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Trump May be Poised to Take Aggressive Trade Action Against China

Rhetoric may soon be giving way to action when it comes to punishing China for its so-labeled trade wrongs.

Despite campaign promises to punish China until it got its trade relationship with the U.S. in line, President Trump and his administration have been treading fairly lightly with the Asian powerhouse as they sought aid in restraining North Korea’s nuclear program.

But now, according to reports from Axios, the president is considering taking action against China for something other than trade deficits: its theft of U.S. intellectual property.

The action, which would be a “self-initiating” trade case under Section 301 of the 1974 Trade Act, would allow the president to impose duties on China for unfair trade practices. Section 301 hasn’t been widely tapped since the World Trade Organization took shape in 1995, but it used to be the way the U.S. handled trade battles before it had the WTO to step in.

If Trump does go that route—and an announcement about trade action could come as soon as this week—the Office of the United States Trade Representative would essentially have sole say in how things went considering the case was self-initiated. The move could see a case eventually end up in the WTO, and with that process, any proposed tariffs on China would likely be at least a year out.

And though the investigation into China’s potential intellectual property abuses itself might not incite a trade war, sweeping punitive tariffs might.

The U.S. and China met in Washington late last month to talk trade and those conversations ended with seemingly little conclusion.

[Read more about the China-U.S. trade talks: U.S.-China Trade Talks Conclude with Little Conclusion]

Reports naturally pointed to China’s trade deficit as the hang-up and all the Commerce Department had to say was that China acknowledged the U.S. position on those deficits and both sides would work to correct it.

President Trump and Chinese President Xi Jinping had what appeared to be an amiable meeting at Mar-a-Lago in April, but it seems Trump’s feelings may have since soured.

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The president said on Twitter Saturday—defending the mode of communication as the only way for him to “get the truth out”—regarding China: “I am very disappointed in China. Our foolish past leaders have allowed them to make hundreds of billions of dollars a year in trade, yet…they do NOTHING for us with North Korea, just talk. We will no longer allow this to continue. China could easily solve this problem!”

Rumblings on the Hill have both addressed this potential trade action and implied that nothing is impending, but if it does move forward, it could pose a drastic change to U.S.-China trade relations.