Trump looks like he's about to hit back at China's crackdown on US tech companies

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  • President Donald Trump is considering another round of trade action against China.
  • The US Trade Representative would look into the Chinese government’s limits on US cloud computing companies.
  • A new investigation would push the US closer to a full-blown trade war with China.

President Donald Trump’s administration is considering retaliatory action in response to China’s limitations on US tech companies, according to a new report.

The Wall Street Journal’s Bob Davis reported that the US Trade Representative is considering opening an investigation under Section 301 of the the Trade Act of 1974, which could lead to new trade restrictions on imports of Chinese goods.

The investigation would look into China’s practice of forcing US cloud computing firms, such as Amazon Web Services and Microsoft, to partner with Chinese firms to offer services in the country. The USTR would also look into the Chinese government’s denial of licenses for these US cloud computing companies to operate in the country according to the Journal.

According to the report, the Treasury Department may also limit the ability of Chinese cloud computing companies like Alibaba that are trying to do work in the US. Currently there are no limits on Chinese computing companies from doing business in the US.

The Trump administration also undertook a Section 301 investigation to develop recently announced tariffs on $US50 billion worth of Chinese goods coming into the US, as well as planned tariffs on an additional $US100 billion worth of Chinese goods.

A second Section 301 investigation would be another blow in the growing trade fight between the US and China. Already the two countries have gone back-and-forth with two different rounds of tariffs on goods.

Economists have expressed concerns that the continuing trade tension between the US and China could turn into a full-blown trade war, which would be damaging to the US economy.

Trump has said the US and China entered into negotiations over trade following the most recent round of tariffs, with the goal of opening up the Chinese market to more US investment.

Chinese President Xi Jinping also announced actions to open up the country’s market to international investment, which prompted a positive tweet from Trump.

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