U.S. President Donald Trump ordered his trade office Monday to investigate whether China is stealing American intellectual property, but Beijing warned in advance that both countries would end up losers in a trade war.
Trump took a break from his working vacation at his golf resort in New Jersey to return to Washington to sign an executive order directing U.S. Trade Representative Robert Lighthizer to investigate the alleged Chinese theft of American technology and intellectual property. Trump wants trade officials to look at Chinese practices that force American companies to divulge their proprietary intellectual information in order to do business in China.
“We will defend our workers…protect our innovations,” Trump said.
He described the investigation as “one big move. This is just the beginning.”
If the United States pursues the case, it could eventually ask the World Trade Organization to impose penalties on China or seek some other remedy.
Analysts says the investigation could heighten tensions between the United States and China and lead to a trade war between the world’s two biggest economies.
Trump has praised Chinese President Xi Jinping for recently voting with the United States at the U.N. Security Council to impose new sanctions on North Korea for its test missile launches and nuclear weapons development. Beijing announced Monday it is banning imports of coal, iron ore, seafood and other products from North Korea to comply with the new sanctions aimed at cutting Pyongyang’s export income by $1 billion annually.
But Trump has often complained about the chronic U.S. trade deficit with China, $347 billion in 2016 and mounting at a similar pace this year. The United States imports an array of consumer goods from China, with many of U.S. consumers’ favorite technology devices manufactured in China, such as Apple’s iPhones.
Meanwhile, major U.S. companies are reporting higher earnings in recent weeks, in part because of their Chinese operations. Caterpillar, a U.S. manufacturer of heavy construction machinery, said it expects the demand for its products to remain strong in China through the rest of the year.
Before Trump’s directive to Lighthizer, China warned against his action.
“There is no future and no winner in a trade war and both sides will be the losers,” said Chinese Foreign Ministry spokeswoman Hua Chunying. “As we have emphasized for many times, the nature of China-U.S. trade relations is mutual benefit and win-win.
“Considering the importance of the China-U.S. relations,” she said, “China is willing to make joint efforts with the United States to keep trade and economic relations on sustained, healthy and stable development on the basis of mutual respect, equality and mutual benefit.”