US companies still fret that they will get caught in the crossfire of a trade war between the US and China.
The American Chamber of Commerce in China (AmCham) said in a report published yesterday that its member companies are worried that investigations into China’s intellectual property practices and industrial policies could cause tensions to flare again.
It was written before the White House announced on Tuesday that it would push ahead with tariffs, despite an earlier agreement to put them on hold.
US President Donald Trump’s earlier threats of tariff hikes resulted in very intense negotiations with Beijing “in a way that we haven’t seen for so many years,” AmCham chairman William Zarit said.
Ahead of US Secretary of Commerce Wilbur Ross’s arrival in China on Saturday for talks, Zarit said companies hope Beijing can be persuaded to “level the playing field” by easing curbs on foreign investment and business activity in its state-dominated economy.
“I wouldn’t say we are in favor of, specifically, export controls, investment restrictions,” Zarit said.
However, US firms want equal treatment “and this seems to be one of the ways to do that,” he said.
US companies “would only be in favor of them to the extent that we can level the playing field,” Zarit told a news conference.
“Bilateral relations between China and the US have become an increasing concern to US businesses in China,” AmCham said in its annual American Business in China white paper.
“Trade tensions between the US and China, particularly those surrounding the Section 232 and 301 investigations, have raised serious concerns that such tensions will escalate into a trade war,” it said.
“China’s success means that it can no longer credibly defend protectionist policies on the grounds that it is still a ‘developing country,’” the report said
The tariff threat is a “very powerful” negotiating tactic ahead of the weekend talks, said Lester Ross, a lawyer who is chairman AmCham’s policy committee.
However, tariffs are a tax on US consumers and a blunt tool to address “very complex problems that hamper trade and investment relationships,” he said.
The paper makes note of US government concerns over cybertheft, forced technology transfer and discriminatory industrial policies.
It urged the Chinese government to address these issues in part by ensuring equal participation for foreign and domestic firms in the “Made in China 2025” initiative, as well as investigating the use of tax credits to support the scheme as an alternative to subsidies.
The report also called on China to negotiate a bilateral investment treaty with the US; implement market opening measures in more sectors; ensure that national security reviews are narrowly applied; develop a comprehensive trade secrets law; open standards development technical committees to foreign-invested enterprises; and improve transparency and equal enforcement of laws and regulations by extending comment periods on new rules, clarifying regulations and issuing public guidance.
Additional reporting by AP
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to