Tariffs spell dilemma for investors

Chinese investors who are looking for investment and trade opportunities in the US are now hesitant and concerned, finding themselves in a dilemma because of looming trade tensions and investment restrictions, according to Zhao Zhenge, general representative of China Council for the Promotion of International Trade (CCPIT) USA.

"You can see that the trade wars make them worried, make them think there are more risks than before. But the risks do not mean there are no opportunities. So there is a dilemma and conflict in their minds," said Zhao.

Zhao had just spoken with many entrepreneurs and investors from China at the 2018 SelectUSA Summit held in National Harbor, Maryland, two weeks ago.

"In the past two years, you can see that the number of delegates attending SelectUSA Summit from Mainland China was the No. 1 largest delegation. But this year you could see there was a decrease (in the number of Chinese delegates) attending SelectUSA.

"We can feel the impact of the trade conflicts and tensions," said Zhao.

SelectUSA Investment Summit was hosted by the US Department of Commerce to attract foreign investment to the US.

Zhu Hong, minister for commercial affairs for the Chinese embassy in Washington, suggested that the present US policy environment has become a major consideration for Chinese entrepreneurs.

"On one hand, the US hopes to attract foreign investors to invest more and expand local employment, but on the other hand, the US tightens investment restrictions. The chaotic message makes our investors feel at a loss," Zhu said.

"Both parties will suffer from the economic and political costs," Zhu said.

"US-China business relations are at very critical crossroads. The business people are more sensitive to the business climate between the US and China" Zhao said.

"Neither Chinese nor American business communities like trade wars. Trade wars will hurt both. We also heard from Chinese and American companies that are really concerned about the tariffs," Zhao added.

Some American states expressed their concerns about the possible impact of tariffs on their products.

"It could be tremendous. Trade is incredibly important for Montana," said Brett Doney, president of the Great Falls Development Authority in Montana.

"Businesses don't like uncertainty. Even one season of lost opportunity could have a negative impact on our famers and ranches," said Doney.

"We're hoping that the trade issues get resolved and increase trade between our countries, not go backwards," said Doney.

From 2008 to 2017, Montana exports to China grew 281 percent and supported 2,600 American jobs in 2016, according to the US-China Business Council's website.

For Alaska, China is its largest trading partner. "I'm concerned about the impact on our seafood industry," said Britteny Cioni-Haywood, director of Alaska's division of economic development.

Alaska exported $1.32 billion in goods to China in 2017, according to the US Department of Commerce.

Cioni-Haywood is also concerned that the tariffs on aluminum and steel may have an impact on the natural gas pipeline in her state.

The Alaska governor's office has been trying to minimize the impact on the state, according to Cioni-Haywood.

"It's obviously a big issue to us and we're closely monitoring it right now," said Bobbi Jo Meuleman, director of Idaho's department of commerce.

China is also one of Idaho's largest trading partners. In 2017, Idaho's exports to China totaled $353 million, according to Idaho's department of commerce.

"We export a lot of agricultural products to China as well as semiconductors and mining products," said Meuleman.

On Tuesday, more than 270 US national, state and local business groups sent a letter to US senators urging them to support legislation that would limit US President Donald Trump's ability to impose tariffs on the grounds of national security.

"The US business and agriculture communities are deeply concerned that the President's unrestricted use of section 232 to impose tariffs may not be in the national interest," the letter said.

The letter came after the Trump administration unilaterally imposed tariffs on steel and aluminum imports in the name of national security.

Contact the writer at leshuodong@chinadailyusa.com