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Speaker 1: The Trump administration is ramping up to investigate China over

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Speaker 1: what it sees as violations of intellectual property. According to

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Speaker 1: an administration official who spoke on condition of anonymity, there's

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Speaker 1: growing concerned because China is attempting to become a world

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Speaker 1: leader in technologies such as microchips and electric cars. The

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Speaker 1: U S and other Western governments have accused China of

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Speaker 1: forcing foreign companies to share their technology with the country

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Speaker 1: in return for access to the vast Chinese market. The

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Speaker 1: administration is considering having the US Trade Representatives Office invoke

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Speaker 1: a rarely used section of the Trade Act of nineteen

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Speaker 1: seventy four to start an investigation. According to The New

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Speaker 1: York Times, joining me is Andrew maida Bloomberg News Global

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Speaker 1: trade reporter. He's in the Bloomberg One newsroom in Washington,

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Speaker 1: d C. Andrew, what are some of the Chinese demands

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Speaker 1: on American companies that expose American proprietary technology. Well, as

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Speaker 1: you suggested, one of the things that China does is

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Speaker 1: when an American company is seeking to get an acquisition

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Speaker 1: approved in China, or when an American company is seeking

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Speaker 1: to start a subsidiary in China, there are often requirements

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Speaker 1: attached to that that require the American company to transfer

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Speaker 1: uh its intellectual property to to China. And companies have

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Speaker 1: been doing this. Yeah. I mean it's a huge market, right,

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Speaker 1: I mean it's a massive market with over a billion people.

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Speaker 1: So I think that until now, um, you know, American

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Speaker 1: companies are pretty much bit the bullet and said, Okay,

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Speaker 1: you know, we need access to China, we need to

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Speaker 1: be there, we need to play there. We're gonna play ball.

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Speaker 1: But they're not happy about it. Tell us about some

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Speaker 1: of the accusations that the U. S. Tr accused China

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Speaker 1: of in a report to lawmakers last month. Yeah, and

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Speaker 1: the back drop to this is the is the fact

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Speaker 1: that China joined the w t O in two thousand one.

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Speaker 1: And when it joined the w t O, the deal

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Speaker 1: was it promised to um open up in all sorts

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Speaker 1: of ways, and it promised to be more discipline when

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Speaker 1: it comes to into came to intellectual property. And some

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Speaker 1: people in the U. S. Governments say that China really

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Speaker 1: hasn't lived up to those promises. They say that trade

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Speaker 1: secrets of American companies are being stolen, trademarks are not respected,

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Speaker 1: copyright is not respected, and obviously they don't like this

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Speaker 1: whole technology transfer practice. Tell us about section three oh

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Speaker 1: one of the Trade Act of nine seventy four. What

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Speaker 1: it does, Geel, I'll tell you, I've never heard of

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Speaker 1: this thing before. My wife we could say then I'm

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Speaker 1: not I am not a trade lawyer, and I think

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Speaker 1: that probably of your listeners have never heard of this thing. Um.

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Speaker 1: Bottom line is it's a it's it's it's a rarely

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Speaker 1: used uh section of a nineteen seventy four law. It

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Speaker 1: was actually used quite frequently during the nineteen eighties and

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Speaker 1: the nineteen nineties, So it was it was it was

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Speaker 1: a favorite tool of the Reagan administration to kind of

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Speaker 1: bring pressure to bear on the trade front against foreign competitors.

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Speaker 1: But you know, the Trump administration is resurrecting this thing

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Speaker 1: is a tool that I can use to put pressure

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Speaker 1: on China. And reportedly they're going to start investigations. Yeah.

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Speaker 1: The the idea is that the US Trade Representatives Office

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Speaker 1: would start an investigation, a probe into China's intellectual property practices,

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Speaker 1: and if the US government finds that those practices uh

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Speaker 1: don't live up to international standards. The president actually has

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Speaker 1: wide latitude to do things like he can impose tariffs

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Speaker 1: on Chinese products, he can impose quotas on Chinese imports,

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Speaker 1: so this range of things that that that he could do.

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Speaker 1: Now I I the one thing I would add as

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Speaker 1: quickly is that they've also been doing a probe into

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Speaker 1: steel imports and they haven't done anything yet, so I

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Speaker 1: would emphasize that this would merely be an investigation at

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Speaker 1: this point. So, Andrew, what could some of the repercussions

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Speaker 1: be if they do this get tough tactic with China? Yeah,

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Speaker 1: I think, uh, you know, not to get too dramatic,

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Speaker 1: but we're talking about possibly a trade war between the

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Speaker 1: world's two largest economies. And we saw what happens when

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Speaker 1: there's kind of a tit for tat race the bottom

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Speaker 1: in terms of trade barriers. We saw that after the

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Speaker 1: Great Depression. Now nobody's saying that that that we're we're

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Speaker 1: we're on the verge of of something that dire. But look,

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Speaker 1: I mean, the global economy is doing actually quite well.

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Speaker 1: The recovery has lasted, in some people's views, surprisingly long

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Speaker 1: since the financial crisis. So again, a trade war between

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Speaker 1: the world's two biggest economy economies with retaliation back and forth,

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Speaker 1: would not be a good thing in about thirty seconds.

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Speaker 1: How would you rate the relationship between China and the US? Now, well,

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Speaker 1: the honeymoon is over. The honeymoon took place at mar Lago. Uh,

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Speaker 1: you know, she came down, he and the president bonded

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Speaker 1: over steake. Um, that's over now. I think that there's

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Speaker 1: a lot of differences on issues like intellectual property, and

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Speaker 1: it seems right now like the differences outnumbered the similarities.

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Speaker 1: Thanks so much for being on Bloomberg Law. I am

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Speaker 1: sure we'll be talking about this very interesting. That's Andrew Maita.

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Speaker 1: He is a Bloomberg News Global trade reporter.