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Trump administration to step up pressure on China

A woman walked by shelves displaying bottles of American wine for sale at a supermarket in Beijing on Tuesday. China has said it will increase purchases of US goods and services by $1.2 trillion over the next several years.
A woman walked by shelves displaying bottles of American wine for sale at a supermarket in Beijing on Tuesday. China has said it will increase purchases of US goods and services by $1.2 trillion over the next several years.(Andy Wong/Associated Press)

WASHINGTON — The Trump administration is planning a series of actions this week targeting China’s trade, cyber, and economic policies, bringing together the work of a handful of federal agencies as part of a longer-term strategy to keep pressure on Beijing, according to senior administration officials.

The moves, which have been contemplated for months and are expected to be announced as early as Wednesday, stem from a growing concern within the administration that China will not easily change its practices — including what it says is a pattern of hacking into US companies and throwing up trade barriers to US goods.

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The action was coordinated by Robert Lighthizer, the US trade representative, and several other administration officials who have grown frustrated with Beijing’s vague promises to make sweeping changes to its treatment of US intellectual property and technology transfer, and as-yet unfulfilled commitments to substantially increase purchases of US goods.

The Justice Department is preparing to announce the indictments of several hackers that the United States believes worked for the Chinese government and have targeted US companies for years, according to a government official briefed on the plan. Other actions this week could include new Commerce Department rules on imported Chinese semiconductors, and a possible revival of a long-shelved executive order intended to make it harder for Chinese companies to obtain telecommunications components, a senior US official with knowledge of the plans said.

While the two sides have reached a 90-day trade truce, administration officials want to keep up a sustained campaign of pressure to ensure that Beijing lives up to the commitments that President Trump and President Xi Jinping of China agreed to during a dinner in Buenos Aires this month.

Administration officials believe that they have the upper hand and can leverage tariffs and other punishments to eke out changes from Beijing.

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But that approach could backfire, given the United States is now targeting high-profile tech executives and others with ties to China’s Ministry of State Security.

China has been angered by the arrest of Meng Wanzhou, the chief financial officer of Huawei, the Chinese telecommunications company. Meng has been detained in Canada on suspicion of fraud involving violations of US sanctions in Iran and is awaiting a decision from a judge about whether she will be released on bail.

US business leaders have been bracing for retaliation from China, which has demanded the immediate release of Meng and accused both the United States and Canada of violating her human rights.

On Tuesday, the International Crisis Group said that one of its employees, a former Canadian diplomat, had been detained in China. The disappearance of the former diplomat, Michael Kovrig, could further inflame tensions between China and Canada.

“International Crisis Group is aware of reports that its Northeast Asia senior adviser, Michael Kovrig, has been detained in China,” the group said in a statement on its website. “We are doing everything possible to secure additional information on Michael’s whereabouts as well as his prompt and safe release.”

Trade negotiators on both sides of the Pacific have been working on an agreement that would involve a commitment by China to increase purchases of US goods and services by $1.2 trillion over the next several years. On Tuesday, Trump said that the United States and China were having “very productive conversations” as top American and Chinese officials held their first talks since the two countries agreed to the trade truce on Dec. 1.

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The Chinese Commerce Ministry announced that Liu He, China’s economic czar, took part in a telephone call with Steven Mnuchin, the Treasury secretary, and Lighthizer to discuss plans for future meetings to hammer out a finalized trade pact. Officials from Beijing are expected to travel to Washington early next year to continue discussions as the two sides try to reach an agreement ahead of the March 1 deadline.

Stock markets initially rallied on the prospect that the countries may make progress in resolving their trade tensions, which have threatened to hurt global economic growth. Despite the truce, conflicting signals from the White House about the agreement and the recent arrest of Meng in Canada, at the request of the United States, have spooked investors, sending markets down across the globe.

Expressing optimism about the state of the negotiations, Trump said on Twitter to “watch for some important announcements.”

Trump has promoted major benefits of the agreement before, such as the “immediate” purchases of US agricultural products, but US industry groups have not confirmed that such purchases are taking place.

US officials declined to comment on whether the Huawei situation was discussed during the call with Liu. In recent days, officials have tried to keep the issue separate from the trade negotiations in hopes that a confrontation over Huawei would not derail the economic discussions.

The effort to compartmentalize national and economic security comes as the United States has spent much of the last year arguing that the two matters are inextricably linked.

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“This is a criminal justice matter,” Lighthizer said in an interview with CBS on Sunday. “It is totally separate from anything that I work on or anything that the trade policy people in the administration work on.”

Lighthizer said that China had until March 1 to reach an agreement with the United States or face more tariffs on its exports.