Trump’s China Action: Another Red Herring
President Donald Trump signed another presidential memorandum yesterday, this one relating to trade with China. It’s the latest in a series of trade-related presidential actions, which so far have been much ado about nothing.
The president interrupted a 17-day vacation at his golf club in New Jersey to return to the White House to sign the executive order. The move was expected for a couple of weeks but the timing seemed calculated to distract attention from a barrage of criticism over Trump’s failure to condemn domestic right-wing extremism in a timely fashion. Instead, the controversy over Charlottesville drowned out Trump’s move against China.
For all of his rhetoric against Chinese trade practices, the executive order itself is rather weak tea. The heart of it, Section 2, is entitled “Determination of Whether to Conduct Investigation.” In it, the president instructed the United States Trade Representative to determine whether to investigate “any of China’s laws, policies, practices, or actions that may be…harming American intellectual property rights, innovation, or technology development.”
At issue are the complaints by some US companies that Chinese companies demand technology transfers as a condition of doing business in that country.
The president doesn’t have the authority to initiate an investigation into China’s trade practices. All he can do is ask his trade representative nicely if he thinks it’s a good idea to do so.
US Trade Representative Robert Lighthizer, for his part, seems to have skipped a step, when he said, in response to the president’s memorandum, “We will engage in a thorough investigation and, if needed, take action to preserve the future of US industry.” It sounds like Lighthizer already made the determination to investigate, but the professionals in his office will no doubt set him straight on that. They first must make the determination whether to investigate.
Under the relevant provisions of the Trade Act, if the USTR does decide to investigate, he must first consult with China about the dispute and then invoke the procedures of any relevant trade agreement involved, in this case the World Trade Organization. This provides China with plenty of opportunity to litigate and delay. The procedures are more likely to take years than months.
So if the president thought he could score political points or to pressure China over North Korea by pressing for a trade investigation, he is probably mistaken.
His other big trade actions have proved equally lame. Early in his administration, the president ordered expedited investigations of the national security implications of steel and aluminum imports, much of this directed against China. The reports of Department of Commerce investigations were due under the president’s directive nearly two months ago, but they haven’t been released yet and there’s no indication they will be anytime soon.