CNN TODAY US-China Tariffs, Trade War Robert Lawrence Kuhn, August 2, 2018 Host: To talk about the potential impact [of tariffs]…. Robert Lawrence Kuhn is a long-time advisor to China’s leaders and the Chinese government. He is also the author of How China’s Leaders Think. You are the perfect person to have on to get China’s perspective. Thank you so much for joining us. RLK: A Pleasure. Host: So Trump is obviously hoping for some kind of trade deal, but is this going to work? Tariffs to get Chinese officials to the table? RLK: Certainly from China’s point of view, they were very happy with the status quo before this occurred. They blame the U.S. for starting a trade war. They think the U.S. will suffer and, indeed in a trade war, everybody suffers. There are some serious problems, though, that American experts, American government [policies], reflect. Very few people in the U.S. actually support the tariffs themselves. There will be higher prices for consumers. There will be more people affected – [there are] more industries that use steel than produce steel. 1 RLK: So there’s a significant impact [on the US]. The US hope is that China will be pressured to make changes in its policy. Now the [tariff] policy is not just [targeting] the trade deficit. The policies are, what are called, China’s closed market, intellectual property protection, industrial espionage, tech transfers and JVs (to get the Chinese market) and government support for tech. And for each of these, China has responses. China says it was doing what was appropriate under the WTO because it was a developing country. Now that it’s advanced, it’s opening markets. China has a “negative list” telling people [companies] what it cannot do, making it much easier; China is also opening further in autos and financial services. But they need to be pushed more. Even economists in China recognize that, that coming out of this, if we have cool heads and smart brains, both sides can be better off. HOST: So are th