There is no deadline for deciding if any investigation is necessary.
A Section 301 investigation normally lasts one year.
Asked Friday about U.S. President Donald Trump's latest statements, Merkel declined to say whether Germany would stand with the U.S.in case of a military conflict with North Korea.
The new probe does signal a bit of a hardening shift in the Trump administration's China trade policy, as it is the first White House trade directive aimed directly at Beijing. In addition to this joint venture they are asked to turn over intellectual property or other propriety information.
The measure would seek to address what the USA business community has described as flagrant trade violations by China, which employs a variety of rules and practices to wall its market off from foreign competition and pressure US companies to part with valuable product designs and trade secrets - or to steal them outright.
Like the president, Lighthizer has criticized multilateral venues such as the World Trade Organization for failing to provide adequate tools to address China's economic violations.
It wasn't immediately clear how China would react to the move.
While Beijing has promised to open more industries to foreign companies, it also has issued new rules on electric vehicle manufacturing, data security, internet censorship, and other fields.
"I don't see a military solution and I don't think it's called for", Merkel said Friday, calling on the U.N. Security Council to continue to address the crisis.
The ministry did not confirm whether Defense Minister Itsunori Onodera has already issued an order to shoot down incoming missiles.
The decision will not only take action against alleged Chinese violations of USA companies' intellectual property rights, but could also be perceived as an attempt by the US government to crank up the pressure on Beijing to rein in North Korea.
The officials, who spoke on condition of anonymity, bluntly accused China of "stealing our intellectual property" - long a concern of Western companies seeking a share of the enormous Chinese market.
President Trump plans to get tougher on trade with China. From lamps to birthday candles, from flip-flops to mouse traps, "Made in China" goods have long become an indispensable part of everyday life for many US households.
U.S. Senate Democratic leader Chuck Schumer took issue with that assessment. Xi urged both sides not to do anything that would aggravate tensions.
"At present, relevant parties should exercise restraint and avoid words and actions that would escalate tensions on the Korean Peninsula", Xi said, according to the statement provided by China's government.
"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.
A top American commander feels that India can play a role in defusing the North Korean crisis by helping the leadership in Pyongyang to understand the seriousness of the threat posed by its nuclear programme. This past week, Trump said he could soften his views on trade if China stepped up its assistance, leading to speculation that the investigation could be a negotiating tactic.
Trump's threat to investigate China's intellectual property and trade practices is valid, but his administration may not be up to the delicate task of carrying out a new China probe without sparking a damaging trade war, USA business lobbyists said last week.
"We lose hundreds of billions of dollars a year on trade with China".
Trump has requested similar inquiries on trade, but the reports haven't been delivered on deadline.
In general, trade disputes among WTO members should be resolved through the WTO mechanism, not based on a member's domestic law, said Zhiqun Zhu, a professor of political science and worldwide relations at Bucknell University in the US state of Pennsylvania.