Trump orders Chinese trade investigation despite cooperation on North Korea

Gregory Korte | USA TODAY

Show Caption Hide Caption US and China agree on improved communication Top military officers from the US and China agree to work toward improving communication between the two countries, especially on sensitive issues such as North Korea. (Aug. 15)

WASHINGTON — President Trump ordered a sweeping review of Chinese trade practices on Monday, escalating his trade dispute with China even as he seeks its help in resolving the North Korean crisis.

The order invokes a rarely used legal mechanism that could give the president the power to retaliate if the administration finds that China has engaged in unfair trade practices. The review will focus on the theft and appropriation of intellectual property, which Trump says costs U.S. businesses billions of dollars.

"For too long this wealth has been drained from our nation while Washington has done nothing," Trump said in a signing ceremony in the White House residence as the Oval Office was being renovated. "But Washington will turn a blind eye no longer."

The memorandum directs the U.S. trade representative to launch an investigation under Section 301 of the Trade Act of 1974 — a popular tool during the Reagan and Clinton administrations that hasn't been used since 2010.

Trump has used other legal tools to investigate China for steel dumping and other unfair trade practices. Monday's order focuses on technology.

"We will stand up to any country that unlawfully forces American companies to transfer their valuable technology as a condition of market access," Trump said.

China often requires U.S. companies to form joint ventures with Chinese companies as a condition of entering the Chinese market — and insists that U.S. companies share their technology with their Chinese counterparts.

The action comes as Trump ramps up pressure on China to further isolate the North Korean regime — using trade as leverage.

White House officials insisted that the trade investigation had nothing to do with North Korea, and Trump made no mention of the regime Monday. But as recently as last week, when he promised to unleash "fire and fury" in response to threats from Pyongyang, Trump linked Chinese cooperation on North Korea to his willingness to negotiate on trade.

"Look, we have trade with China. We lose hundreds of billions of dollars a year on trade with China. They know how I feel. It’s not going to continue like that. But if China helps us, I feel a lot differently toward trade. A lot differently toward trade," he said last Thursday.

The White House had been preparing the action for two weeks, but waited until after China and Russia voted with the United States on a resolution at the United Nations Security Council further tightening economic sanctions on North Korea.

Beijing said China and the United States have common interests in seeking a nuclear-free Korean peninsula, but that the Korean issue and the trade disputes "fall into different categories."

"It is obviously improper to use one issue as a tool to exercise pressure on the other," said Hua Chunying, a spokeswoman for the Chinese foreign ministry on Monday.

Trump signed the order at the White House during a short stopover in Washington during his 17-day working vacation at his golf course in Bedminster, N.J. He'll work from Trump Tower on Tuesday, where the White House said he plans to sign an executive order on the environmental review and permitting of infrastructure projects, before returning to Bedminster on Wednesday.

After signing the presidential memorandum, Trump handed a ceremonial pen to Raytheon CEO Thomas Kennedy. Raytheon makes anti-missile systems like those the U.S. has recently deployed in South Korea — systems that Trump wants to increase spending for in the wake of North Korea's latest threats.

“State-sponsored intellectual property theft is a problem for the U.S. defense industry and our military capability," Kennedy said in a statement. "We applaud President Trump for taking the necessary steps to protect our industry and our country."

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