Two senior Republican senators sent a letter to President Trump this week urging him to take a tougher stance against China on intellectual property theft and Chinese wireless companies’ refusal to pay licensing fees to U.S. technology developers.
Sens. Jim Inhofe, R-Okla., and Roger Wicker, R-Miss., argue that the Chinese companies’ failure to pay for licensing fees allows them to use “the billions of dollars they owe” to outpace both U.S. and European wireless companies in developing future wireless networks and standards.
“If Chinese companies are allowed to remove the profit incentive for standards-based wireless research with repercussions, we will soon face the globally undesirable reality that the only companies conducting this research will be those in non-market economies that do not share our values or have our best interest in mind,” the two Republican lawmakers said in the letter to Trump, which was obtained by Fox News.
Inhofe and Wicker complained that China is able to export products ranging from mobile phones to televisions to the U.S. even though the companies do not have the proper licenses for the technology.
“We must change the ability for Chinese companies to access the U.S. market while simultaneously eroding the ability of U.S. and other Western market-based companies to maintain their leading role in the research and development of advanced wireless technology,” the senators said.
Leading technology firms in both the U.S. and Europe – like Qualcomm, InterDigital, Nokia and Ericsson – research and develop technology used to define global specifications for network technology used on smartphones. Major smartphone makers, such as Apple and Samsung, pay licensing fees to InterDigital and other firms in order to use those specifications in their products.
As Chinese tech firms such as Huawei and ZTE gained prominence, they made use of patent-protected specifications without paying the required royalties, violating the intellectual property of western firms.
The Trump administration has made the defense of U.S. intellectual property rights, including protections against forced technology transfer for companies seeking to conduct business in China, a priority in ongoing trade talks with Beijing. A trade war between the two countries has roiled the international market for months, straining companies and consumers on both sides.
“Intellectual property has always been the number one issue mentioned at these trade talks,” a leading technology firm executive who asked not to be named told Fox News. “The U.S. would like to see some benchmarks put back in place.”
Trump said last Thursday that the U.S. and China are working to secure a new site to sign a tentative trade truce and the location will be announced soon.
U.S. and Chinese negotiators wanted to finalize the deal in time for Trump and Chinese President Xi Jinping to sign it at the Asia Pacific Economic Cooperation summit in Chile in mid-November. But Chile announced last week that it was canceling the event due to ongoing mass demonstrations.
U.S. and Chinese officials are trying to settle details of the modest trade deal that sidesteps some of the biggest issues dividing the countries.
The world’s two biggest economies have wrangled for more than 15 months over U.S. allegations that China steals technology, forces businesses to hand over trade secrets and unfairly subsidizes its technology companies in an aggressive drive to supplant American technological dominance.
Washington and Beijing have imposed tariffs on hundreds of billions of dollars’ worth of each other’s goods in a trade fight that has slowed global economic growth.
On Oct. 11, the sides reached a tentative cease-fire that reassured jittery financial markets. Trump agreed to suspend plans to raise tariffs on $250 billion in Chinese imports, and China agreed to buy American farm products. The Trump administration says the Chinese also agreed to do more to protect intellectual property rights.
But nothing was signed Oct. 11, and few details have emerged on the terms of the so-called “phase one” agreement. Chinese leaders have been reluctant to agree to the substantive changes that Washington wants to see. Doing so would likely require scaling back their aspirations to make China a leader in advanced technologies such as artificial intelligence and driverless cars.
Fox Business Network’s Thomas Barrabi and The Associated Press contributed to this report.