Silicon Valley proposes a more pragmatic approach to suitably modify China’s trade policies

Although tech companies are on the same page as the Trump Administration on it’s findings on the Section 301 investigation, it is of the view that the current strategy is not sustainable and results could be better achieved through an international coalition that challenges China at the World Trade Organization.

On Monday, a trade group representing top technology companies conveyed to U.S. Treasury Secretary Steven Mnuchin that it opposes the Trump administration’s strategy of focussing on tariffs to try and change China’s unfair trade practices.

In a letter, the Information Technology Industry Council, told Mnuchin although it supports the Trump administration’s “Section 301” investigation into China’s abuses of intellectual property, it is of the opinion that a U.S.-led international coalition to pressurize Beijing to change its trading practice would be more effective than the Administration’s current focus on tariffs.

“Our opposition to tariffs is pragmatic. Tariffs do not work,” wrote ITIC President and CEO Dean Garfield. “Instead of tariffs, we strongly encourage the administration to build an international coalition that can challenge China at the World Trade Organization and beyond”.

The letter goes on to state, “Numerous countries share the United States’ concerns about China and its unfair trade practices. The United States is uniquely well-situated to lead that coalition” while calling for a coalition of U.S. allies to quickly travel to China and negotiate terms for a “balanced, fair, and reciprocal trade relationship.”

The tech group includes a wide range of companies starting from Apple Inc to Twitter.

Notably, the group did not make any reference to the Treasury’s forthcoming investment restrictions on Chinese acquisitions of U.S. technology firms.

These restrictions are part of the remedies proposed under the U.S. Trade Representative’s Section 301 investigation, which alleges that China has misappropriated U.S. intellectual property through joint venture requirements that effectively force technology transfer, the use of state funds to acquire U.S. technology companies and other means.

According to the ITIC, it believes China had abused the privileges of its membership in the WTO.

“China has promised open and fair trade, but has instead promulgated rules, regulations, and practices aimed at encumbering non-Chinese companies,” wrote Garfield. “This current approach cannot be sustained.”


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