The Trump administration said it has a “strong commitment to protecting the IP of Americans and ending the illegal theft and transfer of IP to foreign nations”.
According to a White House statement, the USTR will analyse issues and consult with government agencies to determine whether there have been serious and consistent allegations of a problem with China and IP theft.
The White House was clear to point out that Trump was not “prejudging the inquiry and the USTR will decide whether to launch a formal investigation”.
Trump said that USTR, Robert Lighthizer, was “empowered to consider all available options at [his] disposal”, before signing the memorandum.
The White House said that this was Trump “following through on his promise to the American people to protect their IP so they can benefit from their innovation”.
On 8 August 2016, during his campaign, Trump said: “Just enforcing intellectual property rules alone could save millions of American jobs.”
“According to the U.S. International Trade Commission, improved protection of America’s intellectual property in China would produce more than 2 million more jobs right here in the United States.”
Earlier this year, China was placed on the USTR’s Priority Watch List.
According to the USTR, the country “imposes requirements that US firms develop their IP in China or transfer their IP to Chinese entities as a condition to accessing the Chinese market”, while being home to widespread infringing activity.
The White House also referenced a 2017 update to the 2013 report of the Commission on the Theft of American IP released by the National Bureau of Asian Research, which claimed that Chinese government policies led to the theft of IP, directly harming the American economy and workers.
Chinese state media outlet the China Daily said that the move raised “grave concerns about [a] potential bigger trade conflict between the two largest economies of the world”.
“China has urged the US to objectively evaluate China’s progress in protection of IP rights and resolve differences with China through dialogue and consultation.”
Chinese Foreign Ministry spokesperson Hua Chunying said that a trade war between the two countries would “lead nowhere and neither side will win”.
US Chamber of Commerce executive vice president and head of international affairs, Myron Brilliant, said that the chamber has been “forthright in expressing our serious concerns regarding a range of Chinese government policies and practices that restrict access to its market … and broadly seek to undermine the value of intellectual property held by American companies”
“The executive memorandum signed today is an opportunity for the US government to examine these issues and consider a prudent path forward.”
Brilliant added that the US-China relationship was a “critical one” for the US and that the long term goal needs to be “enhanced two-way trade and investment”.
“We urge the two governments to work together to resolve these concerns.”