US trade veteran warns Chinese firms to be ready for a 'roller coaster' under Trump

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Keep calm and be prepared to adapt: that’s the advice of a former senior US Trade representative for Chinese companies hoping to do business overseas, in the new era of uncertainty prompted by Donald Trump’s surprise win in the US presidential election.

“It’s going to be a roller coaster for a while. Buckle your seat belt and hold on,” said Miriam Sapiro, who served under Presidents Reagan, Bush, Clinton and Obama, most recently Deputy US Trade Representative and Acting US Trade Representative under Obama.

Sapiro now heads the Washington, DC, office for global communications firm Finsbury and was recently in Hong Kong and Tokyo working to reassure clients, and discuss how best to operate in the new post-Trump environment.

“I urge clients to think proactively and creatively, to what new opportunities might be afforded by the incoming Trump administration,” she told the Post in an exclusive interview at Finsbury’s Hong Kong headquarters.

“In general, my advice is to be nimble, because we’re in a period of rapid change and shifting coalitions. Be ready to go in different ways depending on how an issue looks like it’s moving.

“Also stay focused, be very clear about what your goals are.”

Trump has already backed away from some of his campaign promises, and is known for firing off tweets in the early hours of the morning containing new potential policy moves.

“You’ve heard of ruling by decree, we may have ruling by Twitter,” she quipped.

“It’s important to look at it as a process, and not to put too much importance on a particular tweet or a particular day, but try to look at the trends that are emerging. That’s the best way to proceed in a time of great uncertainty.”

Her Asian clients were both “very interested” and a bit worried by the result, and by what was going on in Washington, DC, she said.

“There’s a growing sense of ‘we can weather this’, and maybe there are even some aspects that will help the US economy grow and create more US jobs.”

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As a long-time senior US governmental official, Sapiro has wide experience of various administrations. Asked about how the uncertainties during past transition periods compare with the current Trump transition, she said: “It’s different.”

“We’ve never had a president before that hasn’t had political or military experience. This is a first for the United States and we had a campaign unlike any we had seen in at least 100 years in terms of the level of vitriol.”

“A large number of people are waiting to see if he means it [the conciliatory things he said in his victory speech]. And if he does, he could be a successful president.”

And when it comes to the effect on trade between China and the United States, there were “more questions than answers”, Sapiro said.

During the campaign Trump proposed high tariffs on China and threatened to call the country a currency manipulator, but Sapiro didn’t expect a trade war between the two countries.

“I don’t interpret what he’s said as that on day one he’s going to slap tariffs on China,” she said.

“That would be a very difficult step for both the US and Chinese economy – keep in mind they are relatively intertwined.”

Instead, she believed Trump had put China “on notice”.

“If they have concerns, they’re not going to be shy to express them. And if China doesn’t take remedial steps to address such concerns, then we could be in a situation where the new president feels he has to take more drastic action.”

“My hope is, as he reads into the challenges that lie ahead, he will get an increasing appreciation for the importance of our partnership with China and with other key countries in Asia.”

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An area where Trump has been clear is the Trade Pacific Partnership (TPP) – he wants to pull out.

TPP-member countries were likely to join RECP, a competing, albeit weaker, [proposed trade agreement that includes China, unlike the TPP. This means China is likely to be the biggest beneficiary of TPP’s failure, she said.

“It’s a step back for US interests, but a benefit for China. It’s also a step back for the other TPP partners like Japan, who had worked so hard along with the US and Australia, New Zealand to try to forge a strong TPP,” she said, noting that there was a lot of disappointment in the business community.

“What is the most interesting factor here is, we know Trump does not like the TPP. What we haven’t heard is, what doesn’t he like about it. And as he gets up to speed and brings on his economic team, perhaps we’ll get more clarity.”

Another area where things could change for Chinese companies was in foreign direct investment, where transactions that could result in US job loss or relate to national security could be put under greater scrutiny, she said.

Sapiro was a National Finance Committee member for Hillary Clinton’s 2016 presidential campaign, meaning she contributed or raised over $100,000 for Clinton’s campaign.

She has got to know both Obama and Clinton during her time in public office, so it’s no surprise she thinks Clinton would have brought more certainty had she been elected.

But there is a good chance Trump will govern more towards the centre, something she described as “the best case scenario”.

“He wants to be, I think. I don’t know. I haven’t met him, but my sense from people that have met him and have spent a lot more time studying him than I have, is that he wants to do well at whatever he does, therefore he will want to do well as president.

“To do well again, you have to tack a bit more to the middle.”

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