Tech group urges U.S. to recruit allies to take on China, not tariffs

[April 09, 2018]   WASHINGTON (Reuters) - A trade group representing top technology companies on Monday told U.S. Treasury Secretary Steven Mnuchin that it opposes the Trump administration's focus on tariffs to try to change China's unfair trade practices.

The Information Technology Industry Council said in a letter to Mnuchin that it supports the Trump administration's "Section 301" investigation into China's abuses of intellectual property, but instead of tariffs, it advocates a U.S.-led international coalition to put pressure on Beijing.

"Our opposition to tariffs is pragmatic. Tariffs do not work," wrote ITIC President and CEO Dean Garfield.

"Instead of tariffs, we strongly encourage the administration to build an international coalition that can challenge China at the World Trade Organization and beyond," Garfield added.

"Numerous countries share the United States’ concerns about China and its unfair trade practices. The United States is uniquely well-situated to lead that coalition."

Garfield called for such a coalition of allies to quickly travel to China to negotiate terms for a "balanced, fair, and reciprocal trade relationship."

The group, which counts information technology hardware, software, services and social media companies from Apple Inc <AAPL.O> to Twitter Inc <TWTR.N>, did not make any reference to the Treasury's forthcoming investment restrictions on Chinese acquisitions of U.S. technology firms.

U.S. Treasury Secretary Steven Mnuchin speaks during a news conference at the G20 Meeting of Finance Ministers in Buenos Aires, Argentina, March 20, 2018. REUTERS/Marcos Brindicci

The restrictions are part of the remedies proposed under the U.S. Trade Representative's Section 301 investigation, which alleges that China has misappropriated U.S. intellectual property through joint venture requirements that effectively force technology transfer, the use of state funds to acquire U.S. technology companies and other means.

President Donald Trump on Sunday predicted that China would take down its trade barriers, expressing optimism despite the escalating tariff threats between the world's two largest economies that have roiled global markets.

ITIC said that it believed China had abused the privileges of its membership in the WTO.

"China has promised open and fair trade, but has instead promulgated rules, regulations, and practices aimed at encumbering non-Chinese companies," Garfield wrote.

"This current approach cannot be sustained."

(Reporting by David Lawder; Editing by Robert Birsel)

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