Reuters cited USA senior administration officials as saying on Saturday that President Trump will order his top trade adviser on Monday to determine whether to investigate Chinese trade practices that force US firms operating in China to turn over intellectual property.
The announcement followed a call Friday night between Donald Trump and Chinese President Xi Jinping. It was not immediately clear whether he was talking about trade was the subject.
The trade investigation is expected to be only one part of a multi-pronged push by the Trump administration to counter perceived Chinese trade abuses, which Trump frequently railed against as a candidate.
Despite Mr. Trump's promises to be tougher than previous presidents on trade, his administration has proceeded with high levels of caution.
"The relationship could spiral out of control, particularly if the movement on the trade front is combined with growing tensions over how to respond to North Korea", said Scott Kennedy, a China expert at the Center for Strategic and International Studies. He said it would be premature to speculate on actions that could eventually be taken against China, and added that the issue could be resolved through "negotiated agreement".
"The Chinese leader expressed Beijing's willingness to maintain communication with the U.S.to appropriately resolve the Korean Peninsula nuclear issue", the network reported.
Trump's threat to investigate China's intellectual property and trade practices is valid, but his administration may not be up to the delicate task of carrying out a new China probe without sparking a damaging trade war, US business lobbyists said last week.
The decision will not only take action against alleged Chinese violations of US companies' intellectual property rights, but could also be perceived as an attempt by the USA government to crank up the pressure on Beijing to rein in North Korea.
The forced sharing of intellectual property with Chinese firms has been a long-standing concern of the USA business community.
He simply will initiate the latest investigation of intellectual property theft in a long line of them running back through past administrations. Many U.S. businesses must create joint ventures with Chinese companies and turn over valuable technology assets, a practice that Washington says stifles U.S. economic growth.
"If Americans continue to have their best technologies and intellectual property stolen or forcibly transferred off-shore, the United States will find it hard to maintain its current technology leadership position", they added. Meanwhile, 100 days of trade talks with the Chinese carried out in past months resulted in a few trade gains but not the ambitious changes the administration had hoped for.
Like the president, Lighthizer has criticized multilateral venues such as the World Trade Organization for failing to provide adequate tools to address China's economic violations.
Section 301 of the Trade Act of 1974, a popular trade tool in the 1980s that has been rarely used in the past decade, allows the president to unilaterally impose tariffs or other trade restrictions to protect US industries from "unfair trade practices" of foreign countries. "If China helps us, I feel a lot differently toward trade".
Trump's memo will highlight those concerns, but leave it to U.S. Trade Representative Robert Lighthizer to determine whether to launch an investigation - a move that is seen as giving the administration more time to cajole China and gather support from the business community and other trading partners for any eventual action.
There are "a wide variety of potential responses".