US firms fear China retribution after Trump's tough trade ta
Time: 2016-12-16 13:51
AMERICAN companies that have long benefitted from stable relations between the US and China now fear retaliation by Beijing if president-elect Donald Trump were to act on the challenges he made to China on trade and Taiwan.
Mr Trump jarred Chinese officials on Sunday by saying the United States did not necessarily have to stick to its long-standing position that Taiwan is part of "one China." Beijing expressed "serious concern" about Mr Trump's remarks.
Four US industry sources who follow China policy closely said they were unsettled by any suggestion of abandoning the "one China" policy, which they said had served the business community well for several decades, Reuters reported.
The sources, who spoke on condition of anonymity because of the sensitivity of the issue, said Beijing could retaliate against US companies that do business in China if Trump takes his tougher line too far.
One China trade policy expert who interacts closely with US business said : "The Chinese are deeply concerned and we hear now from reliable sources in Beijing who suggest the Chinese government, the Communist Party, are developing lists of US interests against which they could retaliate, commercial interests, and obviously one merely has to look at top US exports to China to get a quick sense of whose heads may be on the chopping block."
The expert pointed out that more than 30 states have over US$1 billion in exports to China and that there is over $500 billion in commercial engagements by US companies in China. All of that would be at risk if China retaliated.
"That commercial engagement supports American jobs, many American jobs here in the United States," the expert said.
From Detroit's car makers to Silicon Valley's technology champions, China is both a critical source of revenue and profits, and a vital link in global supply chains.
China has hit US goods with retaliatory tariffs in the past when disputes flared. China in 2011 slapped duties on US-made large cars and sport utilities as part of a trade dispute. The stakes are higher now.
More than one-third of the 9.96 million vehicles General Motors Co. sold globally in 2015 were delivered to Chinese customers. Profits from Chinese operations, including joint ventures, accounted for about 20 per cent of GM's global net income of $9.7 billion in 2015. Ford Motor Co's China JVs represented about 16 per cent of its global pre-tax profit of $9.4 billion in 2015.
US retail giant Wall Mart Stores Inc has 432 stores in China, while coffee chain Starbucks Corp has 2,500 stores there and outgoing CEO Howard Schultz told investors China will one day be a bigger market for the firm than the United States.
Aircraft maker Boeing Co plans to build a "completion" factory in China for its 737 jets, anticipating the country will need 6,800 new jetliners worth $1 trillion over the next 20 years.
"The United States and China are in a symbiotic relationship, we are wed to each other and do best when we grow together," said Susan Aaronson, a professor at George Washington University who teaches corruption and good governance.
Mr Trump jarred Chinese officials on Sunday by saying the United States did not necessarily have to stick to its long-standing position that Taiwan is part of "one China." Beijing expressed "serious concern" about Mr Trump's remarks.
Four US industry sources who follow China policy closely said they were unsettled by any suggestion of abandoning the "one China" policy, which they said had served the business community well for several decades, Reuters reported.
The sources, who spoke on condition of anonymity because of the sensitivity of the issue, said Beijing could retaliate against US companies that do business in China if Trump takes his tougher line too far.
One China trade policy expert who interacts closely with US business said : "The Chinese are deeply concerned and we hear now from reliable sources in Beijing who suggest the Chinese government, the Communist Party, are developing lists of US interests against which they could retaliate, commercial interests, and obviously one merely has to look at top US exports to China to get a quick sense of whose heads may be on the chopping block."
The expert pointed out that more than 30 states have over US$1 billion in exports to China and that there is over $500 billion in commercial engagements by US companies in China. All of that would be at risk if China retaliated.
"That commercial engagement supports American jobs, many American jobs here in the United States," the expert said.
From Detroit's car makers to Silicon Valley's technology champions, China is both a critical source of revenue and profits, and a vital link in global supply chains.
China has hit US goods with retaliatory tariffs in the past when disputes flared. China in 2011 slapped duties on US-made large cars and sport utilities as part of a trade dispute. The stakes are higher now.
More than one-third of the 9.96 million vehicles General Motors Co. sold globally in 2015 were delivered to Chinese customers. Profits from Chinese operations, including joint ventures, accounted for about 20 per cent of GM's global net income of $9.7 billion in 2015. Ford Motor Co's China JVs represented about 16 per cent of its global pre-tax profit of $9.4 billion in 2015.
US retail giant Wall Mart Stores Inc has 432 stores in China, while coffee chain Starbucks Corp has 2,500 stores there and outgoing CEO Howard Schultz told investors China will one day be a bigger market for the firm than the United States.
Aircraft maker Boeing Co plans to build a "completion" factory in China for its 737 jets, anticipating the country will need 6,800 new jetliners worth $1 trillion over the next 20 years.
"The United States and China are in a symbiotic relationship, we are wed to each other and do best when we grow together," said Susan Aaronson, a professor at George Washington University who teaches corruption and good governance.
