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In addition to these four types of conduct, interested parties may submit for consideration information on other acts, policies and practices of China relating to technology transfer, intellectual property, and innovation described in the President's Memorandum that might be included in this investigation, and/or might be addressed through other applicable mechanisms.

Section 302(b)(1)(A) of the Trade Act authorizes the United States Trade Representative to initiate an investigation to determine whether conduct is actionable under section 301 of the Trade Act.

Actionable conduct under section 301(b)(1) includes, inter alia, acts, policies and practices of a foreign country that are unreasonable or discriminatory and burden or restrict U.S. commerce. Unreasonable actions are those that while not necessarily in violation of, or inconsistent with, the international legal rights of the United States are otherwise unfair and inequitable.

Pursuant to section 302(b)(1)(B), the United States Trade Representative has consulted with appropriate advisory committees. The United States Trade Representative also has consulted with members of the inter-agency Section 301 Committee. On the date of initiation, the United States Trade Representative requested consultations with the Government of China concerning the issues under investigation, pursuant to section 303(a)(1) of the Trade Act ( 19 U.S.C. 2413 (a)(1)).

Pursuant to section 304(a)(2)(B) of the Trade Act, Zales Aquamarine and 1/20 CT Tw Diamond Double Heart Ring in Sterling Silver n7mQCx15Xh
(a)(2)(B), the United States Trade Representative must determine within 12 months from the date of initiation of the investigation whether any act, policy, or practice described in section 301 of the Trade Acts exists and, if that determination is affirmative, what action, if any, to take.

The Office of the U.S. Trade Representative (USTR) invites written comments on:

1. The acts, policies, and practices of the Chinese government described in Section I.B above.

2. Information on other acts, policies and practices of China relating to technology transfer, intellectual property, and innovation as described in the President's Memorandum, which might be included in this investigation, and/or might be addressed through other applicable mechanisms.

3. The nature and level of burden or restriction on U.S. commerce caused by the applicable acts, policies and practices of the Government of China, and/or any economic assessment of that burden or restriction.

4. The determinations required under section 304 of the Trade Act, that is, whether actionable conduct exists under section 301(b) and what action, if any, should be taken.

To be assured of consideration, USTR must receive initial written comments by 11:59 p.m. on September 28, 2017, in accordance with the instructions in section II.B below.

However, history does offer options to strategists seeking to maximize geopolitical advantage through economic means. A more illustrative approach to restricted trade is to be found in Napoleon’s “Continental System” or, better yet, the British Navigation Acts from the 1650s onward. While not even the British mercantile system was eternal or foolproof—it was an important cause of the American Revolution and the War of 1812—it was durable and it was hardly the principal motivation for the colonists’ revolt. The imperial system of preferences resurrected itself and survived into the 20th century.

What made the British system work for so long was that it did not balance security and prosperity while affording, by the standards of the day, a high standard of political liberty. What it sacrificed in economic growth it repaid in other ways. It was protectionistic and nationalistic—the English got the best of the deal—but not so narrowly so that it crippled other parts of the empire.

A modern analog to the Navigation Acts might be an American-led “Free Trade Among Free Nations” system, giving preferential economic status to those states with more representative governments or allies. And, in practice, the post-World War II economic order amounted to something like that, and could tolerate mercantilistic behavior even within a mostly-open system. Thus, for example, the Japanese economic policies of the 1980s posed no threat—except eventually to the prosperity of the Japanese themselves—since Tokyo was a strategic client of the United States. China’s current practices may be more economically egregious, but they also serve to enrich an American adversary. Mass-produced goods made, say, in Indonesia—not only a struggling democracy but the world’s largest Muslim state—might cost a bit more than those made in China, but the strategic effect might well be worth the cost.

In such a context, both sanctions and preferences might make geopolitical sense—although the Trump steel and aluminum tariffs would not meet this test. The problem is that the United States and its industrialized allies have come to see sanctions as a replacement for harder tools of power rather than as a supplement. The effects on today’s autocrats won’t be much: you don’t rise to a leadership position in the Quds Force or Chinese Communist Party or the Russian oligarchy without learning how to hide your money or being willing to let your own people suffer the consequences of your actions.


Thomas Donnelly


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