What Newly Proposed Tariffs On China Mean For The U.S. Business Community
AUDIE CORNISH, HOST:
So what will the new tariffs mean for the U.S. business community? To find out, we called Erin Ennis. She's a senior vice president with the US-China Business Council, a lobbying organization for companies that do business in China. The group's members include companies like Airbnb, Amazon, Citigroup, The Walt Disney Company. Erin Ennis, welcome to the program.
ERIN ENNIS: Thank you.
CORNISH: So I know that one of the purposes of these tariffs, according to a member of the National Economic Council, is to get China to modify its unfair trade practices. Specifically, what are the things to your mind that need to change about the trade relationship between the U.S. and China?
ENNIS: Sure. So I think the important thing to keep in mind is what the origin was of what was happening today, and that is an investigation that was launched back in August to look into China's protection of intellectual property rights and their requirements to transfer technology to do business in China. These are really important issues for American companies, and they want to see solutions to these problems.
CORNISH: One of the problems that people talk about specifically is about China stealing intellectual property - right? - regulations that coerce companies that are doing business there into sharing their technology. It's not up really for a whole lot of debate. I mean, why shouldn't the White House take punitive action?
ENNIS: So what the administration did today actually wasn't to impose tariffs. They announced an intent to look into imposing tariffs. And that's an important distinction because what they are talking about doing is potentially putting tariffs on between $50 and $60 billion worth of imports from China to try to coerce China into addressing its problems. That's a lot of money, and it's not entirely clear how tariffs are going to solve the problem.
CORNISH: We also don't know which industries will face this, right? We've got another more than two weeks to go before the administration announces the industries that they suggest be targeted. Are you hearing from specific clients who are afraid they're going to fall under this?
ENNIS: We're certainly hearing from a variety of companies in a variety of sectors. Part of the reason why tariffs are such a challenging tool to use to address a policy issue is that in general, when you're talking about intellectual property rights, the companies that have issues aren't necessarily the companies that are dealing with the imports that are affected by them. So companies right now are considering what their supply chains look like and trying to figure out what an impact might be of a tariff on a particular product that they get either in whole or in part from China.
CORNISH: The Chinese government has already said that they would respond with all necessary measures to defend legitimate rights. When you hear that, what alarm bells go off for you?
ENNIS: Well, reality is that China's been saying this since the case was launched. And it's among the reasons why it's so important that anything that the United States does be in line with its international obligations. The case is a little controversial because of that - because Section 301, the authority under which the case was brought, is a U.S. law, not an international law. And so I think we should anticipate there's going to be a lot of back-and-forth about the legality of the action as well as direct responses from China on whatever measures the U.S. ultimately puts into place.
CORNISH: What is your message to the White House or to lawmakers right now? I mean, what is the case you're making?
ENNIS: Frankly, the case that we are making to the U.S. government is the same case that we're making to the Chinese government, and that is, these are very important issues. The U.S. government accurately identified issues that are important to American companies and that have been issues raised with the Chinese for many years. It's time to solve these issues. But the way to do that is to focus on solutions to the problems, and that means both sides need to get to the table and start talking about what success looks like.
CORNISH: It's interesting you saying that your message to one government is the same as the other. Does it feel like either is listening?
ENNIS: I hope that both are listening, but, you know, we'll see actually once we see what actions they start taking.
CORNISH: Erin Ennis is with the US-China Business Council. Thank you for speaking with ALL THINGS CONSIDERED.
ENNIS: Thank you, Audie.
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