US 301 Investigation: China tech sectors bear brunt of probe

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The US had used Section 301 against China five times before. Just what sectors are affected by 301 investigations?

The US has initiated five 301 investigations against China. All of the actions ended with negotiated settlements.

Case in point, the US initiated an intellectual property investigation against China in April 1991. The two countries then signed an IP protection agreement the next January and China promised to improve its IP laws.

Besides investigations, China has been included 28 times on the Priority Watch List of Special 301 reports since the first annual report was released in 1989.

So why has the US been persistently targeting China?

For one, Chinese tech and innovation companies are growing and the US sees that as a threat to its interests. Intellectual property investigation is an approach to suppress Chinese firms.

Secondly, The US runs a hefty 375 billion US dollars trade deficit with China. US President Donald Trump thinks that 301 investigations are a way to reverse the deficit and promote a manufacturing flow back to America.

Which Chinese companies will be most affected by Section 301?

Analysts say that high-tech sectors will bear the brunt. Such sectors as telecommunications equipment and integrated circuits will take a hit.

Will the US enforce sanctions on China?

China is the US's major export destination. US exports to China have grown at an average 11 percent annually over the past 10 years. China-US bilateral trade and investments have created 2.6 million jobs for America while contributing 216 billion US dollars to the US economy.

Analysts say there is no winner in a trade war.