American Business Leaders In China Concerned About Trump's Trade Actions

Mar 21, 2018
Originally published on March 22, 2018 1:01 am
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The Trump administration is set to announce sweeping tariffs on at least $30 billion worth of Chinese imports. The White House also plans to make it harder for Chinese companies to get advanced U.S. technology. Administration officials say they are responding to decades of discriminatory Chinese trade practices. NPR's Rob Schmitz reports from Shanghai.

ROB SCHMITZ, BYLINE: If intellectual property theft had a SWAT team devoted to it, Kevyn Kennedy would be in charge of it. Each day the Shanghai-based manager of CBI Consulting works with Chinese authorities to conduct raids on factories throughout China suspected of making counterfeits of his clients' products. A decade ago, he says, his team went on to raids a day. Now it's down to one. China, says Kennedy, is changing.

KEVYN KENNEDY: China wants to be a first world country. They want to be the leader in Asia. If they're going to be a leader in Asia, they have to respect things like trade secrets. They have to respect intellectual property.

SCHMITZ: And for the most part, he says, the Chinese do. That's why he doesn't understand why the Trump administration is imposing tariffs on China for stealing intellectual property, a practice, he says, that is happening less and less often. In the meantime, the mood among U.S. businesses in China while everyone waits for a potential trade war is tense.

KEN JARRETT: Well, there is a fairly high state of anxiety.

SCHMITZ: Ken Jarrett is president of the American Chamber of Commerce in Shanghai. He says even as companies are nervous about what the Trump administration is planning to do...

JARRETT: There has been over the last couple of years a building sense of frustration about the lack of positive and strong movement from China on market access and things that could in fact have averted the situation where we are today.

SCHMITZ: Things like China's government lifting requirements on U.S. companies to transfer key technology in return for access to China's market or doing more to stop hacking into U.S. companies to steal their data. These frustrations show up on the annual surveys Jarrett's organization conducts among its membership. Last year, when he asked U.S. companies what top reforms were important to their growth in China, intellectual property topped the list. He's expecting more complaints this year as China will undoubtedly strike back by limiting U.S. imports into China.

JARRETT: Agricultural products have been a common target. And it's also a part of the country that is a strong supporter of President Trump. And that's important because of - the purpose of the retaliation is in part to cause additional political pain for the Trump administration.

SCHMITZ: China is America's second-largest export market for agriculture - $20 billion worth last year. China could retaliate by reducing imports of U.S. soybeans in favor of those from South America. Another target might be Boeing. More than half of all the commercial jetliners operating in China today are made by the company, and Chinese orders support 150,000 jobs at Boeing facilities throughout the U.S. China could turn to the EU's Airbus for its airplanes instead.

These threats have U.S. business leaders in China looking for alternatives to tariffs on Chinese imports. Many here, like APCO's James McGregor, are looking for what they call reciprocity, treating Chinese companies the way U.S. companies are treated in China.

JAMES MCGREGOR: If the American car makers in China can't keep developing self-driving cars there, why is Baidu doing it in California?

SCHMITZ: Baidu is China's biggest search engine, and it operates an artificial intelligence lab in Silicon Valley that employs top American researchers.

MCGREGOR: We've got to look at what our companies can't do in China and talk about that Chinese companies can't do that here. But we've got to be careful not to demonize every Chinese entrepreneur, every Chinese investor. You know, then we're going to go back to the yellow scare days. I mean, that would be debilitating.

SCHMITZ: What will also be debilitating, says McGregor, is a likely result of Trump's trade actions on China - a trade war between the world's two largest economies. Rob Schmitz, NPR News, Shanghai.

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