U.S. trade barriers report slams China on overcapacity, tech transfer

By David Lawder | WASHINGTON Fri Mar 31, 2017 | 9:26am EDT

The Trump administration on Friday slammed China on a range of trade issues from its chronic industrial overcapacity to forced technology transfers and longstanding bans on U.S. beef and electronic payment services.

The annual trade barriers list from the U.S. Trade Representative’s (USTR) office sets up more areas of potential irritation for the first face-to-face meeting between President Donald Trump and Chinese President Xi Jinping next week in Florida.

Commerce Secretary Wilbur Ross, asked about his expectations for the meeting, told Fox News on Friday: “What I would hope will come out would be a commitment to starting to abide by the rules and a commitment to working collaboratively to help reduce our deficit.“

USTR, controlled by the White House, said that Chinese government industrial policies and financial support for industries such as steel and aluminum have resulted in overproduction and a flood of exports that have distorted global markets and undermined competitors.

“While China has begun to take steps to address steel excess capacity, these steps have been inadequate to date and even fewer efforts have been taken by China in aluminum and other sectors,” USTR said in the report.

USTR released the list of trade irritants in 63 countries just after senior Trump trade officials announced an executive order to study the causes of U.S. trade deficits.

The report said China also is using a series of cybersecurity restrictions as part of an apparent long-term goal to replace foreign information and communications technology products and services with locally produced versions.

USTR also accused China of using a range of measures to engineer the transfer of foreign technology to Chinese firms. They include denying financial or regulatory approvals to companies using foreign-owned intellectual property (IP) or that do not conduct research or manufacture products in China.

“China also reportedly conditions foreign investment approvals on technology transfer to Chinese entities, mandates adverse licensing terms on foreign IP licensors, uses anti-monopoly laws to extract technology on unreasonable terms and subsidizes acquisition of foreign high technology firms to bring technology to the Chinese parent companies.”

Gaps in IP rights enforcement have allowed the misappropriation of foreign IP and trade secrets, both within and outside of China.

USTR’s criticisms are consistent with increasingly vocal concerns raised by international business groups about what they see as a worsening business climate for foreign firms in China, as well as China’s goal to boost domestic manufacturing content in 10 sectors from robotics to biopharmaceuticals.

Earlier this month, the European Union Chamber of Commerce said the “Made in China 2025” plan amounts to a “large-scale import substitution plan aimed at nationalizing key industries” or “severely curtailing the position of foreign business.”

USTR also brought up longstanding complaints about online piracy of movies, books, music, video games and software in China as well as a ban on U.S. beef that has been in place since 2003.

It said delays in China’s approval process for agricultural products derived from biotechnology also worsened in 2016, hurting U.S. corn exports.

Ross, the commerce secretary, also said Trump will sign two executive orders on Friday. The first calls for a 90-day study by the Commerce Department into the causes of U.S. trade deficits, the results of which would be used to formulate policy.

A second order would solve a problem involving collection of anti-dumping duties, he said.

“There’s some $3 billion worth of duties that have never been collected because they set up straw-man importers that don’t have any financial substance, so by the time the case ends, there’s nobody there against whom you can assess the fine. So what these orders will do is require letters of credit or insurance company bonds or cash so there will be somebody against whom we can levy the fine,” Ross said.

(Additional reporting by Eric Walsh; Editing by Michael Perry and Jeffrey Benkoe)

Source: Reuters “U.S. trade barriers report slams China on overcapacity, tech transfer”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


2 Comments on “U.S. trade barriers report slams China on overcapacity, tech transfer”

  1. Steve says:

    What’s the use of crying over spilt milk. The US need to accept reality of its inept administration past and present. The US are no longer competitive in global power and free trade, hence retreating into self imposed protectionism policies as opposed to China’s globalisation. How can American democracy, a competing multi party system prevail over China’s Autocracy. The Trump government is blaming the past Obama govt. and in turn blaming the Bush administration and in turn blaming the subprime financial crisis of 2008. Its an amazing political roadshow on display.

    Seriously, the International Criminal Court should exercise its jurisdiction to prosecute the past US Presidents for the international crimes of genocide and war crimes against humanity. The scoundrels who invaded Iraq, Libya and Syria would be a fantastic place to investigate.

    An investigation into the causes of US trade deficits to formulate a trade policy.? After all the years of gunboat diplomacy, military invasion of sovereign countries, causing untold sufferings, looting of Iraqi oilfields, global leadership, supporting and financing rebels, 20 trillion $$$ in debt,
    high taxes, lies and deceit, highest military budget, etc, etc and the Trump government still cannot figure out what’s wrong with America.?

    There is a holy verse that says, ” The greatest of our habitual tendencies caused by delusion is that we only see the mistakes of others, but seldom reflect on the shortcomings of our own.”

    The US has no one to blame, but it’s greed to maintain military global leadership, inability to overcome it’s financial debt, cost overruns, poor economic and financial managements, etc, etc.

    China has one incredible weapon – when Trump increases import tariffs of Chinese goods Dump the US treasury bonds…What a sinking feeling.!


  2. Assassin says:

    As though Amerika never practise nationalization or in a more quaint term, nationalism. Remember the wind farm issue, fake charges against Huawei and ZTE when in fact, their own companies selling handphone or electronic systems are the ones with spying or subversive implants in electronic components embedded in all kinds of gadgets and systems sold all over the world. And just recently, they fined ZTE billions of dollars. Perhaps Beijing should do the same to their companies in China.

    When I read all the claims and charges being made against China, one can only feel aghast.

    You refuse to sell many hi-tech dual technologies to China from day one, items which would had given you a surplus and not a defcit. How many more items have you sanctioned? You are the one shooting yourself in the foot and you come charging making all kind of claims. You dislevelled your own playing field against yourself.

    Face it. You are protectionist. Why shouldn’t China work towards yhat? Your interest first? How about ours? Or the rest of the world for that matter? China ain’t gonna be an Amerikan economic neo colony the way it was in the 1800s and early 1900s. Import substitution is right. No right minded country would sell out their country to exporting interests and place themselves at the mercy and control of importing countries. It would be a fool’s errand in the long run.

    So cease behaving like a sanctimonious hypocrite, Mr Trump. Your country has much to answer for. Each day that passes seems like another confirmation you are really unduited to be a POTUS. You are really an incompetent CEO or administrator. “Professional” you are not. But please carry on. We are happy to see your countrymen in division but in agreement with our assessment.

    Perhaps it may give us all the reason to pull out all our money placed in you treasury bills or bonds which is financing your “butchering” military. Some prophecies say that the “great hypocrite” Obama would be the last full term president before your Amerika plunges jnto civil war.

    So watch it. We sneeze an you get a fever.