Trump considering cracking down on trade with China


During his campaign, Donald Trump said the words “we’ll get tough on trade with China” almost as much as he said “we’ll build the wall and have Mexico pay for it.”  It stands open to question whether the wall will be built, and the odds of Mexico paying for it are low, but seven months into his presidency it appears President Trump is showing signs of cracking down on trade with China.

The Trump administration is considering using rarely invoked U.S. trade laws to deflect China’s demands that foreign companies share their technology in return for access to China’s huge market.

According to the Wall Street Journal, Trump’s mindset is influenced by U.S. companies who are frustrated with China’s trade and market access practices.  As a result of their one-way street business practices, China is now poised to become a global leader in emerging technologies, such as microchips and electric cars.

Trump’s move towards cracking down may also be influenced on China’s reluctance to help the U.S. stop North Korea from developing and testing its nuclear program.

On Monday, a reader asked DML what he would like to see Trump handle North Korea.  He responded, “Trump isn’t cracking down on China because of the impact it will have with U.S. businesses.  But we need China in order to stop Kim, so I would suggest we put sanctions on China until they change their tune.  They need our business more than we need their business.”

A senior Chinese official said Monday there is absolutely no connection between North Korea’s nuclear program and trade between the U.S. and China.  However trade ministers from China concluded a conference in Shanghai on Wednesday, agreeing to promote international cooperation and oppose “trade and investment protectionism,” Reuters reported.

According to Reuters, President Trump and his administration planned to enforce Section 301 of the Trade Act of 1974, which allows Washington DC to look into China’s trade practices and raise tariffs on imports from China, or impose other sanctions in a matter of months.

Section 301 was used often during the Reagan administration to combat Japanese imports of steel and other items. But then the World Trade Organization was founded in 1995, and Section 301 was rarely ever used.

It is expected that President Trump could launch Section 301 by the end of the week.  Thus, a new investigation would begin.  The focus would be on China’s alleged forced technology transfer policies and practices.

One question being asked by experts and new media is whether President Trump will allow his administration would work with the World Trade Organization or seek to impose penalties on China without relying on the international body.

Earlier in the week, U.S. Commerce Secretary Wilbur Ross wrote an op-ed in the Wall Street Journal, heavily knocking China and the European Union for “formidable nontariff trade barriers” and warning the United States would use “every available tool” to overcome those barriers.


Wilbur Louis Ross Jr. (born November 28, 1937) is an American investor and government official who is the current United States Secretary of Commerce. On November 24, 2016, the Associated Press reported that President-elect Donald Trumpwould nominate Ross to be United States Secretary of Commerce. On February 27, 2017, the Senate confirmed Ross as United States Secretary of Commerce by a margin of 72-27. He was sworn into office on February 28, 2017.

Before he was appointed as Secretary of Commerce, Ross was a banker known for restructuring failed companies in industries such as steel, coal, telecommunications, foreign investment and textiles. He specializes in leveraged buyouts and distressed businesses. In February 2017, Forbes magazine reported that Ross has a net worth of $2.5 billion. He is often called the “King of Bankruptcy” because of his experience in buying bankrupt companies, primarily in the manufacturing and steel industries, and later selling them for a large profit after operations improve.

source: Wikipedia

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