Why is Trump waging a trade war with China? Hint: it’s not about tariffs.

Global technology piracy and knock-off products have long been a source of hand-wringing for U.S.-based companies. China, being the source of much of the world’s manufacturing, is also one of the world’s biggest offenders when it comes to intellectually property theft and is often the source of international trade issues.

Current Trade Issues Between U.S. & China

Contrary to popular opinion, the current dispute between the U.S. and China over trade has little to do with Chinese customs duties, which are already pretty low since both countries are part of the WTO.  The levying of punitively high duties by the U.S. has been used as a retaliatory tactic to counter a wide range of offensive Chinese trade policies such as Chinese currency manipulation and other factors that the U.S. alleges contribute to the wide trade imbalance between the two countries.

The Tariff Punishment to Help Balance International Trade Issues

Central to the current rift between the Trump administration and China is protection of U.S. technology.  Of particular interest to the U.S. is eliminating China’s foreign investment laws that require joint ventures with Chinese companies – effectively requiring U.S. companies to transfer technology and trade secrets to Chinese partners.

There are few simple solutions to questions about international trade issues or international business transaction matters, so companies should consult with experienced legal experts for assistance.

A recent WSJ article discusses measures that U.S. negotiators can pursue to slam the brakes on China’s IP theft.  (The full article requires a subscription).

For more information on Jim Chester and the Klemchuk LLP international business and trade practice, please click here.

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About the Firm:

Klemchuk LLP is a litigation, intellectual property, transactional, and international business law firm dedicated to protecting innovation. The firm provides tailored legal solutions to industries including software, technology, retail, real estate, consumer goods, ecommerce, telecommunications, restaurant, energy, media, and professional services. The firm focuses on serving mid-market companies seeking long-term, value-added relationships with a law firm. Learn more about experiencing law practiced differently and our local counsel practice.

The firm publishes Intellectual Property Trends (latest developments in IP law), Conversations with Innovators (interviews with thought leaders), Leaders in Law (insights from law leaders), Culture Counts (thoughts on law firm culture and business), and Legal Insights (in-depth analysis of IP, litigation, and transactional law).