The U.S.-China Trade War's Blow To American Business Owners
MICHEL MARTIN, HOST:
Now we're going to focus on the economy, especially the escalating trade war between the U.S. and China. Yesterday, China announced plans to impose $75 billion in tariffs on American goods. Now, this is retaliation for tariffs imposed by the Trump administration earlier this year. President Trump took to Twitter saying, quote, "our great American companies are hereby ordered to immediately start looking for an alternative to China," unquote. He then went on to impose additional tariffs on Chinese goods beginning October 1.
And this all took place on a day of extraordinary public comments by President Trump, including a tweet questioning whether the chairman of the Federal Reserve, Jay Powell, whom he appointed, or Chairman Xi Jinping is, quote, "our bigger enemy" - unquote. In a minute, we're going to hear from American business owners and executives about how all this is affecting their companies.
Well, for a step-back view, we're going to try to understand all this. We've called on former Commerce Secretary Carlos Gutierrez. He served as U.S. secretary of commerce under President George W. Bush. Before that, he had a long career at the Kellogg Company, the global food company, and he's currently the chair of Albright Stonebridge Group. That's a global business strategy firm. He was kind enough to join us in our studios in Washington, D.C.
Mr. Secretary, welcome back.
CARLOS GUTIERREZ: Thank you.
MARTIN: Thank you for joining us.
GUTIERREZ: Thank you for having me.
MARTIN: OK. So a lot happened in the span of a few hours. It's hard to keep up, and I recognize that. But - so the U.S. and China haven't engaged in this back-and-forth for a while. How significant is this latest escalation? Why do you think it's important?
GUTIERREZ: Well, this is big because - you know, this takes the trade war to a new level. And I find it very interesting the way China thought through this - is they announced their tariffs well before September 1, which is when our tariffs are set to go in place. So it seems like they're sending a message that they're going to retaliate but that they still have some time if we would like to negotiate. But it's fascinating to watch the differences. The Chinese, of course, are thinking - they're playing the long game. And I find our decisions are incredibly emotional. So I think that's the danger here - is that this trade war is being combined with a tremendous amount of emotion and antagonism.
MARTIN: As I mentioned, you were secretary of commerce from 2005 to 2009 under President George W. Bush. And because of your long career in the private sector, I'm imagining you continue to have relationships with other business leaders who operated at that level. I mean, among your peers, what are they saying to you?
GUTIERREZ: A total uncertainty - they feel that they are caught in the middle of a battle that really isn't theirs, and they're the ones who are being impacted. Right now, they need a license from the U.S. government to be able to sell to China. That right there causes delays. And, of course, it causes China to go out and look for new suppliers. So most of our companies at a minimum have lost market share. And then the question is, will they ever regain that market share?
MARTIN: You know, obviously, as I said, yours is a consultancy now. Recognizing that people, you know, hire you to give them advice, can you just give us a sense of how...
MARTIN: ...You are advising people to proceed here?
GUTIERREZ: What we're advising many companies - obviously, depending on their circumstance - is to be visible, to make sure that the right government officials know that they're still in China and that they're caught in this war between the two countries. But it's the companies being ordered by U.S. regulation to cut their business in China, to cut their supplies to Chinese companies. But now is when every company, as we say, needs their own foreign policy because U.S. government's foreign policy is not helping at all. So companies need to think strategically about geopolitics.
MARTIN: So, just to tie a bow on this, U.S. and Chinese trade negotiations are supposed to begin again next month. And I don't want to ask you to predict, but is there a possibility that this is a lot of high-level posturing on both sides and that substantive negotiations could actually take place?
GUTIERREZ: Well, they could get together. I don't believe that that means substantive negotiations. I worry about that because the stock market is so anxious that if you simply say, well, the two presidents talked on the phone, the market's up 500 points. And they don't realize that the relationship is so bad and we are such antagonists - more so than we have ever been since 1979 or '73 - that this will not get solved for a long, long time. This is here to stay.
MARTIN: That's Carlos Gutierrez. He's the former secretary of commerce. He is currently chair of Stonebridge Albright Group, and he was kind enough to join us in our studios in Washington, D.C., with that very sobering message.
Mr. Secretary, thank you so much for joining us.
GUTIERREZ: Thank you very much. Transcript provided by NPR, Copyright NPR.