The Wall Street Journal: U.S. seeks retaliation for China’s restrictions on tech companies

WASHINGTON — The U.S. is examining ways to retaliate against Beijing’s restrictions on U.S. providers of cloud computing and other high-tech services, effectively opening a new front on its trade offensive against China.

According to individuals familiar with the administration’s thinking, the U.S. trade representative’s office is putting together a fresh trade complaint, probably under Section 301 of the Trade Act of 1974, arguing that the Beijing unfairly restricts U.S. trade in these high-tech services.

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The trade representative has yet to decide whether to go ahead with the complaint, the individuals said, which would be in addition to recent moves to ratchet up pressure on China, including the imposition of tariffs on a total of $150 billion in Chinese imports. But USTR, which has taken the lead in the China trade fight, views China’s restrictions on cloud computing as providing a clear-cut example that might garner public support.

Beijing requires U.S. cloud-computing firms, such as Amazon.com Inc. AMZN, +0.75%   and Microsoft Corp. MSFT, +1.17%   to form joint operations with Chinese companies and license their technology to the Chinese partners. The USTR has said in reports on Chinese trade practices that Beijing withholds licenses that would allow U.S. firms to operate independently in China. As a result, U.S. companies can’t market their cloud-computing services in China or sign up customers directly. Chinese firms, such as Alibaba Group Holding BABA, +1.55%  , by comparison, are allowed to operate in the U.S. without restriction.

An expanded version of this report appears on WSJ.com.

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