Sooner or later the storm will come. On March 22, 2018, after the "301 investigation" report on China came out, Trump signed the "Presidential Memorandum on the 301 Investigation Action of the United States" and issued a title entitled "President Trump Signs aggression against China's Economic Aggression" Presidential Memorandum Speech. The title of the speech mentioned "economic aggression", Vice President Pence bluntly stated that the action was the "end of the era of economic surrender" in the United States, and President Trump claimed that he would impose a 25% tariff on Chinese exports to the United States of about 60 billion U.S. dollars, and Asking China to reduce the US-China trade deficit by 100 billion US dollars, it seems that it is not an overstatement to position it as a "trade war" between China and the United States. And Trump finally mentioned in the speech, "This is the first of many means. This is the first, but this is the first bullet of an intensive attack." It seems that the Trump administration will continue to expand. The US trade war, and the battlefield may extend to other economic areas. So, which economic "battlefields" will the Trump administration choose, and what policy options will it follow?
First, the field of trade remains the focus. The top priority of the Trump administration's short-term goals is to substantially reduce the US-China trade deficit, which means that trade will remain its primary battlefield. In the "Report on China's Implementation of WTO Commitments 2017", "Trade Policy Agenda 2018", and "National Trade Assessment Report 2018" that have been issued by the Office of the United States Trade Representative, for China, the US's major areas of concern are industrial policy, Intellectual property, services, digital trade barriers, agriculture, transparency, and the legal framework also detail issues that the US considers to be addressed in each area. In the Sino-U.S. Trade war, the United States first focused on the four aspects of the so-called "irrational or discriminatory" restrictions imposed on China's commercial interests by the United States, namely compulsory technology transfer, discriminatory licensing, government support for investment and acquisition of advanced U.S. technology, Internet stealing business information, etc. These four aspects are only part of the many issues that the US believes China needs to be addressed urgently. The two things that deserve the most attention next are two aspects. The first is digital trade barriers, including cloud computing restrictions, network filtering and interception, Internet telephony services, domain name rules, cross-border data transfer and data localization, restrictions on Internet TV and entertainment software, encryption, restrictions on online payment services, etc. .
According to the timetable of the U.S. Trade Representative's Office, in 2018 and October and March 2019, the US International Trade Commission will submit the last two digital trade reports to it, when China and the United States will inevitably have a fierce battle. Another aspect is that the United States and Taiwan have begun negotiations on a free trade area. With the arrival of several deputy representatives of the U.S. Trade Representative Office, the United States may end the U.S.-Korea free trade area and NAFTA negotiations in 2018, and then start the U.S.-Japan free trade agreement negotiations and the U.S.-British free trade agreement negotiations. The possibility of starting negotiations on the US-Taiwan Free Trade Agreement in 2020. 2049 The Project 2049 Institute and the US-Taiwan Business Council have proposed to start negotiations on a US-Taiwan free trade agreement.
Secondly, the investment field will also be involved. Positioned China as a "strategic competitor", worried that the United States would lose its leading edge in China in the high-tech field, and accused the Chinese government of guiding and assisting investment mergers involving large-scale technology transfer in its "301 investigation" report on China, and decided Let the US Treasury Department impose stricter scrutiny on the acquisition of technology companies by Chinese companies in the United States. This shows that the investment field will also become a "battlefield." The Foreign Investment Risk Assessment Modernization Act 2017, co-sponsored by members of both parties, is highly likely to become law in 2018. The bill will expand the scope of review of the Foreign Investment Commission (CFIUS) to include real estate investments close to military bases, a minority Equity investment, equity changes, etc., and will strictly review the situation of injecting US companies' technology and intellectual property into non-direct investment, such as joint ventures, and will strictly review specific countries. The bill also covers foreign transactions for the first time. It intends to expand the jurisdiction of CFIUS to include the transfer of intellectual property rights and proprietary technologies from US "core technology" companies to non-US companies. At the same time, the United States may also expand the "espionage" war, strengthen the review of hiring non-U.S. Employees who can obtain sensitive information, tighten student visas and academic exchanges for related majors in the United States, and further blame "cyber" espionage.
Finally, it does not rule out that the flames of war have spread to the financial sector. The U.S. Treasury Department is about to release a report on the "Foreign Policy Policy of Major US Trading Partners" in April. Although it is extremely unlikely that the report will determine China as a currency manipulator, China will still be included in the list of observer countries. Under such circumstances, China has proactively devalued the renminbi, and the possibility of a “currency war” between the two sides is relatively small. If the trade war escalates, China may "sell US debt" as a weapon, but this belongs to the practice of "killing one hundred enemies and self-damaging three thousand." It is also unlikely. It is worth noting that the North Korean nuclear issue and the Iranian nuclear issue have not been ruled out. The United States has initiated secondary sanctions against Chinese companies, especially financial sanctions.
(Luo Zhenxing, Director, Associate Researcher, Department of Economics, Institute of American Studies, Chinese Academy of Social Sciences, Special Commentator of Overseas Network)
Original title: Be wary of Sino-U.S. Trade friction "war" spreading in other areas
Original link: http://opinion.haiwainet.cn/n/2018/0403/c353596-31291698.html