President Trump Directs USTR to Examine China’s Intellectual Property & Forced Technology Transfer Policies

Asserting in a presidential memorandum that “Violations of intellectual property rights and other unfair technology transfers potentially threaten United States firms by undermining their ability to compete fairly in the global market,” President Trump has directed U.S. Trade Representative Robert Lighthizer to investigate any of China’s laws, policies, practices or actions that may be unreasonable or discriminatory and may be harming American intellectual property rights.

In response, Lighthizer stated, “The United States has for many years been facing a very serious problem. China[’s] industrial policies and other practices reportedly have forced the transfer of vital U.S. technology to Chinese companies. We will engage in a thorough investigation and, if needed, take action to preserve the future of U.S. industry. Thousands of jobs are at stake for our workers and for future generations. This will be one of USTR’s highest priorities, and we will report back to the President as soon as possible.”

This trade action is reported to be one of several trade actions that the Trump administration may take against China in the coming months to address alleged intellectual property violations and the theft of American trade secrets. China’s actions in this area were highlighted most recently by USTR in its annual Special 301 Report to Congress released in April 2017. This report stated that the “USTR continues to place China on the Priority Watch List because longstanding and new IP concerns strongly merit attention. China is home to widespread infringing activity, including trade secret theft, rampant online piracy and counterfeiting, and high levels of physical pirated and counterfeit exports to markets around the globe.”

In brief remarks on the topic, Trump indicated that once the investigation is complete, the USTR may use “all available options” to address and enforce any actions against any threat of further Chinese IP violations. For a more detailed analysis, see our client alert, Trump Administration Moves Against Chinese IP Violations.