The executive memo Trump is expected to sign on Monday will direct U.S. Trade Representative Robert Lighthizer to look into whether his office should open an investigation into China's trade policies and whether they abide by the U.S. Trade Act of 1974.
In a background briefing with reporters on Saturday, White House officials pointed to frustration from USA businesses that they have to share intellectual property with China as a condition for doing business in the country.
President Donald Trump has issued an urgent warning to North Korea not to move ahead with its ballistic missile testing.
It may also prove to be a source of leverage to push China to do more to help contain a rising security threat from North Korea, which counts Beijing as its only powerful ally.
"I don't think we're heading toward a period of greater conflict (with China)", said one White House official.
The Trump administration is insisting the move isn't tied to heightening tensions with North Korea, but it is inherently connected to complications in the region.
Worldwide tensions have escalated as Trump and North Korean President Kim Jung Un traded threats of nuclear war in recent days. Trump made addressing the USA trade deficit with China a centerpiece of his campaign past year and has suggested raising tariffs on goods from China.
"If Americans continue to have their best technology and intellectual property stolen, or forcibly transferred offshore, the United States will find it hard to maintain its current technology leadership position and to remain one of the world's most innovative economies". But they may not know that China is forcing and coercing American companies that operate in China to turn over their technology.
The official, who was speaking on the condition of anonymity, said that he doesn't believe this will lead to a period of conflict between the USA and China, adding, "this is simply business between two countries".
At the end of March, Trump asked the Commerce Department to prepare a report on the causes of the trade deficit, country by country and product by product, in 90 days. The Chinese trade announcement is expected to be part of his agenda.
Trump's action amounts to a request that his trade representative determine whether an investigation is needed under the Trade Act of 1974.
Used frequently during the Reagan administration in the 1980s, the law allows the U.S. president to impose tariffs and other measures to force open export markets. "Our foolish past leaders have allowed them to make hundreds of billions of dollars a year in trade, yet. they do NOTHING for us with North Korea, just talk". Lighthizer can do so under Section 302 (b) of the Trade Act of 1974, which outlines the process by which USTR can initiate an investigation "by means other than petition", a senior official told reporters on August 12.
Meanwhile, China has continued to maintain barriers that prevent US companies from accessing its market, while adding new requirements for USA companies to share technology with the Chinese state, like a recent cybersecurity law.
Kennedy of CSIS says business leaders express a range of opinions, depending on how much they discrimination they face in China and how key Chinese profits are to their business.
The U.S. business community, which traditionally lobbied U.S. administrations to take a softer approach toward Beijing to protect access to a profitable market, has shifted toward a tougher stance on China in response. "It's not going to continue like that", he said.
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