When it comes to U.S.-China trade policies, chief executives at a summit of large-company and government leaders Wednesday said four years of the Trump administration have left things worse, not better, and see little hope of improvement under the current administration.
But, at the rare, on-the-record edition of Yale’s well-known Chief Executive Leadership Institute Summit, Robert Lighthizer, the U.S. Trade Representative, voraciously defended the administration’s tactics. “Of course there will be tension,” he said. “We’re trying to change the paradigm.”
In an unscientific poll of more than 150 top business leaders from many of the world’s largest companies—a gathering convened by Yale professor and longtime Chief Executive columnist Jeffrey Sonnenfeld—78% said the outlook for the relationship between China and the U.S. was worse because of the current policies. An equal percentage said the Phase One US-China trade deal had not positively impacted their business.
Asked if US-China trade tensions strengthened or weakened business confidence over the past four years 85% of those polled said it had been weakened and 65% said their business had suffered from the US-China trade war and other Trump trade policies. Still, 61% said their business had suffered from unfair Chinese competitive practices.
Lighthizer, one of the key architects of the Trump Administration’s trade policy, was unapologetic about the administration’s tactics with China. When it came to the relations between the two nations, decades of prior efforts were primarily about making things “cheaper for consumers,” he told the assembled CEOs, not helping U.S. workers retain jobs. “The president sees it the other way around,” said Lighthizer.
“Our view is that what’s good for American workers is not always good for American companies,” he said, an objective he called “the right one.”
Lighthizer’s statements came amid the backdrop of an escalating war over the fate of China-based social media platform TikTok, which the President has termed a threat to national security, as well as tensions over tariffs and Covid-19. Those attending the CEO Summit were closely split on whether foreign-owned technology companies such as TikTok and WeWork pose existential threats to US national security, with 52% saying yes, 48% no.
Speaking via Zoom, Lighthizer made the case that—especially when it came to manufacturing—the Trump administration’s policies had succeeded. He claimed credit for the addition of more than 500,000 U.S. manufacturing jobs from the 2016 election until February, 2020; a 6.8% increase in median incomes in 2019 among U.S. households; a trade deficit that shrunk in four of five recent quarters. He also pointed to a UBS survey of 1000 large U.S. companies doing doing business in China which found 75% of them were planning to move some of that business out of the country.
Meanwhile, polls of registered voters presented at the event showed how far sentiment had shifted on China in the past few years. According to pollster Mark Penn, a recent Harris survey found 53% of registered voters considered China to be an “enemy” of the United States versus 10% saying it was a friend; 70% said China was creating tensions and instability in the world; 60% said the country was responsible for the Covid pandemic. And, Penn said, a majority of Americans want China held accountable “through diplomatic action and economic sanctions” for a range of actions from the spread of the virus, the U.S.-China trade war, the military buildup in the South China Sea and the crackdown on free speech in Hong Kong.
Despite the deteriorating relationship, some CEOs in the audience held out hope that further fraying could be avoided. “We’re hopeful the leaders in the U.S. and China will work together,” to figure out trade between the countries, said Jim Umpleby, CEO of Caterpillar, which has enormous exposure to China’s markets. His hope: That an “atmosphere of free and fair trade” can be resumed. When and how? That remains an open question.
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