China’s ambassador to the United States visited Georgia’s showpiece Chinese manufacturing investment Thursday, talking trade with company leaders as President Joe Biden weighed relief of some China tariffs to help ease inflation.
As Ambassador Qin Gang toured the Peachtree City assembly plant of Sany America, the Changsha, China-based manufacturer of excavators and other heavy machinery, he asked company leaders for a sense for how prices might be affected if the 25 percent tariffs on its imports from China were removed.
“It is a burden…” Global Sourcing Director Brett Malson tells Mr. Qin as they walk past rows of excavator parts in a video provided to Global Atlanta by the Chinese Embassy in Washington. “…which is why we are looking at localization of those parts.”
Mr. Malson said removing the tariffs would mean lower costs for Sany, but also cheaper prices for American customers, making them both more competitive.
In a 2019 interview, Sany CEO Doug Friesen told Global Atlanta that the company had continued to invest in spite of cost increases artificially imposed under the Trump administration.
“I can’t stand these tariffs. It’s terrible for our business, but we have doubled down,” Mr. Friesen said at the time. “Just as bold as Sany was to build this building to say, ‘We’re here to stay,’ that’s as bold as we are toward the tariffs. We told our dealer network, we told everybody — it’s not slowing us down.”
To dampen some effects of the tariffs, Sany started to import the disassembled parts and put them together locally, given that the landed values are different without all the labor and assembly built in.
But the company had already planned to localize production under Mr. Friesen’s leadership.
“Before the tariffs were even talked about, we were talking about doing that here anyway, because we wanted to have the global footprint,” Mr. Friesen said in the 2019 discussion, but the tariffs removed any question marks about the wisdom of this strategy.
Now, the massive, gleaming building on 272 acres that for years remained eerily empty is bustling with inventory and activity, a sign that Sany has been able to make inroads with its network of more than 50 dealers and deliver its products despite supply-chain issues and a turbulent period in the U.S.-China relationship.
As of 2021, Sany was the fourth largest construction equipment company in the world. Mr. Friesen told the state-run China Daily this week that since he arrived in 2017, Sany has distanced itself from the firms fighting it out at the bottom end of the market in the U.S. and now plans to go after the “big guys” like Caterpillar and Komatsu.
During his visit, Mr. Qin, the ambassador, took selfies and chatted with employees on the factory floor, learning what it takes to ascend the company’s ranks. He turned a torque wrench to put the finishing touches on an excavator, then drove a tele-handler, a truck with an extendable forklift mounted on top.
“Had a go with assembling and operating an excavator myself at SANY America. Based in Georgia, they employ over 200 workers and supply excavators for more than 50 dealers across the U.S.,” Mr. Qin wrote on Twitter, a social media site blocked in China. “Their ‘Made in America and Made for America’ model is a good example of China-U.S. win-win cooperation.”
According to reports, Sany now has more than 240 workers in Peachtree City, which would put it close to lofty promises a decade ago that it would hire more than 300 at the $60 million plant. In 2018, the company’s billionaire chairman, Liang Wengen, visited Peachtree City.
The Biden administration’s U.S. Trade Representative, Katherine Tai, is in the midst of a tariff review process that could see the relaxation of a raft of levies imposed on imports worth more than $350 billion under former President Donald Trump. Mr. Trump initiated a trade war that caught many U.S. producers in the middle and contributed to a souring of relations that was exacerbated during COVID-19.
At $355 billion, the U.S. goods trade deficit with China was higher in 2021 than in 2016, and the country continues to be Georgia’s largest trading partner in terms of total trade (accounting for both imports and exports).
As inflation hits 8 percent in the U.S., President Biden said this week he is looking a variety of options to ease upward pressures on pricing.
Mr. Qin also visited Wesleyan College in Macon, pointing out the college’s historic ties with China through the education of the three famous Soong sisters, two of which went on to marry Sun Yatsen and Chiang Kaishek. Wesleyan, a private women’s college, also operates one of the few Confucius Institutes that have continued to embrace Chinese funding for language programs even after the network of language centers came under fire from the Trump administration. After his stop there, Mr. Qin visited The Carter Center in Atlanta, whose China program has sought to remain a conduit for dialogue between U.S. and Chinese officials during a tense period.
The Soong Sisters studied in @WesleyanCollege more than 100yrs ago, initiating the unique bond btw China & the college. A century later, 🇨🇳🇺🇸friendship & cooperation is prospering and I wish more to come! pic.twitter.com/SZAQYhOI1U
— Qin Gang 秦刚 (@AmbQinGang) May 13, 2022