Boeing, FedEx CEOs Take Divergent Approaches Pressing Case for China Ties

GettyImages-471660663-compressorThe founder of one of China’s biggest companies has said a trade war with America would be a “disaster”. U.S. CEOs, too, are continuing to warn of the potential pitfalls, though some are being more circumspect than Alibaba’s Jack Ma. Others not so much.

The CEOs of Boeing and FedEx this week came out in support of continuing strong trade ties with the world’s second-biggest economy, risking putting them at odds with Donald Trump. They’re walking a fine line with a president prone to launching personal attacks against companies that don’t always agree with him.

Boeing’s Dennis Muilenburg, for instance, who recently met with the president to address the latter’s criticism of the cost of government plane-building contracts, was more diplomatic.

“as we increase sales in China, we increase building plans here in the U.S. That’s U.S. manufacturing jobs.”

More generally, Muilenburg had praise for the president’s plans for taxes, regulation and trade. He also welcomed Trump’s openness to engaging with CEOs frequently on a face-to-face basis.”It’s really important for us all to understand that healthy trade relationships between the U.S. and China are important,” Muilenburg told investors on a results call. “I’m very confident the incoming administration understands this.”

As far as Muilenburg is concerned, creating more jobs in America doesn’t necessarily mean outsourcing less jobs to China. Boeing, for example, installs cabin interiors and paints the outside of planes at a factory in Zhoushan, but still carries out most construction work in the U.S.

“With our partners there, we are able to add volume and increase sales in China,” Muilenberg said. “And as we increase sales in China, we increase building plans here in the U.S. That’s U.S. manufacturing jobs. It’s a great example of how growth in China creates growth in U.S. manufacturing jobs.”

FedEx CEO Fred Smith, like Ma, appeared more reluctant to pull his punches. “The United States being cut off from trade would be like trying to breathe without oxygen,” he said in an interview with Fox Business. Smith was responding to Trump’s decision to pull America out of the Transpacific Partnership with Pacific Rim nations.

Withdrawing from the pact, which excluded China, would only work to increase China’s power and influence, he said. “It’s an essential part of our economy,” he told CBS in a separate interview. “I think the decision to pull of of the TPP is unfortunate because the real beneficiary of that is China. And China has been very mercantilist, very protectionist.”

Smith may want to keep an eye on the president’s Twitter feed, at least according to one political expert. “I wouldn’t be surprised if Trump pushes back,” Republican strategist David Carney told Reuters. “Trump’s a new sheriff in town. The niceties of diplomacy and international trade … it’s just not the Trump way.”

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Ross Kelly
Ross Kelly is a London-based business journalist. He has been a staff correspondent or editor at The Wall Street Journal, Yahoo Finance and the Australian Associated Press.

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