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Trump to ramp up trade pressure on China with call for probe on Monday

By Lesley Wroughton

WASHINGTON, Aug 12 (Reuters) - President Donald Trump on
Monday will order his top trade adviser to determine whether to
investigate Chinese trade practices that force U.S. firms
operating in China to turn over intellectual property, senior
administration officials said on Saturday.

The move, which could eventually lead to steep tariffs on
Chinese goods, comes at a time when Trump has asked China to do
more to crack down on North Korea's nuclear missile program as
he threatens possible military action against Pyongyang.

Trump has said he would be more amenable to going easy on
Beijing if it were more aggressive in reining in North Korea.

An administration official, however, insisted diplomacy over
North Korea and the potential trade probe were "totally
unrelated," saying the trade action was not a pressure tactic.

"These are two different things," the official said,
speaking to reporters on a conference call.

Trump will direct U.S. Trade Representative Robert
Lighthizer to determine if an investigation is warranted of "any
of China's laws, policies, practices or actions that may be
unreasonable or discriminatory, and that may be harming American
intellectual property, innovation and technology," the official
said.

"China's unfair trade practices and industrial policies,
including forced technology transfer and intellectual property
theft, harm the U.S. economy and workers," a second official
told reporters. "The action being taken on Monday is a
reflection of the president's firm commitment to addressing this
problem in a firm way."

Any investigation that may be launched could take as long as
a year to conclude, a third official said. 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."

Trump, who will interrupt a 17-day working vacation to make
a day trip to Washington for the trade announcement, had been
expected to seek a so-called Section 301 investigation earlier
this month, but an announcement was postponed as the White House
pressed for China's cooperation on North Korea.

While China joined in a unanimous U.N. Security Council
decision to tighten economic sanctions on Pyongyang, Trump has
kept up pressure on Beijing to do more.

"We lose hundreds of billions of dollars a year on trade
with China. They know how I feel," he told reporters on
Thursday. "If China helps us, I feel a lot different toward
trade."

Trump and Chinese President Xi Jinping spoke by telephone on
Friday and reiterated their mutual commitment to denuclearize
the Korean peninsula, the White House said in a statement. It
was unclear whether the issue of trade came up.

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 U.S. industries from "unfair trade
practices" of foreign countries.

The process can bypass World Trade Organization procedures
for adjudicating grievances. Though widely used worldwide, the
WTO process is viewed unfavorably by the Trump administration.

"We're at the beginning of this process and no firm
decisions have been made as to how that is going to work in
terms of whether we would pursue WTO action or action outside
the WTO," the first administration official said.

In addition to the United States, the European Union, Japan,
Germany and Canada have all expressed concern about Chinese
theft of intellectual property. The technology sector has been
especially hard-hit in intellectual property disputes.
(Reporting by Lesley Wroughton; Editing by Tim Ahmann and
Sandra Maler)

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