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What A Biden Presidency May Mean For U.S. Firms Doing Business In China

STEVE INSKEEP, HOST:

A lot of U.S. businesses are eager to see how President-elect Joe Biden approaches China after January 20. The departing president's trade war has been rough on many U.S. companies. Tariffs forced some to move production lines out of China or just cost them business. But a new president does not mean that everything will change. NPR's John Ruwitch reports.

JOHN RUWITCH, BYLINE: Scott Murray's been making drywall tools in China since the Clinton administration. When President Trump announced tariffs on Chinese-made goods a couple of years ago, Murray's first reaction was a four-letter word.

SCOTT MURRAY: I did not like it. But who would like your cost of goods going up? Nobody does.

RUWITCH: His Kansas City-based company, Level 5 Tools, has passed part of the tariff costs onto the factories he deals with in China - they get paid less now - and part onto U.S. consumers, who pay more. His margins took a hit, too. So at the top of Murray's wish list for the incoming Biden administration...

MURRAY: I would love to see the tariff roll back because it would certainly give me the ability to provide better pricing and probably service and hire more people.

RUWITCH: But President-elect Biden told The New York Times the other day he has no immediate plans to lift the 25% tariffs Trump imposed on many Chinese goods. Still, Murray is hoping for an improvement in tone.

Ker Gibbs, president of the American Chamber of Commerce in Shanghai, says U.S.-China political tensions during the Trump years have been a major distraction.

KER GIBBS: It's kind of like living next to a couple that's just yelling at each other every night. It's not necessarily you're going to get hit in the head with a frying pan. But it's just, you know, you're sitting in your living room, and you're listening to this yelling and screaming, and you're saying, whoa.

RUWITCH: Sometimes it's more than just noise. Ron Wardle helps American companies sell products online in the world's second-biggest economy. His clients have included Victoria's Secret, Fender Guitars and Smuckers. The Chinese authorities, he says, have found creative ways to make life more difficult in response to harder-edged U.S. policies. Take shipments, for example.

RON WARDLE: There'd be more delays than normal when Trump would say we're doing X, Y, Z through tariffs, stuff like that, kind of a tit-for-tat on some very small scale. It's not the big macro.

RUWITCH: A few days after the election, the American Chamber of Commerce in Shanghai did a survey. It found that 63% of members are more optimistic now about doing business in China than they were before the election.

But Biden may not be able to simply throw a switch. Paul Haenle, who was China director at the National Security Council under Presidents Bush and Obama, says it'd be wrong to put all the blame on Trump.

PAUL HAENLE: I put much more of an emphasis on changes to China's behaviors, actions, policies, rhetoric as contributing to the downturn in the relationship.

RUWITCH: In the business arena, Haenle points to China's theft of intellectual property and subsidies for state-owned companies. Then there's the uneven access for foreign firms to certain sectors of the economy, like banking and cloud computing. He says Biden is likely to restart dialogue with China and focus on fixing these problems rather than lashing out.

HAENLE: And that's all good. But nothing will improve if China doesn't respond in kind. And that's the big question mark. And there's a risk that in a year or so, we are back to a huge amount of tension in the U.S.-China relationship.

RUWITCH: Scott Murray, the drywall tool business owner, says he's just seatbelted (ph) in for the ride.

MURRAY: I don't have any expectations. So, I mean, between China and U.S. relations, that's so far above me. I stopped worrying about that stuff a long time ago.

RUWITCH: He'll focus, instead, on making the best products he can.

MURRAY: I'm 58 years old right now. I'm not going anywhere else.

RUWITCH: And that means he'll keep getting his drywall tools made in China.

John Ruwitch, NPR News.

(SOUNDBITE OF LISA MILLIEN'S "ALWAYS WITH YOU") Transcript provided by NPR, Copyright NPR.

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