”
China Newspaper Fires Back at USTR Section 301 Investigation Into Forced Tech Transfers, IP Policies
The Office of the U.S. Trade Representative’s initiation of a Section 301 investigation into reportedly unfair Chinese forced technology transfers and intellectual property policies could “severely” undermine the U.S.-China bilateral relationship, Chinese government media reported on Aug. 28. “Until recently, it had been hard to see where the next financial crisis could come from,” says an article published by China’s Global Times. “But imposing trade sanctions could trigger the pricking of China's credit bubble, engendering social and political unrest, exacerbating China's economic woes and thwarting its economic advance.”
U.S. Trade Representative Robert Lighthizer on Aug. 18 initiated an investigation into China under Section 301 of the Trade Act of 1974, to determine whether acts, policies and practices related to technology transfer, intellectual property and innovation are “unreasonable or discriminatory” and “burden or restrict” U.S. commerce, the Office of the U.S. Trade Representative announced. Per statute, the investigation must be completed within one year of initiation. Section 301 gives the president broad authority, including import duties, to retaliate against restrictions found to “burden or restrict” U.S. commerce. President Donald Trump on Aug. 14 issued a memorandum directing Lighthizer to determine whether to launch the investigation (see 1708150027). “After consulting with stakeholders and other government agencies, I have determined that these critical issues merit a thorough investigation,” Lighthizer said in a statement.
President Donald Trump on Aug. 14 issued a memorandum directing U.S. Trade Representative Robert Lighthizer to determine whether to investigate Chinese “laws, policies, practices, or actions” that might be harming U.S. intellectual property rights, innovation or technological development. The memo pointed to language in the Trade Act of 1974 that requires the Office of the U.S. Trade Representative to undertake several requirements in self-initiating an investigation under Section 301 of that law. Section 301 gives the president broad authority, including import duties, to retaliate against restrictions found to “burden or restrict” U.S. commerce.
A mix of “creative cases” is needed to remedy trade violations created by Chinese industrial overcapacity, including Section 301 investigations and self-initiating antidumping and countervailing duty cases, Gilbert Kaplan, President Donald Trump’s nominee to be under secretary of Commerce for international trade, told the Senate Finance Committee Aug. 3. “I think it’s time maybe to dust off … Section 301,” he said. Section 301 of the Trade Act of 1974 allows the president to take all "appropriate and feasible steps" to eliminate “unreasonable restrictions” of countries found to “burden or restrict” U.S. commerce. The statute authorizes the executive branch to retaliate against these restrictions as well as anti-competitive subsidies through duties, other import restrictions and withholding trade agreement benefits.
The U.S. is bound to its own trade laws over the dictates of international bodies like the World Trade Organization, and could choose to disregard instructions of oppositional WTO dispute panel rulings that impinge U.S. sovereignty, the Office of the U.S. Trade Representative indicated in its annual report to Congress (here), sent March 1. The Financial Times obtained and posted the report online. “Ever since the United States won its independence, it has been a basic principle of our country that American citizens are subject only to laws and regulations made by U.S. government -- not rulings made by foreign governments or international bodies," the USTR said. "This principle remains true today. Accordingly, the Trump Administration will aggressively defend American sovereignty over matters of trade policy.” The report states elsewhere that U.S. sovereignty considerations will play a central role in trade policy development.