Manufacture This

The blog of the Alliance for American Manufacturing

Multiple reports indicate Trump will target China's intellectual property theft.

It's been a whirlwind on the trade front lately, and it looks like things aren't about to calm down anytime soon. In fact, President Trump is about to take another bigly action on trade.

While it's nearly impossible to predict what will actually happen with this administration, all signs are pointing to Trump taking significant action by the end of the week in response to China's ongoing intellectual property theft. According to the Washington Post and other news outlets, the president will issue $60 billion in annual tariffs against more than 100 Chinese products that "were developed by using trade secrets that China stole from U.S. companies or forced them to hand over in exchange for access to its massive market."

The exact details and timing of these new tariffs remain unclear, but one thing that is not — China has been stealing trade secrets and intellectual property from American companies for years, and China has used that stolen information to manufacture its own products. That forced American companies to compete against the very same products that they spent years and often significant financial resources to develop.

A 2017 U.S. Trade Representative report found that "the protection and enforcement of trade secrets in China is a serious problem... Most troubling are reports that actors affiliated with the Chinese government and the Chinese military have infiltrated the computer systems of U.S. companies, stealing terabytes of data, including the companies' intellectual property (IP), for the purpose of providing commercial advantages to Chinese enterprises." The U.S.-China Economic and Security Review Commission echoed those findings, noting in its own 2017 report that "intellectual property issues remain a key challenge for U.S. companies operating in China," as many are forced to hand over their IP in order to operate in the country.

Meanwhile, the United States maintains a massive trade deficit with China that has cost millions of lost jobs.

While we wait for specifics on what this new trade action will include, we're likely to get a few clues starting on Wednesday. U.S. Trade Representative Robert Lighthizer is scheduled to testify before the House Ways and Means Committee about trade, and will head back up to Capitol Hill on Thursday to appear before the Senate Finance Committee. Meanwhile, Commerce Secretary Wilbur Ross will talk trade before the House Ways and Means Committee on Thursday.