US businesses hoping new talks fruitful

But some concerns expressed about unilateral measures taken instead of trade negotiations

Business leaders have voiced concerns about the negative impact of China-US trade tensions but pin their hopes on resumed talks between the two countries.

William Cohen, US defense secretary from 1997 to 2001 and now CEO of the Cohen Group, said on Wednesday that there were legitimate concerns to be addressed, but he emphasized that it's important to address them in a responsible fashion, so that everyone is in a win-win situation.

"I don't feel the (Trump) administration has a strategy for achieving that. The stated objective of doing it within the next two years is pretty short term. I don't think it's possible," said Cohen, who said he has been traveling to China since 1979.

According to US media reports, the US trade delegation led by Treasury Secretary Steven Mnuchin to Beijing last week demanded China cut the bilateral deficit by $100 billion a year over the next two years, a demand that most economists regard as untenable because US fiscal policy and low savings rates in the US are the primary cause of the deficit.

Cohen believes that while the US is taking measures to hamper China's electronics and other high-tech industries, US consumers will pay more for goods and the benefits of the recent US tax cuts will be eroded.

"I think the investors will be reluctant to make investing decisions until they see some level of equanimity settled on the relationship. They will be hesitant to make investments. That will ultimately hurt the growth projection of all the countries, including China's," he said at a talk at the Atlantic Council, a Washington-based think tank.

Erin Ennis, senior vice-president of the US-China Business Council, which represents 200 US companies doing business in China, said that despite the fact that the two sides appeared pretty far apart in the talks in Beijing, it was good that they are finally sitting down to talk and lay out their demands.

The US had not listened to China's call for talks and negotiations to resolve bilateral trade issues, and instead went ahead with unilateral measures by imposing Section 232 steel and aluminum tariffs in the name of national security and proposing Section 301 tariffs on $150 billion in Chinese imports.

Both Cohen and Ennis believe China wants to resolve the issues through dialogue. A Chinese delegation led by Vice-Premier Liu He is expected to come to Washington soon to continue that dialogue.

Gerado Mato, chairman of global banking and markets in the Americas at HSBC, applauded the fact that China and the US are returning to the negotiating table. But he added that the potential trade conflict and rising uncertainty and political risks "can cause more damage in the long run than we can expect today".

Most of the audience at the Wednesday seminar expressed optimism. A majority raised their hands when asked if they thought the China-US trade war would be contained, while only one individual believed it would become a full-blown trade war.

"The solution cannot be to think we can tell China to end all subsidies," Ennis said, clearly referring to news reports saying that the US has demanded China end subsidies to Made in China 2025, a plan to advance China's 10 technology industries.

"I don't think any of our trading partners will ever agree that a foreign government can tell us what to do with subsidies, as long as it's within the WTO rules. Frankly, we don't have any recourse to tell them they can't do it," she said at the Wednesday meeting.

chenweihua@chinadailyusa.com