Business and Congressional Leaders Highlight Need for Strategic, Long-Term Approach to Address Trade Barriers in China

Business Roundtable, Farmers for Free Trade Co-Host Conversation on Trade and American Competitiveness

March 22nd, 2018

Business Roundtable on Tuesday joined Farmers for Free Trade in co-hosting a conversation on trade and American competitiveness. The event offered key insights from leaders in business and government on the need for a strategic, long-term approach — rather than unilaterally imposed U.S. tariffs — to address trade barriers in China for America’s businesses and workers.

In his keynote remarks, Senate Finance Committee Chairman Orrin Hatch(R-UT) highlighted the problem of Chinese overcapacity in steel and aluminum, theft of U.S. intellectual property rights, and forced transfer of U.S. technologies. Hatch stressed the importance of addressing such issues in a targeted manner that does not harm U.S. businesses and consumers:

“To be clear, no one should doubt that Chinese steel and aluminum overcapacity has harmed U.S. companies and workers. But, to put it bluntly, the global tariffs set to take effect on Friday will do absolutely nothing to address that problem. Chinese companies don’t pay U.S. tariffs. Rather, American companies and American consumers get the bill.”
“Targeted deployment of Section 301 investigations also can be used to bring China to the table to resolve long-standing issues…. [L]et me emphasize that any actions that the administration intends to take under Section 301, whether aimed at China or elsewhere, must be narrowly targeted at the source of the problem and with an objective to bring about a positive resolution — and not for the purpose of erecting trade barriers.
“China is a problem. There’s no getting around it. Let’s be honest about it. Overcapacity — steel and aluminum. Market access, forced technology transfer, you name it — there’s a long, long list and it is a problem…. The question is, what do you do about it?
The United States has to lead. If we don’t lead somebody else is going to lead. And if somebody else leads, the consequences probably are not going to be as good…. It also means we have to get countries behind us — working with us. The goal here is to work in concert, vis-à-vis China. We have to work together.”

Tom Linebarger, Chairman and CEO of Cummins Inc. and Chair of Business Roundtable’s International Engagement Committee, was also a featured panelist. Linebarger laid out additional strategic priorities that should be included in an effective, long-term strategy to continue to improve U.S.-China trade relations:

“There remain challenges to open and fair trade and operation in China for American companies. There has been progress on a lot of fronts — on currency and on environmental standards — but there remains progress that needs to be made. Pretty important reforms that need to be made.
“I share [Senator Baucus’] view that a constructive approach that includes a clear strategy for the US about what barriers we want removed, a set of targets about when and how we want them removed, a set of actions we will take if that doesn’t happen — all targeted to make sure that they are relative to what we’re asking them to do — and then engaging our allies totally the whole way is what’s necessary.
“It’s much harder work — or more detailed and longer-term — than these unilateral tariffs, but I know for a company like ours, our trade relationship with China is critical to our company. I really can’t think of any relationship besides NAFTA that’s more critical to Cummins.”