President Trump will announce Thursday a series of trade enforcement actions designed to punish China for years of widespread violations of U.S. intellectual property rights, the White House said.
Tighter visa policies for Chinese students are also being considered, according to the executives, who spoke on the condition of anonymity in order to discuss private conversations.
The trade crackdown on China follows years of fruitless negotiations that failed to halt “China’s state-led, market-distorting efforts to force, pressure and steal U.S. technologies and intellectual property,” said Raj Shah, principal deputy press secretary.
Since the 1983 formation of the Joint Commission on Commerce and Trade, the two countries have tried in various diplomatic settings to hammer out agreements on the economic issues that divide them.
But years of broken Chinese promises explain why the president is preparing to take the toughest — and potentially most disruptive — U.S. trade actions against China in a generation, according to an official with the U.S. trade representative’s office.
“China uses these dialogues to delay and run out the clock and make you ask for things they already said they were going to do,” the official said. “The administration has not been satisfied with the type of responses we’ve been getting from China.”
The official requested anonymity to provide context for the president’s announcement of new steps designed to punish China for violating U.S. intellectual property rights by stealing trade secrets or forcing companies to surrender them in return for market access.
Administration officials are bracing for a firm Chinese response to any action. Chinese President Xi Jinping, fresh from eliminating term limits on his rule, presides over a government that already has drawn up lists of potential American products for retaliation in a trade war.
“China is not going to want to come to the negotiating table from a position of weakness,” said Claire Reade, former U.S. trade representative chief counsel for China trade enforcement. “They’ve been thinking of this since Trump was elected.”
In testimony Wednesday before the House Ways and Means Committee, Robert E. Lighthizer, the U.S. trade representative, called China’s intellectual property rights practices “an assault” on American high-technology industries.
After the hurried rollout this month of new tariffs on imported steel and aluminum, the Trump administration is portraying the coming China moves as the result of a deliberative interagency process.
The president opted for new trade barriers after sounding out officials in Beijing about a potential deal, the official said.
Starting at Xi’s visit to Trump’s Mar-a-Lago Florida retreat last spring, U.S. and Chinese officials met for talks aimed at resolving lingering trade differences.
“There’s very little evidence that China’s actual behavior was changing for the better,” the official said.
The president sees the record $375 billion deficit in goods trade with China as evidence that U.S. businesses are being unfairly treated. Many economists say that bilateral trade scores reflect broader economic forces, including Americans’ propensity to buy imported goods rather than save.
When last year’s talks made little headway, Trump in August ordered Lighthizer to investigate whether China was discriminating against U.S. companies with its intellectual property practices.
The administration says that U.S. companies face pressure to hand over technology to their Chinese partners to gain needed government permits and licenses. Chinese hackers also have penetrated computer networks of companies such as U.S. Steel, making off with confidential business plans. And Chinese investors, including state-backed funds, have been encouraged by their government to acquire U.S. intellectual property by buying Silicon Valley companies, officials said.
Chinese companies often register U.S. trademarks as their own in China and effectively hold them for “ransom” from the legitimate owner, according to a January report from Lighthizer’s office.
U.S. companies also complained of only “relatively modest progress made by China over the last several years in reducing” the use of pirated software and a continuing problem with trade-secret theft from their China-based research centers, the report added.