The United States put into effect the collection of a 25-percent tariff on US$34 billion of Chinese products on July 6. In response, Chinese Foreign Ministry spokesman Lu Kang said on the same day that China's counter-tariffs on certain U.S. products have taken effect immediately following the unfair tariff measures against China.

The American Chamber of Commerce in China said increased tensions in the China-US economic relationship will negatively impact on its member companies' operations in China.

William Zarit, the chamber's chairman, said there are no winners in a trade war. Counter-productive import tariffs, such as these, hurt not only the economies of the United States and China, but those of every country around the world.

He said increased tensions in the US-China economic relationship will negatively impact its 900 member companies' operations in China.

The chamber urged the two governments to come back to the negotiation table with the aim of having productive discussions based on achieving results – focused on fairness and reciprocal treatment – instead of escalating the current situation. Only a mutually beneficial solution for both the US and Chinese economics will be sustainable for the long run.

The escalation of tariffs between the two countries is "worrying" and "clearly damaging" to the world economy, European Union (EU) Trade Commissioner Cecilia Malmstrom said on Friday.

"Worrying development with escalation of tariffs between US and China. Clearly damaging for the world economy. Trade wars are bad and not easy to win," the EU trade chief said via Twitter.

Malmstrom's words were apparently in reference to a tweet posted by US President Donald Trump on March 2, in which he said "trade wars are good, and easy to win."

US businessman Peter Shiao had worked hard with his Chinese capital partners to create an investment fund, but as they prepared to announce it this year, China-US trade tensions escalated, forcing them to make an abrupt change of plans.

"We were planning on doing something very significant, with a positive impact for the region, that would have been great for US employment. That's been put on hold," Shiao, a Los Angeles entrepreneur, investor and producer who founded Orb Media Group, among several other China-US-based companies.

Some business owners in Los Angeles said a trade war between the United States and China will erode business confidence and add uncertainty to cross-border economic activity.

"It's going to hurt California in general, but it is going to hurt Los Angeles, in my opinion, more than any other region in the United States because of our close dependency on international trade," Stephen Cheung, president of World Trade Center Los Angeles, said in a recent interview.

According to a 2018 report by the organization, there are an estimated 10,378 foreign-owned companies in Southern California, representing approximately 1.2 percent of all businesses in the region.

Of those companies, 467 are Chinese-owned, and responsible for creating 15,968 jobs and paying $990 million in wages.

Cheung said that because China is such a massive consumer market that when it adds tariffs on US goods, US exporters will have more difficulty selling their products in China.

When prices on US exports go up, consumers are the ones that will end up shouldering the costs.

"The shipping companies are not going to absorb the costs. The manufacturers are not going to absorb the costs. They are going to pass it on to the consumers," Cheung said.

Brandy Kang, president and CEO of Coolpad Americas, a Chinese telecommunications equipment company, said a trade war would bring uncertainty to his company's operations.

Coolpad has been in the US since 2011 and employs around 80 people. Kang said 80 percent of his workers are US citizens and that a continued trade standoff could affect local employment.

"This is a lose-lose situation," Kang said.

Ye Wei is the executive director and president of COMAC America Corp, a subsidiary of the Commercial Aircraft Corp of China, an aircraft researcher and manufacturer. He said international corporations would be hurt most by a trade war.

"When we first invested here, we found that the United States has more restrictions in this industry, so we were very cautious," Ye said. "Now we worry that we might be treated unfairly in the industry because of the emotions stirred up by the trade tensions."

Shiao said he is optimistic that China and US will eventually work out their differences.

"The economic relationship is too big to fail," Shiao said. "It's too important to fail."

People from business communities of different countries have voiced their opposition to US trade protectionism, saying it damages global multilateral trading system and increases chaos and uncertainty of the world economy.

Kim Sam Soo, director of the Korea Trade-Investment Promotion Agency's Beijing Office, said companies in the Republic of Korea (ROK) are worried about the Sino-US trade frictions.

He told a symposium highlighting global economic and trade prospects Thursday that the ROK's exports to China would plummet by 20 percent if US imports from China contracted by 10 percent, citing a domestic survey.

Co-hosted by the China Council for the Promotion of International Trade (CCPIT) and China Chamber of International Commerce, the forum has attracted business professionals from different countries.

Michael House, chief representative of US law firm Perkins Coie in Beijing, said the recent trade policies taken by the United States run against the trend of trade liberalization and breach the obligations of the United States under the World Trade Organization.

Sebastian Fritz, counsel with the German Industry and Commerce Greater China, also denounced the US trade protectionism, and gave China credit for its commitment to opening-up to the world and to Germany in particular.

On June 28, China unveiled a shortened negative list for foreign investment to widen market access in primary, secondary as well as tertiary sectors.

Wang Guiqing, vice president of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, said that China-U.S economic and trade cooperation involve more than the two countries.

Statistics from China's Ministry of Commerce (MOC) show that around 59 percent of products worth $34 billion subject to additional tariffs are made by foreign firms in China, with American firms making up a considerable part.

"By imposing additional tariffs on the Chinese products, the United States is actually damaging the world's industrial chains, and other countries involved will also suffer," said Wang.

Lu Pengqi, vice chairman of the CCPIT, said the protectionist measures taken by the US disrupted world economic order, and severely harmed the legitimate interests of global industrial and business circles.

Lu also warned of the ripple effect and more unilateral or regional actions across the world. "The US moves are not conducive to its own economic growth, and increase the chaos and uncertainty of the world economy."

The 2018 APEC China CEO Forum is taking place in Beijing on July 6 and 7. [Photo/CGTN]

But Business leaders at APEC China CEO Forum, which ended on Saturday in Beijing, remain optimistic about the future of globalization despite the trade tensions between Beijing and Washington.

Many said they believed China could continue its high-quality growth and that protectionist policies by US would not succeed.

Yu Jianlong, Secretary General of the China Chamber of International Commerce, said he's speaking on behalf of the commerce sector when vowing full support of the Chinese government's position.

"We are resolutely against trade protectionism, just as we resolutely root for multilateralism. When we look at today's volatile trade landscape, all of the commerce sector shares the same view, that we will continue to push for further globalization," Yu told the forum.

That sentiment was echoed by the attending business leaders.

Carsten Bretfeld, CEO and co-founder of Byton, told CGTN that the company, now based in Nanjing, continues to forecast strong growth in the industry as well as China generally. "We are all for globalization. There might be implications between different trading parties but the big picture will stay to be pro-globalization," he said.

Daling Family, a company that partly deals in cross-border e-commerce, said it also doesn't expect to be significantly impacted by the trade frictions, as domestic consumption and production remains on track.

"We witness only very minor changes over the years whatever shifts in the economy have taken place. And we've seen constant growth in this sector," said Qi Yan, CEO of Daling Family.

They agreed that as China has been through great changes over the past five years, its path of high-quality, sustainable development, will not be undermined by outside forces.

Central bank economist Ma Jun also believed the trade war between China and the United States will have limited impact on the Chinese economy.

The research team led by Ma found that the trade war will slow China's GDP growth by 0.2 percent with full consideration of the second and third rounds of impact of reduced exports on related industries.

"The trade war involving US$50 billion has been discussed for over two months with its impact on the economy, industry and enterprises already digested, and some impact has even been over interpreted," said Ma Jun on Friday.

Ma, a member of the monetary policy committee of the People's Bank of China, added that the trade war will not necessarily have much impact on the capital market and exchange rates.

For industries that will experience a relatively bigger impact, necessary countermeasures will be considered to lower the impact, said Ma.

Xinhua, China Daily and CGTN contribute to the story.

Related

Go to Forum >>0 Comment(s)