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American Executives In China Respond To Tariffs

NOEL KING, HOST:

China says it can impose tariffs, too.

STEVE INSKEEP, HOST:

Yeah. After being hit with trade actions by the United States, Beijing announced plans for its own taxes on more than 100 American products, ranging from pork to steel and. Stock markets did not take this well. The Dow had its worst day in six weeks. And this morning, Asian markets are tumbling, too.

KING: The White House says these tariffs are needed because China routinely steals data from American companies and forces them to hand over trade secrets in order to do business in China. So some business leaders are cheering this move. We're going to get the view now from William Zarit. He's president of the American Chamber of Commerce in China, and he's on the line with us from Beijing. William, thanks for being here.

WILLIAM ZARIT: Thanks for having me.

KING: So what are executives of U.S. companies in Beijing saying about the president's move and about China's response?

ZARIT: Our members in the American Chamber of Commerce are very concerned about what's going on. Yes, indeed, according to a survey that we annually put out, two of the major things that the U.S. government - they want the U.S. government to do was to advocate more strongly for a level playing field and to advocate for reciprocal treatment to improve market access - just what you have been talking about. But our approach is really more focused on the reciprocity or reciprocal treatment, having China open up what the U.S. has opened up in our trade and investment markets rather than these tariffs.

KING: Can you give me an example of what these unfair trade practices actually look like on the ground in practice?

ZARIT: Well, we've got the technology transfer - forced technology transfer. An American company comes into China, wants to invest, wants to operate in China and there have been requirements, whether written or unwritten, that the company needed to transfer technology in order to manufacture here, in order to trade here. So that's one area that has been very difficult. IP violations - intellectual property violations - and that is the out and out taking or stealing of intellectual property, whether it's by cyber or whether it's actually at a factory that a U.S. company has where an employee has taken the intellectual property and gone and set up a competing factory.

KING: William, could American companies just say no, no we're not going to give you our intellectual property?

ZARIT: (Laughter).

KING: Could they - could they refuse to work in the Chinese - you're laughing. All right. Explain why not.

ZARIT: No. Yes. It's difficult for our companies to say no - one of the largest markets in the world for just about any product these days, a growing middle class, some 400 million...

KING: Massive middle class.

ZARIT: ...Consumers in the middle class. So for just about any industry sector you can think of, this as a desirable market. And so it's very difficult for the companies to just not be present here.

KING: The Chinese embassy put out a statement yesterday saying if a trade war was initiated by the U.S., China would fight to the end to defend its own legitimate interests with all necessary measures. That's a strong tone there. Is that the tone that you're hearing on the ground in Beijing?

ZARIT: Yes. That's exactly the tone and that's the talking point - similar to the talking points we've been hearing in the run-up to this, that our Chinese interlocutors don't want a trade war, but if the U.S. takes these measures, that the Chinese will definitely retaliate. And it's interesting. There are some folks here that have been doing business here for a long time feel that we've been in a trade war with the Chinese for a long time. So I guess it's semantics.

KING: Well, it's semantics in some ways, yes, but the stock market did tank yesterday on this news. And we saw loads of headlines about, you know, worries over a potential trade war. Are you concerned about an actual trade war?

ZARIT: I'm concerned if there is an actual trade war. I am still optimistic that we will avoid something that is going to disrupt U.S. economy, Chinese economy, the world economy, considerably. I'm still hopeful that both sides will start communicating more robustly and that we can really base this negotiation on reciprocal treatment.

KING: Very briefly, William, what makes you hopeful?

ZARIT: There's too much at stake. And I think that both governments understand that.

KING: William Zarit heads the American Chamber of Commerce in China. William, thank you for being with us.

ZARIT: Thank you. Transcript provided by NPR, Copyright NPR.