Tariffs on China Do More Harm Than Good, Business Council Says

(Bloomberg) -- American companies want solutions to the problems they face doing business in China, not just sanctions from the Trump administration, according to their representative in Beijing.

“Tariffs will do more harm than good in bringing about an improvement in intellectual property protection for American companies in China,” Jake Parker, vice president of China operations at the U.S.-China Business Council in Beijing, said by email. “A focused effort to fix the problems is better than imposing sanctions that will bring collateral damage to American households, farmers, and manufacturers.”

U.S. President Donald Trump is set to announce about $50 billion of tariffs against China over intellectual-property violations on Thursday, according a person familiar with the matter. The value of the tariffs was based on U.S. estimates of economic damage caused by intellectual-property theft by China, said the person, who spoke on the condition of anonymity.

Companies do want to see a solution to the problems of weak protection of intellectual property and forced technology transfers, but Parker questioned how the proposed tariffs would do that.

“How will that fix the problem? What actions does the administration want China to take to improve IP protection and end forced technology transfer? We hope that the Administration will spell this out,” Parker wrote.

China’s Ministry of Commerce said in a faxed statement on Tuesday that “China is a developing country, and it doesn’t have a perfect system to protect intellectual property.” The country welcomes “friendly negotiations” with the U.S. on the issue, but is firmly opposed to any unilateral moves.

To contact Bloomberg News staff for this story: Miao Han in Beijing at mhan22@bloomberg.net.

To contact the editors responsible for this story: Jeffrey Black at jblack25@bloomberg.net, James Mayger, Emma O'Brien

©2018 Bloomberg L.P.

With assistance from Miao Han