A clumsy trade weapon, Section 301 would isolate US when it has partner in EU
Europe would likely join US to investigate China’s IP abuses in a multilateral setting
The Trump administration was well advised to cancel the announcement last Friday that they would launch an investigation into China’s trade practices using domestic Section 301 law. Under the statute, the US acts as ultimate arbiter of possible punishment for unfair trade practices, and could unilaterally impose tariffs.
Using such a tool would more likely draw criticism of US protectionism than it would highlight China’s unfair practices, and it risks triggering an all-out trade war.
But European businesses are largely aligned with the US in their opposition to China’s practice of forced technology transfer. While the threat of unilateral action may have been a useful chip to push China to agree on tougher sanctions on North Korea, it is the wrong way to address trade concerns.