US - China Trade Dispute

Why in news?

U.S. President Donald Trump has ordered an enquiry to determine whether an investigation into China’s trade practices and policies was warranted.

What is the practices that U.S. object?

• Chinese laws require American and other foreign companies wo are directly investing in China to set up joint ventures with Chinese partners.
• In some cases, transferof  intellectual property assets are also mandated.
• China is already on the USTR Priority Watch List, which is a list of countries whose IP regimes are deficient.
• But it is also to be noted here that China is the U.S.’s largest goods trading partner.

What could be the possible actions?

• There are provisions in the U.S. Trade Act, 1974, which enable the U.S. to take action to enforce trade treaties, or use counter measures, such as retaliatory tariffs. 
• China has said if that it will retaliate if the U.S. acts against it in a manner that violates existing international trade agreements.
• If retaliatory measures come in place, then it is possible that a trade war could ensue between the two. 

Source: The Hindu