Back in May, the current administration implemented measures to address technology transfers, intellectual property theft, and the flooding of global markets with low-priced exports by various Chinese providers. In response, the U.S. Trade Representative increased tariffs on $18 billion worth of Chinese imports under Section 301 of the Trade Act of 1974. And a few companies are starting to react as well.
This Trade Act gives the U.S. government the authority to investigate and respond to unfair trade practices by other countries, including the right to impose tariffs or other trade restrictions to protect businesses and workers when foreign practices are found to be discriminatory or harmful to U.S. interests.
These measures align with efforts to boost American manufacturing, create jobs, and secure critical supply chains, particularly in clean energy and semiconductors. The approach focuses on addressing specific sectors and challenges, avoiding broad tariffs that could raise costs across the board.
For instance, technology transfers—the process by which technology, knowledge, skills, manufacturing processes, or other intellectual property are transferred from one organization, country, or entity to another—can involve the sharing of technical information, patents, or trade secrets through various means such as licensing agreements, joint ventures, partnerships, or foreign direct investments.
Such practices often occur when a company from one country (usually a more technologically advanced one) shares its technology with a company in another country, either voluntarily or as a requirement for doing business there. This can happen when a foreign company is required to share its technology with a local partner in exchange for market access or as a condition for investment.
Sometimes, these transfers are effectively forced, such as when joint ventures with local firms are mandated, requiring the foreign company to share its proprietary technology. This is viewed as unfair because it can lead to the loss of competitive advantages for the company that developed the technology and can undermine innovation.
This concern is particularly significant in trade relations between the U.S. and China, especially regarding sectors like steel and aluminum, semiconductors, electric vehicles, batteries, critical minerals, solar cells, ship-to-shore cranes, and medical products.
Lean Consulting Solutions can help you navigate these challenges through diversification and cost reduction strategies within your supply chain, offsetting the impact of tariffs. Your first session with us is AT NO COST—give us a call, and we'll explore a wide array of solutions tailored specifically to your department or company. Contact us now!
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