Chinese trade practices are hurting the US, so the White House should soldier on with its trade war, says Blackstone Group chief Steve Schwarzman. His criticism of China comes at a time that his fellow business titans are growing chary about the Washington-Beijing clash.
Schwarzman makes the case that the conflict is worthwhile because otherwise the West will continue to be victimized. That’s essentially the Trump administration line, although Schwarzman delivers it in a less strident manner than the president.
A confidante of President Donald Trump, Schwarzman has been involved in the trade talks now set to resume again, as a low-key, unofficial liaison. In a similar capacity, he also has helped renegotiate the North American Free Trade Agreement with Canada and Mexico.
During a CNBC appearance Tuesday, he argued that China needs to change its business and trade methods, such as its filching US and other Western nations’ intellectual property. And China’s unfair practices have damaged ordinary people across America, he went on, declaring that “the developed world has suffered. We’ve got 40% of our people who are really hurting in this country.”
“That leads the developed world to say to China: ‘We’ve got to rebalance this. It’s working for you. It’s not working for us,’” he said.
Right now, the trade war has the reluctant asset of the US population, polling shows. A recent Harvard CAPS/Harris Poll, for instance, finds that 63% of registered voters say tariffs on Chinese goods harm the US more than China. Nevertheless, 67% also say it’s necessary to confront China over unfair trade practices.
At the same time, business leaders are starting to question Trump’s aggressive stance toward Beijing. For a long time, many were quiet about the issue, but as the conflict has dragged on, important skeptics among the C-suite set have become more vocal.
When the president jacked up tariffs on a range of Chinese items this month, Joshua Bolten, head of the Business Roundtable, an organization representing the largest companies, warned that the step might “disrupt trade and commerce in a way that would cause huge damage—not just to the Chinese economy, but to the global economy and the US economy.”
Meanwhile, the chief of the National Association of Manufacturers, Jay Timmons, tweeted that “America’s manufacturing workers will bear the brunt of these retaliatory tariffs, which will make it even harder to sell the products they make to customers in China.”
In his new book, Schwarzman freely recounts his efforts to bring the two sides together. The memoir-cum-career-advice volume, called What It Takes: Lessons in the Pursuit of Excellence, describes how to he took eight trips to China in 2018, meeting with top Chinese officials, including President Xi Jinping.
His involvement in China is long and deep. He founded the Schwarzman Scholars program at Tsinghua University in Beijing. China’s sovereign wealth fund made a $3 billion investment in Blackstone in 2007, right before its initial public offering. The fund, which had a 10% stake in Blackstone, sold its interest last year. Blackstone has made a number of large real estate transactions in China.
So in a way, Schwarzman is well-positioned to be the bridge between the business world and the president. Whether he’ll be able to do that with China is another question.