By Joyce Yu
China will take action to defend its interests if the United States damages trader relations, the Ministry of Commerce said on Tuesday, after US President Donald Trump signed a memorandum Monday that authorizes an inquiry into China’s alleged theft of intellectual property.
The inquiry is the first step in a process that could lead to tariffs imposed on Chinese imports or other punishing trade actions.
“This is just the beginning,” Trump said at the signing Monday. “We will defend our workers.”
Edward Alden, a senior fellow at the Council on Foreign Relations, told CNN that, “For an administration that portrays itself as tough on trade, it keeps taking one baby step after another, and this is another one.”
Some experts say the wording of the memorandum is deliberately toned down. Trump’s order did not direct Lighthizer to open an investigation, but asked the latter to determine if an investigation is needed.
Citing a senior administration official’s comments, A CNN reported that the final version of the memorandum reflected a desire to put some more distance between Trump and a potential investigation of Chinese trade practices.
US will have a year to look into whether to launch a formal investigation of China’s policies on intellectual property. In a report published this year, the Commission on the Theft of American Intellectual Property named China as the main offender, estimating it costs the U.S. economy up to $600 billion a year.
Jacob Parker, vice president of China operations at the U.S.-China Business Council told the Reuters that Mr Trump’s memo is only the beginning of the process. He also expected a decision on how to move forward from the administration to be made in 60-90 days, much faster than a year.
Following Trump’s initiation of the inquiry, the Chinese Commerce Ministry warned in its press conference that “any actions of trade protectionism from the U.S. side would be harmful to the bilateral trade and business relationship and the interests of companies on both sides.”
The Ministry also added that China was continuously strengthening its administrative and judicial protections for intellectual property.
Trump’s memorandum comes as his administration seeks cooperation with China on North Korea. Despite urge by parties including China that the issues of Sino-US trade should not be linked to the North Korea, Mr Trump has repeatedly made the link himself.
According to a Financial Times report, Mr Trump told reporters last week that “We lose hundreds of billions of dollars a year on trade with China. But if China helps us [with North Korea], I feel a lot differently toward trade.”