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A Resolution To The U.S.-China Trade War Is Not In The Offing


The already-tense relationship between China and the U.S. has just gotten more complicated. At this moment, one of China's top executives from its biggest tech firm, Huawei, is in Canadian custody. The arrest came at the request of the United States, which has been investigating whether this executive, Meng Wanzhou, violated sanctions against Iran. Meng is also the daughter of Huawei's founder.

It is an awkward time for the dispute. The U.S. just struck a trade truce with China. The White House is hanging a lot of hope on a new deal, but concrete details on how to bring the trade war to an end are scarce.

So what does all of this look like for Americans trying to do business in China? We've got William Zarit with us on the line from China to talk with us about this. He is the head of the U.S. Chamber of Commerce in Beijing. Mr. Zarit, thanks for joining us [see POST-BROADCAST CORRECTION below].


MARTIN: The U.S. reportedly had this executive arrested because she had violated sanctions against Iran. How is this being framed inside China?

ZARIT: Well, there's not a lot of information inside China except that this woman has been detained. And, you know, we were - like you said, we were up to our ears with this trade dispute. And we just thought we had - catch our breath, and then this happens.

The Chinese reaction is mixed, but, you know, there are folks that don't really understand how the rule of law works in the U.S. And so they are very suspicious of the timing of this perhaps being another negotiating ploy by the U.S. administration. Other folks are saying, you know, be calm. Let the cool heads take over here. And let's just wait and see what happens. But it's really bad timing.

MARTIN: What was the take after President Trump sat down with China's leader, Xi Jinping, in Argentina at the G-20 and came out with this - what was framed as a sort of truce? How did you perceive that? How did other American executives in China look at that?

ZARIT: We looked at it. You know, there are a lot of issues - complex issues, so we felt the results were as good as they could have been. The 90-day clause...

MARTIN: But there was nothing really concrete that came out of that - well, except for that timeline.

ZARIT: Yes. But you know, they also talked about China buying more agricultural products. They mentioned forced technology transfer, cybertheft and IPR violations and so forth.

But I didn't see a lot of talk about the real, central issue, which is China's discriminatory economic policies with the state support and domestic market protectionism. And that's really what needs to be addressed in the medium and long term to get a level playing field and have a sustainable commercial relationship based on fairness and reciprocal treatment.

MARTIN: How does that problem affect the work that you try to do? How does it affect trying to do business from China as an American?

ZARIT: Sure. And the companies here, because of the uncertainty and unpredictability, are - the best they can do right now is to keep their powder dry and see what happens. The smart companies here are looking at feasibility studies to, perhaps, diversify their supply chains - some out of China, some out of the U.S. There's been more and more talk about companies just going to kick the tires in Vietnam and Indonesia, Philippines, Thailand and so forth. But we don't see companies moving back their operations - their main operations back to the U.S.

MARTIN: Which is something that won't come as welcome news to President Trump.

We spoke with White House trade adviser Peter Navarro right after the G-20 summit. He was actually at that dinner with President Trump and Xi Jinping. And here's what he had to say.


PETER NAVARRO: They presented us with documents that had 142 specific demands that we had made and their responses. And they were very specific in how they would respond to that. It's going to require changing their laws. It's going to require enforcing their laws.

MARTIN: So they've got 90 days to come up with a plan to end this trade war. And as we just heard there from Peter Navarro, they're really putting the onus on China to make changes to their own legal system. Do you think China's really going to see this as a problem they're responsible for fixing?

ZARIT: The Chinese, right now, really want to avoid this dispute getting any worse. And so the way I see things developing is that - you know, a lot of people are saying 90 days is too short. And it is short, and I don't see that China's going to solve the problem in 90 days.

But what I do see, you know, the Chinese - the party and the government - basically, they control the economy, most of the Internet, media, security. And they can pretty much, in 90 days, do what they need to do - perhaps, do just enough - to keep the U.S. administration at bay. And then I think they'll probably continue to extend, and the Chinese will respond.

But again, they're not going to be able to meet all the demands in 90 days. And I don't think - I still think, though, that it'll be a positive movement.

MARTIN: William Zarit is the chairman of the U.S. Chamber of Commerce in Beijing. Sir, thank you very much for your time. We appreciate it.

ZARIT: Thank you.

[POST-BROADCAST CORRECTION: In this story William Zarit is mistakenly referred to as head of the U.S. Chamber of Commerce in Beijing. In fact, he is chairman of the American Chamber of Commerce in China.] Transcript provided by NPR, Copyright NPR.

Corrected: December 9, 2018 at 11:00 PM CST
In this story William Zarit is mistakenly referred to as head of the U.S. Chamber of Commerce in Beijing. In fact, he is chairman of the American Chamber of Commerce in China.
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