The US business community can no longer resist political pressure for Washington to take a tougher stand against China on trade issues, according to a senior figure from the US Chamber of Commerce.
Myron Brilliant, senior vice-president for international affairs, who has previously helped to protect Beijing from hawkish trade policies, told the Financial Times: “I don’t think the Chinese government can count on the American business community to be able to push back and block action [on Capitol Hill].”
Speaking on the eve of a trip to Beijing, where he will meet senior Chinese officials, Mr Brilliant added: “Certainly the chamber remains a bridge in support of the relationship but it is a difficult time to keep the wolves at bay. China shouldn’t take the American business community for granted.”
Mr Brilliant said corporate America’s attitude had changed in response to a range of “industrial policies” pursued by Beijing, including the undervaluation of the renminbi, which made it harder for US companies to do business and compete with China. He also cited the tough economic times in the US – particularly the near 10 per cent jobless rate – as making it more difficult to argue against tough action on China.
The political heat in the US surrounding China’s currency policy increased last week when a group of Democrats and Republicans in the House of Representatives urged the Treasury to describe China as a “currency manipulator” in its report due in April. This move could be followed by sanctions. In addition, lawmakers from both parties in the Senate last week proposed legislation designed to force China to allow the renminbi to appreciate.
Mr Brilliant said it was too early for the chamber to take a position on the recently unveiled Senate proposal. However, he did say the chamber understood the “frustration” of lawmakers. “We concur that this is a growing problem,” he said, while adding: “I don’t believe in an eye-for-an-eye. I don’t believe that protectionism should be met with protectionism.”
In the 1990s, Mr Brilliant helped lead the chamber’s lobbying efforts in favour of China’s accession to the World Trade Organisation, persuading thousands of companies to push for its inclusion in the global trading system. “I don’t think I could pull that coalition together now. Part of it is that China is not playing by the same rules”
Meanwhile, China vowed again on Sunday to resist pressure for a renminbi revaluation and threatened to retaliate if the US imposed trade sanctions.
Speaking as Beijing sent a senior official to Washington to ease trade frictions, Chen Deming, commerce minister, said China would “not turn a blind eye” if it was labelled a manipulator by the US Treasury. Mr Chen said if the US falsely called China a manipulator for domestic political reasons, and sanctions followed: “We will not do nothing. We will also respond if this means litigation under the global legal framework.”
He added adjusting the value of the renminbi would not solve global trade imbalances, predicting that China could see its trade balance turn to deficit in March.
Copyright The Financial Times Limited 2010.
By James Politi in Washington and Patti Waldmeir in Shanghai
The Financial Times
Published: March 21 2010 19:28 | Last updated: March 21 2010 19:28