The investigation is the administration’s first direct measure against Chinese trade practices, which the White House and US business groups say are damaging American industry. China’s Commerce Ministry said in a statement that the move sent the wrong signal to the world, and would be condemned by the international community.
“The United States’ disregard of World Trade Organisation rules and use of domestic law to initiate a trade investigation against China is irresponsible, and its criticism of China is not objective,” an unnamed ministry spokesman said.
“China expresses strong dissatisfaction with the United States’ unilateral protectionist action. We urge the US side to respect the facts, … respect multilateral principles, and act prudently,” the official said, adding that Beijing would take “all appropriate measures, and resolutely defend China’s lawful interests”.
The United States should instead work with China to find consensus and promote healthy trade relations, the ministry said.
Section 301 of the Trade Act of 1974, a popular trade tool in the 1980s that has been rarely used in the past decade, allows the US president to unilaterally impose tariffs or other trade restrictions to protect US industries from “unfair trade practices” of foreign countries.
Beijing would almost certainly challenge any such measures at the WTO. But China’s policy of forcing foreign companies to turn over technology to Chinese joint venture partners and failure to crack down on intellectual property theft have been longstanding problems for several US administrations.
Administration officials have said that Chinese theft could amount to as much as US$600 million, though Chinese officials deny that such forced technology transfers exist. They say the country is continuously improving intellectual property protection.
The probe will likely further complicate the US relationship with China, the country’s largest trading partner. The Trump administration has been pressing Beijing to take steps to encourage North Korea to curb its nuclear and missile programmes.