AmCham China Chairman: At this point tariffs are just a threat

China on Wednesday struck back at the US with a duty plan that will affect 106 types of imported US products in 14 areas including soybeans, automobiles, and chemicals.

The 25-percent tariffs on US goods were a retaliatory move following the US announcement on Tuesday proposing a list of 1,300 Chinese products from industries such as aerospace, robotics and machinery that could all be subject to additional American tariffs.

As the world’s two largest economies edge closer to a trade war, William Zarit, chairman of the American Chamber of Commerce in China cautioned against taking the battle beyond words. “Now we are in a situation where the US and China have threatened to put tariffs on each other’s goods,” says Zarit. "But we have to also remember that at this point it’s a threat. And that’s it.”

CGTN's Jenny Cortes spoke with William Zarit, chairman of the American Chamber of Commerce in China on Wednesday./CGTN Photo

Though both countries have publicly proposed tariffs, Zarit noted that the US still has 60 days before any of the tariffs see the light of day. “Whether it’s a thousand items, whether it’s 5,000 items, what I’m hoping is that the two sides will get together and negotiate in good faith. And resolve this before any of these tariffs are actually enacted,” said Zarit optimistically.

Even with the stern language used by both sides, Zarit believes the countries have enough at stake to come to the table for talks. Citing the size of the economy, the size of the trade, and the size of mutual investment between China and the US, the tariffs have the potential to do more harm than good.

The chairman also identified some of the ways both countries could start conversations again. “One thing I would like to see on the Chinese side is to address US concerns about what the US feels are unfair industrial policies, as exemplified in ‘Made in China 2025’."

"Made in China 2025" is a strategy to comprehensively upgrade the Chinese manufacturing industry, with sectors that boost manufacturing innovation, including the Internet of Things, smart appliances and high-end consumer electronics in priority.

Though the policy states that it's meant to accelerate China's high-tech industries, many other countries view it as a strategy to replace high-tech products with Chinese ones.

"Innovation does not take place in a vacuum. And it would be in China’s interest, as well as the interest of the US, to work together to develop these technologies so you would come up with optimum technologies for the US, China and the world,” said Zarit.

Analysts have said that as China becomes a technologically pre-eminent economy, it puts more pressure on US policymakers.

VCG Photo

Optimistic about the potential for both sides to step back from their retaliatory steps, Zarit took a practical tone, “hopefully both sides can start talking at the same time because these tariffs that the US has now put on China and then Chinese tariffs, if taken to their logical conclusion, this will not end well for anybody.”

(CGTN)