US is said to plan probe of China on intellectual property

[WASHINGTON] The Trump administration is gearing up to investigate China over what the US perceives to be violations of intellectual property, according to a person familiar with the matter.

US officials are discussing ways to raise the pressure on China over IP issues, said an administration official, who spoke on condition of anonymity Wednesday because the investigation hasn't been announced.

Specifically, the administration is considering having the US Trade Representative's office start an investigation authorised by section 301 of the Trade Act of 1974, which allows the president to impose tariffs on foreign products in response to unreasonable or discriminatory restrictions on American commerce, the New York Times reported on Wednesday. A USTR official declined to comment to Bloomberg on the plans.

The probe could start in coming days and wrap up in a few months, the newspaper reported, citing three people familiar with the plans who asked not to be identified because the strategy isn't public.

The investigation would focus on allegations that China has violated US intellectual property amid growing concern that it's trying to become a world leader in technologies such as microchips and electric cars. The government could increase tariffs on products or rescind licenses for Chinese firms, the Times reported.

The move would mark a new strategy for the administration as it grows increasingly frustrated with China's trade practices. Commerce Secretary Wilbur Ross in a Wall Street Journal opinion piece on Monday lambasted the country for imposing "formidable non-tariff trade barriers" against US companies.

So far the administration has focused its efforts on seldom-used section 232 of the 1962 Trade Expansion Act, which allows the government to investigate whether imports threaten national security. At President Donald Trump's request, the Commerce Department has been investigating whether steel and aluminum imports represent a security threat.

In a report to lawmakers last month, USTR accused China of engaging in "widespread infringing activity, including trade secret theft, rampant online piracy and counterfeiting, and high levels of physical pirated and counterfeit exports to markets around the globe."

Relations between the world's two biggest economies have recently become tense, following a brief honeymoon. High-level economic talks in Washington last month ended with the two sides unable to produce a joint statement.

BLOOMBERG