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U.S. Companies That Operate In China Mull Trump's Trade Comments

NOEL KING, HOST:

On Friday, President Trump called for American companies who do business in China to, quote, "look for an alternative to China, including bringing your companies home." He said that in a tweet. And then yesterday, he seemed to change his mind.

(SOUNDBITE OF PRESS CONFERENCE)

PRESIDENT DONALD TRUMP: If we make a deal, I'd like to see them stay there and do a great job.

KING: So what are American companies that operate in China making of all this? Ker Gibbs is president of the American Chamber of Commerce in Shanghai. Mr. Gibbs, thanks for being with us.

KER GIBBS: Thank you, Noel. Good to be here.

KING: President Trump held a press conference yesterday from the G-7 summit in France, and he was asked about these swings in the way he's talked about U.S.-China's trade relationship over the past couple days. Take a listen to what he had to say.

(SOUNDBITE OF PRESS CONFERENCE)

UNIDENTIFIED REPORTER: If I could ask you a little bit about your China strategy...

TRUMP: Yeah.

UNIDENTIFIED REPORTER: ...President Macron talked a little bit about instability and the worry in the markets and around the globe about instability. One of the things that that comes from, as you talk...

TRUMP: You're talking about global economic instability?

UNIDENTIFIED REPORTER: Right. But one of the things...

TRUMP: I don't consider it instability (unintelligible).

UNIDENTIFIED REPORTER: ...That it comes from is the back-and-forth and the changing statements from yourself so that, on the one...

TRUMP: Sorry. It's the way I negotiate.

KING: OK. It's the way he negotiates. How are U.S. businesses that operate in China reacting to all this back-and-forth?

GIBBS: Well, uncertainty is never a good thing in business. I mean, we certainly do want to understand what the environment is that we're investing into, so instability and uncertainty are certainly the enemy of business, yeah.

KING: Are American companies who operate in China, when you speak to them, do they blame the president for the uncertainty? Are they frustrated with him?

GIBBS: Well, it is a frustrating situation. We have a certain amount of sympathy for the situation. I mean, let's be clear: we do support a rebalancing of the relationship. And so we're supportive of that general approach. I mean, let's be honest about it. I mean, this relationship has grown so rapidly in the last 40 years that, frankly, it would be unnatural or strange if we didn't need a certain amount of adjustment and rebalancing.

That's a different question from whether the tariffs are necessary. And also, I guess what you're talking about is really the swing back-and-forth and the instability of the situation, which is disturbing.

KING: I want to ask you about this tweet that the president sent out last week where he said U.S. businesses - in fact, he ordered them to look for alternatives to working in China. As far as you know, are there U.S. companies there in China who are preparing to do that?

GIBBS: Well, I think business is always looking for alternatives. We're always - you know, I think doing business in China is sort of a process of constant adjustment. And I think that the businesses that are operating in China - American businesses, you know, fall in roughly two categories. One is the businesses that I think the president is talking about more, which is the supply chains, manufacturing businesses, those guys. And those guys have been severely impacted by tariffs, and they are looking for alternatives to manufacturing in China.

The other big group is what we call in China for China, meaning they are producing goods and services within the China market for the China market. So those guys - I don't want to say they're immune from tariffs, and they're certainly not immune from the uncertainty that are created around this atmosphere - but they're not directly impacted by the tariffs in quite the same way that the supply chain people are.

KING: The supply chain companies, the first group you mentioned, that are thinking - that are looking for alternatives, is that a tough thing to do, to find another place to go?

GIBBS: It is tough. It depends on the sectors. To take the two opposite extremes, I would say, you've got the textiles and sort of, you know, apparel, footwear, those kind of guys. Those businesses have actually been moving out of China for quite a long time. They are impacted by the increase in cost of labor. And those businesses are relatively straightforward to move, and they have welcome markets in Bangladesh, Vietnam,

The other guys - the electronics manufacturers - very difficult to move. China's supply chain is extremely sophisticated. The ecosystem is very complex. So those are very difficult to move. And they're certainly not moving back to that United States. That's for sure. They're moving to Vietnam. They're moving to Mexico. But very few are considering coming back to the U.S.

KING: Ker Gibbs, president of the American Chamber of Commerce in Shanghai. Thanks.

GIBBS: Thank you. Transcript provided by NPR, Copyright NPR.