Running Out of Tariff Options, China Takes Aim at American Companies

China TradeMore

China TradeMore

Some of them have criticized Trump's tactics but many echo USA complaints about Chinese market barriers and industrial strategy.

In Washington, White House economic advisor Larry Kudlow sounded a cautious note about the possible outcome of talks.

China's foreign ministry on Thursday said it welcomed the invitation from the USA side, led by Treasury Secretary Steven Mnuchin, for renewed dialogue on trade after low-level talks in Washington last month fizzled without results.

So far, the United States and China have hit $50 billion worth of each others' goods with tariffs in a dispute over US demands that China make sweeping economic policy changes, including ending joint venture and technology transfer policies, rolling back industrial subsidy programs and better protecting American intellectual property.

According to many recent reports, Taiwanese companies are already beginning to shy away from the Chinese market because of the likelihood that their products manufactured in China will be targeted by the Trump administration.

The negative impact of the tariffs on USA companies has been "clear and far reaching", according to the joint survey by AmCham China and AmCham Shanghai published on Thursday.

Former Commerce Secretary Carlos Gutierrez, who served under former President George W. Bush, said he worries that USA tariffs would push China "over the cliff" and end up hurting the global economy.

The sides have been engaged in an escalating tit-for-tat trade fight for months but on Wednesday it emerged that US Treasury Secretary Steven Mnuchin had invited top Chinese officials to discuss the issue.

Mnuchin's offer comes just under a week after US President Donald Trump threatened to impose tariffs on all $500 billion worth of imports from China.

"There's some discussions and information that we received that the Chinese government - the top of the Chinese government - wished to pursue talks", Kudlow said.

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But Kudlow was non-committal over the chances of a breakthrough, adding: "I guarantee nothing".

Yu Zhi, an worldwide trade specialist at the Shanghai University of Finance and Economics, urged Beijing to resolve Washington's fundamental and long-standing problems with its trade practices in any negotiations that take place to avoid further expanding the trade war.

On Thursday, the USA business lobbies AmCham China and AmCham Shanghai published a joint survey showing that the negative impact on US companies in China of tit-for-tat tariffs Washington and Beijing have imposed on one another was "clear and far reaching".

US business groups are escalating their fight against Trump's tariffs, with over 60 industry groups launching a coalition to put political pressure on the Trump administration to seek alternatives to tariffs.

The timing and location of the proposed meeting were unclear, the sources familiar with the matter said.

The last talks, between mid-level USA and Chinese officials on August 22 and 23, failed to reach any agreement.

"I suppose that protectionism has just been accepted and "baked into the cake" for the US vehicle market, and USA consumers aren't even aware that Ford and GM have a "cartel" for the USA truck market that allows them to charge above-market prices and earn above-market profits for trucks", he said.

The escalating trade spat between Washington and Beijing has generated turbulence in global markets.

"Every sector of the US economy stands to lose in a trade war", Matthew Shay, who heads the National Retail Federation, said in the statement.

More than 60 per cent of USA companies polled said the US tariffs were already affecting their business operations, while a similar percentage said tariffs by China on USA goods were having an effect on business.

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