Trump to direct USTR to determine whether to investigate China's trade practices

Updated 2017-08-13 09:00:40 Xinhua

The U.S. administration said here on Saturday that President Donald Trump will direct on Monday the U.S. trade representative (USTR) to determine whether to investigate China's trade practices, triggering concerns that Washington may take unilateral moves harming China-U.S. trade and economic ties.

The USTR Robert Lighthizer would consider whether to probe China's trade practices under Section 301 of the Trade Act, senior administration officials said, but they declined to say when the USTR's decision would be made.

If Lighthizer decides to go ahead with an investigation, the United States would first consult with China and the investigation process could take as long as a year, officials said.

The Section 301, which was passed in 1974 and heavily used in 1980s and early 1990s, would allow the U.S. president to unilaterally impose tariffs or other trade restrictions against foreign countries. But the United States has rarely used that obsolete trade law since the World Trade Organization (WTO) came into effect in 1995.

"It became no longer necessary really for the United States that they have to use that law, because now we have an effective dispute settlement system under the WTO," Chad Bown, a senior fellow at the Washington D.C.-based Peterson Institute for International Economics, told Xinhua, adding the legal timeline of the process under Section 301 doesn't work well with the rules of the WTO.

"A decision to trigger Section 301 today is problematic because it would provide additional fuel to the already simmering argument that the Trump administration is undoing the American commitment to rules-based trade and decades of work to establish international cooperation," argued Bown, who worked as a senior economist for international trade and investment in the White House Council of Economic Advisers and the World Bank.

Michael Froman, former USTR under the Obama administration, has also warned that the United State could face retaliation if the country moves away from resolving trade disputes through the WTO and instead starts taking unilateral actions.

"It will just lead other countries to retaliate against us or perhaps even worse, imitate us, and take action on their own without regard to international obligations," he said.

The Chinese Ministry of Commerce has stressed the importance of China-U.S. trade ties and urged U.S. authorities to abide by WTO rules in its trade measures.

"Any trade measures to be taken by WTO members must conform to WTO rules," Gao Feng, spokesman of Chinese Ministry of Commerce, said earlier this month, noting China and the United States will push forward the bilateral trade and economic relation in the basic principle of win-win cooperation and resolve differences "through dialogues and consultations."

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