China puts off licenses for U.S. firms amid tariff battle
BEIJING» Amid a worsening tariff battle, China is putting off accepting license applications from American companies in financial services and other industries until Washington makes progress toward a settlement, an official of a business group said Tuesday.
The disclosure is the first public confirmation of U.S. companies’ fears that their operations in China or access to its markets might be disrupted by the battle over Beijing’s technology policy. China is running out of American imports for penalties in response to U.S. President Donald Trump’s tariff hikes, which has prompted worries that Chinese regulators might target operations of U.S. companies.
The license delay applies to industries Beijing has promised to open to foreign competitors, according to Jacob Parker, vice president for China operations of the U.S.China Business Council. The group represents some 200 American companies that do business with China.
In meetings over the past three weeks, Cabinetlevel officials told USCBC representatives they are putting off accepting applications “until the trajectory of the U.S.China relationship improves and stabilizes,” Parker said.
Chinese authorities have promised to increase foreign access to areas including banking, securities, insurance and asset management.
“There seem to be domestic political pressures that are working against the perception of U.S. companies receiving benefits” during the dispute, Parker said.
As for what improvement might entail,
Parker said Chinese officials want an end to Trump’s tariff hikes and a negotiated settlement. He declined to identify the officials but, in a sign Beijing wants foreign companies to help lobby Washington, said the meetings represented “unprecedented access” for his group.
Beijing matched Trump’s earlier tariff increase on $50 billion of imports but is running out of American goods for retaliation due to their lopsided trade balance. China bought American goods worth about $1 for every $3 of goods it exported to the United States. Trump is poised to decide whether to raise duties on $200 billion of Chinese goods. Beijing has issued a $60 billion list of goods for retaliation.
A foreign ministry spokesman, Geng Shuang, said Monday that China will “definitely take countermeasures” if the tariff hike goes ahead.
Economists have warned Beijing might target service industries such as engineering or logistics, in which the U.S. runs a trade surplus with China. Chinese commentators have suggested Beijing might use its multitrilliondollar holdings of U.S. government debt as a weapon, though that would impose costs on China. State media have encouraged boycotts of Japanese and South Korean products in past disputes with those governments.
The government said in June it would impose unspecified “comprehensive measures” if necessary. That left U.S. companies on edge about whether Beijing will use its heavily regulated economy to disrupt their operations by withholding licenses or launching tax, antimonopoly or other investigations.
Chinese leaders reject Trump’s demand to roll back official industry plans such as “Made in China 2025,” which calls for stateled creation of global champions in robotics, artificial intelligence and other technologies.