Unilateral probe of China's trade could hurt both Washington, Beijing

Schott didn't see "any immediate restrictions" being imposed on China by the United States as the USTR has to do "a lot more study" on this case.

"Whether there are restrictions or not will depend on how the study proceeds and how the bilateral consultations between the United States and China unfold over the next few months," he said.

China has urged the United States to objectively evaluate China's progress in protection of intellectual property rights (IPR) and resolve differences with China through dialogue and consultation.

"The United States should treasure the current sound Sino-US economic and trade ties and cooperation momentum. Any US trade protectionism move will surely damage bilateral ties and the interests of companies from both countries," China's Ministry of Commerce said in a statement on Tuesday.

Lighthizer, former deputy USTR in the Reagan administration, may wish to relive the trade battle against Japan in the 1980s. However, the world has tremendously changed in the past three decades and the China-US economic and trade relationship is more important than ever.

Trade and investment between China and the US supports about 2.6 million American jobs, according to the US-China Business Council.

"The Chinese market matters very much to the US administration, much more than the Japanese market matters to the US," Yorizumi Watanabe, a professor at Faculty of Policy Management of Keio University in Tokyo, told Xinhua.

"If they (the Trump administration) become very naughty and nasty against Chinese exports, then Chinese authorities would easily imagine similar sorts of restrictions (against US exports), so this is kind of tit-for-tat situation," he said.

He hoped the Trump administration would be "extremely careful" about imposing new import restrictions against China.

If the US side fails to respect basic facts and multilateral trade rules, and takes measures that harm bilateral economic and trade relations, "China will definitely not sit by, but take all appropriate measures to resolutely safeguard its legitimate rights and interests," China's Ministry of Commerce said.

Given China's role in current global supply chains, "a trade war between US and China will hurt not only Chinese manufacturers, but also upstream suppliers and downstream distributors such as US retailers," the Institute of International Finance (IIF), a global association with around 500 major financial institutions, warned in a recent report.

Asked about the trade investigation, the International Monetary Fund (IMF) on Tuesday reiterated its support for an open trading and investment system and the importance of working within the multilateral framework to resolve differences.

"We believe that the multilateral trading system can be an important source of economic prosperity for all countries concerned," said Markus Rodlauer, deputy director in the IMF's Asia and Pacific Department.