China's industrial policies like 'Made in China 2025' plan harm companies in US: White House

Alleging that China has aggressively sought to obtain technology from American companies, the White House said the cost of China's intellectual property theft costs US innovators billions of dollars.

Published: 30th May 2018 01:02 AM  |   Last Updated: 30th May 2018 01:02 AM   |  A+A-

China flag US flag

China and US flags (Photo | Reuters)

By PTI

WASHINGTON: China's industrial policies like 'Made in China 2025' plan harm companies in the US and around the world, the White House said today and asserted that US President Donald Trump is confronting the Communist giant's "unfair trade policies".

For many years, China has pursued industrial policies and unfair trade practices - including dumping, discriminatory non-tariff barriers, forced technology transfer, over capacity, and industrial subsidies, that champion Chinese firms and make it impossible for many US firms to compete on a level playing field, the White House said.

China's industrial policies, such as its 'Made in China 2025' plan, harm companies in the US and around the world, the White House said and alleged that China imposes much higher tariffs on US exports than America imposes on China.

Noting that China's average tariff rate is nearly three times higher than the average US rate, the White House said certain products are even more imbalanced, for instance the US charges a 2.5 per cent tariff on Chinese cars, while China currently maintains a 25 per cent tariff on cars from the US.

Observing that China has banned imports of the US' agricultural products such as poultry, cutting off America's ranchers and farmers from a major market for their goods, the White House accused China with dumping and unfairly subsidised a range of goods for the US market, undermining America's domestic industry.

In 2018 alone, the Trump administration has found dumping or unfair subsidies on 13 different products, including steel wheels, cold-drawn mechanical tubing, tool chests and cabinets, forged steel fittings, aluminum foil, rubber bands, cast iron soil pipe and fittings, and large diameter welded pipe, it said.

Further in January 2018, the Trump administration found that China's overproduction of steel and aluminum, and the resulting impact on global markets, is a circumstance that threatens to impair America's national security.

The US has run a trade in goods deficit with China for years, including a USD375 billion deficit in 2017 alone, it said.

Alleging that China has aggressively sought to obtain technology from American companies and undermine American innovation and creativity, the White House said the cost of China's intellectual property theft costs United States innovators billions of dollars a year, and China accounts for 87 per cent of counterfeit goods seized coming into the US.

United States Trade Representative's (USTR) Section 301 investigation identified four of China's aggressive technology policies that put 44 million American technology jobs at risk.

These are forced technology transfer; requiring licensing at less than economic value; Chinese state-directed acquisition of sensitive United States technology for strategic purposes; and outright cyber theft.

China uses foreign ownership restrictions, administrative review, and licensing processes to force or pressure technology transfers from American companies, the White House said.

At the same time, China requires foreign companies that access their New Energy Vehicles market to transfer core technologies and disclose development and manufacturing technology.

The White House said China imposes contractual restrictions on the licensing of intellectual property and technology by foreign firms into China, but does not put the same restrictions on contracts between two Chinese enterprises.

"China directs and facilitates investments in and acquisitions of United States companies to generate large-scale technology transfer.

China conducts and supports cyber intrusions into United States computer networks to gain access to valuable business information, so Chinese companies can copy products," it said.

As such, under Trump's leadership the US will impose a 25 per cent tariff on USD 50 billion of goods imported from China containing industrially significant technology, including those related to the "Made in China 2025" program.

The final list of covered imports will be announced by June 15.

In January 2018, the President announced his decision to provide safeguard relief to US manufacturers injured by surging imports of washing machines and solar products.

This was the first use of Section 201 of the Trade Act of 1974 to impose tariffs in 16 years.

"These actions responded to injurious trade practices by China and other countries, including attempts to avoid legally imposed anti-dumping and countervailing duties," the White House said adding that following the decision, Whirlpool announced 200 new jobs in Ohio.

USTR and the Department of Commerce are working together to defend the right of the United States to continue treating China as a non-market economy in antidumping investigations until China makes the reforms it agreed to when it joined the World Trade Organization (WTO).

"Trump's administration has successfully litigated WTO disputes targeting unfair trade practices and upholding our right to enforce United States trade laws," it said, adding that in February this year, USTR won a WTO compliance challenge against China's unfair anti-dumping and countervailing duties on United States poultry exports and China announced the termination of those duties.

 

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