Trump ups ante with China, orders inquiry over trade ties

15 August 2017: President Donald Trump ratcheted up trade tensions with China on Monday, ordering an investigation into Beijing's practices on intellectual property at a time when relations are already strained over North Korea.

Trump signed a memorandum directing US Trade Representative Robert Lighthizer to determine whether Chinese policies hurt American investors or companies -- with retaliatory measures a possible outcome.

"We will stand up to any country that unlawfully forces American companies to transfer their valuable technology as a condition of market access. We will combat the counterfeiting and piracy that destroys American jobs," Trump said.

"We will safeguard the copyrights, patents, trademarks, trade secrets and other intellectual property that is so vital to our security and to our prosperity.

"Washington will turn a blind eye no longer," Trump insisted.

Trump said the US would no longer tolerate Beijing's "theft" of US industrial secrets, long a concern of major foreign corporations seeking a share of the huge Chinese market.

"We will engage in a thorough investigation and, if needed, take action to preserve the future of US industry," Lighthizer said.

Beijing fired a pre-emptive strike, warning "everybody will lose" in the event of a trade war between the world's two largest economies.

"China and the US should continue to work together for the stable and sound development of China-US economic relations," said foreign ministry spokeswoman Hua Chunying.

"Fighting a trade war has no future. There will be no winner," she added, noting that all World Trade Organization members must respect its rules.

The United States is China's second-largest trading partner after the European Union, but Washington and Beijing have seen their relations grow increasingly fraught since a promising summit between Trump and China's Xi Jinping in April.

- Multiple trade disputes -

The new intellectual property inquiry joins numerous investigations launched by Washington into Chinese trade practices, notably those concerning steel and aluminum and their national security consequences, which the Trump administration began earlier this year.

However, the start of a US inquiry will not immediately result in open confrontation.

Lighthizer will first need to reach a preliminary finding of unfair practices by China before opening a formal investigation, which could take as much as a year, administration officials said.

Since launching his successful run for the White House and then taking office, Trump has frequently accused China of undermining the US economy.

The bilateral US trade deficit with China approached $350 billion in 2016, and Trump has repeatedly blamed Chinese imports for gutting employment in US sectors such as steel.

Last week, Washington announced preliminary sanctions against Chinese imports of aluminum foil. But so far, the US has not imposed heavier trade measures on Chinese goods.

- North Korea a bargaining chip? -

On Thursday, Trump reiterated the suggestion that he could soften his position on trade if Beijing were to do more to help rein in nuclear-armed North Korea.

"If China helps us, I feel a lot differently toward trade," he said.

China said it would halt iron, iron ore and seafood imports from North Korea starting Tuesday, in accordance with new UN sanctions that Beijing voted to approve.

US administration officials, however, have denied any link between the latest trade action and Pyongyang's nuclear ambitions.

Beijing echoed this view Monday, with the foreign ministry saying the two matters were "totally different."

Despite Monday's expected action, Trump has so far refrained from making good on threats of retaliatory trade measures against China.

This includes in particular concerns over Beijing's requirement that foreign companies establish local joint ventures. According to Washington, this can mean surrendering technological know-how to Chinese partners.