In August 2017, US Trade Representative Robert Lighthizer initiated an investigation to determine whether the acts, policies, and practices of the Chinese Government related to technology transfer, intellectual property and innovation are unreasonable or discriminatory and either burden or restrict US commerce under Section 301 of the Trade Act of 1974, as amended (19 U.S.C. § 2411). In instructing USTR to conduct the Section 301 investigation, the President emphasized that “the United States is a world leader in research-and-development-intensive, high-technology goods,” and that “violations of intellectual property rights and other unfair technology transfers potentially threaten United States firms by undermining their ability to compete fairly in the global market.”

On March 22, 2018, the Office of the United States Trade Representative released its Section 301 report, finding that China’s policies harm to the US economy by at least US$50 billion per year. Simultaneously, President Trump signed a Presidential Memorandum outlining a series of remedies that his Administration may take, including plans to (1) increase tariffs on certain Chinese imports, (2) take action against China at the World Trade Organization (WTO) and (3) increase restrictions on Chinese investment in sensitive US technology.

US businesses must assess their supply chains and global operations to evaluate potential effects and potentially engage with US policymakers on the impacts of these proposals. A full analysis of the proposals is available here.