US companies fear Trump could cost them business in China

Anita Kumar, McClatchy Washington Bureau on

Published in Business News

Already, the administration launched a so-called 301 investigation -- named after a section of 1974 trade law -- into Chinese intellectual property theft that left open the door to increased tariffs on Chinese products. The inquiry surprised and angered the Chinese. A state-run newspaper recently warned the decision would "poison the overall US-China relationship."

Nearly 30 leaders of U.S. companies, including Boeing, Cheniere Energy and DowDuPont, traveled to China at the invitation of Commerce Secretary Wilbur Ross as part of an event designed to coincide with Trump's visit.

Trump and Xi are expected to announce millions of dollars in economic development deals but real policy changes may elude them after years of inaction.

"The sense I get is China's willing to sign trade deals all day long, as long it stays away from industrial policy and the sort of market access issues that they're seeking to avoid, " said Christopher Johnson, a senior China analyst at the CIA who now serves as a senior adviser to the Center for Strategic and International Studies.

In 2016, Georgia sent $2.6 billion in exports to China, according to the U.S.-China Business Council. The top export for the state -- two-thirds of which is forestland -- was pulp and paperboard mill products. About a dozen of Georgia's mills are working on exports to China, according to Andres Villegas, president & CEO of the Georgia Forestry Association.

Georgia-Pacific, based in Atlanta, exports pulp, containerboard, bleached board and recycled fiber to China, where it has offices in Hong Kong and Shanghai. It has been exporting to China for more than two decades.

"China is important market for fiber exports" -- wood pulp and recovered paper -- "and paperboard packaging," said Jake Handelsman, senior director, international trade for the American Forest & Paper Association. "Overall, we want to ensure that Chinese markets remain open to our industry's exports."

About a dozen other states, including California, Missouri and South Carolina, have trade offices in China, most in Shanghai.

In China, U.S. companies face frequent and inconsistent regulations, delays getting their products where they need to be sent and the theft of intellectual property, according to administration and business officials.

National security adviser H.R. McMaster said Trump is pushing for "fair and reciprocal trade" by ensuring governments do not unfairly subsidize their industries, discriminate against foreign business or restrict foreign investment.

"It's critical for the president to stand up vigorously for America's interests, but it's important to remember that our economic interests are not neatly defined by a bilateral trade deficit figure or advanced by threatening tariffs on Chinese goods," said Jake Colvin, vice president for Global Trade, National Foreign Trade Council. "The economic relationship with China is complex and oftentimes frustrating, but also important to many American businesses."

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