While U.S. officials pursued trade talks with their Chinese counterparts in Washington on Thursday, President Trump’s son Eric shed some light on how serious his father is about stopping the theft of American businesses’ intellectual property as a condition of reaching a trade deal.
“There has been no one in the world who has been tougher, and you know what I can tell you, China quite frankly is one of the reasons I think my father got into the race,” said Eric Trump at Yahoo Finance’s All Markets Summit on Thursday.
Investors and American corporations are paying very close attention to the outcome of the latest China trade talks. The Dow jumped more than 150 points as optimism for progress grew after the president tweeted: “Big day of negotiations with China. They want to make a deal, but do I? I meet with the Vice Premier tomorrow at The White House.”
“I don’t think there’s anybody that’s been tougher on China in the world than my father has been. You see it right we have the best economy in the history of our country,” he said, adding that China’s economy has been negatively impacted by tariffs.
Since the start of the trade war with China in 2018, President Trump has used the threat and implementation of tariffs on Chinese imports as leverage in his pursuit of a trade deal with China. President Trump and Chinese President Xi Jinping have reached two truces both at the G20 summit in Argentina in December of last year and at the G20 summit in Japan in June. Prior to Thursday’s trade negotiation meetings, optimism for a trade deal had dimmed as both world leaders have continually failed to reach an agreement and sign a deal.
Tariffs imposed by both countries have continued to escalate with additional tariffs set to take place on October 15 on $250 billion in Chinese goods at the increased tariff rate of 30%. On December 15, nearly all imports from China will be subject to tariffs.
“I talk to people all the time, people come up to me all the time. ‘You know I produce X, I produce Y. I’m moving my business out of China because quite frankly I don’t want to be in the middle of this trade war between the two superpowers of the world and it’s just much easier for me to go produce product in Vietnam, or Pakistan, or India, or one of 100 different places’,” says Trump.
One of the key sticking points in reaching a deal with China has been President Xi Jinping’s refusal to concede that his country is responsible for the theft of American companies’ intellectual property. Trump says GE is an example of an American company that has been hurt by this.
“When you see what happened to GE with the wind turbines right, where the exact same wind turbine that GE spent years developing, including...the computer source code behind it, gets replicated. They buy one. They bring it over. They replicate the thing to the T, including all the computer programs. And all of a sudden GE can no longer make it here because [China] undercuts prices by 30%,” Trump said.
April marked the first time that the U.S. Department of Justice formally accused former GE engineer Xiaoqing Zheng and Chinese businessman Zhaoxi Zhang of spying on GE for the benefit of China with financial assistance from the country’s government.
The FBI is investigating economic espionage done on behalf of China. “We are bringing all of our investigative resources to bear against this threat to protect the United States and our interests,” said FBI Deputy Director David Bowdich when he announced the launch of a new working group on China last year, adding that “every type of business is at risk.”
As President Trump plans to meet with China’s top trade negotiator this week, investors and businesses can expect the road to a trade deal to remain challenging.
China’s “intellectual property [theft is] insane,” says Trump.
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