U.S. companies do not want a trade war: top business lobby

"I think it (trade war) will hurt both countries, and there would be collateral damage, I’m sure, in other markets. So a trade war, basically, everybody loses."

——William Zarit, chairman of the American Chamber of Commerce in China. 

Last month, U.S. President Donald Trump threatened to impose tariffs on 60 billion U.S. dollars worth of imports from China, and put restrictions on Chinese investment in the country.

The trade frictions have heightened fears about a trade war erupting between the world's two biggest economies.

Recently, U.S. companies operating in China have expressed their concerns over the potential for losses in the event of a trade war.

William Zarit, the chairman of the American Chamber of Commerce in China, speaks to CRI in Beijing on March 31, 2018. [Photo: China Plus]

With more on the concerns of U.S. companies, CRI's Li Yi caught up with William Zarit, the chairman of the American Chamber of Commerce in China, a leading business lobby for about 900 U.S. companies in China.

Q: You know there has been a lot of concerns from U.S. companies about the impact of a trade war with China, so I’m wondering what are US companies operating in China saying to your organization, as you are their main lobby in China?

A: Companies are saying that they don’t want a trade war. We have an annual survey at the American Chamber in China, and we ask the question: what would you like the U.S. government to do to help you? And the No. 1 response was“to advocate for a more level playing field, the No. 2 response was“to advocate for reciprocal treatment to get better access, market access”. So the companies feel something needs to be done, but that doesn’t mean that they want a trade war.

Q: What effect will it have on bilateral and international trade if the Trump administration imposes additional tariffs on imports from China?

A: Well, on international trade, global trade, I think we would have a negative effect. You know what is more important than the actual effect on the trade is the expectations of investors. We saw when Trump was talking about these 50 billion dollars worth of tariffs, did you notice what happened to stock markets all around the world? They tanked. Nothing has happened, it’s just the expectation. So more tariffs, I think will have a deleterious effect on investors, on the stock market. The stock market is sometimes a good gage of the economy although it’s not directly linked, but a lot of people will lose a lot of wealth if stock markets go down considerably.

Q: What about bilateral trade, just between the U.S. and China?

A: It definitely will not be good, but you know I don’t want to speculate because I am hoping that they won’t get to that point. I think that we have too much stake, both sides have too much stake for it to get to that point.

Q: How deep do you think a “trade war”, or we say trade disputes between China and the U.S. might go?

A: Trade disputes between China and the U.S. are broad, and in some areas kind of deep. In general, my hope is that we will be able to come up with solutions that are beneficial and acceptable to both sides. One thing I’m concern about right now is that the U.S. administration is considering these tariffs, and there hasn’t been a lot of communication between the two governments. Now I understand, supposedly there have been talks going on for at least few days, but in general, there is very little communication, and I think that’s dangerous. We need more communication. So I understand why the administration is frustrated, and I agree that those bilateral mechanisms weren’t very effective, but we still need to talk.

Q: If a so-called trade war happens, who will be the winner?

A: Well again, I don’t know that we’re going to have a trade war. China’s economy, I think about 20 percent of the economy is based on exports. The U.S. is about half of that, as the percentage of GDP. I think it (trade war) will hurt both countries, and there would be collateral damage, I’m sure, in other markets. So a trade war, basically, everybody loses.