President Trump has given China six months to prove that it is committed to preventing a nuclear-armed North Korea, and it seems his tolerance for China’s dithering has finally reached its limit. Now that President Xi Jinping has established that his government is unwilling to engage in a meaningful crackdown on its neighbor, the era of using carrots like improving trade relations to coax China into helping solve the ‘North Korea problem’ has ended. It is now time for the stick.
According to reports in the New York Times, Wall Street Journal and Associated Press, the Trump administration is planning to use an obscure 1970s law to launch a “broad-based” investigation into whether China’s trade-related intellectual property policies constitute ‘unfair trade practices.
The US inquiry could become an obstacle for one of the Communist Party’s top economic priorities: the Made in China 2025 initiative, while calls for China to become a ‘global leader’ in ten industries with the help of huge infusions of state money.
In the coming days, the US trade rep will launch a ‘Section 301’ investigation, named after a portion of the 1974 Trade Act. Here’s a breakdown of the likely timeline for the investigation, as well as possible outcomes, courtesy of the NYT:
This post was published at Zero Hedge on Aug 2, 2017.
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