Tariff Battle Heats Up Between China And The U.S. Steve Inskeep talks to William Zarit, head of the U.S. Chamber of Commerce in Beijing about the escalating tariffs to find out how things are playing out in China.

Tariff Battle Heats Up Between China And The U.S.

Tariff Battle Heats Up Between China And The U.S.

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Steve Inskeep talks to William Zarit, head of the U.S. Chamber of Commerce in Beijing about the escalating tariffs to find out how things are playing out in China.

STEVE INSKEEP, HOST:

So how do the escalating tariffs between the United States and China look to Americans doing business in China? William Zarit is on the line from Beijing. He's chairman of the American Chamber of Commerce in China, representing American companies there.

Welcome to the program, sir.

WILLIAM ZARIT: Thank you.

INSKEEP: What would a trade war mean for the American companies that you represent?

ZARIT: A trade war would not be good for the American companies here, obviously, but I think they would continue to do their business. The atmosphere, of course, would not be as good. And the Chinese could take actions - subtle actions - unwritten regulations that could put pressure on American companies.

INSKEEP: OK, so that's interesting - not just raising the price of American products but actually doing things that sort of freeze them out of markets. But here's my question. Isn't China already doing that? Don't they do that to your companies on a regular basis?

ZARIT: Yes, it's not a level playing field. And we don't have reciprocal treatment. But American companies here, especially those that have been here for a long time, are doing OK. According to the size of the market, they should be doing better. But American companies have learned how to make a profit. And for some of these companies, it's a major part of their revenue worldwide.

INSKEEP: So what are the businesses that you talk with thinking about President Trump? Because on the one hand - as you're saying - there's a possibility of Chinese retaliation against your companies. On the other hand, the president is acting because, in part, he says China is trying too hard to acquire American intellectual property for example. Are there - is there a level in which your members are supportive of the president?

ZARIT: There certainly is. The tariffs are a blunt way of getting China's attention, but I think it's also a sign of how frustrated this administration and, I think, a lot of American companies are. So I'm getting the sense that they may be willing to take some pain in order to get the Chinese to the negotiating table to address the lack of level playing field and the lack of reciprocal treatment and a fair commercial relationship.

INSKEEP: When you say they may be willing to take some pain, I gather you mean the administration.

ZARIT: Yeah.

INSKEEP: Are - or do you mean your companies? Are your companies willing to take some pain?

ZARIT: My sense is that companies can take some pain, but I think it's the administration that is more willing to take some pain in order to get some movement with the Chinese.

INSKEEP: So you mentioned negotiating. Larry Kudlow, a presidential adviser, has been saying that this is part of a negotiating strategy. Hopefully the Chinese will come and seriously talk. From where you sit, does this strike you as a smart negotiating strategy - one that is well-tailored to China and the way China operates?

ZARIT: (Laughter) The short answer would be, not really. The Chinese don't like to have these headline negotiations. They would much prefer to have behind-the-scenes talks so that the leadership here in China would not be in a position from which it's difficult to back away.

INSKEEP: Oh, because they would rather not lose face. They would rather quietly give a concession rather than loudly be forced to back down.

ZARIT: Yeah, I think that's a good way to put it. And I think that's very normal not for only the Chinese. I think that even our administration might need a way out of - especially from the rhetoric that's been going on.

INSKEEP: Oh, President Trump needs to save face, now you're saying.

ZARIT: (Laughter) I would think so. I think both sides need to save face. And I'm hoping that they can do that through talks and through talks that are not necessarily...

INSKEEP: And that will continue...

ZARIT: ...Headlines.

INSKEEP: ...For a while. We'll keep talking about this. William Zarit, thanks very much.

ZARIT: Thank you.

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