President Trump’s tough-on-China rhetoric has led finally to a probe of the country’s intellectual property protections that might prove to be the opening salvo of a trade war.
In a ceremony at the White House Monday, Trump signed an executive order empowering U.S. Trade Representative Robert Lighthizer to investigate China in terms of the “forced transfers of American technology and the theft of intellectual property.”
Trump said: “We will safeguard the copyrights, patents, trade marks, trade secrets and other intellectual property that is so vital to our security and to our prosperity. We will uphold our values, we will defend our workers and we will protect the innovations, creations and inventions that power our magnificent country.”
As Trump sat down to sign the order, he promised, “And this is just the beginning.”
Just where it all ends is very much an open question, especially since the businessman-turned-President who prides himself on his negotiating prowess is still something of an unknown quantity when it comes to high-stakes foreign policy.
And the issue arises after steady complaints from Trump that the Chinese haven’t exerted enough pressure on North Korea, the increasingly aggressive and volatile nuclear player.
The Chinese government has sought to avoid an outright confrontation with the U.S. on trade. According to the country’s official news service, Xinhua, Foreign Ministry spokeswoman Hua Chunying warned earlier in the day, “With the increasingly interwoven interests between China and the United States, a trade war will lead nowhere and neither side will win.”
She said trade and North Korea should be treated as separate issues, noting, “It would not be proper to use one as a tool to exert pressure on the other.”
But the two now seem to be connected, ratcheting up pressure on an issue of vital importance to the fashion industry.
China accounted for $11.5 billion of apparel imports to the U.S. during the first half. And although that was down 3.7 percent from a year earlier, the country was still the number-one supplier to the U.S., with a 30.3 percent share of the import market.
That leaves many fashion retailers and brands dependent on a smooth trading relationship with China. However, plenty of other brands, particularly luxury names that are more likely to be counterfeited, are keen to see the country crack down on fakes.
“We’re at the beginning stages of this,” said Stephen Lamar, executive vice president of the American Apparel & Footwear Association.
He noted that Trump’s action Monday was part of a long process that “may result in an agreement or may result in actions that would impose additional costs on doing business in China.”
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