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Trump to request possible probe of China trade practices

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NICHOLAS KAMM  AFP  Getty Images

The executive memo Trump is expected to sign on Monday will direct U.S. Trade Representative Robert Lighthizer to look into whether his office should open an investigation into China's trade policies and whether they abide by the U.S. Trade Act of 1974. It was not immediately clear whether he was talking about trade was the subject.

When reports of the potential trade investigation first emerged more than a week ago, China's Commerce Ministry stressed the importance of U.S.

The president's trade action will be a long way from any punitive move against China, despite his and his advisors' open talk of Chinese "theft" and "stealing" of US companies' intellectual property, which broadly includes technological innovations, film and other artistic products, industrial designs and military secrets.

It's impossible, however, to see the move as somehow disconnected from the back-and-forth rhetoric between the USA and North Korea over the past week.

Trump on Thursday hardened his warning that North Korea would face "fire and fury" if it kept threatening the United States, saying maybe that tough talk "wasn't tough enough". They added that the trade measure would be carried out under the rules of worldwide law and would not trigger greater conflict with China.

Politico said the trade probe would not mean immediate sanctions, but could ultimately lead to steep tariffs on Chinese goods. "The results are there for all to see".

"I don't think we're heading toward a period of greater conflict (with China)", said one White House official. "They know how I feel", Trump told reporters on Thursday.

And on Friday, Trump tweeted the USA military is indeed ready, describing it as "locked and loaded, should North Korea act unwisely". The Trump administration is insisting the move isn't tied to heightening tensions with North Korea, but it is inherently connected to complications in the region.

The trade investigation is expected to be only one part of a multi-pronged push by the Trump administration to counter perceived Chinese trade abuses, which Trump frequently railed against as a candidate. -China trading relationship. But analysts have cautioned that Trump faces a huge challenge in his desire to significantly reduce the USA trade deficit with China, which previous year stood at more than $300 billion.

The U.S. business community, which traditionally lobbied U.S. administrations to take a softer approach toward Beijing to protect access to a profitable market, has shifted toward a tougher stance on China in response.

"Protection measures against some specific items, such as steel and aluminum, may gain political favors, but are not likely to be of much help to rebalance trade", economists at the Institute of International Finance wrote in a research note this week.

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