On August 14th, pursuant to a Memorandum sent by President Trump, USTR Robert Lighthizer initiated a Section a Section 301 investigation of China under the 1974 Trade Act.
The investigation will seek to determine whether acts, policies and practices of the government of China relating to technology transfer, intellectual property, and innovation are unreasonable or discriminatory and burden or restrict U.S. commerce.
The USTR posted a notice in the Federal Register seeking written comments from companies having difficulties in China regarding the above (see attached notice) to be submitted by September 28, 2017. The Section 301 Committee will convene a public hearing at the US International Trade Commission on October 10, 2017. The deadline for submission of post-hearing rebuttal comments is October 20, 2017.
The importance of using the Section 301 is that the President can impose sanctions without consulting Congress or the World Trade Organization. In short, he can act independently through the USTR who is authorized by law to impose trade sanctions. It’s happened before. In 1995 and 1996 when USTR Mickey Kantor imposed $1.8 billion in trade sanctions. China imposed trade sanctions in retaliation. The sanctions never went into effect because of agreements signed just hours before the sanctions were to take effect in both years.
I covered the 1995 and 1996 trade disputes in great detail in by book Trademark Counterfeiting, Product Piracy and the Billion Dollar Threat to the U.S. Economy.
Let’s see what happens this time. We won’t have long to wait.