Is Trade War Between America and China About to Begin?

The White House, as well as previous administrations, have long been accusing China of unfair trade practices. And, to large degree, they were right. After steel and aluminum tariffs, there’s another issue: the trade secrets. Trump’s administration, CNN Money reports, has began an investigation about intellectual property theft by China.

There’s no doubt that copyrights are violated in China. American movies, academic textbooks, and music are widely copied. But now, the issue is even bigger. It comes to alleged high-tech theft. It’s not that American-made high-tech hasn’t been stolen before, but that it is being brought up with more stress now.

According to a report by Commission on the Theft of American Intellectual Property, America loses as much as $600 million a year because of intellectual property theft. Meanwhile, Chinese government wants the Middle Kingdom to transition from being a low cost manufacturer to high-tech innovative economy. For example, China is now working on developing electric cars and 5G mobile networks.

To becomes a high-tech economy, China needs a lot of know-how, so no wonder it is looking for it rather aggressively. Some foreign companies claim that they were forced to transfer their technologies in order to be able to operate in China.

The Trump administration can either complain with the World Trade Organization (WTO) or take a unilateral action. This can possibly lead to a trade war.