US trade case against China very weak

On the surface, US Trade Representative Robert Lighthizer appears to have made an ironclad case against China in the so-called Section 301 report issued on March 22. Laid out in a detailed 182-page document (which, with 1,139 footnotes and five appendices, would make any legal team blush with pride), the USTR's indictment of China on charges of unfair trading practices regarding technology transfer, intellectual property, and innovation seems both urgent and compelling.

It has quickly been accepted by many as foundational evidence in support of the tariffs and other punitive trade measures that the Donald Trump administration has initiated against China in recent months. It is powerful ammunition in a potential trade war.

But don't be fooled. The report is wide of the mark in several key areas. First, it accuses China of "forced technology transfer", arguing that US companies must turn over the blueprints of proprietary technologies and operating systems in order to do business in China. This transfer is alleged to take place within the structure of joint-venture arrangements - partnerships with domestic counterparts which China and other countries have long established as models for the growth and expansion of new businesses.