President Donald Trump may be finding out that taking on China over trade is harder than it looks.
The White House is stepping up pressure over perceived intellectual-property abuses, and the administration has in recent days proposed fresh duties on imports of China’s aluminum foil products. But headway is proving elusive, as deep trade links mean that bold sanctions risk backfiring and targeted ones may end up yielding little. Trump has also backed off past threats citing counterpart Chinese President Xi Jinping’s help on North Korea.
A separate bid to use trade probes as a weapon may also turn out to be less effective than using the levers of the World Trade Organization. Landing a blow against China would also be more complicated if the U.S. chooses to target sectors where the countries are connected along global supply chains, which make up a most of their bilateral trade.
“Trump really doesn’t have many cards in his hand,” said Tu Xinquan, dean of the China Institute for WTO studies at the University of International Business and Economics in Beijing. He said the two economies are so closely linked that it’s difficult for the U.S. to find a specific industry to assail without triggering repercussions from China.
On Saturday, administration officials said Trump will direct U.S. Trade Representative Robert Lighthizer on Monday to consider investigating China’s IP policies, especially the practice of forcing U.S. companies operating in China to transfer technological know-how. If China is found to be flouting rules, the administration’s options include imposing import tariffs, officials said. If USTR moves forward, the investigation could take as long as a year.
The latest move, opening a new front of trade friction even as the countries try to work together to contain North Korea’s nuclear threat, is another…