US Trade Representative Robert Lighthizer has been authorized to look into whether China is guilty of intellectual property theft, a move that could eventually lead to trade sanctions. The administration has cited the theft of intellectual property such as computer software as well as Beijing's requirement that US companies turn over proprietary technology as a condition of entering China's markets. US companies have complained that they are often forced to share valuable technology with Chinese counterparts as a condition of doing business in the country.
While the review is a preliminary step, it could lead the administration to initiate a Section 301 investigation, a sanctions mechanism that is part of the Trade Act of 1974. Section 301 allows the US to unilaterally take action against countries that impose barriers to US exports. The section was widely used until 1995 when the WTO was established. Trump has implied he may use Section 301 without WTO authorization. Bypassing the WTO would be quicker, but in conflict with international law.
The ordering of the investigation will not immediately impose sanctions but could lead to steep tariffs on Chinese goods or limit Chinese investments in the US. The form and scope of the investigation are expected to be tied to negotiations of how the Chinese will manage the North Korean nuclear risk.