Prior to departing for the G-20 summit in Argentina on Nov. 29, President Trump again raised the prospect of imposing U.S. tariffs starting Jan. 1 on up to an additional $200 billion in Chinese imports – and increasing the rate to 25 percent from the previously announced 10 percent – as he prepared for a Dec. 1 dinner meeting with Chinese President Xi Jinping. The president also again reiterated he was prepared to impose tariffs on the remaining roughly $267 billion of Chinese imports to the United States if China does not fundamentally reform its trade practices.
To underscore the administration’s pre-dinner position, the Office of the U.S. Trade Representative on Nov. 20 issued a 53-page report updating China’s trade practices that allegedly threaten U.S. intellectual property rights, innovation or technological development. “…China fundamentally has not altered its acts, policies and practices related to technology transfer, intellectual property and innovation, and indeed appears to have taken further unreasonable actions in recent months,” the USTR report concludes.
The USTR report is an update to its initial report issued in March under Section 301 of the Trade Act of 1974, which authorizes the president to take “all appropriate action, including retaliation, to obtain the removal of any act, policy or practice of a foreign government that violates an international trade agreement or is unjustified, unreasonable or discriminatory, and that burdens or restricts U.S. commerce.”
The USTR report maintains China has:
- Continued its policy and practice of conducting and supporting cyber-enabled theft and intrusions into the commercial networks of U.S. companies and those of other countries to obtain unauthorized access to intellectual property, including trade secrets, as well as confidential business information, technical data, negotiating positions and sensitive and proprietary internal business communications.
- Persisted in using foreign investment restrictions to require or pressure the transfer of technology from U.S. companies to Chinese entities – particularly in industry, despite relaxing some foreign ownership restrictions.
- Maintained discriminatory licensing restrictions.
- Continued to “direct and unfairly facilitate” the systematic investment in, and acquisition of. U.S. companies and assets by Chinese entities “to obtain cutting-edge technologies and intellectual property and generate large-scale technology transfer in industries deemed important by state industrial plans,” despite what apparently has been a decline in aggregate Chinese outbound investment in the United States in 2018. The USTR report states that Chinese outbound investment increasingly is focused on venture capital investment in U.S. technology centers such as Silicon Valley, Calif., where Chinese venture capital investments reached a record this year. The report specifically cites Chinese venture capital invested in U.S. life science companies involved in the biotechnology sector, primarily those working on biotech advancements in health care
USMCA Signed by Leaders Today: Meanwhile, the leaders of the United States, Mexico and Canada today signed the U.S.-Mexico-Canada trade agreement on the sidelines of the G-20 meeting in Buenos Aires, Argentina.
President Trump hailed USMCA as a “model agreement that changes the trade landscape forever…, (and as) probably the largest trade deal ever.”
Trump added that the accord will “expand our agricultural exports, something we’ve been wanting to do for many years” and would facilitate farmers’ ability to utilize “cutting-edge biotechnology” while eliminating “non-scientific barriers” to trade.
Meanwhile, a more reserved Canadian Prime Minister Justin Trudeau said the agreement removes the risks of serious economic uncertainty, but again called on the United States to remove its 25 percent tariffs on steel and aluminum imports from Canada and Mexico. Unlike the other two leaders, Trudeau declined to hold up a copy of the signed agreement. Mexican President Enrique Peña Nieto signed the agreement in one of his last official actions before the transition to new President Andrés Manuel López Obrador on Dec. 1.
The agreement still requires ratification from the U.S. Congress before it can take effect, and that will not occur until after the next Congress is sworn into office in 2019.
President Donald J. Trump is shown with Mexican President Enrique Peña Nieto (left) and Canadian President Justin Trudeau during the signing ceremony of the U.S.-Mexico-Canada trade agreement.