China’s technological rise has become a matter of bipartisan concern.  The basic strategy of both candidates is to be “tough on China” while accusing the other candidate of being “too soft” or misguided.  On the surface, the differences in approaches appear to focus primarily on matters of degree.  Both parties support such tools as continued tariffs against Chinese imports, use of export controls and other trade sanctions, and enhanced efforts to “de-link” or “de-risk” from dependency on Chinese imports.  Nonetheless, candidates Trump and Harris have sparred over the extent and impact of the tariffs, and the track records and rhetoric of the candidates suggest more differences than may initially be evident.

This article examines the candidates’ positions and accomplishments in four key areas implicating technological competition: derisking, negotiating, and advancing new trade policies, reorganizing government structures to promote competitiveness, and developing policies to address new technology issues.

Reshoring/Derisking the US Supply Chain

The Trump-era tariffs were initially intended to remedy “IP Theft” by China. At that time, the administration used dubious data to support loss claims for compensatory tariffs to address more than 600 billion dollars in harm to the United States.[1]  In fact, the duties imposed had little to do with IP Theft. Instead, they entailed a broad range of consumer goods, including furniture and home goods, clothing and textiles, agricultural goods, toys, building materials, and basic electronics.  The Biden administration has kept the existing tariffs in place while hiking them on such trade-sensitive goods as steel and aluminum, ship-to-shore cranes, specific medical personal protective equipment, semiconductors, electric vehicles, and batteries and battery components.  The bottom line is that for both Trump and Biden, tariffs have largely been deployed as a protectionist tool, not as a targeted tool to remedy harm caused by China’s innovation and intellectual property policies.  Trump has favored more extensive tariffs on imports, while the Biden administration has viewed them as another weapon in the China toolbox.

The effect of tariffs and other protectionist measures has been the subject of numerous articles and research studies, which have typically looked at factors such as their impact on consumers and the relocation of manufacturing facilities. In general, the United States and Europe have become increasingly dependent on Chinese-origin goods, particularly technology, over the past 20 years, while China has reduced its reliance.[2]  One impact that has materialized during the Biden period is that Chinese exports through manufacturing in Vietnam and Mexico using China-origin materials have increased.[3] 

While tariffs might otherwise have significantly affected Chinese outbound investment, data from the Rhodium Group, which analyzes bilateral investment, demonstrates that Chinese direct investment in the United States lags Asia and Europe.  Investment has recently increased, principally in technology-intensive areas such as manufacturing batteries and solar modules.[4]  Meanwhile, the Biden Treasury Department is considering blocking US outbound investment in China in specific technology sectors and products, while the US Congress has also been seeking to regulate outbound investment in the proposed FY25 National Defense Authorization Act.[5]

Scientific and intellectual property data may also provide additional data on the extent of current and anticipated delinking. These data can be useful indicators of scientific, commercial, and technological cooperation between both countries.

According to Prof. Carolyn Wagner from Ohio State University, the share of China-US collaboration in global science decreased sharply in 2021 from 2019. The USA continues collaborating more with the EU-28 than China, although that cooperation is also dropping. However, the collaboration between China and EU-28 has also continued to increase but at a slowed rate in 2021.[6]  Other data compiled by Prof. David Zweig shows decreased cooperation in science between the US and China as measured by declining enrollments by Chinese STEM students in PhD programs in the United States, declining collaboration by ethnic Chinese scholars in the United States with Chinese counterparts, Chinese government encouragement to publish scholarship in Chinese publications, as well as declining confidence in the future of cooperation as measured by surveys of Chinese researchers in the United States, among other indicia.[7]

Cross-border IP application data is another resource that can be used to analyze cross-border business and technology trends. IP rights generally are obtained in anticipation of future business plans and may thereby reflect the confidence of a trademark owner or patentee in a particular market.  Broadly speaking, trademark application data can be a valuable predictor of business plans in China, including developing new innovative products.  Patent application data can indicate business expectations for investment or sales in patent-intensive technology markets, such as telecommunications or life sciences.

According to data from the five largest trademark offices (TM-5), trademark applications from the US decreased in China during the last several years.  The United States’ share of foreign applications to China increased as a percentage of foreign applications but declined in absolute terms in 2023 (27,312)  from 2022 (29,195).  There was also a significant drop in domestic applications in China during the same time, which may reflect a decline in the economy.  During this period, trademark applications from China to the United States declined from 228,445 (2021) to 111,697 (2023).  The massive number of trademarks filed in the United States from China was likely due to the demand that Chinese exporters develop their own brands and not counterfeit others from Amazon and other e-tailers. 

Patent applications in China from the US have also decreased from 2022 (43,090) to 2023 (40,380).[8]  Chinese applications in the US once again present a different picture from US applications in China.  Chinese applications increased from 56,479 to 61,083 during this period.  Part of the increase may be attributable to China’s growing innovative capacity.  However, I also believe that part of the increase may be due to the pressure placed on Chinese companies because of US sanctions. As Chinese tech companies with rich patent portfolios find themselves locked out of physical markets in China, they may wish to secure patent licensing revenue for products they are forbidden to sell physically in the US market.  Huawei, for example, despite being blocked from the US market, has become a significant licensor of patented technology in recent years and has resorted to litigation in the US market to obtain additional revenue.[9]

The data suggests that “de-linking” has been occurring in complex ways.  De-linking in physical goods has happened with the active participation of third countries or regions, such as Taiwanese companies relocating their supply chains.  United States scientific collaboration with China has been declining, partly due to greater U.S. government regulation of research with China, including risks of prosecution for economic espionage or other sanctions by the FBI and federal grant-making agencies under the “China Initiative” of the U.S. Department of Justice.  The data also suggests that US business interest in China may also be declining.  However, Chinese direct and indirect participation in the US market remains strong.  More trade sanctions and tariffs from the US are also likely to have an impact through the diversion of manufacturing to third countries, as well as a reorientation from sales of finished IP-intensive goods by Chinese tech companies to licensing of the underlying technology.

The Ins and Outs of Trade Policies Affecting IP and Innovation

Donald Trump upended US trade policy through several significant policy changes, including pulling the US out of accession to the Transpacific Partnership (now CPTPP), a comprehensive trade agreement, blocking US appointments to the Dispute Settlement body of the WTO (thereby weakening the WTO’s binding dispute settlement process), and imposing a range of unilateral measures such as tariffs that violated US commitments to the WTO and/or our major trading partners.

Despite his  “America First” rhetoric, the Trump administration was also transactional in using trade tools.  Trump’s trade representative, Robert Lighthizer, a seasoned trade lawyer, was also willing to use traditional trade tools tactically to advance US interests. To address “forced technology transfer” by China, Trump became the first president to bring a WTO dispute involving Chinese technology transfer policies before the WTO (DS542).  Importantly, this case was the first major US win of a WTO IP dispute with China, as China made the requested conforming changes to its laws.  Lighthizer maintains good relations with Trump and may continue to play an essential role in a second Trump administration.

The Trump administration also renewed the bilateral US-China Science and Technology Agreement (“STA”).  The STA has been in place since the normalization of relations with China in 1979 and has enormous practical and symbolic significance.  By contrast, the Biden administration has not yet openly committed to the long-term renewal of the STA, despite its commitment to work with China on shared issues of concern.

The Trump administration generally used the traditional resources of the US Trade Representative as the lead trade negotiator on IP issues. In the past, other agencies, such as the US Patent and Trademark Office (USPTO), have also served as essential negotiators for the United States on major IP-related trade agreements, including the TRIPS Agreement.  Lighthizer also negotiated significant new intellectual property trade agreements, including the US-Mexico-Canada Free Trade Agreement.  The IP Chapters of the Phase 1 Trade Agreement have been impactful and likely helped China develop into a more innovative and robust knowledge-intensive economy.[10]

The Phase 1 Agreement bears the imprint of a skilled trade negotiator balancing numerous economic interests with little in-depth knowledge of the Chinese legal system. It failed to address significant systemic challenges in China’s IP and innovation ecosystem.  For example, it did little to address the need for market mechanisms in managing IP assets through a reduced role for administrative agencies and improved civil remedies in China’s IP enforcement regime.  The Agreement offered a missed opportunity to support judicial reform, including China’s new national appellate IP court, new internet courts, local specialized IP courts, and an increasing extra-territorial reach of the Chinese judiciary.  The Agreement also did not address making court dockets more available to the public or improve transparency to enable rightsholders to develop more effective strategies.  It left an opaque administrative IP enforcement system in place. It did not attempt to handle emerging issues like privacy and biometric data. Specific industrial sectors, such as high-tech and telecommunications, were also largely ignored. 

Thus far, neither candidate Trump nor Harris has indicated whether they might seek to engage China on a “Phase 2” Agreement or other trade-related IP negotiations.  Nor have such negotiations  been undertaken by the Biden administration.  Furthermore, neither candidate has indicated an interest in the aftermath of China’s failure at the WTO in DS542 by engaging with China towards further international compliance in technology transfer, such as by addressing efforts of Chinese courts and agencies to set global licensing terms for standardized technologies. Shockingly, the Biden administration earlier this year expressed support for China’s position in a dispute filed by the EU, saying that it is not obligated to make its internal policies affecting IP court decisions publicly available.[11] 

When it entered trade negotiations, the Biden administration sought to conclude less comprehensive trade agreements, such as the Indo-Pacific Economic Framework for Prosperity, which focuses on trade, supply chains, clean energy, decarbonization, infrastructure, and tax and anti-corruption.  Nothing on IP appears specifically in the IPEF, nor is developing and sharing new innovations a significant focus of the various agreements, nor is China a part of those discussions.

During the Biden administration, key positions such as the IP Enforcement Coordinator in the White House and the USTR Chief Negotiator for IP and Innovation were not filled.  Neither candidate has expressed any proposal regarding filling those positions if elected, as they are below Cabinet level and usually confirmed relatively late after a new President is inaugurated.  Such appointments should be part of a holistic approach to engaging China on IP and technology issues.[12]

One agency that has continued to advance IP-related concerns with China during the Biden period has been the USPTO.  USPTO continues to have a presence in the US Embassy and the US consulates in Shanghai and Guangzhou, with a legal team that is the largest in the US mission to China.  A counterpart team to the USPTO team also exists at the Chinese Embassy, with representatives from China’s Ministry of Commerce, National IP Administration, and State Administration for Market Regulation.  In the aftermath of a call for more significant people-to-people exchanges, on April 15, 2024, USPTO Director Kathy Vidal was also given an audience with Vice Premier Ding Xuexiang.  Several bilateral programs are anticipated in the aftermath of that visit.

As previously mentioned, the Biden administration formally stopped the Trump administration’s China Initiative in February 2022.  The Heritage Foundation Project 2025 Report, which has not been fully adopted by Candidate Trump, notes that the Trump administration should “restart the Trump administration’s ‘China Initiative’” to address Chinese espionage and theft of trade secrets. There had been considerable concern expressed by many commentators and academics about the effectiveness of this initiative, including its success rates in the courts, its use of racial targeting, and its adverse impact on technological competitiveness through reduced retention of talented Chinese American scientists.

Regarding trade sanctions, both the Harris and Trump administrations will likely suffer from continuing weaknesses in predicting the future direction of China’s technological strengths and capacity for technological catch-up.[13]  In practical terms, a Harris administration would likely continue the Biden administration’s practice of streamlining and harmonizing the numerous sanctions lists used by the government, evolving controls in critical areas of military or dual-use technology, and increasing coordination with allies.[14] A Trump administration might favor a broader approach, similar to its first administration, which sometimes included counter-productive sanctions (such as prohibiting participation in standards-setting bodies that included Chinese organizations). It may also include sweeping sanctions against investment in China or against individual companies.

Developing  New Government Structures to Promote Innovation

During the past several decades, the United States dissolved the Technology Administration under the US Department of Commerce according to the America COMPETES Act of 2007. It defunded the Office of Technology Assessment in Congress in 1995. USPTO was also established as a fee-based agency, with its director serving as Under Secretary for Intellectual Property in the US Department of Commerce under the American Inventors Protection Act of 1999.  After many years of lobbying, the diplomatic rank of several USPTO postings overseas was also elevated in December 2020, enabling them to advance US policy at a higher level.[15]  Perhaps the most significant developments in IP have not been in the administration or the legislative branch but have been the increasing involvement of the US Supreme Court in IP-related disputes, including in such critical areas as patent-eligible subject matter and the availability of injunctive relief to address infringement.  There are currently pending bills in Congress to address what many perceive as judicial overreach in recent Supreme Court jurisprudence, which also affects American competitiveness with other jurisdictions.

The  Heritage Foundation’s Project 2025 report addresses the need for changes in the patent law and various kinds of government institutional reform to enhance US competitiveness.  Many of its t recommendations also address redundant functions in US government agencies.  For example, the Heritage Foundation has proposed moving the International Trade Administration of the Commerce Department to USTR, along with the Exim Bank, Trade and Development Agency, and others. The Heritage Foundation has also proposed moving the United States Patent and Trademark Office to the White House Office of Management and Budget, as the PTO is a performance-based (fee-based) agency that does not rely on taxpayer funds.  An alternative proposal is to consolidate the USPTO with the National Institute of Standards and Technology (NIST) to create an agency involved in patents and technical standards.  The Day One Project, an initiative of the Federation of American Scientists, a non-partisan NGO, has previously recommended improving the IP system in the United States and reforming existing institutions.[16] 

 Thus far, I have not seen any proposal calling for a more coordinated interagency approach to science policy to address the need for more expertly informed science policy across the whole of the US government, including supporting initiatives such as scientific support for the CHIPS and Science Act and any technology clusters it may create, structuring export controls to address technological challenges, assessing technology aspects of economic espionage, supporting innovation-informed patent policies,  enhancing STEM education policies, management of grant-making and international research collaboration, and related aspects of science and technology diplomacy. The Project 2025 report does not consider the need for an integrated Science and Technology agency, which might combine the USPTO, NIST, National Science Foundation, the Office of Science and Technology Cooperation in the State Department, and the Office of Science and Technology Policy in the White House. A new science and technology agency could also help drive interagency consensus on rapidly emerging new policy challenges such as data protection, genetic resource protection, and the many opportunities and policy questions posed by the emergence of generative AI.

Developing Policies to Address Emerging Tech Issues

Vice President Harris has close ties to Silicon Valley, where she grew up, and Hollywood, where her husband practiced entertainment law. Her brother-in-law serves as Uber’s general counsel. During her stint as attorney general of California, she oversaw the prosecution of companies for software piracy. Former President Trump, by contrast, has fewer ties to Silicon Valley overall and has often expressed suspicion regarding the biases of tech and media companies.

Vice President Harris has expressed an interest in various technology and IP issues, including her leadership on the National Space Council and her support of AI regulation. However, she may be reluctant to address many of the more controversial issues, perhaps due to the lack of unanimity in the tech community concerning the need for reform, particularly in controversial areas of intellectual property.

The Biden administration has, however, taken several unprecedented steps to weaken the US IP system, including US support for an IP waiver on pharmaceutical products to address global pandemics, an effort to nullify IP rights for pharmaceutical products through price controls, exercising “march-in rights” over patents derived from US government-funded research, and the continued uncertainty of patentability of inventions in emerging technologies such as software-enabled inventions, fintech, and genetic inventions. The Biden administration’s pro-labor approach has occasionally conflicted with its technology programs, such as when the Federal Trade Commission sought to ban non-compete agreements.  Non-compete agreements are critical tools for companies that can be used to address technology theft, mainly when this theft occurs overseas in jurisdictions like China, where success rates for trade secret case litigation are low.[17]  It is doubtful that a Trump administration would undertake similar actions. Many of these issues are also addressed as areas for potential Republican pushback in the Project 2025 report.

 Among the more damaging aspects of the recent pandemic and the Biden administration’s tenure has been declining morale and consequent declining efficiency of USPTO patent and trademark examination practices. Currently, the backlog for patent examination is 26.2 months, and 14.4 months is for trademarks. USPTO pioneered remote work in the federal government and was rated in 2014 as one of the top places to work in the federal government.  It is now rated as number 236.[18]  Many tech companies, such as Amazon and Dell, are now calling their employees back to work full-time and also facing the challenges of recruiting and maintaining STEM talent.

Several differences have also appeared between the candidates concerning domestic programs that impact international competitiveness. Trump will likely favor less regulation of AI and other new technologies.  One can also expect that a  Trump administration will be more disposed to approve domestic tech mergers and acquisitions.  The CHIPS and Science Act passed Congress despite traditional Republican concerns over big government and industrial policies.  If the CHIPS and Science Act is a bellwether on the return of industrial and technology policy to the US government, then a Harris or Trump administration could affect other critical aspects of the US industrial and technology base.  

Conclusion

Neither candidate has thus far urged significant new additions to a diplomatic toolbox to compete with China, which was fashioned or repurposed in the Trump era. However, considerable differences exist between the rhetoric of the candidates and their actual programs on the ground.  President Trump’s America First rhetoric may foreshadow more extreme unilateral action by the United States.  However, if he sticks to the script he used during his first administration, his approach may be less ideological and more practical than this rhetoric suggests.  Vice President Harris may also be more committed to multilateral approaches to competitive challenges with China, although her support for intellectual property-related solutions may also be relatively thin.  For both candidates, keeping up with the pace of technological change and China’s experimental approaches to policy will demand greater expertise and coordination among US government agencies and our allies.

The Presidential election is not the only one that could significantly affect US-China technological relations.  During “China Week” in Congress this past September, the House of Representatives voted on 25 bills related to China and US-China competition. The bills address such issues as the renewal of the STA with China, addressing trade secret theft and economic espionage by China, addressing US battery dependence on China, improving US export controls, and improving data biosecurity and the security of domestic telecommunications. President Biden has signed several bills during his tenure that target China’s tech companies and practices, including one that would potentially one that would ban entry into the United States by foreigners engaged in IP theft and another that would ban TikTok from the United States.  The TikTok ban does not appear to be fully supported by candidate Trump despite his prior actions against TikTok when he was in office.  Ultimately, as both candidates desire to be seen as “tough on China,” final legislation passed by both houses may be difficult to resist enacting into law, no matter who holds the nation’s highest office.

Your thoughts and comments are appreciated!

[1] Mark A. Cohen, “The 600 Billion Dollar China IP Echo Chamber” (May 12, 2019), https://chinaipr.com/2019/05/12/the-600-billion-dollar-china-ip-echo-chamber/.

[2] François Chimits, “Growing Asymmetry: Mapping the Import Dependences in EU and US Trade with China” (Oct. 1, 2024) https://merics.org/en/report/growing-asymmetry-mapping-import-dependencies-eu-and-us-trade-china.

[3] Vernon Hsu, Boya Peng, and Jing Wu, “The Paradox of De-risking: Global Supply Chain Rerouting in Response to the U.S.-China Trade War” (April 8, 2024). Available at SSRN:  https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4787687.

[4]Thilo Hanemann, Danielle Goh, Armand Meyer, “China’s Post Covid OFDI Rebound Loses Steam” (July 16, 2024), https://cbm.rhg.com/research-note/chinas-post-covid-ofdi-rebound-loses-steam

[5] Owen Redford, “Regulations Loom for U.S. Outbound Investment in China,” Forbes (Sept. 27, 2024).  https://www.forbes.com/sites/owentedford/2024/09/27/regulations-loom-for-us-outbound-investment-in-china/ .

[6]Carolyn S. Wagner and Cai Xiaojing, “Changes in Co-Publication Patterns among China, the European Union (28) and the United States of America 2016-2021 (2022), available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4035897.

[7] See, e.g., David Zweig, The War for Chinese Talent in America (2024)

[8] CNIPA, 2023 Yearbook国家知识产权局2023年度报,  at p. 101.

[9] “Huawei Announces Royalty Rates for its Patent License Programs” (July 14, 2023), https://www.prnewswire.com/news-releases/huawei-announces-royalty-rates-for-its-patent-license-programs-301877294.html.

[10] Mark A. Cohen Is It in There – CNIPA’s “Phase 1” IP Action Plan? (April 22, 2022), https://chinaipr.com/2020/04/22/is-it-in-there-cnipas-phase-1-ip-action-plan/.

[11] See “Why is the US Helping China Undermine Global Innovation?” (May 15, 2024),  https://c4ip.org/new-op-ed-from-c4ip-co-chair-andrei-iancu-and-uc-berkeley-official-mark-cohen-why-is-the-us-helping-china-undermine-global-innovation/.

[12]  Mark Cohen, “USTR and Restructuring China IP Policy”  (March 24, 2021), https://chinaipr.com/2021/03/24/ustr-and-restructuring-china-ip-policy/

[13] Jeanne Suchodolski, Suzanne Harrison and Bowman Heiden, Innovation Warfare, 22 N.C. J.L. & Tech. 175 (2020). Available at: https://scholarship.law.unc.edu/ncjolt/vol22/iss2/4.

[14] Reva Goujon, Juliana Bouchaud and Ciel Qi  “The Urge to Merge – Streamlining US Sanctions Lists” (Aug. 29, 2024), https://rhg.com/research/the-urge-to-merge-streamlining-us-sanction-lists-targeting-china/.

[15] Mark A. Cohen, “USPTO Finally Travels Up the Diplomatic Staircase (Dec. 20, 2021), https://chinaipr.com/2020/12/10/uspto-finally-travels-up-the-diplomatic-staircase//

[16] https://www.dayoneproject.org/. In the interest of full disclosure, I was a part of the Day One Project’s contributors in 2021. 

[17] Mark Cohen, “The Proposed FTC rule on Non-Compete Agreements and China “ ( March 19, 2023 ), https://chinaipr.com/2023/03/19/the-proposed-ftc-rule-on-non-compete-agreements-and-china/

[18] Eileen McDermott, “IP Watchdog Celebrates 25 Years” (Oct. 2, 2024), https://ipwatchdog.com/2024/10/02/ipwatchdog-celebrates-25-years-gene-quinn-awarded-lifetime-achievement-former-uspto-leaders-discuss-ways-improve-agency/id=181781/.