Donald trump brings China under article 301
In an environment of the President of the United States Donald trump is studying the possibility of launching new trade war with China on the basis of American law 1970-ies. This is reported by American media, citing sources in the White house. Against Beijing in spite of the WTO rules can be imposed unilateral punitive measures — raising taxes and deprivation of a license to engage in business in the United States. The development of the situation will largely depend on whether the United States and China agree to increase pressure on North Korea.
According to U.S. media, the White house is prepared to give instructions to the office of U.S. representative for trade negotiations Robert Leitheiser to check the activities of China in accordance with the 301st article of the US law on trade from 1974, the once horrendous in the trade of competitors of Washington.
If the investigation reveal the facts of illegal trade practices (dumping, state export subsidies, the theft of intellectual property), against Beijing are starting to take unilateral punitive measures — raising taxes and deprivation of a license to engage in business in the United States.
In 1980-e years, Washington wore such investigations Japan — she was accused of “unfair sales” color TVs, motorcycles and consumer goods. It was in the days when the White house rules President Ronald Reagan, rose star Robert Leitheiser — at the time of initiative Deputy US trade representative.
According to us media reports, after three decades, still remaining afloat Robert Leitheiser offers already the current head of the White house to apply similar measures for China. While it does not bother that such commercial pressures in the style of President Reagan would be contrary to the rules established in 1995, the world trade organization (WTO).
Recall that the WTO requires the solution of export-import of disputes under this structure, in connection with which in recent years, States have avoided to resort to punitive article 301 of the trade act. However, the President of trump during the election campaign promised to introduce a huge additional duties on Chinese goods. Beijing took the threat seriously, and in April of this year, Chinese President XI Jinping discussed the situation of conflict with a new US President at his ranch in Florida.
President trump reportedly made clear that collision can be avoided if Beijing would severely limit the military ambitions of North Korea.
In response, XI Jinping, asked for a hundred days — how on the development of a program of balancing bilateral trade and on curbing Pyongyang, closely approached the creation of Intercontinental ballistic missiles.
However, one hundred days passed, and Washington has not received evidence that Beijing is ready to meet the requirements of the United States. In this situation, and there were leaks of a possible activation of the 301st article.
China again reacted flexibly — he has shown tractability in the discussion adopted last week a resolution of the UN Security Council with new sanctions against the DPRK.
The measures include a total ban on the purchase of major North Korean export goods — coal, iron ore, lead, seafood. However, dissatisfaction remains in Washington — Beijing still has not agreed to cut off oil supplies to the DPRK, although it can inflict the most painful blow to the economy of the “country of Juche”.
Thus, the threat of introduction of 301st article remains — especially as China becomes an increasingly dangerous economic challenge for the United States. It is not only the giant American trade deficit with China, which amounted last year to $347 billion In January—March this year, he exceeded the amount of the US deficits in export-import operations with Germany, Japan, Mexico, India, Italy and Taiwan combined.
More Washington worries that China has set a goal for 2025 to become the world’s technological leader in the development and production of unmanned and electric vehicles, medical equipment new generation of microchips of the future. In the United States believe that China intends to carry out this task by the massive borrowing of American intellectual property, which may prevent the use of 301st article.
However, Washington is not all advocate for punitive measures against China, given that similar steps will hit major us retailers that sell huge volumes of Chinese goods.
Given that the decision in Washington is still pending, can China make further concessions.
First, China is more dependent on bilateral trade than the United States. Second, the battle over 301st article, and in the future — a trade war with the United States — are not included in the plans of Chinese President XI Jinping, who this fall will be a great test — the Congress of the Communist party of China.
Vasily Golovnin, TASS correspondent in Tokyo, especially for “b”