Trump administration steps up its attack on rival, saying terms for Beijing’s membership of the WTO were too lenient
The United States mistakenly supported China’s membership of the World Trade Organisation in 2001 on terms that have failed to force Beijing to open its economy, the Trump administration has said.
As the White House prepares its long-promised crackdown on what it sees as China’s unfair trade practices, the administration said in a report to Congress: “It seems clear that the United States erred in supporting China’s entry into the WTO on terms that have proven to be ineffective in securing China’s embrace of an open, market-orientated trade regime..
“It is now clear that the WTO rules are not sufficient to constrain China’s market-distorting behavior,” the report said.
While the US trade representative’s office has long taken China to task for unfair trade practices, the first such review under Donald Trump’s presidency takes a harsher tone against Beijing.
It comes amid worsening trade tensions between the world’s two largest economies and as the administration prepares actions to curb China’s alleged theft of intellectual property. A decision in the so-called “section 301” investigation is expected in the coming weeks.
The report also points at Russia’s behaviour, saying Moscow had no intention of complying with its WTO obligations, a trend the administration said was “very troubling”.
A White House official said despite consultations with China, it had failed to follow through on promises of moving more toward a market-orientated economy and playing by international trading rules.
“The president and his principal adviser are united in the belief that this is a problem that has gone on for too long and needs to be addressed,” the official said.
“In the past, conversations have focused more on discreet opening for discreet products, and what we’re saying is systematically we’re not going to tolerate broad-based policy that attempts to promote state-led enterprises,” the official said, speaking on condition of anonymity.
Trump said this week he was considering a big “fine” against China for forcing US companies to transfer their intellectual property to China as a cost of doing business there.
While the administration is also looking at whether foreign imports of steel, aluminium, washing machines and solar panels are harming US businesses, China’s alleged theft of intellectual property is a particular concern to Trump because it affects a large swath of American firms, the official said.
Trump did not specify what he meant by a “fine” against China, but the 1974 trade law that authorised an investigation into China’s alleged theft of US intellectual property allows him to impose retaliatory tariffs on Chinese goods or other trade sanctions until China changes its policies.