Even as US President Donald Trump escalated the US-China trade war with implementation of fresh tariffs on $200 billion worth of Chinese imports, industry leaders of both countries weighed in with opposing views on their nations’ trade relations. While Apple Inc.’s chief executive officer Tim Cook said that he was optimistic on US-China trade talks, Alibaba Group Holding Ltd’s Jack Ma warned the US-China trade war could last 20 years.
China has vowed to retaliate after the US administration said it will impose a 10% tariff on about $200 billion in Chinese goods next week and more than double the rate in 2019.
Cook, whose Apple products were spared from the new US tariffs on Chinese goods, said he is optimistic that the United States and China will eventually work through their trade differences.
“I’m optimistic because trade is one of those things where it’s not a zero-sum game," Cook told ABC News’ Good Morning America program on Tuesday. “I’m optimistic that the two countries will sort this out and life will go on."
Ma, however, sent out a grave warning regarding the US-China trade war: it’s going to last longer and have a bigger impact than most people think. China’s richest man said the dispute could last 20 years and persist beyond Trump’s presidency, as the world’s two strongest economic powers battle for supremacy.
China needs to strengthen its economy to deal with the conflict and shift trade relations from the US to regions like Southeast Asia and Africa, Ma said during a speech at the company’s investor day conference in Hangzhou.
“Short term, business communities in China, US, Europe will all be in trouble," Ma said, pacing a stage in an open white dress shirt and punctuating his remarks with forceful jabs. “This thing will last long. If you want a short-term solution, there is no solution."
“We should not focus on this quarter or next quarter or next year’s profit. This is a huge opportunity," he said. “If Alibaba cannot sustain and grow, no company in China can grow. I’m 100% confident in that."
Earlier today, the US spared consumer gadgets from the latest round of tariffs on Chinese goods, a senior administration official said in a last-minute reprieve for the technology industry. The iPhone was not among the “wide range" of products that Apple told regulators would be hit by the $200 billion round of tariffs in a 5 September comment letter to trade officials.
But Trump, in a statement announcing the new round of tariffs, warned that if China takes retaliatory action against US farmers or industries, “we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports." And if the Trump administration enacts a further $267 billion round of tariffs, nearly every Chinese import, the iPhone, along with all other smart phones, are likely to be included in the list.
Apple had said the US tariffs would affect prices for a “wide range" of Apple products, including its Apple Watch, in a letter commenting on administration proposals earlier this month. “Our concern with these tariffs is that the US will be hardest hit, and that will result in lower US growth and competitiveness and higher prices for US consumers," Apple had said in a letter commenting on the proposal.
After Apple’s comments, Trump said in a tweet said that there was an “easy solution" for Apple to avoid tariffs. “Make your products in the United States instead of China. Start building new plants now," he tweeted on 8 September.