As US President Donald Trump ordered an investigation into intellectual property infringement, taking aim at China not actively tackling the North Korean nuclear issue, North Korean nuclear tension is expected to lead to a trade dispute between the US and China.
US President Donald Trump signed a presidential memorandum to direct to the US Trade Representative (USTR) to investigate unfair practices such as China's infringement of US intellectual property rights and mandatory technology transfers at the White House. The presidential memorandum like an executive order is a measure to ensure that an instruction by the President is legally binding and enforceable. The USTR will conduct a one-year investigation.
Through this directive, Trump ordered US authorities to check whether or not China is forcing American companies seeking to enter its market to share intellectual properties and transfer key technologies by establishing joint ventures (JVs) with Chinese companies.
According to a US trade act, the USTR will begin investigations sooner or later and depending on the results of the investigations, the US will be able to directly impose sanctions on China.
Trump's intellectual property investigation card is intended to mitigate the US's massive trade deficit and keep China in check both internally and externally. But the card is also aimed at compelling China, which holds the key to resolving the North Korean nuclear issue to actively pressure North Korea.
Trump pledged to designate China as a currency manipulator during his presidential election campaign last year, but has delayed its implementation because of the North Korean nuclear issue.
However, as the Chinese government immediately responded to Trump's action, a possibility of a trade war between the two countries increased. "Article 301 of The US Trade Act is based on very serious unilateralism. Thus, the act has been opposed by other nations," the Chinese Commerce Ministry said. "We think the United States should wreak havoc on multilateral rules."