Trump may order inquiry into 'unfair' Chinese trade practices

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US President 'close' to deciding how to respond to China's trade practices

WASHINGTON: US President Donald Trump is close to a decision on how to respond to what he considers China's unfair trade practices, a senior Trump administration official said on Tuesday.

Mr Trump is considering encouraging US Trade Representative Robert Lighthizer to start investigating Chinese trade practices under the 1974 Trade Act's section 301, the official said. An announcement could come this week, he said, speaking on condition of anonymity.

Section 301 allows the president to unilaterally impose tariffs or other restrictions to protect US industries from "unfair trade practices" of foreign countries, such as trade agreement violations or "discriminatory" actions that burden US commerce.

The US has many grievances about China on trade, including accusations of steel dumping and theft of US intellectual property.

China has said that trade between China and US benefits both and that Beijing is willing to work with Washington to improve their trade relationship.

Mr Trump has long been a critic of Chinese trade practices, but his interest in penalising Beijing has risen due to his concern over what he perceives to be Chinese inaction on an increasingly belligerent North Korea.

The US has pressed China to exert more economic and diplomatic pressure on North Korea to help rein in its nuclear and missile programmes.

Beijing has repeatedly said its influence on North Korea is limited and that it is doing all it can.

A Chinese official said on Monday there is no link between North Korea's nuclear programme and China-US trade.

Ms Susan Thornton, Acting Assistant Secretary of State for East Asia, told a congressional hearing on Tuesday that new US sanctions aimed at curbing North Korea's weapons programme, including measures aimed at Chinese financial institutions, could be expected "fairly soon".

Section 301 was used in the 1980s to combat Japanese imports of motorcycles, steel and other products - an era during which Mr Lighthizer served as Deputy US Trade Representative.

The statute has been barely used since the World Trade Organisation (WTO) was launched in 1995.

The WTO provides a forum for resolving trade disputes, but both Mr Lighthizer and Commerce Secretary Wilbur Ross have complained that it is slow, often taking years to reach a conclusion.

"The Trump administration believes in free and fair trade and will use every available tool to counter the protectionism of those who pledge allegiance to free trade while violating its core principles," Mr Ross said in an opinion piece on Tuesday.

He denied that the Trump administration was taking a protectionist stance, saying that both China and Europe were more protectionist because they subsidised export industries and had "formidable tariff and non-tariff trade barriers against imports". - REUTERS

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