Reliable Brokers
Online Investing
Alerts & Analysis
Easy Trading

China warns of retaliation as Trump launches trade probe

Update : 15 Aug 2017, 07:14 PM

Trade tensions between the United States and China heated up on Tuesday as Beijing warned that it "will not sit idle" if a US probe into its intellectual property practices leads to sanctions.

US President Donald Trump's decision to order the investigation comes on top of strains between the two nations over how to handle Beijing's ally North Korea.

Trump on Monday signed a memorandum directing US Trade Representative Robert Lighthizer to determine whether Chinese policies hurt American investors or companies, with retaliatory measures a possible outcome.

"We will stand up to any country that unlawfully forces American companies to transfer their valuable technology as a condition of market access. We will combat the counterfeiting and piracy that destroys American jobs," Trump said.

The president said the US would no longer tolerate Beijing's "theft" of US industrial secrets, long a concern of major foreign corporations seeking a share of the huge Chinese market.

"We will engage in a thorough investigation and, if needed, take action to preserve the future of US industry," Lighthizer said.

China's commerce ministry issued a statement voicing "serious concern" and warning that any US trade protectionism "will definitely harm bilateral trade relations".

"If the US side take actions that impair the mutual trade relations, disregarding the facts and disrespecting multilateral trade rules, China will not sit idle," the statement said.

The ministry said the country "is definitely going to adopt all appropriate measures to vigorously defend the lawful rights and interest of China."

Multiple trade disputes

The United States is China's second-largest trading partner after the European Union, but Washington and Beijing have seen their relations grow increasingly fraught since a promising summit between Trump and China's Xi Jinping in April.

The new intellectual property inquiry joins numerous investigations launched by Washington into Chinese trade practices, notably those concerning steel and aluminium and their national security consequences, which the Trump administration began earlier this year.

However, the start of a US probe will not immediately result in open confrontation.

Since launching his successful run for the White House and then taking office, Trump has frequently accused China of undermining the US economy.

The bilateral US trade deficit with China approached $350 billion in 2016, and Trump has repeatedly blamed Chinese imports for gutting employment in US sectors such as steel.

Last week, Washington announced preliminary sanctions against Chinese imports of aluminium foil. But so far, the US has not imposed heavier trade measures on Chinese goods.

Top Brokers